1.1                          A bill for an act 
  1.2             relating to financing and operation of government in 
  1.3             this state; making changes to income, corporate 
  1.4             franchise, estate, property, sales and use, motor 
  1.5             vehicle sales, gross earnings, hazardous waste 
  1.6             generator, insurance premiums, and cigarette and 
  1.7             tobacco taxes, and tax provisions; changing, 
  1.8             providing, or abolishing tax exemptions and credits; 
  1.9             changing property tax valuation, assessment, 
  1.10            classification, levy, notice, review, appeal, 
  1.11            apportionment, distribution, and aid provisions; 
  1.12            conforming to certain changes in the internal revenue 
  1.13            code; providing for tax administration, collection, 
  1.14            compliance, and enforcement; changing or imposing 
  1.15            certain requirements on assessors; changing provisions 
  1.16            relating to property tax refunds, tax increment 
  1.17            financing, border city development zones, 
  1.18            tax-forfeited land sales, recording of documents, 
  1.19            revenue recapture, and sustainable forest management 
  1.20            incentives; authorizing certain certificates of motor 
  1.21            vehicle title; imposing certain requirements for 
  1.22            cigarettes shipped for sale in another state; 
  1.23            authorizing a Central Lakes Region Sanitary District; 
  1.24            authorizing a tax increment financing district in the 
  1.25            city of Duluth; changing provisions relating to Cook 
  1.26            county hospital district; authorizing a lodging tax in 
  1.27            the city of Newport; repealing a local law relating to 
  1.28            Stearns and Benton counties; authorizing disclosure of 
  1.29            data and requiring access to certain records; imposing 
  1.30            penalties; amending Minnesota Statutes 2002, sections 
  1.31            115B.24, subdivision 8; 168A.03; 216B.2424, 
  1.32            subdivision 5; 270.06; 270.10, subdivision 1a; 270.69, 
  1.33            by adding a subdivision; 270.701, subdivision 2, by 
  1.34            adding a subdivision; 270.72, subdivision 2; 270A.03, 
  1.35            subdivision 2; 270B.12, by adding a subdivision; 
  1.36            272.02, subdivisions 31, 47, 53, by adding 
  1.37            subdivisions; 272.12; 273.01; 273.05, subdivision 1; 
  1.38            273.061, by adding subdivisions; 273.08; 273.11, 
  1.39            subdivision 1a; 273.124, subdivision 1; 273.13, 
  1.40            subdivisions 22, 25; 273.1398, subdivisions 4b, 4d; 
  1.41            273.372; 273.42, subdivision 2; 274.01, subdivision 1; 
  1.42            274.13, subdivision 1; 275.025, subdivisions 1, 3, 4; 
  1.43            276.10; 276.11, subdivision 1; 277.20, subdivision 2; 
  1.44            278.01, subdivision 4; 279.06, subdivision 1; 281.17; 
  1.45            282.01, subdivision 7a; 282.08; 289A.02, subdivision 
  1.46            7; 289A.10, subdivision 1; 289A.19, subdivision 4; 
  2.1             289A.31, subdivisions 3, 4, by adding a subdivision; 
  2.2             289A.36, subdivision 7, by adding subdivisions; 
  2.3             289A.50, subdivision 2a; 289A.56, subdivision 3; 
  2.4             289A.60, subdivision 7, by adding a subdivision; 
  2.5             290.01, subdivisions 19, 19b, 19d, 31; 290.06, 
  2.6             subdivision 2c; 290.0671, subdivision 1; 290.0675, 
  2.7             subdivisions 2, 3; 290.0679, subdivision 2; 290.0802, 
  2.8             subdivision 1; 290A.03, subdivisions 8, 15; 290C.02, 
  2.9             subdivisions 3, 7; 290C.03; 290C.07; 290C.09; 290C.10; 
  2.10            290C.11; 291.005, subdivision 1; 291.03, subdivision 
  2.11            1; 295.50, subdivision 9b; 295.53, subdivision 1; 
  2.12            297A.61, subdivisions 3, 12, 34, by adding 
  2.13            subdivisions; 297A.665; 297A.67, subdivision 2, by 
  2.14            adding a subdivision; 297A.68, subdivisions 5, 36, by 
  2.15            adding a subdivision; 297A.69, subdivisions 2, 3, 4; 
  2.16            297A.85; 297B.025, subdivisions 1, 2; 297B.035, 
  2.17            subdivision 1, by adding a subdivision; 297F.01, 
  2.18            subdivisions 21a, 23; 297F.06, subdivision 4; 297F.20, 
  2.19            subdivisions 1, 2, 3, 6, 9; 297I.01, subdivision 9; 
  2.20            297I.20; 325D.421, subdivision 2, by adding a 
  2.21            subdivision; 352.15, subdivision 1; 353.15, 
  2.22            subdivision 1; 354.10, subdivision 1; 354B.30; 
  2.23            354C.165; 469.1731, subdivision 3; 469.1792, 
  2.24            subdivision 3; 473F.07, subdivision 4; 515B.1-116; 
  2.25            Laws 1989, chapter 211, section 8, subdivision 2, as 
  2.26            amended; Laws 1989, chapter 211, section 8, 
  2.27            subdivision 4, as amended; Laws 2001, First Special 
  2.28            Session chapter 5, article 3, section 61; Laws 2001, 
  2.29            First Special Session chapter 5, article 3, section 
  2.30            63; Laws 2001, First Special Session chapter 5, 
  2.31            article 9, section 12; Laws 2002, chapter 377, article 
  2.32            6, section 4; proposing coding for new law in 
  2.33            Minnesota Statutes, chapters 270; 275; 276; 290C; 
  2.34            repealing Minnesota Statutes 2002, sections 270.691, 
  2.35            subdivision 8; 274.04; 290.0671, subdivision 3; 
  2.36            290.0675, subdivision 5; 294.01; 294.02; 294.021; 
  2.37            294.03; 294.06; 294.07; 294.08; 294.09; 294.10; 
  2.38            294.11; 294.12; 297A.72, subdivision 1; 297A.97; 
  2.39            477A.065; Laws 1984, chapter 652, section 2; Laws 
  2.40            2002, chapter 377, article 9, section 12; Minnesota 
  2.41            Rules, parts 8007.0300, subpart 3; 8009.7100; 
  2.42            8009.7200; 8009.7300; 8009.7400; 8092.1000; 8106.0100, 
  2.43            subparts 11, 15, 16; 8106.0200; 8125.1000, 8125.1300, 
  2.44            subpart 1; 8125.1400; 8130.0800, subparts 5, 12; 
  2.45            8130.1300; 8130.1600, subpart 5; 8130.1700, subparts 
  2.46            3, 4; 8130.4800, subpart 2; 8130.7500, subpart 5; 
  2.47            8130.8000; 8130.8300. 
  2.48  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.49                             ARTICLE 1 
  2.50                             SALES TAX 
  2.51     Section 1.  Minnesota Statutes 2002, section 168A.03, is 
  2.52  amended to read: 
  2.53     168A.03 [EXEMPT VEHICLES.] 
  2.54     Subdivision 1.  The registrar shall not issue a certificate 
  2.55  of title for: 
  2.56     (1) a vehicle owned by the United States; 
  2.57     (2) a vehicle owned by a manufacturer or dealer and held 
  2.58  for sale, even though incidentally moved on the highway or used 
  2.59  pursuant to section 168.27 or 168.28, or a vehicle used by a 
  3.1   manufacturer solely for testing; 
  3.2      (3) a vehicle owned by a nonresident and not required by 
  3.3   law to be registered in this state; 
  3.4      (4) (3) a vehicle owned by a nonresident and regularly 
  3.5   engaged in the interstate transportation of persons or property 
  3.6   for which a currently effective certificate of title has been 
  3.7   issued in another state; 
  3.8      (5) (4) a vehicle moved solely by animal power; 
  3.9      (6) (5) an implement of husbandry; 
  3.10     (7) (6) special mobile equipment; 
  3.11     (8) (7) a self-propelled wheelchair or invalid tricycle; 
  3.12     (9) (8) a trailer (i) having a gross weight of 4,000 pounds 
  3.13  or less unless a secured party holds an interest in the trailer 
  3.14  or a certificate of title was previously issued by this state or 
  3.15  any other state or (ii) designed primarily for agricultural 
  3.16  purposes except recreational equipment or a manufactured home, 
  3.17  both as defined in section 168.011, subdivisions 8 and 25; 
  3.18     (10) (9) a snowmobile.  
  3.19     Subd. 2.  [DEALERS.] No certificate of title need be 
  3.20  obtained for a vehicle owned by a manufacturer or dealer and 
  3.21  held for sale, even though incidentally moved on the highway or 
  3.22  used pursuant to section 168.27 or 168.28, or a vehicle used by 
  3.23  a manufacturer solely for testing. 
  3.24     <h>[EFFECTIVE DATE.]</h> This section is effective for sales made 
  3.25  after June 30, 2003. 
  3.26     Sec. 2.  Minnesota Statutes 2002, section 297A.61, 
  3.27  subdivision 3, is amended to read: 
  3.28     Subd. 3.  [SALE AND PURCHASE.] (a) "Sale" and "purchase" 
  3.29  include, but are not limited to, each of the transactions listed 
  3.30  in this subdivision. 
  3.31     (b) Sale and purchase include: 
  3.32     (1) any transfer of title or possession, or both, of 
  3.33  tangible personal property, whether absolutely or conditionally, 
  3.34  for a consideration in money or by exchange or barter; and 
  3.35     (2) the leasing of or the granting of a license to use or 
  3.36  consume, for a consideration in money or by exchange or barter, 
  4.1   tangible personal property, other than a manufactured home used 
  4.2   for residential purposes for a continuous period of 30 days or 
  4.3   more. 
  4.4      (c) Sale and purchase include the production, fabrication, 
  4.5   printing, or processing of tangible personal property for a 
  4.6   consideration for consumers who furnish either directly or 
  4.7   indirectly the materials used in the production, fabrication, 
  4.8   printing, or processing. 
  4.9      (d) Sale and purchase include the preparing for a 
  4.10  consideration of food.  Notwithstanding section 297A.67, 
  4.11  subdivision 2, taxable food includes, but is not limited to, the 
  4.12  following: 
  4.13     (1) prepared food sold by the retailer; 
  4.14     (2) soft drinks; 
  4.15     (3) candy; and 
  4.16     (4) all food sold through vending machines. 
  4.17     (e) A sale and a purchase includes the furnishing for a 
  4.18  consideration of electricity, gas, water, or steam for use or 
  4.19  consumption within this state. 
  4.20     (f) A sale and a purchase includes the transfer for a 
  4.21  consideration of computer software.  
  4.22     (g) A sale and a purchase includes the furnishing for a 
  4.23  consideration of the following services: 
  4.24     (1) the privilege of admission to places of amusement, 
  4.25  recreational areas, or athletic events, and the making available 
  4.26  of amusement devices, tanning facilities, reducing salons, steam 
  4.27  baths, turkish baths, health clubs, and spas or athletic 
  4.28  facilities; 
  4.29     (2) lodging and related services by a hotel, rooming house, 
  4.30  resort, campground, motel, or trailer camp and the granting of 
  4.31  any similar license to use real property other than the renting 
  4.32  or leasing of it for a continuous period of 30 days or more; 
  4.33     (3) parking services, whether on a contractual, hourly, or 
  4.34  other periodic basis, except for parking at a meter; 
  4.35     (4) the granting of membership in a club, association, or 
  4.36  other organization if: 
  5.1      (i) the club, association, or other organization makes 
  5.2   available for the use of its members sports and athletic 
  5.3   facilities, without regard to whether a separate charge is 
  5.4   assessed for use of the facilities; and 
  5.5      (ii) use of the sports and athletic facility is not made 
  5.6   available to the general public on the same basis as it is made 
  5.7   available to members.  
  5.8   Granting of membership means both onetime initiation fees and 
  5.9   periodic membership dues.  Sports and athletic facilities 
  5.10  include golf courses; tennis, racquetball, handball, and squash 
  5.11  courts; basketball and volleyball facilities; running tracks; 
  5.12  exercise equipment; swimming pools; and other similar athletic 
  5.13  or sports facilities; 
  5.14     (5) delivery of aggregate materials and concrete block by a 
  5.15  third party if the delivery would be subject to the sales tax if 
  5.16  provided by the seller of the aggregate material or concrete 
  5.17  block; and 
  5.18     (6) services as provided in this clause: 
  5.19     (i) laundry and dry cleaning services including cleaning, 
  5.20  pressing, repairing, altering, and storing clothes, linen 
  5.21  services and supply, cleaning and blocking hats, and carpet, 
  5.22  drapery, upholstery, and industrial cleaning.  Laundry and dry 
  5.23  cleaning services do not include services provided by coin 
  5.24  operated facilities operated by the customer; 
  5.25     (ii) motor vehicle washing, waxing, and cleaning services, 
  5.26  including services provided by coin operated facilities operated 
  5.27  by the customer, and rustproofing, undercoating, and towing of 
  5.28  motor vehicles; 
  5.29     (iii) building and residential cleaning, maintenance, and 
  5.30  disinfecting and exterminating services; 
  5.31     (iv) detective, security, burglar, fire alarm, and armored 
  5.32  car services; but not including services performed within the 
  5.33  jurisdiction they serve by off-duty licensed peace officers as 
  5.34  defined in section 626.84, subdivision 1, or services provided 
  5.35  by a nonprofit organization for monitoring and electronic 
  5.36  surveillance of persons placed on in-home detention pursuant to 
  6.1   court order or under the direction of the Minnesota department 
  6.2   of corrections; 
  6.3      (v) pet grooming services; 
  6.4      (vi) lawn care, fertilizing, mowing, spraying and sprigging 
  6.5   services; garden planting and maintenance; tree, bush, and shrub 
  6.6   pruning, bracing, spraying, and surgery; indoor plant care; 
  6.7   tree, bush, shrub, and stump removal; and tree trimming for 
  6.8   public utility lines.  Services performed under a construction 
  6.9   contract for the installation of shrubbery, plants, sod, trees, 
  6.10  bushes, and similar items are not taxable; 
  6.11     (vii) massages, except when provided by a licensed health 
  6.12  care facility or professional or upon written referral from a 
  6.13  licensed health care facility or professional for treatment of 
  6.14  illness, injury, or disease; and 
  6.15     (viii) the furnishing of lodging, board, and care services 
  6.16  for animals in kennels and other similar arrangements, but 
  6.17  excluding veterinary and horse boarding services. 
  6.18     In applying the provisions of this chapter, the terms 
  6.19  "tangible personal property" and "sales at retail" include 
  6.20  taxable services and the provision of taxable services, unless 
  6.21  specifically provided otherwise.  Services performed by an 
  6.22  employee for an employer are not taxable.  Services performed by 
  6.23  a partnership or association for another partnership or 
  6.24  association are not taxable if one of the entities owns or 
  6.25  controls more than 80 percent of the voting power of the equity 
  6.26  interest in the other entity.  Services performed between 
  6.27  members of an affiliated group of corporations are not taxable.  
  6.28  For purposes of this section, "affiliated group of corporations" 
  6.29  includes those entities that would be classified as members of 
  6.30  an affiliated group under United States Code, title 26, section 
  6.31  1504, and that are eligible to file a consolidated tax return 
  6.32  for federal income tax purposes. 
  6.33     (h) A sale and a purchase includes the furnishing for a 
  6.34  consideration of tangible personal property or taxable services 
  6.35  by the United States or any of its agencies or 
  6.36  instrumentalities, or the state of Minnesota, its agencies, 
  7.1   instrumentalities, or political subdivisions. 
  7.2      (i) A sale and a purchase includes the furnishing for a 
  7.3   consideration of telecommunications services, including cable 
  7.4   television services and direct satellite services.  
  7.5   Telecommunications services are taxed to the extent allowed 
  7.6   under federal law if those services: 
  7.7      (1) either (i) originate and terminate in this state; or 
  7.8   (ii) originate in this state and terminate outside the state and 
  7.9   the service is charged to a telephone number customer located in 
  7.10  this state or to the account of any transmission instrument in 
  7.11  this state; or (iii) originate outside this state and terminate 
  7.12  in this state and the service is charged to a telephone number 
  7.13  customer located in this state or to the account of any 
  7.14  transmission instrument in this state; or 
  7.15     (2) are rendered by providing a private communications 
  7.16  service for which the customer has one or more locations within 
  7.17  Minnesota connected to the service and the service is charged to 
  7.18  a telephone number customer located in this state or to the 
  7.19  account of any transmission instrument in this state. 
  7.20     All charges for mobile telecommunications services, as 
  7.21  defined in United States Code, title 4, section 124, are deemed 
  7.22  to be provided by the customer's home service provider and 
  7.23  sourced to the customer's place of primary use and are subject 
  7.24  to tax based upon the customer's place of primary use in 
  7.25  accordance with the Mobile Telecommunications Sourcing Act, 
  7.26  United States Code, title 4, sections 116 to 126.  All other 
  7.27  definitions and provisions of the Mobile Telecommunications 
  7.28  Sourcing Act as provided in United States Code, title 4, are 
  7.29  hereby adopted. 
  7.30     (j) A sale and a purchase includes the furnishing for a 
  7.31  consideration of installation if the installation charges would 
  7.32  be subject to the sales tax if the installation were provided by 
  7.33  the seller of the item being installed. 
  7.34     (k) A sale and a purchase includes the rental of a vehicle 
  7.35  by a motor vehicle dealer to a customer when (1) the vehicle is 
  7.36  rented by the customer for a consideration, or (2) the motor 
  8.1   vehicle dealer is reimbursed pursuant to a service contract as 
  8.2   defined in section 65B.29, subdivision 1, clause (1). 
  8.3      <h>[EFFECTIVE DATE.]</h> This section is effective for sales and 
  8.4   purchases made on or after July 1, 2003. 
  8.5      Sec. 3.  Minnesota Statutes 2002, section 297A.61, is 
  8.6   amended by adding a subdivision to read: 
  8.7      Subd. 35.  [DIRECT MAIL.] "Direct mail" means printed 
  8.8   material delivered or distributed by United States Mail or other 
  8.9   delivery service to a mass audience or to addressees on a 
  8.10  mailing list provided by the purchaser or at the direction of 
  8.11  the purchaser when the cost of the items is not billed directly 
  8.12  to the recipients.  "Direct mail" includes tangible personal 
  8.13  property supplied directly or indirectly by the purchaser to the 
  8.14  direct mail seller for inclusion in the package containing the 
  8.15  printed material.  "Direct mail" does not include multiple items 
  8.16  of printed material delivered to a single address. 
  8.17     <h>[EFFECTIVE DATE.]</h> This section is effective for sales and 
  8.18  purchases made on or after January 1, 2004. 
  8.19     Sec. 4.  Minnesota Statutes 2002, section 297A.67, is 
  8.20  amended by adding a subdivision to read: 
  8.21     Subd. 31.  [SERVICE LOANER VEHICLE COVERED BY 
  8.22  WARRANTY.] The loan of a vehicle by a motor vehicle dealer to a 
  8.23  customer as a replacement for a vehicle being serviced or 
  8.24  repaired is exempt if the vehicle is loaned pursuant to a 
  8.25  warranty included in the original purchase price of the vehicle 
  8.26  being serviced or repaired. 
  8.27     <h>[EFFECTIVE DATE.]</h> This section is effective for vehicle 
  8.28  loans made after June 30, 2003. 
  8.29     Sec. 5.  Minnesota Statutes 2002, section 297A.68, 
  8.30  subdivision 36, is amended to read: 
  8.31     Subd. 36.  [DELIVERY OR DISTRIBUTION CHARGES; PRINTED 
  8.32  MATERIALS DIRECT MAIL.] Charges for the delivery or distribution 
  8.33  of printed materials, including individual account 
  8.34  information, direct mail are exempt if (1) the charges are 
  8.35  separately stated, (2) the delivery or distribution is to a mass 
  8.36  audience or to a mailing list provided at the direction of the 
  9.1   customer, and (3) the cost of the materials is not billed 
  9.2   directly to the recipients on an invoice or similar billing 
  9.3   document given to the purchaser. 
  9.4      <h>[EFFECTIVE DATE.]</h> This section is effective for purchases 
  9.5   and sales made on or after January 1, 2004. 
  9.6      Sec. 6.  Minnesota Statutes 2002, section 297B.035, is 
  9.7   amended by adding a subdivision to read: 
  9.8      Subd. 5.  [USE BY DEALER.] If a motor vehicle dealer uses a 
  9.9   vehicle, purchased for resale in the ordinary course of 
  9.10  business, other than for demonstration purposes, the dealer may 
  9.11  elect to pay the motor vehicle sales tax under this chapter or 
  9.12  the use tax under chapter 297A based on the reasonable rental 
  9.13  value of the vehicle.  If the motor vehicle dealer fails to 
  9.14  report the use tax under chapter 297A, it is presumed that the 
  9.15  dealer elected to pay the motor vehicle sales tax under this 
  9.16  chapter. 
  9.17     <h>[EFFECTIVE DATE.]</h> This section is effective for sales made 
  9.18  after June 30, 2003. 
  9.19     Sec. 7.  [CITY OF NEWPORT; LODGING TAX.] 
  9.20     Subdivision 1.  [LODGING TAX.] Notwithstanding Minnesota 
  9.21  Statutes, section 477A.016, or any ordinance, city charter, or 
  9.22  other provision of law, the city of Newport may, by ordinance, 
  9.23  impose a tax of up to four percent upon the gross receipts from 
  9.24  the sale of lodging for periods of less than 30 days in hotels 
  9.25  and motels located in the city.  The tax does not apply to the 
  9.26  furnishing of lodging by a business having less than 25 lodging 
  9.27  rooms.  The total amount of taxes imposed under this section and 
  9.28  under Minnesota Statutes, section 469.190, shall not exceed four 
  9.29  percent. 
  9.30     Subd. 2.  [USE OF PROCEEDS.] The proceeds of any tax 
  9.31  imposed in subdivision 1 shall be used by the city to fund 
  9.32  economic development and redevelopment of the city.  Authorized 
  9.33  expenses include, but are not limited to, acquisition and 
  9.34  development costs of open space, parks, and trails. 
  9.35     Subd. 3.  [ENFORCEMENT, COLLECTION, AND 
  9.36  ADMINISTRATION.] The tax shall be collected and administered in 
 10.1   the same manner as local lodging taxes under Minnesota Statutes, 
 10.2   section 469.190. 
 10.3      <h>[EFFECTIVE DATE.]</h> This section is effective upon approval 
 10.4   by the Newport city council and compliance with Minnesota 
 10.5   Statutes, section 645.021, subdivision 3. 
 10.6      Sec. 8.  [REPEALER.] 
 10.7      Laws 2002, chapter 377, article 9, section 12, the 
 10.8   effective date, is repealed effective for sales and purchases 
 10.9   made on or after January 1, 2004. 
 10.10                             ARTICLE 2
 10.11                            PROPERTY TAX
 10.12     Section 1.  Minnesota Statutes 2002, section 216B.2424, 
 10.13  subdivision 5, is amended to read: 
 10.14     Subd. 5.  [MANDATE.] (a) A public utility, as defined in 
 10.15  section 216B.02, subdivision 4, that operates a nuclear-powered 
 10.16  electric generating plant within this state must construct and 
 10.17  operate, purchase, or contract to construct and operate (1) by 
 10.18  December 31, 1998, 50 megawatts of electric energy installed 
 10.19  capacity generated by farm-grown closed-loop biomass scheduled 
 10.20  to be operational by December 31, 2001; and (2) by December 31, 
 10.21  1998, an additional 75 megawatts of installed capacity so 
 10.22  generated scheduled to be operational by December 31, 2002.  
 10.23     (b) Of the 125 megawatts of biomass electricity installed 
 10.24  capacity required under this subdivision, no more than 50 
 10.25  megawatts of this capacity may be provided by a facility that 
 10.26  uses poultry litter as its primary fuel source and any such 
 10.27  facility:  
 10.28     (1) need not use biomass that complies with the definition 
 10.29  in subdivision 1; 
 10.30     (2) must enter into a contract with the public utility for 
 10.31  such capacity, that has an average purchase price per megawatt 
 10.32  hour over the life of the contract that is equal to or less than 
 10.33  the average purchase price per megawatt hour over the life of 
 10.34  the contract in contracts approved by the public utilities 
 10.35  commission before April 1, 2000, to satisfy the mandate of this 
 10.36  section, and file that contract with the public utilities 
 11.1   commission prior to September 1, 2000; and 
 11.2      (3) must schedule such capacity to be operational by 
 11.3   December 31, 2002.  
 11.4      (c) Of the total 125 megawatts of biomass electric energy 
 11.5   installed capacity required under this section, no more than 75 
 11.6   megawatts may be provided by a single project.  
 11.7      (d) Of the 75 megawatts of biomass electric energy 
 11.8   installed capacity required under paragraph (a), clause (2), no 
 11.9   more than 25 megawatts of this capacity may be provided by a St. 
 11.10  Paul district heating and cooling system cogeneration facility 
 11.11  utilizing waste wood as a primary fuel source.  The St. Paul 
 11.12  district heating and cooling system cogeneration facility need 
 11.13  not use biomass that complies with the definition in subdivision 
 11.14  1.  
 11.15     (e) The public utility must accept and consider on an equal 
 11.16  basis with other biomass proposals: 
 11.17     (1) a proposal to satisfy the requirements of this section 
 11.18  that includes a project that exceeds the megawatt capacity 
 11.19  requirements of either paragraph (a), clause (1) or (2), and 
 11.20  that proposes to sell the excess capacity to the public utility 
 11.21  or to other purchasers; and 
 11.22     (2) a proposal for a new facility to satisfy more than ten 
 11.23  but not more than 20 megawatts of the electrical generation 
 11.24  requirements by a small business-sponsored independent power 
 11.25  producer facility to be located within the northern quarter of 
 11.26  the state, which means the area located north of Constitutional 
 11.27  Route No. 8 as described in section 161.114, subdivision 2, and 
 11.28  that utilizes biomass residue wood, sawdust, bark, chipped wood, 
 11.29  or brush to generate electricity.  A facility described in this 
 11.30  clause is not required to utilize biomass complying with the 
 11.31  definition in subdivision 1, but must have the capacity required 
 11.32  by this clause operational be under construction by December 31, 
 11.33  2002 2005. 
 11.34     (f) If a public utility files a contract with the 
 11.35  commission for electric energy installed capacity that uses 
 11.36  poultry litter as its primary fuel source, the commission must 
 12.1   do a preliminary review of the contract to determine if it meets 
 12.2   the purchase price criteria provided in paragraph (b), clause 
 12.3   (2), of this subdivision.  The commission shall perform its 
 12.4   review and advise the parties of its determination within 30 
 12.5   days of filing of such a contract by a public utility.  A public 
 12.6   utility may submit by September 1, 2000, a revised contract to 
 12.7   address the commission's preliminary determination.  
 12.8      (g) The commission shall finally approve, modify, or 
 12.9   disapprove no later than July 1, 2001, all contracts submitted 
 12.10  by a public utility as of September 1, 2000, to meet the mandate 
 12.11  set forth in this subdivision.  
 12.12     (h) If a public utility subject to this section exercises 
 12.13  an option to increase the generating capacity of a project in a 
 12.14  contract approved by the commission prior to April 25, 2000, to 
 12.15  satisfy the mandate in this subdivision, the public utility must 
 12.16  notify the commission by September 1, 2000, that it has 
 12.17  exercised the option and include in the notice the amount of 
 12.18  additional megawatts to be generated under the option 
 12.19  exercised.  Any review by the commission of the project after 
 12.20  exercise of such an option shall be based on the same criteria 
 12.21  used to review the existing contract. 
 12.22     (i) A facility specified in this subdivision qualifies for 
 12.23  exemption from property taxation under section 272.02, 
 12.24  subdivision 43. 
 12.25     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 12.26  following final enactment. 
 12.27     Sec. 2.  Minnesota Statutes 2002, section 270B.12, is 
 12.28  amended by adding a subdivision to read: 
 12.29     Subd. 13.  [COUNTY ASSESSORS; CLASS 1B HOMESTEADS.] The 
 12.30  commissioner may disclose to a county assessor, and to the 
 12.31  assessor's designated agents or employees, a listing of parcels 
 12.32  of property qualifying for the class 1b property tax 
 12.33  classification under section 273.13, subdivision 22. 
 12.34     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 12.35  following final enactment. 
 12.36     Sec. 3.  Minnesota Statutes 2002, section 272.02, 
 13.1   subdivision 31, is amended to read: 
 13.2      Subd. 31.  [BUSINESS INCUBATOR PROPERTY.] Property owned by 
 13.3   a nonprofit charitable organization that qualifies for tax 
 13.4   exemption under section 501(c)(3) of the Internal Revenue Code 
 13.5   of 1986, as amended through December 31, 1997, that is intended 
 13.6   to be used as a business incubator in a high-unemployment 
 13.7   county, is exempt.  As used in this subdivision, a "business 
 13.8   incubator" is a facility used for the development of nonretail 
 13.9   businesses, offering access to equipment, space, services, and 
 13.10  advice to the tenant businesses, for the purpose of encouraging 
 13.11  economic development, diversification, and job creation in the 
 13.12  area served by the organization, and "high-unemployment county" 
 13.13  is a county that had an average annual unemployment rate of 7.9 
 13.14  percent or greater in 1997.  Property that qualifies for the 
 13.15  exemption under this subdivision is limited to no more than two 
 13.16  contiguous parcels and structures that do not exceed in the 
 13.17  aggregate 40,000 square feet.  This exemption expires after 
 13.18  taxes payable in 2005 2011. 
 13.19     Sec. 4.  Minnesota Statutes 2002, section 272.02, 
 13.20  subdivision 47, is amended to read: 
 13.21     Subd. 47.  [POULTRY LITTER BIOMASS GENERATION FACILITY; 
 13.22  PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a), 
 13.23  attached machinery and other personal property which is part of 
 13.24  an electrical generating facility that meets the requirements of 
 13.25  this subdivision is exempt.  At the time of construction, the 
 13.26  facility must: 
 13.27     (1) be designed to utilize poultry litter as a primary fuel 
 13.28  source; and 
 13.29     (2) be constructed for the purpose of generating power at 
 13.30  the facility that will be sold pursuant to a contract approved 
 13.31  by the public utilities commission in accordance with the 
 13.32  biomass mandate imposed under section 216B.2424. 
 13.33     Construction of the facility must be commenced after 
 13.34  January 1, 2000 2003, and before December 31, 2002 2003.  
 13.35  Property eligible for this exemption does not include electric 
 13.36  transmission lines and interconnections or gas pipelines and 
 14.1   interconnections appurtenant to the property or the facility. 
 14.2      <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
 14.3   levied in 2004, payable in 2005, and thereafter. 
 14.4      Sec. 5.  Minnesota Statutes 2002, section 272.02, 
 14.5   subdivision 53, is amended to read: 
 14.6      Subd. 53.  [ELECTRIC GENERATION FACILITY; PERSONAL 
 14.7   PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 
 14.8   machinery and other personal property which is part of a 3.2 
 14.9   megawatt run-of-the-river hydroelectric generation facility and 
 14.10  that meets the requirements of this subdivision is exempt.  At 
 14.11  the time of construction, the facility must: 
 14.12     (1) utilize two turbine generators at a dam site existing 
 14.13  on March 31, 1994; 
 14.14     (2) be located on publicly owned land and within 1,500 feet 
 14.15  of a 13.8 kilovolt distribution substation; and 
 14.16     (3) be eligible to receive a renewable energy production 
 14.17  incentive payment under section 216C.41. 
 14.18     Construction of the facility must be commenced after 
 14.19  January 1, 2002, and before January 1, 2004 2005.  Property 
 14.20  eligible for this exemption does not include electric 
 14.21  transmission lines and interconnections or gas pipelines and 
 14.22  interconnections appurtenant to the property or the facility. 
 14.23     Sec. 6.  Minnesota Statutes 2002, section 272.02, is 
 14.24  amended by adding a subdivision to read: 
 14.25     Subd. 56.  [ELECTRIC GENERATION FACILITY; PERSONAL 
 14.26  PROPERTY.] (a) Notwithstanding subdivision 9, clause (a), 
 14.27  attached machinery and other personal property which is part of 
 14.28  a combined-cycle combustion-turbine electric generation facility 
 14.29  that exceeds 550 megawatts of installed capacity and that meets 
 14.30  the requirements of this subdivision is exempt.  At the time of 
 14.31  construction, the facility must: 
 14.32     (1) be designed to utilize natural gas as a primary fuel; 
 14.33     (2) not be owned by a public utility as defined in section 
 14.34  216B.02, subdivision 4; 
 14.35     (3) be located within five miles of an existing natural gas 
 14.36  pipeline and within four miles of an existing electrical 
 15.1   transmission substation; 
 15.2      (4) be located outside the metropolitan area as defined 
 15.3   under section 473.121, subdivision 2; and 
 15.4      (5) be designed to provide energy and ancillary services 
 15.5   and have received a certificate of need under section 216B.243. 
 15.6      (b) Construction of the facility must be commenced after 
 15.7   January 1, 2004, and before January 1, 2007.  Property eligible 
 15.8   for this exemption does not include electric transmission lines 
 15.9   and interconnections or gas pipelines and interconnections 
 15.10  appurtenant to the property or the facility. 
 15.11     <h>[EFFECTIVE DATE.]</h> This section is effective for assessment 
 15.12  year 2005, taxes payable in 2006, and thereafter. 
 15.13     Sec. 7.  Minnesota Statutes 2002, section 272.02, is 
 15.14  amended by adding a subdivision to read: 
 15.15     Subd. 57.  [ELECTRIC GENERATION FACILITY; PERSONAL 
 15.16  PROPERTY.] (a) Notwithstanding subdivision 9, clause (a), 
 15.17  attached machinery and other personal property which is part of 
 15.18  a combined-cycle combustion-turbine electric generation facility 
 15.19  that exceeds 150 megawatts of installed capacity and that meets 
 15.20  the requirements of this subdivision is exempt.  At the time of 
 15.21  construction, the facility must: 
 15.22     (1) utilize natural gas as a primary fuel; 
 15.23     (2) be owned by an electric generation and transmission 
 15.24  cooperative; 
 15.25     (3) be located within ten miles of parallel existing 
 15.26  24-inch and 30-inch natural gas pipelines and a 345-kilovolt 
 15.27  high-voltage electric transmission line; 
 15.28     (4) be designed to provide intermediate energy and 
 15.29  ancillary services, and have received a certificate of need 
 15.30  under section 216B.243, demonstrating demand for its capacity; 
 15.31  and 
 15.32     (5) have received by resolution, the approval from the 
 15.33  governing body of the county and city in which the proposed 
 15.34  facility is to be located for the exemption of personal property 
 15.35  under this subdivision. 
 15.36     (b) Construction of the facility must be commenced after 
 16.1   January 1, 2004, and before January 1, 2009.  Property eligible 
 16.2   for this exemption does not include electric transmission lines 
 16.3   and interconnections or gas pipelines and interconnections 
 16.4   appurtenant to the property or the facility. 
 16.5      (c) The exemption under this section will take effect only 
 16.6   if the owner of the facility enters into agreements with the 
 16.7   governing bodies of the county and the city in which the 
 16.8   facility is located.  The agreements may include a requirement 
 16.9   that the facility must pay a host fee to compensate the county 
 16.10  and city for hosting the facility. 
 16.11     <h>[EFFECTIVE DATE.]</h> This section is effective for assessment 
 16.12  year 2005, taxes payable in 2006, and thereafter. 
 16.13     Sec. 8.  Minnesota Statutes 2002, section 273.01, is 
 16.14  amended to read: 
 16.15     273.01 [LISTING AND ASSESSMENT, TIME.] 
 16.16     All real property subject to taxation shall be listed and 
 16.17  at least one-fourth one-fifth of the parcels listed shall be 
 16.18  appraised each year with reference to their value on January 2 
 16.19  preceding the assessment so that each parcel shall be 
 16.20  reappraised at maximum intervals of four five years.  All real 
 16.21  property becoming taxable in any year shall be listed with 
 16.22  reference to its value on January 2 of that year.  Except as 
 16.23  provided in this section and section 274.01, subdivision 1, all 
 16.24  real property assessments shall be completed two weeks prior to 
 16.25  the date scheduled for the local board of review or 
 16.26  equalization.  No changes in valuation or classification which 
 16.27  are intended to correct errors in judgment by the county 
 16.28  assessor may be made by the county assessor after the board of 
 16.29  review or the county board of equalization has adjourned; 
 16.30  however, corrections of errors that are merely clerical in 
 16.31  nature or changes that extend homestead treatment to property 
 16.32  are permitted after adjournment until the tax extension date for 
 16.33  that assessment year.  Any changes made by the assessor after 
 16.34  adjournment must be fully documented and maintained in a file in 
 16.35  the assessor's office and shall be available for review by any 
 16.36  person.  A copy of any changes made during this period shall be 
 17.1   sent to the county board no later than December 31 of the 
 17.2   assessment year.  In the event a valuation and classification is 
 17.3   not placed on any real property by the dates scheduled for the 
 17.4   local board of review or equalization the valuation and 
 17.5   classification determined in the preceding assessment shall be 
 17.6   continued in effect and the provisions of section 273.13 shall, 
 17.7   in such case, not be applicable, except with respect to real 
 17.8   estate which has been constructed since the previous 
 17.9   assessment.  Real property containing iron ore, the fee to which 
 17.10  is owned by the state of Minnesota, shall, if leased by the 
 17.11  state after January 2 in any year, be subject to assessment for 
 17.12  that year on the value of any iron ore removed under said lease 
 17.13  prior to January 2 of the following year.  Personal property 
 17.14  subject to taxation shall be listed and assessed annually with 
 17.15  reference to its value on January 2; and, if acquired on that 
 17.16  day, shall be listed by or for the person acquiring it.  
 17.17     <h>[EFFECTIVE DATE.]</h> This section is effective for assessments 
 17.18  on or after January 2, 2004. 
 17.19     Sec. 9.  Minnesota Statutes 2002, section 273.08, is 
 17.20  amended to read: 
 17.21     273.08 [ASSESSOR'S DUTIES.] 
 17.22     The assessor shall actually view, and determine the market 
 17.23  value of each tract or lot of real property listed for taxation, 
 17.24  including the value of all improvements and structures thereon, 
 17.25  at maximum intervals of four five years and shall enter the 
 17.26  value opposite each description. 
 17.27     <h>[EFFECTIVE DATE.]</h> This section is effective for assessments 
 17.28  on or after January 2, 2004. 
 17.29     Sec. 10.  Minnesota Statutes 2002, section 273.13, 
 17.30  subdivision 22, is amended to read: 
 17.31     Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
 17.32  23 and in paragraphs (b) and (c), real estate which is 
 17.33  residential and used for homestead purposes is class 1a.  In the 
 17.34  case of a duplex or triplex in which one of the units is used 
 17.35  for homestead purposes, the entire property is deemed to be used 
 17.36  for homestead purposes.  The market value of class 1a property 
 18.1   must be determined based upon the value of the house, garage, 
 18.2   and land.  
 18.3      The first $500,000 of market value of class 1a property has 
 18.4   a net class rate of one percent of its market value; and the 
 18.5   market value of class 1a property that exceeds $500,000 has a 
 18.6   class rate of 1.25 percent of its market value. 
 18.7      (b) Class 1b property includes homestead real estate or 
 18.8   homestead manufactured homes used for the purposes of a 
 18.9   homestead by 
 18.10     (1) any blind person, or the blind person and the blind 
 18.11  person's spouse; or 
 18.12     (2) any person, hereinafter referred to as "veteran," who: 
 18.13     (i) served in the active military or naval service of the 
 18.14  United States; and 
 18.15     (ii) is entitled to compensation under the laws and 
 18.16  regulations of the United States for permanent and total 
 18.17  service-connected disability due to the loss, or loss of use, by 
 18.18  reason of amputation, ankylosis, progressive muscular 
 18.19  dystrophies, or paralysis, of both lower extremities, such as to 
 18.20  preclude motion without the aid of braces, crutches, canes, or a 
 18.21  wheelchair; and 
 18.22     (iii) has acquired a special housing unit with special 
 18.23  fixtures or movable facilities made necessary by the nature of 
 18.24  the veteran's disability, or the surviving spouse of the 
 18.25  deceased veteran for as long as the surviving spouse retains the 
 18.26  special housing unit as a homestead; or 
 18.27     (3) any person who: 
 18.28     (i) is permanently and totally disabled and 
 18.29     (ii) receives 90 percent or more of total household income, 
 18.30  as defined in section 290A.03, subdivision 5, from 
 18.31     (A) aid from any state as a result of that disability; or 
 18.32     (B) supplemental security income for the disabled; or 
 18.33     (C) workers' compensation based on a finding of total and 
 18.34  permanent disability; or 
 18.35     (D) social security disability, including the amount of a 
 18.36  disability insurance benefit which is converted to an old age 
 19.1   insurance benefit and any subsequent cost of living increases; 
 19.2   or 
 19.3      (E) aid under the federal Railroad Retirement Act of 1937, 
 19.4   United States Code Annotated, title 45, section 228b(a)5; or 
 19.5      (F) a pension from any local government retirement fund 
 19.6   located in the state of Minnesota as a result of that 
 19.7   disability; or 
 19.8      (G) pension, annuity, or other income paid as a result of 
 19.9   that disability from a private pension or disability plan, 
 19.10  including employer, employee, union, and insurance plans and 
 19.11     (iii) has household income as defined in section 290A.03, 
 19.12  subdivision 5, of $50,000 or less; or 
 19.13     (4) any person who is permanently and totally disabled and 
 19.14  whose household income as defined in section 290A.03, 
 19.15  subdivision 5, is 275 percent or less of the federal poverty 
 19.16  level. 
 19.17     Property is classified and assessed under clause (4) only 
 19.18  if the government agency or income-providing source certifies, 
 19.19  upon the request of the homestead occupant, that the homestead 
 19.20  occupant satisfies the disability requirements of this paragraph.
 19.21     Property is classified and assessed pursuant to clause (1) 
 19.22  only if the commissioner of economic security revenue certifies 
 19.23  to the assessor that the homestead occupant satisfies the 
 19.24  requirements of this paragraph.  Once the initial application is 
 19.25  made and approved by the commissioner, no further applications 
 19.26  are required, unless the property is sold, there is a change in 
 19.27  occupancy, or the occupant's vision changes.  Failure to notify 
 19.28  the commissioner within 60 days that the property no longer 
 19.29  qualifies shall result in a penalty provided under section 
 19.30  273.124, subdivision 13, computed on the basis of the class 1b 
 19.31  benefits for the property, and the property shall lose its 
 19.32  current class 1b classification.  If the commissioner determines 
 19.33  that the homestead occupant no longer satisfies the requirements 
 19.34  of this paragraph, the commissioner shall notify the county 
 19.35  assessor. 
 19.36     Permanently and totally disabled for the purpose of this 
 20.1   subdivision means a condition which is permanent in nature and 
 20.2   totally incapacitates the person from working at an occupation 
 20.3   which brings the person an income.  The first $32,000 market 
 20.4   value of class 1b property has a net class rate of .45 percent 
 20.5   of its market value.  The remaining market value of class 1b 
 20.6   property has a class rate using the rates for class 1a or class 
 20.7   2a property, whichever is appropriate, of similar market value.  
 20.8      (c) Class 1c property is commercial use real property that 
 20.9   abuts a lakeshore line and is devoted to temporary and seasonal 
 20.10  residential occupancy for recreational purposes but not devoted 
 20.11  to commercial purposes for more than 250 days in the year 
 20.12  preceding the year of assessment, and that includes a portion 
 20.13  used as a homestead by the owner, which includes a dwelling 
 20.14  occupied as a homestead by a shareholder of a corporation that 
 20.15  owns the resort or, a partner in a partnership that owns the 
 20.16  resort, or a member of a limited liability company that owns the 
 20.17  resort even if the title to the homestead is held by the 
 20.18  corporation or, partnership, or limited liability company.  For 
 20.19  purposes of this clause, property is devoted to a commercial 
 20.20  purpose on a specific day if any portion of the property, 
 20.21  excluding the portion used exclusively as a homestead, is used 
 20.22  for residential occupancy and a fee is charged for residential 
 20.23  occupancy.  The first $500,000 of market value of class 1c 
 20.24  property has a class rate of one percent, and the remaining 
 20.25  market value of class 1c property has a class rate of one 
 20.26  percent, with the following limitation:  the area of the 
 20.27  property must not exceed 100 feet of lakeshore footage for each 
 20.28  cabin or campsite located on the property up to a total of 800 
 20.29  feet and 500 feet in depth, measured away from the lakeshore.  
 20.30  If any portion of the class 1c resort property is classified as 
 20.31  class 4c under subdivision 25, the entire property must meet the 
 20.32  requirements of subdivision 25, paragraph (d), clause (1), to 
 20.33  qualify for class 1c treatment under this paragraph. 
 20.34     (d) Class 1d property includes structures that meet all of 
 20.35  the following criteria: 
 20.36     (1) the structure is located on property that is classified 
 21.1   as agricultural property under section 273.13, subdivision 23; 
 21.2      (2) the structure is occupied exclusively by seasonal farm 
 21.3   workers during the time when they work on that farm, and the 
 21.4   occupants are not charged rent for the privilege of occupying 
 21.5   the property, provided that use of the structure for storage of 
 21.6   farm equipment and produce does not disqualify the property from 
 21.7   classification under this paragraph; 
 21.8      (3) the structure meets all applicable health and safety 
 21.9   requirements for the appropriate season; and 
 21.10     (4) the structure is not salable as residential property 
 21.11  because it does not comply with local ordinances relating to 
 21.12  location in relation to streets or roads. 
 21.13     The market value of class 1d property has the same class 
 21.14  rates as class 1a property under paragraph (a). 
 21.15     <h>[EFFECTIVE DATE.]</h> Paragraph (b) of this section is 
 21.16  effective for taxes payable in 2005 and thereafter. 
 21.17     Paragraph (c) of this section is effective for taxes 
 21.18  payable in 2004 and thereafter. 
 21.19     Sec. 11.  [275.75] [CHARTER EXEMPTION FOR AID LOSS.] 
 21.20     Notwithstanding any other provision of a municipal charter 
 21.21  which limits ad valorem taxes to a lesser amount, or which would 
 21.22  require voter approval for any increase, a municipality may 
 21.23  increase its levy in any payable year by an amount equal to the 
 21.24  reduction in the amount of aid it is certified to receive under 
 21.25  sections 477A.011 to 477A.03 for that same payable year compared 
 21.26  to the amount certified in the previous year.  The levy increase 
 21.27  is a permanent increase in the municipality's levy authority. 
 21.28     <h>[EFFECTIVE DATE.]</h> This section is effective for aids levied 
 21.29  in calendar year 2003, payable in 2004, and thereafter. 
 21.30     Sec. 12.  Minnesota Statutes 2002, section 278.01, 
 21.31  subdivision 4, is amended to read: 
 21.32     Subd. 4.  [FILING OF APPEAL DEADLINE; EXCEPTION.] 
 21.33  Notwithstanding the March 31 April 30 date in subdivision 1, 
 21.34  whenever the exempt status, valuation, or classification of real 
 21.35  or personal property is changed other than by an abatement or a 
 21.36  court decision, and the owner responsible for payment of the tax 
 22.1   is not given notice of the change until after January 31 
 22.2   February 28 of the year the tax is payable or after July 1 in 
 22.3   the case of property subject to section 273.125, subdivision 4, 
 22.4   an eligible petitioner, as defined and limited in subdivision 1, 
 22.5   has 60 days from the date of mailing of the notice to initiate 
 22.6   an appeal of the property's exempt status, classification, or 
 22.7   valuation change under this chapter. 
 22.8      <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
 22.9   payable in 2003 and thereafter. 
 22.10     Sec. 13.  Minnesota Statutes 2002, section 290A.03, 
 22.11  subdivision 8, is amended to read: 
 22.12     Subd. 8.  [CLAIMANT.] (a) "Claimant" means a person, other 
 22.13  than a dependent, as defined under sections 151 and 152 of the 
 22.14  Internal Revenue Code disregarding section 152(b)(3) of the 
 22.15  Internal Revenue Code, who filed a claim authorized by this 
 22.16  chapter and who was a resident of this state as provided in 
 22.17  chapter 290 during the calendar year for which the claim for 
 22.18  relief was filed. 
 22.19     (b) In the case of a claim relating to rent constituting 
 22.20  property taxes, the claimant shall have resided in a rented or 
 22.21  leased unit on which ad valorem taxes or payments made in lieu 
 22.22  of ad valorem taxes, including payments of special assessments 
 22.23  imposed in lieu of ad valorem taxes, are payable at some time 
 22.24  during the calendar year covered by the claim.  
 22.25     (c) "Claimant" shall not include a resident of a nursing 
 22.26  home, intermediate care facility, or long-term residential 
 22.27  facility, or a facility that accepts group residential housing 
 22.28  payments whose rent constituting property taxes is paid pursuant 
 22.29  to the supplemental security income program under title XVI of 
 22.30  the Social Security Act, the Minnesota supplemental aid program 
 22.31  under sections 256D.35 to 256D.54, the medical assistance 
 22.32  program pursuant to title XIX of the Social Security Act, or the 
 22.33  general assistance medical care program pursuant to section 
 22.34  256D.03, subdivision 3, or the group residential housing program 
 22.35  under chapter 256I. 
 22.36  If only a portion of the rent constituting property taxes is 
 23.1   paid by these programs, the resident shall be a claimant for 
 23.2   purposes of this chapter, but the refund calculated pursuant to 
 23.3   section 290A.04 shall be multiplied by a fraction, the numerator 
 23.4   of which is income as defined in subdivision 3, paragraphs (1) 
 23.5   and (2), reduced by the total amount of income from the above 
 23.6   sources other than vendor payments under the medical assistance 
 23.7   program or the general assistance medical care program and the 
 23.8   denominator of which is income as defined in subdivision 3, 
 23.9   paragraphs (1) and (2), plus vendor payments under the medical 
 23.10  assistance program or the general assistance medical care 
 23.11  program, to determine the allowable refund pursuant to this 
 23.12  chapter. 
 23.13     (d) Notwithstanding paragraph (c), if the claimant was a 
 23.14  resident of the nursing home, intermediate care facility or, 
 23.15  long-term residential facility, or facility for which the rent 
 23.16  was paid for the claimant by the group residential housing 
 23.17  program for only a portion of the calendar year covered by the 
 23.18  claim, the claimant may compute rent constituting property taxes 
 23.19  by disregarding the rent constituting property taxes from the 
 23.20  nursing home, intermediate care facility, or long-term 
 23.21  residential facility and use only that amount of rent 
 23.22  constituting property taxes or property taxes payable relating 
 23.23  to that portion of the year when the claimant was not in the 
 23.24  facility.  The claimant's household income is the income for the 
 23.25  entire calendar year covered by the claim.  
 23.26     (e) In the case of a claim for rent constituting property 
 23.27  taxes of a part-year Minnesota resident, the income and rental 
 23.28  reflected in this computation shall be for the period of 
 23.29  Minnesota residency only.  Any rental expenses paid which may be 
 23.30  reflected in arriving at federal adjusted gross income cannot be 
 23.31  utilized for this computation.  When two individuals of a 
 23.32  household are able to meet the qualifications for a claimant, 
 23.33  they may determine among them as to who the claimant shall be. 
 23.34  If they are unable to agree, the matter shall be referred to the 
 23.35  commissioner of revenue whose decision shall be final.  If a 
 23.36  homestead property owner was a part-year Minnesota resident, the 
 24.1   income reflected in the computation made pursuant to section 
 24.2   290A.04 shall be for the entire calendar year, including income 
 24.3   not assignable to Minnesota. 
 24.4      (f) If a homestead is occupied by two or more renters, who 
 24.5   are not husband and wife, the rent shall be deemed to be paid 
 24.6   equally by each, and separate claims shall be filed by each.  
 24.7   The income of each shall be each renter's household income for 
 24.8   purposes of computing the amount of credit to be allowed. 
 24.9      <h>[EFFECTIVE DATE.]</h> This section is effective for claims 
 24.10  based on rent paid in 2003 and thereafter. 
 24.11     Sec. 14.  Laws 1989, chapter 211, section 8, subdivision 2, 
 24.12  as amended by Laws 2002, chapter 390, section 24, is amended to 
 24.13  read: 
 24.14     Subd. 2.  [OPERATION OF DISTRICT.] (a) A hospital district 
 24.15  created under this section shall be subject to Minnesota 
 24.16  Statutes, sections 447.32, except subdivision 1, to 447.41, and 
 24.17  except as provided otherwise in this act.  
 24.18     (b) A hospital district created under this section is a 
 24.19  municipal corporation and a political subdivision of the state. 
 24.20     <h>[EFFECTIVE DATE.]</h> This section is effective upon compliance 
 24.21  with Minnesota Statutes, section 645.021, subdivision 3, by the 
 24.22  governing body of the Cook county hospital district. 
 24.23     Sec. 15.  Laws 1989, chapter 211, section 8, subdivision 4, 
 24.24  as amended by Laws 2002, chapter 390, section 24, is amended to 
 24.25  read: 
 24.26     Subd. 4.  [TAX LEVY.] The tax levied under Minnesota 
 24.27  Statutes, section 447.34, shall not exceed $300,000 in any year, 
 24.28  and its for taxes levied in 2002.  For taxes levied in 2003 and 
 24.29  subsequent years, the tax must not exceed the lesser of: 
 24.30     (1) the product of the hospital district's property tax 
 24.31  levy limitation for the previous year determined under this 
 24.32  subdivision, multiplied by 103 percent; or 
 24.33     (2) the product of the hospital district's property tax 
 24.34  levy limitation for the previous year determined under this 
 24.35  subdivision multiplied by the ratio of the most recent available 
 24.36  annual medical care expenditure category of the revised Consumer 
 25.1   Price Index, U.S. citywide average, for all urban consumers 
 25.2   prepared by the United States Department of Labor to the same 
 25.3   annual index for the previous year. 
 25.4      The proceeds of the tax may be used for all purposes of the 
 25.5   hospital district. 
 25.6      <h>[EFFECTIVE DATE.]</h> This section is effective upon compliance 
 25.7   with Minnesota Statutes, section 645.021, subdivision 3, by the 
 25.8   governing body of the Cook county hospital district. 
 25.9                              ARTICLE 3 
 25.10            DEPARTMENT INCOME, CORPORATE FRANCHISE, AND 
 25.11                       ESTATE TAX INITIATIVES 
 25.12     Section 1.  Minnesota Statutes 2002, section 289A.10, 
 25.13  subdivision 1, is amended to read: 
 25.14     Subdivision 1.  [RETURN REQUIRED.] In the case of a 
 25.15  decedent who has an interest in property with a situs in 
 25.16  Minnesota, the personal representative must submit a Minnesota 
 25.17  estate tax return to the commissioner, on a form prescribed by 
 25.18  the commissioner, if: 
 25.19     (1) a federal estate tax return is required to be filed; or 
 25.20     (2) the federal gross estate exceeds $700,000 for estates 
 25.21  of decedents dying after December 31, 2001, and before January 
 25.22  1, 2004; $850,000 for estates of decedents dying after December 
 25.23  31, 2003, and before January 1, 2005; $950,000 for estates of 
 25.24  decedents dying after December 31, 2004, and before January 1, 
 25.25  2006; and $1,000,000 for estates of decedents dying after 
 25.26  December 31, 2005. 
 25.27     The return must contain a computation of the Minnesota 
 25.28  estate tax due.  The return must be signed by the personal 
 25.29  representative. 
 25.30     <h>[EFFECTIVE DATE.]</h> This section is effective for estates of 
 25.31  decedents dying after December 31, 2002. 
 25.32     Sec. 2.  Minnesota Statutes 2002, section 289A.19, 
 25.33  subdivision 4, is amended to read: 
 25.34     Subd. 4.  [ESTATE TAX RETURNS.] When in the commissioner's 
 25.35  judgment good cause exists, the commissioner may extend the time 
 25.36  for filing an estate tax return for not more than six months.  
 26.1   When an extension to file the federal estate tax return has been 
 26.2   granted under section 6081 of the Internal Revenue Code, the 
 26.3   time for filing the estate tax return is extended for that 
 26.4   period.  
 26.5      <h>[EFFECTIVE DATE.]</h> This section is effective for estates of 
 26.6   decedents dying after December 31, 2001. 
 26.7      Sec. 3.  Minnesota Statutes 2002, section 289A.31, is 
 26.8   amended by adding a subdivision to read: 
 26.9      Subd. 8.  [LIABILITY OF VENDOR FOR REPAYMENT OF REFUND.] If 
 26.10  an individual income tax refund resulting from claiming an 
 26.11  education credit under section 290.0674 is paid by means of 
 26.12  directly depositing the proceeds of the refund into a bank 
 26.13  account controlled by the vendor of the product or service upon 
 26.14  which the education credit is based, and the commissioner 
 26.15  subsequently disallows the credit, the commissioner may seek 
 26.16  repayment of the refund from the vendor.  The amount of the 
 26.17  repayment must be assessed and collected in the same time and 
 26.18  manner as an erroneous refund under section 289A.37, subdivision 
 26.19  2. 
 26.20     <h>[EFFECTIVE DATE.]</h> This section is effective for refunds 
 26.21  paid to accounts controlled by a vendor on or after the day 
 26.22  following final enactment. 
 26.23     Sec. 4.  Minnesota Statutes 2002, section 289A.56, 
 26.24  subdivision 3, is amended to read: 
 26.25     Subd. 3.  [WITHHOLDING TAX, ENTERTAINER WITHHOLDING TAX, 
 26.26  WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, ESTATE 
 26.27  TAX, AND SALES TAX OVERPAYMENTS.] When a refund is due for 
 26.28  overpayments of withholding tax, entertainer withholding tax, or 
 26.29  withholding from payments to out-of-state contractors, or estate 
 26.30  tax, interest is computed from the date of payment to the date 
 26.31  the refund is paid or credited.  For purposes of this 
 26.32  subdivision, the date of payment is the later of the date the 
 26.33  tax was finally due or was paid. 
 26.34     For the purposes of computing interest on estate tax 
 26.35  refunds, interest is paid from the later of the date of 
 26.36  overpayment, the date the estate tax return is due, or the date 
 27.1   the original estate tax return is filed to the date the refund 
 27.2   is paid. 
 27.3      For purposes of computing interest on sales and use tax 
 27.4   refunds, interest is paid from the date of payment to the date 
 27.5   the refund is paid or credited, if the refund claim includes a 
 27.6   detailed schedule reflecting the tax periods covered in the 
 27.7   claim.  If the refund claim submitted does not include a 
 27.8   detailed schedule reflecting the tax periods covered in the 
 27.9   claim, interest is computed from the date the claim was filed. 
 27.10     <h>[EFFECTIVE DATE.]</h> This section is effective for estates of 
 27.11  decedents dying after December 31, 2003. 
 27.12     Sec. 5.  Minnesota Statutes 2002, section 289A.60, 
 27.13  subdivision 7, is amended to read: 
 27.14     Subd. 7.  [PENALTY FOR FRIVOLOUS RETURN.] If a taxpayer 
 27.15  files what purports to be a tax return or a claim for refund but 
 27.16  which does not contain information on which the substantial 
 27.17  correctness of the purported return or claim for refund may be 
 27.18  judged or contains information that on its face shows that the 
 27.19  purported return or claim for refund is substantially incorrect 
 27.20  and the conduct is due to a position that is frivolous or a 
 27.21  desire that appears on the purported return or claim for refund 
 27.22  to delay or impede the administration of Minnesota tax laws, 
 27.23  then the individual shall pay a penalty of $500 the greater of 
 27.24  $1,000 or 25 percent of the amount of tax required to be shown 
 27.25  on the return.  In a proceeding involving the issue of whether 
 27.26  or not a person is liable for this penalty, the burden of proof 
 27.27  is on the commissioner.  
 27.28     <h>[EFFECTIVE DATE.]</h> This section is effective for returns 
 27.29  filed after December 31, 2003. 
 27.30     Sec. 6.  Minnesota Statutes 2002, section 290.01, 
 27.31  subdivision 19b, is amended to read: 
 27.32     Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
 27.33  individuals, estates, and trusts, there shall be subtracted from 
 27.34  federal taxable income: 
 27.35     (1) interest income on obligations of any authority, 
 27.36  commission, or instrumentality of the United States to the 
 28.1   extent includable in taxable income for federal income tax 
 28.2   purposes but exempt from state income tax under the laws of the 
 28.3   United States; 
 28.4      (2) if included in federal taxable income, the amount of 
 28.5   any overpayment of income tax to Minnesota or to any other 
 28.6   state, for any previous taxable year, whether the amount is 
 28.7   received as a refund or as a credit to another taxable year's 
 28.8   income tax liability; 
 28.9      (3) the amount paid to others, less the amount used to 
 28.10  claim the credit allowed under section 290.0674, not to exceed 
 28.11  $1,625 for each qualifying child in grades kindergarten to 6 and 
 28.12  $2,500 for each qualifying child in grades 7 to 12, for tuition, 
 28.13  textbooks, and transportation of each qualifying child in 
 28.14  attending an elementary or secondary school situated in 
 28.15  Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 
 28.16  wherein a resident of this state may legally fulfill the state's 
 28.17  compulsory attendance laws, which is not operated for profit, 
 28.18  and which adheres to the provisions of the Civil Rights Act of 
 28.19  1964 and chapter 363.  For the purposes of this clause, 
 28.20  "tuition" includes fees or tuition as defined in section 
 28.21  290.0674, subdivision 1, clause (1).  As used in this clause, 
 28.22  "textbooks" includes books and other instructional materials and 
 28.23  equipment purchased or leased for use in elementary and 
 28.24  secondary schools in teaching only those subjects legally and 
 28.25  commonly taught in public elementary and secondary schools in 
 28.26  this state.  Equipment expenses qualifying for deduction 
 28.27  includes expenses as defined and limited in section 290.0674, 
 28.28  subdivision 1, clause (3).  "Textbooks" does not include 
 28.29  instructional books and materials used in the teaching of 
 28.30  religious tenets, doctrines, or worship, the purpose of which is 
 28.31  to instill such tenets, doctrines, or worship, nor does it 
 28.32  include books or materials for, or transportation to, 
 28.33  extracurricular activities including sporting events, musical or 
 28.34  dramatic events, speech activities, driver's education, or 
 28.35  similar programs.  For purposes of the subtraction provided by 
 28.36  this clause, "qualifying child" has the meaning given in section 
 29.1   32(c)(3) of the Internal Revenue Code; 
 29.2      (4) income as provided under section 290.0802; 
 29.3      (5) to the extent included in federal adjusted gross 
 29.4   income, income realized on disposition of property exempt from 
 29.5   tax under section 290.491; 
 29.6      (6) to the extent not deducted in determining federal 
 29.7   taxable income or used to claim the long-term care insurance 
 29.8   credit under section 290.0672, the amount paid for health 
 29.9   insurance of self-employed individuals as determined under 
 29.10  section 162(l) of the Internal Revenue Code, except that the 
 29.11  percent limit does not apply.  If the individual deducted 
 29.12  insurance payments under section 213 of the Internal Revenue 
 29.13  Code of 1986, the subtraction under this clause must be reduced 
 29.14  by the lesser of: 
 29.15     (i) the total itemized deductions allowed under section 
 29.16  63(d) of the Internal Revenue Code, less state, local, and 
 29.17  foreign income taxes deductible under section 164 of the 
 29.18  Internal Revenue Code and the standard deduction under section 
 29.19  63(c) of the Internal Revenue Code; or 
 29.20     (ii) the lesser of (A) the amount of insurance qualifying 
 29.21  as "medical care" under section 213(d) of the Internal Revenue 
 29.22  Code to the extent not deducted under section 162(1) of the 
 29.23  Internal Revenue Code or excluded from income or (B) the total 
 29.24  amount deductible for medical care under section 213(a); 
 29.25     (7) the exemption amount allowed under Laws 1995, chapter 
 29.26  255, article 3, section 2, subdivision 3; 
 29.27     (8) to the extent included in federal taxable income, 
 29.28  postservice benefits for youth community service under section 
 29.29  124D.42 for volunteer service under United States Code, title 
 29.30  42, sections 12601 to 12604; 
 29.31     (9) (7) to the extent not deducted in determining federal 
 29.32  taxable income by an individual who does not itemize deductions 
 29.33  for federal income tax purposes for the taxable year, an amount 
 29.34  equal to 50 percent of the excess of charitable contributions 
 29.35  allowable as a deduction for the taxable year under section 
 29.36  170(a) of the Internal Revenue Code over $500; 
 30.1      (10) (8) for taxable years beginning before January 1, 
 30.2   2008, the amount of the federal small ethanol producer credit 
 30.3   allowed under section 40(a)(3) of the Internal Revenue Code 
 30.4   which is included in gross income under section 87 of the 
 30.5   Internal Revenue Code; 
 30.6      (11) (9) for individuals who are allowed a federal foreign 
 30.7   tax credit for taxes that do not qualify for a credit under 
 30.8   section 290.06, subdivision 22, an amount equal to the carryover 
 30.9   of subnational foreign taxes for the taxable year, but not to 
 30.10  exceed the total subnational foreign taxes reported in claiming 
 30.11  the foreign tax credit.  For purposes of this clause, "federal 
 30.12  foreign tax credit" means the credit allowed under section 27 of 
 30.13  the Internal Revenue Code, and "carryover of subnational foreign 
 30.14  taxes" equals the carryover allowed under section 904(c) of the 
 30.15  Internal Revenue Code minus national level foreign taxes to the 
 30.16  extent they exceed the federal foreign tax credit; and 
 30.17     (12) (10) in each of the five tax years immediately 
 30.18  following the tax year in which an addition is required under 
 30.19  subdivision 19a, clause (7), an amount equal to one-fifth of the 
 30.20  delayed depreciation.  For purposes of this clause, "delayed 
 30.21  depreciation" means the amount of the addition made by the 
 30.22  taxpayer under subdivision 19a, clause (7), minus the positive 
 30.23  value of any net operating loss under section 172 of the 
 30.24  Internal Revenue Code generated for the tax year of the 
 30.25  addition.  The resulting delayed depreciation cannot be less 
 30.26  than zero. 
 30.27     <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
 30.28  beginning after December 31, 2003. 
 30.29     Sec. 7.  Minnesota Statutes 2002, section 290.01, 
 30.30  subdivision 19d, is amended to read: 
 30.31     Subd. 19d.  [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 
 30.32  TAXABLE INCOME.] For corporations, there shall be subtracted 
 30.33  from federal taxable income after the increases provided in 
 30.34  subdivision 19c:  
 30.35     (1) the amount of foreign dividend gross-up added to gross 
 30.36  income for federal income tax purposes under section 78 of the 
 31.1   Internal Revenue Code; 
 31.2      (2) the amount of salary expense not allowed for federal 
 31.3   income tax purposes due to claiming the federal jobs credit 
 31.4   under section 51 of the Internal Revenue Code; 
 31.5      (3) any dividend (not including any distribution in 
 31.6   liquidation) paid within the taxable year by a national or state 
 31.7   bank to the United States, or to any instrumentality of the 
 31.8   United States exempt from federal income taxes, on the preferred 
 31.9   stock of the bank owned by the United States or the 
 31.10  instrumentality; 
 31.11     (4) amounts disallowed for intangible drilling costs due to 
 31.12  differences between this chapter and the Internal Revenue Code 
 31.13  in taxable years beginning before January 1, 1987, as follows: 
 31.14     (i) to the extent the disallowed costs are represented by 
 31.15  physical property, an amount equal to the allowance for 
 31.16  depreciation under Minnesota Statutes 1986, section 290.09, 
 31.17  subdivision 7, subject to the modifications contained in 
 31.18  subdivision 19e; and 
 31.19     (ii) to the extent the disallowed costs are not represented
 31.20  by physical property, an amount equal to the allowance for cost 
 31.21  depletion under Minnesota Statutes 1986, section 290.09, 
 31.22  subdivision 8; 
 31.23     (5) the deduction for capital losses pursuant to sections 
 31.24  1211 and 1212 of the Internal Revenue Code, except that: 
 31.25     (i) for capital losses incurred in taxable years beginning 
 31.26  after December 31, 1986, capital loss carrybacks shall not be 
 31.27  allowed; 
 31.28     (ii) for capital losses incurred in taxable years beginning 
 31.29  after December 31, 1986, a capital loss carryover to each of the 
 31.30  15 taxable years succeeding the loss year shall be allowed; 
 31.31     (iii) for capital losses incurred in taxable years 
 31.32  beginning before January 1, 1987, a capital loss carryback to 
 31.33  each of the three taxable years preceding the loss year, subject 
 31.34  to the provisions of Minnesota Statutes 1986, section 290.16, 
 31.35  shall be allowed; and 
 31.36     (iv) for capital losses incurred in taxable years beginning 
 32.1   before January 1, 1987, a capital loss carryover to each of the 
 32.2   five taxable years succeeding the loss year to the extent such 
 32.3   loss was not used in a prior taxable year and subject to the 
 32.4   provisions of Minnesota Statutes 1986, section 290.16, shall be 
 32.5   allowed; 
 32.6      (6) an amount for interest and expenses relating to income 
 32.7   not taxable for federal income tax purposes, if (i) the income 
 32.8   is taxable under this chapter and (ii) the interest and expenses 
 32.9   were disallowed as deductions under the provisions of section 
 32.10  171(a)(2), 265 or 291 of the Internal Revenue Code in computing 
 32.11  federal taxable income; 
 32.12     (7) in the case of mines, oil and gas wells, other natural 
 32.13  deposits, and timber for which percentage depletion was 
 32.14  disallowed pursuant to subdivision 19c, clause (11), a 
 32.15  reasonable allowance for depletion based on actual cost.  In the 
 32.16  case of leases the deduction must be apportioned between the 
 32.17  lessor and lessee in accordance with rules prescribed by the 
 32.18  commissioner.  In the case of property held in trust, the 
 32.19  allowable deduction must be apportioned between the income 
 32.20  beneficiaries and the trustee in accordance with the pertinent 
 32.21  provisions of the trust, or if there is no provision in the 
 32.22  instrument, on the basis of the trust's income allocable to 
 32.23  each; 
 32.24     (8) for certified pollution control facilities placed in 
 32.25  service in a taxable year beginning before December 31, 1986, 
 32.26  and for which amortization deductions were elected under section 
 32.27  169 of the Internal Revenue Code of 1954, as amended through 
 32.28  December 31, 1985, an amount equal to the allowance for 
 32.29  depreciation under Minnesota Statutes 1986, section 290.09, 
 32.30  subdivision 7; 
 32.31     (9) amounts included in federal taxable income that are due 
 32.32  to refunds of income, excise, or franchise taxes based on net 
 32.33  income or related minimum taxes paid by the corporation to 
 32.34  Minnesota, another state, a political subdivision of another 
 32.35  state, the District of Columbia, or a foreign country or 
 32.36  possession of the United States to the extent that the taxes 
 33.1   were added to federal taxable income under section 290.01, 
 33.2   subdivision 19c, clause (1), in a prior taxable year; 
 33.3      (10) 80 percent of royalties, fees, or other like income 
 33.4   accrued or received from a foreign operating corporation or a 
 33.5   foreign corporation which is part of the same unitary business 
 33.6   as the receiving corporation; 
 33.7      (11) income or gains from the business of mining as defined 
 33.8   in section 290.05, subdivision 1, clause (a), that are not 
 33.9   subject to Minnesota franchise tax; 
 33.10     (12) the amount of handicap access expenditures in the 
 33.11  taxable year which are not allowed to be deducted or capitalized 
 33.12  under section 44(d)(7) of the Internal Revenue Code; 
 33.13     (13) the amount of qualified research expenses not allowed 
 33.14  for federal income tax purposes under section 280C(c) of the 
 33.15  Internal Revenue Code, but only to the extent that the amount 
 33.16  exceeds the amount of the credit allowed under section 290.068; 
 33.17     (14) the amount of salary expenses not allowed for federal 
 33.18  income tax purposes due to claiming the Indian employment credit 
 33.19  under section 45A(a) of the Internal Revenue Code; 
 33.20     (15) the amount of any refund of environmental taxes paid 
 33.21  under section 59A of the Internal Revenue Code; 
 33.22     (16) for taxable years beginning before January 1, 2008, 
 33.23  the amount of the federal small ethanol producer credit allowed 
 33.24  under section 40(a)(3) of the Internal Revenue Code which is 
 33.25  included in gross income under section 87 of the Internal 
 33.26  Revenue Code; 
 33.27     (17) for a corporation whose foreign sales corporation, as 
 33.28  defined in section 922 of the Internal Revenue Code, constituted 
 33.29  a foreign operating corporation during any taxable year ending 
 33.30  before January 1, 1995, and a return was filed by August 15, 
 33.31  1996, claiming the deduction under this section 290.21, 
 33.32  subdivision 4, for income received from the foreign operating 
 33.33  corporation, an amount equal to 1.23 multiplied by the amount of 
 33.34  income excluded under section 114 of the Internal Revenue Code, 
 33.35  provided the income is not income of a foreign operating 
 33.36  company; 
 34.1      (18) any decrease in subpart F income, as defined in 
 34.2   section 952(a) of the Internal Revenue Code, for the taxable 
 34.3   year when subpart F income is calculated without regard to the 
 34.4   provisions of section 614 of Public Law Number 107-147; and 
 34.5      (19) in each of the five tax years immediately following 
 34.6   the tax year in which an addition is required under subdivision 
 34.7   19c, clause (16), an amount equal to one-fifth of the delayed 
 34.8   depreciation.  For purposes of this clause, "delayed 
 34.9   depreciation" means the amount of the addition made by the 
 34.10  taxpayer under subdivision 19c, clause (16).  The resulting 
 34.11  delayed depreciation cannot be less than zero. 
 34.12     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 34.13  following final enactment. 
 34.14     Sec. 8.  Minnesota Statutes 2002, section 290.06, 
 34.15  subdivision 2c, is amended to read: 
 34.16     Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
 34.17  AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
 34.18  married individuals filing joint returns and surviving spouses 
 34.19  as defined in section 2(a) of the Internal Revenue Code must be 
 34.20  computed by applying to their taxable net income the following 
 34.21  schedule of rates: 
 34.22     (1) On the first $25,680, 5.35 percent; 
 34.23     (2) On all over $25,680, but not over $102,030, 7.05 
 34.24  percent; 
 34.25     (3) On all over $102,030, 7.85 percent. 
 34.26     Married individuals filing separate returns, estates, and 
 34.27  trusts must compute their income tax by applying the above rates 
 34.28  to their taxable income, except that the income brackets will be 
 34.29  one-half of the above amounts.  
 34.30     (b) The income taxes imposed by this chapter upon unmarried 
 34.31  individuals must be computed by applying to taxable net income 
 34.32  the following schedule of rates: 
 34.33     (1) On the first $17,570, 5.35 percent; 
 34.34     (2) On all over $17,570, but not over $57,710, 7.05 
 34.35  percent; 
 34.36     (3) On all over $57,710, 7.85 percent. 
 35.1      (c) The income taxes imposed by this chapter upon unmarried 
 35.2   individuals qualifying as a head of household as defined in 
 35.3   section 2(b) of the Internal Revenue Code must be computed by 
 35.4   applying to taxable net income the following schedule of rates: 
 35.5      (1) On the first $21,630, 5.35 percent; 
 35.6      (2) On all over $21,630, but not over $86,910, 7.05 
 35.7   percent; 
 35.8      (3) On all over $86,910, 7.85 percent. 
 35.9      (d) In lieu of a tax computed according to the rates set 
 35.10  forth in this subdivision, the tax of any individual taxpayer 
 35.11  whose taxable net income for the taxable year is less than an 
 35.12  amount determined by the commissioner must be computed in 
 35.13  accordance with tables prepared and issued by the commissioner 
 35.14  of revenue based on income brackets of not more than $100.  The 
 35.15  amount of tax for each bracket shall be computed at the rates 
 35.16  set forth in this subdivision, provided that the commissioner 
 35.17  may disregard a fractional part of a dollar unless it amounts to 
 35.18  50 cents or more, in which case it may be increased to $1. 
 35.19     (e) An individual who is not a Minnesota resident for the 
 35.20  entire year must compute the individual's Minnesota income tax 
 35.21  as provided in this subdivision.  After the application of the 
 35.22  nonrefundable credits provided in this chapter, the tax 
 35.23  liability must then be multiplied by a fraction in which:  
 35.24     (1) the numerator is the individual's Minnesota source 
 35.25  federal adjusted gross income as defined in section 62 of the 
 35.26  Internal Revenue Code and increased by the additions required 
 35.27  under section 290.01, subdivision 19a, clauses (1), (5), and 
 35.28  (6), and reduced by the Minnesota assignable portion of the 
 35.29  subtraction for United States government interest under section 
 35.30  290.01, subdivision 19b, clause (1), after applying the 
 35.31  allocation and assignability provisions of section 290.081, 
 35.32  clause (a), or 290.17; and 
 35.33     (2) the denominator is the individual's federal adjusted 
 35.34  gross income as defined in section 62 of the Internal Revenue 
 35.35  Code of 1986, increased by the amounts specified in section 
 35.36  290.01, subdivision 19a, clauses (1), (5), and (6), and reduced 
 36.1   by the amounts specified in section 290.01, subdivision 19b, 
 36.2   clause (1). 
 36.3      <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
 36.4   beginning after December 31, 2002. 
 36.5      Sec. 9.  Minnesota Statutes 2002, section 290.0671, 
 36.6   subdivision 1, is amended to read: 
 36.7      Subdivision 1.  [CREDIT ALLOWED.] (a) An individual is 
 36.8   allowed a credit against the tax imposed by this chapter equal 
 36.9   to a percentage of earned income.  To receive a credit, a 
 36.10  taxpayer must be eligible for a credit under section 32 of the 
 36.11  Internal Revenue Code.  
 36.12     (b) For individuals with no qualifying children, the credit 
 36.13  equals 1.9125 percent of the first $4,620 of earned income.  The 
 36.14  credit is reduced by 1.9125 percent of earned income or modified 
 36.15  adjusted gross income, whichever is greater, in excess of 
 36.16  $5,770, but in no case is the credit less than zero. 
 36.17     (c) For individuals with one qualifying child, the credit 
 36.18  equals 8.5 percent of the first $6,920 of earned income and 8.5 
 36.19  percent of earned income over $12,080 but less than $13,450.  
 36.20  The credit is reduced by 5.73 percent of earned income or 
 36.21  modified adjusted gross income, whichever is greater, in excess 
 36.22  of $15,080, but in no case is the credit less than zero. 
 36.23     (d) For individuals with two or more qualifying children, 
 36.24  the credit equals ten percent of the first $9,720 of earned 
 36.25  income and 20 percent of earned income over $14,860 but less 
 36.26  than $16,800.  The credit is reduced by 10.3 percent of earned 
 36.27  income or modified adjusted gross income, whichever is greater, 
 36.28  in excess of $17,890, but in no case is the credit less than 
 36.29  zero. 
 36.30     (e) For a nonresident or part-year resident, the credit 
 36.31  must be allocated based on the percentage calculated under 
 36.32  section 290.06, subdivision 2c, paragraph (e). 
 36.33     (f) For a person who was a resident for the entire tax year 
 36.34  and has earned income not subject to tax under this chapter, the 
 36.35  credit must be allocated based on the ratio of federal adjusted 
 36.36  gross income reduced by the earned income not subject to tax 
 37.1   under this chapter over federal adjusted gross income. 
 37.2      (g) For tax years beginning after December 31, 2001, and 
 37.3   before December 31, 2004, the $5,770 in paragraph (b) is 
 37.4   increased to $6,770, the $15,080 in paragraph (c) is increased 
 37.5   to $16,080, and the $17,890 in paragraph (d) is increased to 
 37.6   $18,890, after being adjusted for inflation under subdivision 7, 
 37.7   are each increased by $1,000 for married taxpayers filing joint 
 37.8   returns. 
 37.9      (h) For tax years beginning after December 31, 2004, and 
 37.10  before December 31, 2007, the $5,770 in paragraph (b) is 
 37.11  increased to $7,770, the $15,080 in paragraph (c) is increased 
 37.12  to $17,080, and the $17,890 in paragraph (d) is increased to 
 37.13  $19,890, after being adjusted for inflation under subdivision 7, 
 37.14  are each increased by $2,000 for married taxpayers filing joint 
 37.15  returns. 
 37.16     (i) For tax years beginning after December 31, 2007, and 
 37.17  before December 31, 2010, the $5,770 in paragraph (b) is 
 37.18  increased to $8,770, the $15,080 in paragraph (c) is increased 
 37.19  to $18,080, and the $17,890 in paragraph (d) is increased to 
 37.20  $20,890, after being adjusted for inflation under subdivision 7, 
 37.21  are each increased by $3,000 for married taxpayers filing joint 
 37.22  returns.  For tax years beginning after December 31, 2008, the 
 37.23  $3,000 is adjusted annually for inflation under subdivision 7. 
 37.24     (j) The commissioner shall construct tables showing the 
 37.25  amount of the credit at various income levels and make them 
 37.26  available to taxpayers.  The tables shall follow the schedule 
 37.27  contained in this subdivision, except that the commissioner may 
 37.28  graduate the transition between income brackets. 
 37.29     <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
 37.30  beginning after December 31, 2002. 
 37.31     Sec. 10.  Minnesota Statutes 2002, section 290.0675, 
 37.32  subdivision 2, is amended to read: 
 37.33     Subd. 2.  [CREDIT ALLOWED.] A married couple filing a joint 
 37.34  return is allowed a credit against the tax imposed under section 
 37.35  290.06.  
 37.36     The minimum taxable income for the married couple to be 
 38.1   eligible for the credit is $25,680, and the minimum earned 
 38.2   income in order for the couple to be eligible for the credit is 
 38.3   $14,250 for each spouse. 
 38.4      <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
 38.5   beginning after December 31, 2002. 
 38.6      Sec. 11.  Minnesota Statutes 2002, section 290.0675, 
 38.7   subdivision 3, is amended to read: 
 38.8      Subd. 3.  [CREDIT AMOUNT.] The credit amount is the 
 38.9   difference between the tax on the couple's joint Minnesota 
 38.10  taxable income under the rates and income levels in section 
 38.11  290.06, subdivision 2c, paragraph (a), as adjusted for the 
 38.12  taxable year by section 290.06, subdivision 2d, and the sum of 
 38.13  the tax under the rates and income levels of section 290.06, 
 38.14  subdivision 2c, paragraph (b), as adjusted for the taxable year 
 38.15  by section 290.06, subdivision 2d, on the earned income of the 
 38.16  lesser-earning spouse, and the tax under the rates and income 
 38.17  levels of section 290.06, subdivision 2c, paragraph (b), as 
 38.18  adjusted for the taxable year by section 290.06, subdivision 2d, 
 38.19  on the couple's joint Minnesota taxable income, minus the earned 
 38.20  income of the lesser-earning spouse. 
 38.21     The commissioner of revenue shall prepare and make 
 38.22  available to taxpayers a comprehensive table showing the credit 
 38.23  under this section at brackets of earnings of the lesser-earning 
 38.24  spouse and joint taxable income.  The brackets of earnings shall 
 38.25  not be more than $2,000. 
 38.26     <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
 38.27  beginning after December 31, 2002. 
 38.28     Sec. 12.  Minnesota Statutes 2002, section 290.0679, 
 38.29  subdivision 2, is amended to read: 
 38.30     Subd. 2.  [CONDITIONS FOR ASSIGNMENT.] A qualifying 
 38.31  taxpayer may assign all or part of an anticipated refund for the 
 38.32  current and future taxable years to a financial institution or a 
 38.33  qualifying organization.  A financial institution or qualifying 
 38.34  organization accepting assignment must pay the amount secured by 
 38.35  the assignment to a third-party vendor.  The commissioner of 
 38.36  children, families, and learning shall provide a list of 
 39.1   categories of, upon request from a third-party vendor, certify 
 39.2   that the vendor's products and services that qualify for the 
 39.3   education credit to financial institutions and qualifying 
 39.4   organizations.  A denial of a certification is subject to the 
 39.5   contested case procedure under chapter 14.  A financial 
 39.6   institution or qualifying organization that accepts assignments 
 39.7   under this section must verify as part of the assignment 
 39.8   documentation that the product or service to be provided by the 
 39.9   third-party vendor qualifies has been certified by the 
 39.10  commissioner of children, families, and learning as qualifying 
 39.11  for the education credit.  The amount assigned for the current 
 39.12  and future taxable years may not exceed the maximum allowable 
 39.13  education credit for the current taxable year.  Both the 
 39.14  taxpayer and spouse must consent to the assignment of a refund 
 39.15  from a joint return. 
 39.16     <h>[EFFECTIVE DATE.]</h> This section is effective for assignments 
 39.17  made on or after the day following final enactment. 
 39.18     Sec. 13.  Minnesota Statutes 2002, section 290.0802, 
 39.19  subdivision 1, is amended to read: 
 39.20     Subdivision 1.  [DEFINITIONS.] For purposes of this 
 39.21  section, the following terms have the meanings given. 
 39.22     (a) "Adjusted gross income" means federal adjusted gross 
 39.23  income as used in section 22(d) of the Internal Revenue Code for 
 39.24  the taxable year, plus a lump sum distribution as defined in 
 39.25  section 402(e)(3) of the Internal Revenue Code, and less any 
 39.26  pension, annuity, or disability benefits included in federal 
 39.27  gross income but not subject to state taxation other than the 
 39.28  subtraction allowed under section 290.01, subdivision 19b, 
 39.29  clause (4). 
 39.30     (b) "Disability income" means disability income as defined 
 39.31  in section 22(c)(2)(B)(iii) of the Internal Revenue Code. 
 39.32     (c) "Nontaxable retirement and disability benefits" means 
 39.33  the amount of pension, annuity, or disability benefits that 
 39.34  would be included in the reduction under section 22(c)(3) of the 
 39.35  Internal Revenue Code and pension, annuity, or disability 
 39.36  benefits included in federal gross income but not subject to 
 40.1   state taxation other than the subtraction allowed under section 
 40.2   290.01, subdivision 19b, clause (4). 
 40.3      (d) "Qualified individual" means a qualified individual as 
 40.4   defined in section 22(b) of the Internal Revenue Code. 
 40.5      (e) "Social security benefits above the second federal 
 40.6   threshold" means the amount of social security benefits included 
 40.7   in federal taxable income due to the provisions of section 13215 
 40.8   of the Omnibus Budget Reconciliation Act of 1993, Public Law 
 40.9   Number 103-66. 
 40.10     <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
 40.11  beginning after December 31, 2002. 
 40.12     Sec. 14.  Minnesota Statutes 2002, section 291.005, 
 40.13  subdivision 1, is amended to read: 
 40.14     Subdivision 1.  Unless the context otherwise clearly 
 40.15  requires, the following terms used in this chapter shall have 
 40.16  the following meanings: 
 40.17     (1) "Federal gross estate" means the gross estate of a 
 40.18  decedent as valued and otherwise determined for federal estate 
 40.19  tax purposes by federal taxing authorities pursuant to the 
 40.20  provisions of the Internal Revenue Code. 
 40.21     (2) "Minnesota gross estate" means the federal gross estate 
 40.22  of a decedent after (a) excluding therefrom any property 
 40.23  included therein which has its situs outside Minnesota and 
 40.24  pensions exempt from tax under this chapter pursuant to section 
 40.25  352.15, subdivision 1; 353.15, subdivision 1; 354.10, 
 40.26  subdivision 1; 354B.30; or 354C.165, and (b) including therein 
 40.27  any property omitted from the federal gross estate which is 
 40.28  includable therein, has its situs in Minnesota, and was not 
 40.29  disclosed to federal taxing authorities.  
 40.30     (3) "Personal representative" means the executor, 
 40.31  administrator or other person appointed by the court to 
 40.32  administer and dispose of the property of the decedent.  If 
 40.33  there is no executor, administrator or other person appointed, 
 40.34  qualified, and acting within this state, then any person in 
 40.35  actual or constructive possession of any property having a situs 
 40.36  in this state which is included in the federal gross estate of 
 41.1   the decedent shall be deemed to be a personal representative to 
 41.2   the extent of the property and the Minnesota estate tax due with 
 41.3   respect to the property. 
 41.4      (4) "Resident decedent" means an individual whose domicile 
 41.5   at the time of death was in Minnesota. 
 41.6      (5) "Nonresident decedent" means an individual whose 
 41.7   domicile at the time of death was not in Minnesota. 
 41.8      (6) "Situs of property" means, with respect to real 
 41.9   property, the state or country in which it is located; with 
 41.10  respect to tangible personal property, the state or country in 
 41.11  which it was normally kept or located at the time of the 
 41.12  decedent's death; and with respect to intangible personal 
 41.13  property, the state or country in which the decedent was 
 41.14  domiciled at death. 
 41.15     (7) "Commissioner" means the commissioner of revenue or any 
 41.16  person to whom the commissioner has delegated functions under 
 41.17  this chapter. 
 41.18     (8) "Internal Revenue Code" means the United States 
 41.19  Internal Revenue Code of 1986, as amended through December 31, 
 41.20  2000 2002. 
 41.21     <h>[EFFECTIVE DATE.]</h> This section is effective for estates of 
 41.22  decedents dying after December 31, 2002. 
 41.23     Sec. 15.  Minnesota Statutes 2002, section 291.03, 
 41.24  subdivision 1, is amended to read: 
 41.25     Subdivision 1.  [TAX AMOUNT.] The tax imposed shall be an 
 41.26  amount equal to the proportion of the maximum credit computed 
 41.27  under section 2011 of the Internal Revenue Code, as amended 
 41.28  through December 31, 2000, for state death taxes as the 
 41.29  Minnesota gross estate bears to the value of the federal gross 
 41.30  estate.  For a resident decedent, the tax shall be the maximum 
 41.31  credit computed under section 2011 of the Internal Revenue Code 
 41.32  reduced by the amount of the death tax paid the other state and 
 41.33  credited against the federal estate tax if this results in a 
 41.34  larger amount of tax than the proportionate amount of the 
 41.35  credit.  The tax determined under this paragraph shall not be 
 41.36  greater than the federal estate tax computed under section 2001 
 42.1   of the Internal Revenue Code after the allowance of the federal 
 42.2   credits allowed under section 2010 of the Internal Revenue Code 
 42.3   of 1986, as amended through December 31, 2000.  For the purposes 
 42.4   of this section, expenses which are deducted for federal income 
 42.5   tax purposes under section 642(g) of the Internal Revenue Code 
 42.6   as amended through December 31, 2002, are not allowable in 
 42.7   computing the tax under this chapter. 
 42.8      <h>[EFFECTIVE DATE.]</h> This section is effective for estates of 
 42.9   decedents dying after December 31, 2002. 
 42.10     Sec. 16.  Minnesota Statutes 2002, section 352.15, 
 42.11  subdivision 1, is amended to read: 
 42.12     Subdivision 1.  [EXEMPTION; EXCEPTIONS.] None of the money, 
 42.13  annuities, or other benefits mentioned in this chapter is 
 42.14  assignable either in law or in equity or subject to state estate 
 42.15  tax, or to execution, levy, attachment, garnishment, or other 
 42.16  legal process, except as provided in subdivision 1a or section 
 42.17  518.58, 518.581, or 518.6111.  
 42.18     <h>[EFFECTIVE DATE.]</h> This section is effective for estates of 
 42.19  decedents dying after December 31, 2002. 
 42.20     Sec. 17.  Minnesota Statutes 2002, section 353.15, 
 42.21  subdivision 1, is amended to read: 
 42.22     Subdivision 1.  [EXEMPTION; EXCEPTIONS.] No money, annuity, 
 42.23  or benefit provided for in this chapter is assignable or subject 
 42.24  to any state estate tax, or to execution, levy, attachment, 
 42.25  garnishment, or legal process, except as provided in subdivision 
 42.26  2 or section 518.58, 518.581, or 518.6111.  
 42.27     <h>[EFFECTIVE DATE.]</h> This section is effective for estates of 
 42.28  decedents dying after December 31, 2002. 
 42.29     Sec. 18.  Minnesota Statutes 2002, section 354.10, 
 42.30  subdivision 1, is amended to read: 
 42.31     Subdivision 1.  [EXEMPTION; EXCEPTIONS.] The right of a 
 42.32  teacher to take advantage of the benefits provided by this 
 42.33  chapter, is a personal right only and is not assignable.  All 
 42.34  money to the credit of a teacher's account in the fund or any 
 42.35  money payable to the teacher from the fund belongs to the state 
 42.36  of Minnesota until actually paid to the teacher or a beneficiary 
 43.1   under this chapter.  The association may acknowledge a properly 
 43.2   completed power of attorney form.  An assignment or attempted 
 43.3   assignment of a teacher's interest in the fund, or of the 
 43.4   beneficiary's interest in the fund, by a teacher or a 
 43.5   beneficiary is void and exempt from taxation under chapter 291 
 43.6   and from garnishment or levy under attachment or execution, 
 43.7   except as provided in subdivision 2 or 3, or section 518.58, 
 43.8   518.581, or 518.6111.  
 43.9      <h>[EFFECTIVE DATE.]</h> This section is effective for estates of 
 43.10  decedents dying after December 31, 2002. 
 43.11     Sec. 19.  Minnesota Statutes 2002, section 354B.30, is 
 43.12  amended to read: 
 43.13     354B.30 [PROHIBITION ON LOANS OR PRETERMINATION 
 43.14  DISTRIBUTIONS.] 
 43.15     (a) No participant may obtain a loan from the plan or 
 43.16  obtain any distribution from the plan at a time before the 
 43.17  participant terminates the employment that gave rise to plan 
 43.18  coverage. 
 43.19     (b) No amounts to the credit of the plan are assignable 
 43.20  either in law or in equity, are subject to state estate tax, or 
 43.21  are subject to execution, levy, attachment, garnishment, or 
 43.22  other legal process, except as provided in section 518.58, 
 43.23  518.581, or 518.6111.  
 43.24     <h>[EFFECTIVE DATE.]</h> This section is effective for estates of 
 43.25  decedents dying after December 31, 2002. 
 43.26     Sec. 20.  Minnesota Statutes 2002, section 354C.165, is 
 43.27  amended to read: 
 43.28     354C.165 [PROHIBITION ON LOANS OR PRETERMINATION 
 43.29  DISTRIBUTIONS.] 
 43.30     (a) Except as provided in paragraph (c), no participant may 
 43.31  obtain a loan or any distribution from the plan before the 
 43.32  participant terminates the employment that gave rise to plan 
 43.33  coverage. 
 43.34     (b) No amounts to the credit of the plan are assignable 
 43.35  either in law or in equity, are subject to state estate tax, or 
 43.36  are subject to execution, levy, attachment, garnishment, or 
 44.1   other legal process, except as provided in section 518.58, 
 44.2   518.581, or 518.6111.  
 44.3      (c) Unless prohibited by or subject to a penalty under 
 44.4   federal law, a teacher who is a participant in the supplemental 
 44.5   retirement plan may request, in writing, a transfer of all or a 
 44.6   portion of the funds accumulated in the person's supplemental 
 44.7   plan account to the teachers retirement association to purchase 
 44.8   service credit under sections 354.53, 354.533, 354.534, 354.535, 
 44.9   354.536, 354.537, and 354.538 or to the teachers retirement fund 
 44.10  association to purchase service credit under sections 354A.097, 
 44.11  354A.098, 354A.099, 354A.101, 354A.102, 354A.103, and 354A.104.  
 44.12  Upon receipt of a valid request, the board shall execute the 
 44.13  transfer.  The transfer must be a fund-to-fund transfer, and in 
 44.14  no event shall the participant directly receive any of the funds 
 44.15  while still employed by the board.  In no event may the board 
 44.16  transfer more than the participant's account balance.  The 
 44.17  board, in cooperation with the executive director of the 
 44.18  teachers retirement association, shall develop the forms for 
 44.19  requesting a transfer and the procedures for executing the 
 44.20  requested transfers. 
 44.21     <h>[EFFECTIVE DATE.]</h> This section is effective for estates of 
 44.22  decedents dying after December 31, 2002. 
 44.23     Sec. 21.  Laws 2001, First Special Session chapter 5, 
 44.24  article 9, section 12, the effective date, is amended to read: 
 44.25     <h>[EFFECTIVE DATE.]</h> This section is effective for assignment 
 44.26  of refunds filed with the commissioner after December 31, 2001.  
 44.27  The time period for filing assignments expires December 31, 
 44.28  2003, but assignments filed on or before that date remain in 
 44.29  effect until satisfied or canceled. 
 44.30     Sec. 22.  [REPEALER.] 
 44.31     (a) Minnesota Statutes 2002, sections 290.0671, subdivision 
 44.32  3; and 290.0675, subdivision 5, are repealed effective for tax 
 44.33  years beginning after December 31, 2002. 
 44.34     (b) Minnesota Rules, parts 8007.0300, subpart 3; 8009.7100; 
 44.35  8009.7200; 8009.7300; 8009.7400; and 8092.1000, are repealed 
 44.36  effective the day following final enactment.  
 45.1                              ARTICLE 4 
 45.2                            FEDERAL UPDATE 
 45.3      Section 1.  Minnesota Statutes 2002, section 289A.02, 
 45.4   subdivision 7, is amended to read: 
 45.5      Subd. 7.  [INTERNAL REVENUE CODE.] Unless specifically 
 45.6   defined otherwise, "Internal Revenue Code" means the Internal 
 45.7   Revenue Code of 1986, as amended through March 15 December 31, 
 45.8   2002. 
 45.9      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 45.10  following final enactment. 
 45.11     Sec. 2.  Minnesota Statutes 2002, section 290.01, 
 45.12  subdivision 19, is amended to read: 
 45.13     Subd. 19.  [NET INCOME.] The term "net income" means the 
 45.14  federal taxable income, as defined in section 63 of the Internal 
 45.15  Revenue Code of 1986, as amended through the date named in this 
 45.16  subdivision, incorporating any elections made by the taxpayer in 
 45.17  accordance with the Internal Revenue Code in determining federal 
 45.18  taxable income for federal income tax purposes, and with the 
 45.19  modifications provided in subdivisions 19a to 19f. 
 45.20     In the case of a regulated investment company or a fund 
 45.21  thereof, as defined in section 851(a) or 851(g) of the Internal 
 45.22  Revenue Code, federal taxable income means investment company 
 45.23  taxable income as defined in section 852(b)(2) of the Internal 
 45.24  Revenue Code, except that:  
 45.25     (1) the exclusion of net capital gain provided in section 
 45.26  852(b)(2)(A) of the Internal Revenue Code does not apply; 
 45.27     (2) the deduction for dividends paid under section 
 45.28  852(b)(2)(D) of the Internal Revenue Code must be applied by 
 45.29  allowing a deduction for capital gain dividends and 
 45.30  exempt-interest dividends as defined in sections 852(b)(3)(C) 
 45.31  and 852(b)(5) of the Internal Revenue Code; and 
 45.32     (3) the deduction for dividends paid must also be applied 
 45.33  in the amount of any undistributed capital gains which the 
 45.34  regulated investment company elects to have treated as provided 
 45.35  in section 852(b)(3)(D) of the Internal Revenue Code.  
 45.36     The net income of a real estate investment trust as defined 
 46.1   and limited by section 856(a), (b), and (c) of the Internal 
 46.2   Revenue Code means the real estate investment trust taxable 
 46.3   income as defined in section 857(b)(2) of the Internal Revenue 
 46.4   Code.  
 46.5      The net income of a designated settlement fund as defined 
 46.6   in section 468B(d) of the Internal Revenue Code means the gross 
 46.7   income as defined in section 468B(b) of the Internal Revenue 
 46.8   Code. 
 46.9      The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 
 46.10  1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 
 46.11  1616, 1617, 1704(l), and 1704(m) of the Small Business Job 
 46.12  Protection Act, Public Law Number 104-188, the provisions of 
 46.13  Public Law Number 104-117, the provisions of sections 313(a) and 
 46.14  (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 
 46.15  1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 
 46.16  1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 
 46.17  and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 
 46.18  Public Law Number 105-34, the provisions of section 6010 of the 
 46.19  Internal Revenue Service Restructuring and Reform Act of 1998, 
 46.20  Public Law Number 105-206, the provisions of section 4003 of the 
 46.21  Omnibus Consolidated and Emergency Supplemental Appropriations 
 46.22  Act, 1999, Public Law Number 105-277, and the provisions of 
 46.23  section 318 of the Consolidated Appropriation Act of 2001, 
 46.24  Public Law Number 106-554, shall become effective at the time 
 46.25  they become effective for federal purposes. 
 46.26     The Internal Revenue Code of 1986, as amended through 
 46.27  December 31, 1996, shall be in effect for taxable years 
 46.28  beginning after December 31, 1996. 
 46.29     The provisions of sections 202(a) and (b), 221(a), 225, 
 46.30  312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 
 46.31  (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 
 46.32  1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 
 46.33  1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 
 46.34  of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 
 46.35  the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 
 46.36  7002, and 7003 of the Internal Revenue Service Restructuring and 
 47.1   Reform Act of 1998, Public Law Number 105-206, the provisions of 
 47.2   section 3001 of the Omnibus Consolidated and Emergency 
 47.3   Supplemental Appropriations Act, 1999, Public Law Number 
 47.4   105-277, the provisions of section 3001 of the Miscellaneous 
 47.5   Trade and Technical Corrections Act of 1999, Public Law Number 
 47.6   106-36, and the provisions of section 316 of the Consolidated 
 47.7   Appropriation Act of 2001, Public Law Number 106-554, shall 
 47.8   become effective at the time they become effective for federal 
 47.9   purposes. 
 47.10     The Internal Revenue Code of 1986, as amended through 
 47.11  December 31, 1997, shall be in effect for taxable years 
 47.12  beginning after December 31, 1997. 
 47.13     The provisions of sections 5002, 6009, 6011, and 7001 of 
 47.14  the Internal Revenue Service Restructuring and Reform Act of 
 47.15  1998, Public Law Number 105-206, the provisions of section 9010 
 47.16  of the Transportation Equity Act for the 21st Century, Public 
 47.17  Law Number 105-178, the provisions of sections 1004, 4002, and 
 47.18  5301 of the Omnibus Consolidation and Emergency Supplemental 
 47.19  Appropriations Act, 1999, Public Law Number 105-277, the 
 47.20  provision of section 303 of the Ricky Ray Hemophilia Relief Fund 
 47.21  Act of 1998, Public Law Number 105-369, the provisions of 
 47.22  sections 532, 534, 536, 537, and 538 of the Ticket to Work and 
 47.23  Work Incentives Improvement Act of 1999, Public Law Number 
 47.24  106-170, the provisions of the Installment Tax Correction Act of 
 47.25  2000, Public Law Number 106-573, and the provisions of section 
 47.26  309 of the Consolidated Appropriation Act of 2001, Public Law 
 47.27  Number 106-554, shall become effective at the time they become 
 47.28  effective for federal purposes. 
 47.29     The Internal Revenue Code of 1986, as amended through 
 47.30  December 31, 1998, shall be in effect for taxable years 
 47.31  beginning after December 31, 1998.  
 47.32     The provisions of the FSC Repeal and Extraterritorial 
 47.33  Income Exclusion Act of 2000, Public Law Number 106-519, and the 
 47.34  provision of section 412 of the Job Creation and Worker 
 47.35  Assistance Act of 2002, Public Law Number 107-147, shall become 
 47.36  effective at the time it became effective for federal purposes. 
 48.1      The Internal Revenue Code of 1986, as amended through 
 48.2   December 31, 1999, shall be in effect for taxable years 
 48.3   beginning after December 31, 1999.  The provisions of sections 
 48.4   306 and 401 of the Consolidated Appropriation Act of 2001, 
 48.5   Public Law Number 106-554, and the provision of section 
 48.6   632(b)(2)(A) of the Economic Growth and Tax Relief 
 48.7   Reconciliation Act of 2001, Public Law Number 107-16, and 
 48.8   provisions of sections 101 and 402 of the Job Creation and 
 48.9   Worker Assistance Act of 2002, Public Law Number 107-147, shall 
 48.10  become effective at the same time it became effective for 
 48.11  federal purposes. 
 48.12     The Internal Revenue Code of 1986, as amended through 
 48.13  December 31, 2000, shall be in effect for taxable years 
 48.14  beginning after December 31, 2000.  The provisions of sections 
 48.15  659a and 671 of the Economic Growth and Tax Relief 
 48.16  Reconciliation Act of 2001, Public Law Number 107-16, the 
 48.17  provisions of sections 104, 105, and 111 of the Victims of 
 48.18  Terrorism Tax Relief Act of 2001, Public Law Number 107-134, and 
 48.19  the provisions of sections 201, 403, 413, and 606 of the Job 
 48.20  Creation and Worker Assistance Act of 2002, Public Law Number 
 48.21  107-147, shall become effective at the same time it became 
 48.22  effective for federal purposes. 
 48.23     The Internal Revenue Code of 1986, as amended through March 
 48.24  15, 2002, shall be in effect for taxable years beginning after 
 48.25  December 31, 2001. 
 48.26     The provisions of sections 101 and 102 of the Victims of 
 48.27  Terrorism Tax Relief Act of 2001, Public Law Number 107-134, 
 48.28  shall become effective at the same time it becomes effective for 
 48.29  federal purposes. 
 48.30     The Internal Revenue Code of 1986, as amended through 
 48.31  December 31, 2002, shall be in effect for taxable years 
 48.32  beginning after December 31, 2002. 
 48.33     Except as otherwise provided, references to the Internal 
 48.34  Revenue Code in subdivisions 19a to 19g mean the code in effect 
 48.35  for purposes of determining net income for the applicable year. 
 48.36     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 49.1   following final enactment. 
 49.2      Sec. 3.  Minnesota Statutes 2002, section 290.01, 
 49.3   subdivision 31, is amended to read: 
 49.4      Subd. 31.  [INTERNAL REVENUE CODE.] Unless specifically 
 49.5   defined otherwise, "Internal Revenue Code" means the Internal 
 49.6   Revenue Code of 1986, as amended through March 15 December 31, 
 49.7   2002. 
 49.8      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 49.9   following final enactment. 
 49.10     Sec. 4.  Minnesota Statutes 2002, section 290A.03, 
 49.11  subdivision 15, is amended to read: 
 49.12     Subd. 15.  [INTERNAL REVENUE CODE.] "Internal Revenue Code" 
 49.13  means the Internal Revenue Code of 1986, as amended 
 49.14  through March 15 December 31, 2002. 
 49.15     <h>[EFFECTIVE DATE.]</h> This section is effective for refunds 
 49.16  payable for rents paid in 2003 and thereafter and property taxes 
 49.17  payable in 2004 and thereafter. 
 49.18                             ARTICLE 5 
 49.19                DEPARTMENT PROPERTY TAX INITIATIVES 
 49.20     Section 1.  Minnesota Statutes 2002, section 270.06, is 
 49.21  amended to read: 
 49.22     270.06 [POWERS AND DUTIES.] 
 49.23     The commissioner of revenue shall: 
 49.24     (1) have and exercise general supervision over the 
 49.25  administration of the assessment and taxation laws of the state, 
 49.26  over assessors, town, county, and city boards of review and 
 49.27  equalization, and all other assessing officers in the 
 49.28  performance of their duties, to the end that all assessments of 
 49.29  property be made relatively just and equal in compliance with 
 49.30  the laws of the state; 
 49.31     (2) confer with, advise, and give the necessary 
 49.32  instructions and directions to local assessors and local boards 
 49.33  of review throughout the state as to their duties under the laws 
 49.34  of the state; 
 49.35     (3) direct proceedings, actions, and prosecutions to be 
 49.36  instituted to enforce the laws relating to the liability and 
 50.1   punishment of public officers and officers and agents of 
 50.2   corporations for failure or negligence to comply with the 
 50.3   provisions of the laws of this state governing returns of 
 50.4   assessment and taxation of property, and cause complaints to be 
 50.5   made against local assessors, members of boards of equalization, 
 50.6   members of boards of review, or any other assessing or taxing 
 50.7   officer, to the proper authority, for their removal from office 
 50.8   for misconduct or negligence of duty; 
 50.9      (4) require county attorneys to assist in the commencement 
 50.10  of prosecutions in actions or proceedings for removal, 
 50.11  forfeiture and punishment for violation of the laws of this 
 50.12  state in respect to the assessment and taxation of property in 
 50.13  their respective districts or counties; 
 50.14     (5) require town, city, county, and other public officers 
 50.15  to report information as to the assessment of property, 
 50.16  collection of taxes received from licenses and other sources, 
 50.17  and such other information as may be needful in the work of the 
 50.18  department of revenue, in such form and upon such blanks as the 
 50.19  commissioner may prescribe; 
 50.20     (6) require individuals, copartnerships, companies, 
 50.21  associations, and corporations to furnish information concerning 
 50.22  their capital, funded or other debt, current assets and 
 50.23  liabilities, earnings, operating expenses, taxes, as well as all 
 50.24  other statements now required by law for taxation purposes; 
 50.25     (7) subpoena witnesses, at a time and place reasonable 
 50.26  under the circumstances, to appear and give testimony, and to 
 50.27  produce books, records, papers and documents for inspection and 
 50.28  copying relating to any matter which the commissioner may have 
 50.29  authority to investigate or determine; 
 50.30     (8) issue a subpoena which does not identify the person or 
 50.31  persons with respect to whose liability the subpoena is issued, 
 50.32  but only if (a) the subpoena relates to the investigation of a 
 50.33  particular person or ascertainable group or class of persons, 
 50.34  (b) there is a reasonable basis for believing that such person 
 50.35  or group or class of persons may fail or may have failed to 
 50.36  comply with any law administered by the commissioner, (c) the 
 51.1   information sought to be obtained from the examination of the 
 51.2   records (and the identity of the person or persons with respect 
 51.3   to whose liability the subpoena is issued) is not readily 
 51.4   available from other sources, (d) the subpoena is clear and 
 51.5   specific as to the information sought to be obtained, and (e) 
 51.6   the information sought to be obtained is limited solely to the 
 51.7   scope of the investigation.  Provided further that the party 
 51.8   served with a subpoena which does not identify the person or 
 51.9   persons with respect to whose tax liability the subpoena is 
 51.10  issued shall have the right, within 20 days after service of the 
 51.11  subpoena, to petition the district court for the judicial 
 51.12  district in which lies the county in which that party is located 
 51.13  for a determination as to whether the commissioner of revenue 
 51.14  has complied with all the requirements in (a) to (e), and thus, 
 51.15  whether the subpoena is enforceable.  If no such petition is 
 51.16  made by the party served within the time prescribed, the 
 51.17  subpoena shall have the force and effect of a court order; 
 51.18     (9) cause the deposition of witnesses residing within or 
 51.19  without the state, or absent therefrom, to be taken, upon notice 
 51.20  to the interested party, if any, in like manner that depositions 
 51.21  of witnesses are taken in civil actions in the district court, 
 51.22  in any matter which the commissioner may have authority to 
 51.23  investigate or determine; 
 51.24     (10) investigate the tax laws of other states and countries 
 51.25  and to formulate and submit to the legislature such legislation 
 51.26  as the commissioner may deem expedient to prevent evasions of 
 51.27  assessment and taxing laws, and secure just and equal taxation 
 51.28  and improvement in the system of assessment and taxation in this 
 51.29  state; 
 51.30     (11) consult and confer with the governor upon the subject 
 51.31  of taxation, the administration of the laws in regard thereto, 
 51.32  and the progress of the work of the department of revenue, and 
 51.33  furnish the governor, from time to time, such assistance and 
 51.34  information as the governor may require relating to tax matters; 
 51.35     (12) transmit to the governor, on or before the third 
 51.36  Monday in December of each even-numbered year, and to each 
 52.1   member of the legislature, on or before November 15 of each 
 52.2   even-numbered year, the report of the department of revenue for 
 52.3   the preceding years, showing all the taxable property in the 
 52.4   state and the value of the same, in tabulated form; 
 52.5      (13) inquire into the methods of assessment and taxation 
 52.6   and ascertain whether the assessors faithfully discharge their 
 52.7   duties, particularly as to their compliance with the laws 
 52.8   requiring the assessment of all property not exempt from 
 52.9   taxation; 
 52.10     (14) administer and enforce the assessment and collection 
 52.11  of state taxes and fees, including the use of any remedy 
 52.12  available to nongovernmental creditors, and, from time to time, 
 52.13  make, publish, and distribute rules for the administration and 
 52.14  enforcement of assessments and fees laws administered by the 
 52.15  commissioner and state tax laws.  The rules have the force of 
 52.16  law; 
 52.17     (15) prepare blank forms for the returns required by state 
 52.18  tax law and distribute them throughout the state, furnishing 
 52.19  them subject to charge on application; 
 52.20     (16) prescribe rules governing the qualification and 
 52.21  practice of agents, attorneys, or other persons representing 
 52.22  taxpayers before the commissioner.  The rules may require that 
 52.23  those persons, agents, and attorneys show that they are of good 
 52.24  character and in good repute, have the necessary qualifications 
 52.25  to give taxpayers valuable services, and are otherwise competent 
 52.26  to advise and assist taxpayers in the presentation of their case 
 52.27  before being recognized as representatives of taxpayers.  After 
 52.28  due notice and opportunity for hearing, the commissioner may 
 52.29  suspend and bar from further practice before the commissioner 
 52.30  any person, agent, or attorney who is shown to be incompetent or 
 52.31  disreputable, who refuses to comply with the rules, or who with 
 52.32  intent to defraud, willfully or knowingly deceives, misleads, or 
 52.33  threatens a taxpayer or prospective taxpayer, by words, 
 52.34  circular, letter, or by advertisement.  This clause does not 
 52.35  curtail the rights of individuals to appear in their own behalf 
 52.36  or partners or corporations' officers to appear in behalf of 
 53.1   their respective partnerships or corporations; 
 53.2      (17) appoint agents as the commissioner considers necessary 
 53.3   to make examinations and determinations.  The agents have the 
 53.4   rights and powers conferred on the commissioner to subpoena, 
 53.5   examine, and copy books, records, papers, or memoranda, subpoena 
 53.6   witnesses, administer oaths and affirmations, and take 
 53.7   testimony.  In addition to administrative subpoenas of the 
 53.8   commissioner and the agents, upon demand of the commissioner or 
 53.9   an agent, the court administrator of any district court shall 
 53.10  issue a subpoena for the attendance of a witness or the 
 53.11  production of books, papers, records, or memoranda before the 
 53.12  agent for inspection and copying.  Disobedience of a court 
 53.13  administrator's subpoena shall be punished by the district court 
 53.14  of the district in which the subpoena is issued, or in the case 
 53.15  of a subpoena issued by the commissioner or an agent, by the 
 53.16  district court of the district in which the party served with 
 53.17  the subpoena is located, in the same manner as contempt of the 
 53.18  district court; 
 53.19     (18) appoint and employ additional help, purchase supplies 
 53.20  or materials, or incur other expenditures in the enforcement of 
 53.21  state tax laws as considered necessary.  The salaries of all 
 53.22  agents and employees provided for in this chapter shall be fixed 
 53.23  by the appointing authority, subject to the approval of the 
 53.24  commissioner of administration; 
 53.25     (19) execute and administer any agreement with the 
 53.26  secretary of the treasury of the United States or a 
 53.27  representative of another state regarding the exchange of 
 53.28  information and administration of the tax laws; 
 53.29     (20) authorize the use of unmarked motor vehicles to 
 53.30  conduct seizures or criminal investigations pursuant to the 
 53.31  commissioner's authority; and 
 53.32     (21) exercise other powers and perform other duties 
 53.33  required of or imposed upon the commissioner of revenue by law.  
 53.34     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 53.35  following final enactment. 
 53.36     Sec. 2.  Minnesota Statutes 2002, section 270.10, 
 54.1   subdivision 1a, is amended to read: 
 54.2      Subd. 1a.  [NOTIFICATION TO TAXPAYER.] At the same time 
 54.3   that notice of the assessment, determination, or order of the 
 54.4   commissioner is given to a taxpayer, the taxpayer must be 
 54.5   notified in writing of the right to appeal to the tax court, and 
 54.6   if applicable, to the small claims division.  Except in the case 
 54.7   of mathematical or clerical errors, the notice must contain a 
 54.8   description of the basis for, including applicable law and other 
 54.9   factors considered in the determination, and a listing of the 
 54.10  amounts of tax due, interest, additions to tax, and penalties.  
 54.11  Failure to provide all the required information does not 
 54.12  invalidate the notice for purposes of satisfying statutory 
 54.13  notice requirements if the notice contains sufficient 
 54.14  information to advise the taxpayer that an assessment, order, or 
 54.15  other determination has been made.  The taxpayer may request 
 54.16  further clarification within the time provided for appealing the 
 54.17  determination.  In any notice of assessment, determination, or 
 54.18  order dealing with property valuation or assessment for property 
 54.19  tax purposes by the commissioner of revenue or a local unit of 
 54.20  government, the taxpayer must be notified in writing that a 
 54.21  taxpayer must appeal to the town or city board of equalization 
 54.22  and to the county board of equalization before appealing to the 
 54.23  small claims division of the tax court, except for those 
 54.24  taxpayers whose original assessments are determined by the 
 54.25  commissioner of revenue.  
 54.26     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 54.27  following final enactment. 
 54.28     Sec. 3.  Minnesota Statutes 2002, section 272.02, is 
 54.29  amended by adding a subdivision to read: 
 54.30     Subd. 56.  [COMPREHENSIVE HEALTH ASSOCIATION.] All property 
 54.31  owned by the comprehensive health association is exempt to the 
 54.32  extent provided in section 62E.10, subdivision 1. 
 54.33     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 54.34  following final enactment. 
 54.35     Sec. 4.  Minnesota Statutes 2002, section 272.02, is 
 54.36  amended by adding a subdivision to read: 
 55.1      Subd. 57.  [PRIVATE CEMETERIES.] All property owned by 
 55.2   private cemeteries is exempt to the extent provided in section 
 55.3   307.09. 
 55.4      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 55.5   following final enactment. 
 55.6      Sec. 5.  Minnesota Statutes 2002, section 272.02, is 
 55.7   amended by adding a subdivision to read: 
 55.8      Subd. 58.  [WESTERN LAKE SUPERIOR SANITARY BOARD.] All 
 55.9   property owned, leased, controlled, used, or occupied for 
 55.10  public, governmental, and municipal purposes by the Western Lake 
 55.11  Superior Sanitary Board is exempt to the extent provided in 
 55.12  section 458D.23. 
 55.13     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 55.14  following final enactment. 
 55.15     Sec. 6.  Minnesota Statutes 2002, section 272.02, is 
 55.16  amended by adding a subdivision to read: 
 55.17     Subd. 59.  [UNFINISHED SALE OR RENTAL PROJECTS.] Unfinished 
 55.18  sale or rental projects are exempt to the extent provided in 
 55.19  section 469.155, subdivision 17. 
 55.20     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 55.21  following final enactment. 
 55.22     Sec. 7.  Minnesota Statutes 2002, section 272.02, is 
 55.23  amended by adding a subdivision to read: 
 55.24     Subd. 60.  [SKYWAYS.] The pedestrian skyway system, 
 55.25  underground pedestrian concourse, the people mover system, and 
 55.26  publicly owned parking structures are exempt to the extent 
 55.27  provided in section 469.127. 
 55.28     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 55.29  following final enactment. 
 55.30     Sec. 8.  Minnesota Statutes 2002, section 272.02, is 
 55.31  amended by adding a subdivision to read: 
 55.32     Subd. 61.  [MUNICIPAL RECREATION FACILITIES.] All property 
 55.33  acquired and used by a city is exempt to the extent provided in 
 55.34  section 471.191, subdivision 4. 
 55.35     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 55.36  following final enactment. 
 56.1      Sec. 9.  Minnesota Statutes 2002, section 272.02, is 
 56.2   amended by adding a subdivision to read: 
 56.3      Subd. 62.  [WATER AND WASTEWATER TREATMENT 
 56.4   FACILITIES.] Related facilities owned by water and wastewater 
 56.5   treatment providers who have contracted with a municipality to 
 56.6   provide capital intensive public services to the municipality 
 56.7   are exempt to the extent provided in section 471A.05. 
 56.8      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 56.9   following final enactment. 
 56.10     Sec. 10.  Minnesota Statutes 2002, section 272.12, is 
 56.11  amended to read: 
 56.12     272.12 [CONVEYANCES, TAXES PAID BEFORE RECORDING.] 
 56.13     When: 
 56.14     (a) a deed or other instrument conveying land, 
 56.15     (b) a plat of any town site or addition thereto, 
 56.16     (c) a survey required pursuant to section 508.47, 
 56.17     (d) a condominium plat subject to chapter 515 or 515A or a 
 56.18  declaration that contains such a plat, or 
 56.19     (e) a common interest community plat subject to chapter 
 56.20  515B or a declaration that contains such a plat, 
 56.21  is presented to the county auditor for transfer, the auditor 
 56.22  shall ascertain from the records if there be taxes delinquent 
 56.23  upon the land described therein, or if it has been sold for 
 56.24  taxes.  An assignment of a sheriff's or referee's certificate of 
 56.25  sale, when the certificate of sale describes real estate, and 
 56.26  certificates of redemption from mortgage or lien foreclosure 
 56.27  sales, when the certificate of redemption encompasses real 
 56.28  estate and is issued to a junior creditor, are considered 
 56.29  instruments conveying land for the purposes of this section and 
 56.30  section 272.121.  If there are taxes delinquent, the auditor 
 56.31  shall certify to the same; and upon payment of such taxes, or in 
 56.32  case no taxes are delinquent, shall transfer the land upon the 
 56.33  books of the auditor's office, and note upon the instrument, 
 56.34  over official signature, the words, "no delinquent taxes and 
 56.35  transfer entered," or, if the land described has been sold or 
 56.36  assigned to an actual purchaser for taxes, the words "paid by 
 57.1   sale of land described within;" and, unless such statement is 
 57.2   made upon such instrument, the county recorder or the registrar 
 57.3   of titles shall refuse to receive or record the same; provided, 
 57.4   that sheriff's or referees' certificates of sale on execution or 
 57.5   foreclosure of a lien or mortgage, certificates of redemption 
 57.6   from mortgage or lien foreclosure sales issued to the redeeming 
 57.7   mortgagor or lienee, deeds of distribution made by a personal 
 57.8   representative in probate proceedings, decrees and judgments, 
 57.9   receivers receipts, patents, and copies of town or statutory 
 57.10  city plats, in case the original plat filed in the office of the 
 57.11  county recorder has been lost or destroyed, and the instruments 
 57.12  releasing, removing and discharging reversionary and forfeiture 
 57.13  provisions affecting title to land and instruments releasing, 
 57.14  removing or discharging easement rights in land or building or 
 57.15  other restrictions, may be recorded without such certificate; 
 57.16  and, provided that instruments conveying land and, as 
 57.17  appurtenant thereto an easement over adjacent tract or tracts of 
 57.18  land, may be recorded without such certificate as to the land 
 57.19  covered by such easement; and provided further, that any 
 57.20  instrument granting an easement made in favor of any public 
 57.21  utility or pipe line for conveying gas, liquids or solids in 
 57.22  suspension, in the nature of a right-of-way over, along, across 
 57.23  or under a tract of land may be recorded without such 
 57.24  certificate as to the land covered by such easement.  Any 
 57.25  instrument amending or restating the declarations, bylaws, 
 57.26  plats, or other enabling Documents governing homeowners 
 57.27  associations of condominiums, townhouses, common interest 
 57.28  ownership communities, and other planned unit developments may 
 57.29  be recorded without the auditor's certificate to the extent 
 57.30  provided in section 515B.1-116(f). 
 57.31     A deed of distribution made by a personal representative in 
 57.32  a probate proceeding, a decree, or a judgment that conveys land 
 57.33  shall be presented to the county auditor, who shall transfer the 
 57.34  land upon the books of the auditor's office and note upon the 
 57.35  instrument, over official signature, the words, "transfer 
 57.36  entered", and the instrument may then be recorded.  A decree or 
 58.1   judgment that affects title to land but does not convey land may 
 58.2   be recorded without presentation to the auditor. 
 58.3      A violation of this section by the county recorder or the 
 58.4   registrar of titles shall be a gross misdemeanor, and, in 
 58.5   addition to the punishment therefor, the recorder or registrar 
 58.6   shall be liable to the grantee of any instrument so recorded for 
 58.7   the amount of any damages sustained. 
 58.8      When, as a condition to permitting the recording of deed or 
 58.9   other instrument affecting the title to real estate previously 
 58.10  forfeited to the state under the provisions of sections 281.16 
 58.11  to 281.25, county officials, after such real estate has been 
 58.12  purchased or repurchased, have required the payment of taxes 
 58.13  erroneously assumed to have accrued against such real estate 
 58.14  after forfeiture and before the date of purchase or repurchase, 
 58.15  the sum required to be so paid shall be refunded to the persons 
 58.16  entitled thereto out of moneys in the funds in which the sum so 
 58.17  paid was placed.  Delinquent taxes are those taxes deemed 
 58.18  delinquent under section 279.02. 
 58.19     <h>[EFFECTIVE DATE.]</h> This section is effective for deeds or 
 58.20  instruments accepted for recording or registration on or after 
 58.21  July 1, 2003. 
 58.22     Sec. 11.  Minnesota Statutes 2002, section 273.05, 
 58.23  subdivision 1, is amended to read: 
 58.24     Subdivision 1.  [APPOINTMENT OF TOWN AND CITY ASSESSORS.] 
 58.25  Notwithstanding any other provision of law all town assessors 
 58.26  shall be appointed by the town board, and notwithstanding any 
 58.27  charter provisions to the contrary, all city assessors shall be 
 58.28  appointed by the city council or other appointing authority as 
 58.29  provided by law or charter.  Such assessors shall be residents 
 58.30  of the state but need not be a resident of the town or city for 
 58.31  which they are appointed.  They shall be selected and appointed 
 58.32  because of their knowledge and training in the field of property 
 58.33  taxation.  All town and statutory city assessors shall be 
 58.34  appointed for indefinite terms.  A town or statutory city 
 58.35  assessor who is an employee may be dismissed by the appointing 
 58.36  authority for cause.  The term of the town or city assessors may 
 59.1   be terminated at any time by the town board or city council on 
 59.2   charges by the commissioner of revenue of inefficiency or 
 59.3   neglect of duty.  Vacancies in the office of town or city 
 59.4   assessor shall be filled within 90 days by appointment of the 
 59.5   respective appointing authority indicated above.  If the vacancy 
 59.6   is not filled within 90 days, the office shall be terminated.  
 59.7   When a vacancy in the office of town or city assessor is not 
 59.8   filled by appointment, and it is imperative that the office of 
 59.9   assessor be filled, the county auditor shall appoint some 
 59.10  resident of the county as assessor for such town or city.  The 
 59.11  county auditor may appoint the county assessor as assessor for 
 59.12  such town or city, in which case the town or city shall pay to 
 59.13  the county treasurer the amount determined by the county auditor 
 59.14  to be due for the services performed and expenses incurred by 
 59.15  the county assessor in acting as assessor for such town or 
 59.16  city.  The term of any town or statutory city assessor in a 
 59.17  county electing in accordance with section 273.052 shall be 
 59.18  terminated as provided in section 273.055. 
 59.19     The commissioner of revenue may recommend to the state 
 59.20  board of assessors the nonrenewal, suspension, or revocation of 
 59.21  an assessor's license as provided in sections 270.41 to 270.53. 
 59.22     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 59.23  following final enactment and applies to every town or city 
 59.24  assessor whether that assessor was appointed before, on, or 
 59.25  after the effective date. 
 59.26     Sec. 12.  Minnesota Statutes 2002, section 273.061, is 
 59.27  amended by adding a subdivision to read: 
 59.28     Subd. 1a.  [COMPATIBLE OFFICES.] A person appointed as the 
 59.29  county assessor also may serve as the county auditor, county 
 59.30  treasurer, or county auditor-treasurer if those offices are 
 59.31  appointive, provided that the person in the combined appointed 
 59.32  office must not serve on the county board of appeal and 
 59.33  equalization under section 274.13.  In a county in which the 
 59.34  functions of the county assessor are combined with those of the 
 59.35  county auditor or county auditor-treasurer, the county board may 
 59.36  not delegate any authority, power, or responsibility under 
 60.1   section 375.192, subdivision 4. 
 60.2      <h>[EFFECTIVE DATE.]</h> This section is effective January 2, 2004.
 60.3      Sec. 13.  Minnesota Statutes 2002, section 273.061, is 
 60.4   amended by adding a subdivision to read: 
 60.5      Subd. 1b.  [COMPATIBLE OFFICES IN COUNTIES CHANGING TO 
 60.6   APPOINTED AUDITOR.] In a county in which the office of auditor, 
 60.7   treasurer, or auditor-treasurer is an elective position, a 
 60.8   person appointed as the county assessor also may serve as the 
 60.9   county auditor, county treasurer, or county auditor-treasurer if 
 60.10  a proposal to make the affected office appointive has been 
 60.11  approved as required by other law and will be effective within 
 60.12  five years. 
 60.13     <h>[EFFECTIVE DATE.]</h> This section is effective January 2, 2004.
 60.14     Sec. 14.  Minnesota Statutes 2002, section 273.061, is 
 60.15  amended by adding a subdivision to read: 
 60.16     Subd. 1c.  [INCOMPATIBLE OFFICES.] The person appointed as 
 60.17  the county assessor must not also be the county attorney, a 
 60.18  county board member, an elected county auditor, an elected 
 60.19  county treasurer, an elected county auditor-treasurer, a town 
 60.20  board supervisor for a town in the same county, or a city mayor 
 60.21  or council member for a city in the same county.  The person 
 60.22  appointed as the city assessor must not also be a city council 
 60.23  member or mayor for the same city.  A person appointed as the 
 60.24  town assessor must not also be a town board supervisor for the 
 60.25  same town.  Except as provided in subdivision 1b, an assessor 
 60.26  who accepts a position that is incompatible with the office of 
 60.27  assessor is deemed to have resigned from the assessor position. 
 60.28     <h>[EFFECTIVE DATE.]</h> This section is effective January 2, 2004.
 60.29     Sec. 15.  Minnesota Statutes 2002, section 273.11, 
 60.30  subdivision 1a, is amended to read: 
 60.31     Subd. 1a.  [LIMITED MARKET VALUE.] In the case of all 
 60.32  property classified as agricultural homestead or nonhomestead, 
 60.33  residential homestead or nonhomestead, timber, or noncommercial 
 60.34  seasonal residential recreational residential, the assessor 
 60.35  shall compare the value with the taxable portion of the value 
 60.36  determined in the preceding assessment.  
 61.1      For assessment year 2002, the amount of the increase shall 
 61.2   not exceed the greater of (1) ten percent of the value in the 
 61.3   preceding assessment, or (2) 15 percent of the difference 
 61.4   between the current assessment and the preceding assessment. 
 61.5      For assessment year 2003, the amount of the increase shall 
 61.6   not exceed the greater of (1) 12 percent of the value in the 
 61.7   preceding assessment, or (2) 20 percent of the difference 
 61.8   between the current assessment and the preceding assessment. 
 61.9      For assessment year 2004, the amount of the increase shall 
 61.10  not exceed the greater of (1) 15 percent of the value in the 
 61.11  preceding assessment, or (2) 25 percent of the difference 
 61.12  between the current assessment and the preceding assessment. 
 61.13     For assessment year 2005, the amount of the increase shall 
 61.14  not exceed the greater of (1) 15 percent of the value in the 
 61.15  preceding assessment, or (2) 33 percent of the difference 
 61.16  between the current assessment and the preceding assessment.  
 61.17     For assessment year 2006, the amount of the increase shall 
 61.18  not exceed the greater of (1) 15 percent of the value in the 
 61.19  preceding assessment, or (2) 50 percent of the difference 
 61.20  between the current assessment and the preceding assessment. 
 61.21     This limitation shall not apply to increases in value due 
 61.22  to improvements.  For purposes of this subdivision, the term 
 61.23  "assessment" means the value prior to any exclusion under 
 61.24  subdivision 16. 
 61.25     The provisions of this subdivision shall be in effect 
 61.26  through assessment year 2006 as provided in this subdivision. 
 61.27     For purposes of the assessment/sales ratio study conducted 
 61.28  under section 127A.48, and the computation of state aids paid 
 61.29  under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 
 61.30  477A, market values and net tax capacities determined under this 
 61.31  subdivision and subdivision 16, shall be used. 
 61.32     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 61.33  following final enactment. 
 61.34     Sec. 16.  Minnesota Statutes 2002, section 273.124, 
 61.35  subdivision 1, is amended to read: 
 61.36     Subdivision 1.  [GENERAL RULE.] (a) Residential real estate 
 62.1   that is occupied and used for the purposes of a homestead by its 
 62.2   owner, who must be a Minnesota resident, is a residential 
 62.3   homestead.  
 62.4      Agricultural land, as defined in section 273.13, 
 62.5   subdivision 23, that is occupied and used as a homestead by its 
 62.6   owner, who must be a Minnesota resident, is an agricultural 
 62.7   homestead. 
 62.8      Dates for establishment of a homestead and homestead 
 62.9   treatment provided to particular types of property are as 
 62.10  provided in this section.  
 62.11     Property held by a trustee under a trust is eligible for 
 62.12  homestead classification if the requirements under this chapter 
 62.13  are satisfied. 
 62.14     The assessor shall require proof, as provided in 
 62.15  subdivision 13, of the facts upon which classification as a 
 62.16  homestead may be determined.  Notwithstanding any other law, the 
 62.17  assessor may at any time require a homestead application to be 
 62.18  filed in order to verify that any property classified as a 
 62.19  homestead continues to be eligible for homestead status.  
 62.20  Notwithstanding any other law to the contrary, the department of 
 62.21  revenue may, upon request from an assessor, verify whether an 
 62.22  individual who is requesting or receiving homestead 
 62.23  classification has filed a Minnesota income tax return as a 
 62.24  resident for the most recent taxable year for which the 
 62.25  information is available. 
 62.26     When there is a name change or a transfer of homestead 
 62.27  property, the assessor may reclassify the property in the next 
 62.28  assessment unless a homestead application is filed to verify 
 62.29  that the property continues to qualify for homestead 
 62.30  classification. 
 62.31     (b) For purposes of this section, homestead property shall 
 62.32  include property which is used for purposes of the homestead but 
 62.33  is separated from the homestead by a road, street, lot, 
 62.34  waterway, or other similar intervening property.  The term "used 
 62.35  for purposes of the homestead" shall include but not be limited 
 62.36  to uses for gardens, garages, or other outbuildings commonly 
 63.1   associated with a homestead, but shall not include vacant land 
 63.2   held primarily for future development.  In order to receive 
 63.3   homestead treatment for the noncontiguous property, the owner 
 63.4   must use the property for the purposes of the homestead, and 
 63.5   must apply to the assessor, both by the deadlines given in 
 63.6   subdivision 9.  After initial qualification for the homestead 
 63.7   treatment, additional applications for subsequent years are not 
 63.8   required. 
 63.9      (c) Residential real estate that is occupied and used for 
 63.10  purposes of a homestead by a relative of the owner is a 
 63.11  homestead but only to the extent of the homestead treatment that 
 63.12  would be provided if the related owner occupied the property.  
 63.13  For purposes of this paragraph and paragraph (g), "relative" 
 63.14  means a parent, stepparent, child, stepchild, grandparent, 
 63.15  grandchild, brother, sister, uncle, aunt, nephew, or niece.  
 63.16  This relationship may be by blood or marriage.  Property that 
 63.17  has been classified as seasonal residential recreational 
 63.18  residential property at any time during which it has been owned 
 63.19  by the current owner or spouse of the current owner will not be 
 63.20  reclassified as a homestead unless it is occupied as a homestead 
 63.21  by the owner; this prohibition also applies to property that, in 
 63.22  the absence of this paragraph, would have been classified as 
 63.23  seasonal residential recreational residential property at the 
 63.24  time when the residence was constructed.  Neither the related 
 63.25  occupant nor the owner of the property may claim a property tax 
 63.26  refund under chapter 290A for a homestead occupied by a 
 63.27  relative.  In the case of a residence located on agricultural 
 63.28  land, only the house, garage, and immediately surrounding one 
 63.29  acre of land shall be classified as a homestead under this 
 63.30  paragraph, except as provided in paragraph (d). 
 63.31     (d) Agricultural property that is occupied and used for 
 63.32  purposes of a homestead by a relative of the owner, is a 
 63.33  homestead, only to the extent of the homestead treatment that 
 63.34  would be provided if the related owner occupied the property, 
 63.35  and only if all of the following criteria are met: 
 63.36     (1) the relative who is occupying the agricultural property 
 64.1   is a son, daughter, grandson, granddaughter, father, or mother 
 64.2   of the owner of the agricultural property or a son, daughter, 
 64.3   grandson, or granddaughter of the spouse of the owner of the 
 64.4   agricultural property; 
 64.5      (2) the owner of the agricultural property must be a 
 64.6   Minnesota resident; 
 64.7      (3) the owner of the agricultural property must not receive 
 64.8   homestead treatment on any other agricultural property in 
 64.9   Minnesota; and 
 64.10     (4) the owner of the agricultural property is limited to 
 64.11  only one agricultural homestead per family under this paragraph. 
 64.12     Neither the related occupant nor the owner of the property 
 64.13  may claim a property tax refund under chapter 290A for a 
 64.14  homestead occupied by a relative qualifying under this 
 64.15  paragraph.  For purposes of this paragraph, "agricultural 
 64.16  property" means the house, garage, other farm buildings and 
 64.17  structures, and agricultural land. 
 64.18     Application must be made to the assessor by the owner of 
 64.19  the agricultural property to receive homestead benefits under 
 64.20  this paragraph.  The assessor may require the necessary proof 
 64.21  that the requirements under this paragraph have been met. 
 64.22     (e) In the case of property owned by a property owner who 
 64.23  is married, the assessor must not deny homestead treatment in 
 64.24  whole or in part if only one of the spouses occupies the 
 64.25  property and the other spouse is absent due to:  (1) marriage 
 64.26  dissolution proceedings, (2) legal separation, (3) employment or 
 64.27  self-employment in another location, or (4) other personal 
 64.28  circumstances causing the spouses to live separately, not 
 64.29  including an intent to obtain two homestead classifications for 
 64.30  property tax purposes.  To qualify under clause (3), the 
 64.31  spouse's place of employment or self-employment must be at least 
 64.32  50 miles distant from the other spouse's place of employment, 
 64.33  and the homesteads must be at least 50 miles distant from each 
 64.34  other.  Homestead treatment, in whole or in part, shall not be 
 64.35  denied to the owner's spouse who previously occupied the 
 64.36  residence with the owner if the absence of the owner is due to 
 65.1   one of the exceptions provided in this paragraph. 
 65.2      (f) The assessor must not deny homestead treatment in whole 
 65.3   or in part if: 
 65.4      (1) in the case of a property owner who is not married, the 
 65.5   owner is absent due to residence in a nursing home, boarding 
 65.6   care facility, or an elderly assisted living facility property 
 65.7   as defined in section 273.13, subdivision 25a, and the property 
 65.8   is not otherwise occupied; or 
 65.9      (2) in the case of a property owner who is married, the 
 65.10  owner or the owner's spouse or both are absent due to residence 
 65.11  in a nursing home, boarding care facility, or an elderly 
 65.12  assisted living facility property as defined in section 273.13, 
 65.13  subdivision 25a, and the property is not occupied or is occupied 
 65.14  only by the owner's spouse. 
 65.15     (g) If an individual is purchasing property with the intent 
 65.16  of claiming it as a homestead and is required by the terms of 
 65.17  the financing agreement to have a relative shown on the deed as 
 65.18  a coowner, the assessor shall allow a full homestead 
 65.19  classification.  This provision only applies to first-time 
 65.20  purchasers, whether married or single, or to a person who had 
 65.21  previously been married and is purchasing as a single individual 
 65.22  for the first time.  The application for homestead benefits must 
 65.23  be on a form prescribed by the commissioner and must contain the 
 65.24  data necessary for the assessor to determine if full homestead 
 65.25  benefits are warranted. 
 65.26     (h) If residential or agricultural real estate is occupied 
 65.27  and used for purposes of a homestead by a child of a deceased 
 65.28  owner and the property is subject to jurisdiction of probate 
 65.29  court, the child shall receive relative homestead classification 
 65.30  under paragraph (c) or (d) to the same extent they would be 
 65.31  entitled to it if the owner was still living, until the probate 
 65.32  is completed.  For purposes of this paragraph, "child" includes 
 65.33  a relationship by blood or by marriage. 
 65.34     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 65.35  following final enactment. 
 65.36     Sec. 17.  Minnesota Statutes 2002, section 273.13, 
 66.1   subdivision 25, is amended to read: 
 66.2      Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
 66.3   estate containing four or more units and used or held for use by 
 66.4   the owner or by the tenants or lessees of the owner as a 
 66.5   residence for rental periods of 30 days or more.  Class 4a also 
 66.6   includes hospitals licensed under sections 144.50 to 144.56, 
 66.7   other than hospitals exempt under section 272.02, and contiguous 
 66.8   property used for hospital purposes, without regard to whether 
 66.9   the property has been platted or subdivided.  The market value 
 66.10  of class 4a property has a class rate of 1.8 percent for taxes 
 66.11  payable in 2002, 1.5 percent for taxes payable in 2003, and 1.25 
 66.12  percent for taxes payable in 2004 and thereafter, except that 
 66.13  class 4a property consisting of a structure for which 
 66.14  construction commenced after June 30, 2001, has a class rate of 
 66.15  1.25 percent of market value for taxes payable in 2003 and 
 66.16  subsequent years. 
 66.17     (b) Class 4b includes: 
 66.18     (1) residential real estate containing less than four units 
 66.19  that does not qualify as class 4bb, other than seasonal 
 66.20  residential, and recreational property; 
 66.21     (2) manufactured homes not classified under any other 
 66.22  provision; 
 66.23     (3) a dwelling, garage, and surrounding one acre of 
 66.24  property on a nonhomestead farm classified under subdivision 23, 
 66.25  paragraph (b) containing two or three units; and 
 66.26     (4) unimproved property that is classified residential as 
 66.27  determined under subdivision 33.  
 66.28     The market value of class 4b property has a class rate of 
 66.29  1.5 percent for taxes payable in 2002, and 1.25 percent for 
 66.30  taxes payable in 2003 and thereafter. 
 66.31     (c) Class 4bb includes: 
 66.32     (1) nonhomestead residential real estate containing one 
 66.33  unit, other than seasonal residential, and recreational 
 66.34  property; and 
 66.35     (2) a single family dwelling, garage, and surrounding one 
 66.36  acre of property on a nonhomestead farm classified under 
 67.1   subdivision 23, paragraph (b). 
 67.2      Class 4bb property has the same class rates as class 1a 
 67.3   property under subdivision 22. 
 67.4      Property that has been classified as seasonal recreational 
 67.5   residential recreational property at any time during which it 
 67.6   has been owned by the current owner or spouse of the current 
 67.7   owner does not qualify for class 4bb. 
 67.8      (d) Class 4c property includes: 
 67.9      (1) except as provided in subdivision 22, paragraph (c), 
 67.10  real property devoted to temporary and seasonal residential 
 67.11  occupancy for recreation purposes, including real property 
 67.12  devoted to temporary and seasonal residential occupancy for 
 67.13  recreation purposes and not devoted to commercial purposes for 
 67.14  more than 250 days in the year preceding the year of 
 67.15  assessment.  For purposes of this clause, property is devoted to 
 67.16  a commercial purpose on a specific day if any portion of the 
 67.17  property is used for residential occupancy, and a fee is charged 
 67.18  for residential occupancy.  In order for a property to be 
 67.19  classified as class 4c, seasonal residential recreational 
 67.20  residential for commercial purposes, at least 40 percent of the 
 67.21  annual gross lodging receipts related to the property must be 
 67.22  from business conducted during 90 consecutive days and either 
 67.23  (i) at least 60 percent of all paid bookings by lodging guests 
 67.24  during the year must be for periods of at least two consecutive 
 67.25  nights; or (ii) at least 20 percent of the annual gross receipts 
 67.26  must be from charges for rental of fish houses, boats and 
 67.27  motors, snowmobiles, downhill or cross-country ski equipment, or 
 67.28  charges for marina services, launch services, and guide 
 67.29  services, or the sale of bait and fishing tackle.  For purposes 
 67.30  of this determination, a paid booking of five or more nights 
 67.31  shall be counted as two bookings.  Class 4c also includes 
 67.32  commercial use real property used exclusively for recreational 
 67.33  purposes in conjunction with class 4c property devoted to 
 67.34  temporary and seasonal residential occupancy for recreational 
 67.35  purposes, up to a total of two acres, provided the property is 
 67.36  not devoted to commercial recreational use for more than 250 
 68.1   days in the year preceding the year of assessment and is located 
 68.2   within two miles of the class 4c property with which it is 
 68.3   used.  Class 4c property classified in this clause also includes 
 68.4   the remainder of class 1c resorts provided that the entire 
 68.5   property including that portion of the property classified as 
 68.6   class 1c also meets the requirements for class 4c under this 
 68.7   clause; otherwise the entire property is classified as class 3.  
 68.8   Owners of real property devoted to temporary and seasonal 
 68.9   residential occupancy for recreation purposes and all or a 
 68.10  portion of which was devoted to commercial purposes for not more 
 68.11  than 250 days in the year preceding the year of assessment 
 68.12  desiring classification as class 1c or 4c, must submit a 
 68.13  declaration to the assessor designating the cabins or units 
 68.14  occupied for 250 days or less in the year preceding the year of 
 68.15  assessment by January 15 of the assessment year.  Those cabins 
 68.16  or units and a proportionate share of the land on which they are 
 68.17  located will be designated class 1c or 4c as otherwise 
 68.18  provided.  The remainder of the cabins or units and a 
 68.19  proportionate share of the land on which they are located will 
 68.20  be designated as class 3a.  The owner of property desiring 
 68.21  designation as class 1c or 4c property must provide guest 
 68.22  registers or other records demonstrating that the units for 
 68.23  which class 1c or 4c designation is sought were not occupied for 
 68.24  more than 250 days in the year preceding the assessment if so 
 68.25  requested.  The portion of a property operated as a (1) 
 68.26  restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 
 68.27  facility operated on a commercial basis not directly related to 
 68.28  temporary and seasonal residential occupancy for recreation 
 68.29  purposes shall not qualify for class 1c or 4c; 
 68.30     (2) qualified property used as a golf course if: 
 68.31     (i) it is open to the public on a daily fee basis.  It may 
 68.32  charge membership fees or dues, but a membership fee may not be 
 68.33  required in order to use the property for golfing, and its green 
 68.34  fees for golfing must be comparable to green fees typically 
 68.35  charged by municipal courses; and 
 68.36     (ii) it meets the requirements of section 273.112, 
 69.1   subdivision 3, paragraph (d). 
 69.2      A structure used as a clubhouse, restaurant, or place of 
 69.3   refreshment in conjunction with the golf course is classified as 
 69.4   class 3a property; 
 69.5      (3) real property up to a maximum of one acre of land owned 
 69.6   by a nonprofit community service oriented organization; provided 
 69.7   that the property is not used for a revenue-producing activity 
 69.8   for more than six days in the calendar year preceding the year 
 69.9   of assessment and the property is not used for residential 
 69.10  purposes on either a temporary or permanent basis.  For purposes 
 69.11  of this clause, a "nonprofit community service oriented 
 69.12  organization" means any corporation, society, association, 
 69.13  foundation, or institution organized and operated exclusively 
 69.14  for charitable, religious, fraternal, civic, or educational 
 69.15  purposes, and which is exempt from federal income taxation 
 69.16  pursuant to section 501(c)(3), (10), or (19) of the Internal 
 69.17  Revenue Code of 1986, as amended through December 31, 1990.  For 
 69.18  purposes of this clause, "revenue-producing activities" shall 
 69.19  include but not be limited to property or that portion of the 
 69.20  property that is used as an on-sale intoxicating liquor or 3.2 
 69.21  percent malt liquor establishment licensed under chapter 340A, a 
 69.22  restaurant open to the public, bowling alley, a retail store, 
 69.23  gambling conducted by organizations licensed under chapter 349, 
 69.24  an insurance business, or office or other space leased or rented 
 69.25  to a lessee who conducts a for-profit enterprise on the 
 69.26  premises.  Any portion of the property which is used for 
 69.27  revenue-producing activities for more than six days in the 
 69.28  calendar year preceding the year of assessment shall be assessed 
 69.29  as class 3a.  The use of the property for social events open 
 69.30  exclusively to members and their guests for periods of less than 
 69.31  24 hours, when an admission is not charged nor any revenues are 
 69.32  received by the organization shall not be considered a 
 69.33  revenue-producing activity; 
 69.34     (4) post-secondary student housing of not more than one 
 69.35  acre of land that is owned by a nonprofit corporation organized 
 69.36  under chapter 317A and is used exclusively by a student 
 70.1   cooperative, sorority, or fraternity for on-campus housing or 
 70.2   housing located within two miles of the border of a college 
 70.3   campus; 
 70.4      (5) manufactured home parks as defined in section 327.14, 
 70.5   subdivision 3; 
 70.6      (6) real property that is actively and exclusively devoted 
 70.7   to indoor fitness, health, social, recreational, and related 
 70.8   uses, is owned and operated by a not-for-profit corporation, and 
 70.9   is located within the metropolitan area as defined in section 
 70.10  473.121, subdivision 2; 
 70.11     (7) a leased or privately owned noncommercial aircraft 
 70.12  storage hangar not exempt under section 272.01, subdivision 2, 
 70.13  and the land on which it is located, provided that: 
 70.14     (i) the land is on an airport owned or operated by a city, 
 70.15  town, county, metropolitan airports commission, or group 
 70.16  thereof; and 
 70.17     (ii) the land lease, or any ordinance or signed agreement 
 70.18  restricting the use of the leased premise, prohibits commercial 
 70.19  activity performed at the hangar. 
 70.20     If a hangar classified under this clause is sold after June 
 70.21  30, 2000, a bill of sale must be filed by the new owner with the 
 70.22  assessor of the county where the property is located within 60 
 70.23  days of the sale; and 
 70.24     (8) residential real estate, a portion of which is used by 
 70.25  the owner for homestead purposes, and that is also a place of 
 70.26  lodging, if all of the following criteria are met: 
 70.27     (i) rooms are provided for rent to transient guests that 
 70.28  generally stay for periods of 14 or fewer days; 
 70.29     (ii) meals are provided to persons who rent rooms, the cost 
 70.30  of which is incorporated in the basic room rate; 
 70.31     (iii) meals are not provided to the general public except 
 70.32  for special events on fewer than seven days in the calendar year 
 70.33  preceding the year of the assessment; and 
 70.34     (iv) the owner is the operator of the property. 
 70.35  The market value subject to the 4c classification under this 
 70.36  clause is limited to five rental units.  Any rental units on the 
 71.1   property in excess of five, must be valued and assessed as class 
 71.2   3a.  The portion of the property used for purposes of a 
 71.3   homestead by the owner must be classified as class 1a property 
 71.4   under subdivision 22. 
 71.5      Class 4c property has a class rate of 1.5 percent of market 
 71.6   value, except that (i) each parcel of seasonal residential 
 71.7   recreational property not used for commercial purposes has the 
 71.8   same class rates as class 4bb property, (ii) manufactured home 
 71.9   parks assessed under clause (5) have the same class rate as 
 71.10  class 4b property, (iii) commercial-use seasonal residential 
 71.11  recreational property has a class rate of one percent for the 
 71.12  first $500,000 of market value, which includes any market value 
 71.13  receiving the one percent rate under subdivision 22, and 1.25 
 71.14  percent for the remaining market value, (iv) the market value of 
 71.15  property described in clause (4) has a class rate of one 
 71.16  percent, (v) the market value of property described in clauses 
 71.17  (2) and (6) has a class rate of 1.25 percent, and (vi) that 
 71.18  portion of the market value of property in clause (8) qualifying 
 71.19  for class 4c property has a class rate of 1.25 percent.  
 71.20     (e) Class 4d property is qualifying low-income rental 
 71.21  housing certified to the assessor by the housing finance agency 
 71.22  under sections 273.126 and 462A.071.  Class 4d includes land in 
 71.23  proportion to the total market value of the building that is 
 71.24  qualifying low-income rental housing.  For all properties 
 71.25  qualifying as class 4d, the market value determined by the 
 71.26  assessor must be based on the normal approach to value using 
 71.27  normal unrestricted rents. 
 71.28     Class 4d property has a class rate of 0.9 percent for taxes 
 71.29  payable in 2002, and one percent for taxes payable in 2003 and 
 71.30  1.25 percent for taxes payable in 2004 and thereafter.  
 71.31     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 71.32  following final enactment. 
 71.33     Sec. 18.  Minnesota Statutes 2002, section 273.1398, 
 71.34  subdivision 4b, is amended to read: 
 71.35     Subd. 4b.  [COURT EXPENDITURES; MAINTENANCE OF EFFORT.] (a) 
 71.36  Until the costs of court administration as defined under section 
 72.1   480.183, subdivision 3, in a county have been transferred to the 
 72.2   state, each county in a judicial district transferring court 
 72.3   administration costs to state funding after July 1, 2001, shall 
 72.4   budget for the funding of these costs an amount at least equal 
 72.5   to the certified budget amount for calendar year 2001, increased 
 72.6   by six percent for each year from 2001 to 2003 and by eight 
 72.7   percent from 2004 to the year of the transfer.  The county shall 
 72.8   budget, fund, and authorize expenditures not less than the 
 72.9   amount calculated under this paragraph plus the temporary aid 
 72.10  amount under subdivision 4c for maintenance of effort of 
 72.11  administrative costs. 
 72.12     (b) By July 15, 2001, the court shall certify to each 
 72.13  county in the judicial district its cost of court administration 
 72.14  as defined under section 480.183, subdivision 3, based on 2001 
 72.15  budgets.  In making that determination, the court shall exclude 
 72.16  the budget costs of the county for the following categories: 
 72.17     (1) rent; 
 72.18     (2) examiner of titles; 
 72.19     (3) civil court appointed attorneys for civil matters; 
 72.20     (4) hospitalization costs; and 
 72.21     (5) cost of maintaining vital statistics. 
 72.22     The amount of funding provided by a county for courts that 
 72.23  is increased by the maintenance of effort requirement may not be 
 72.24  used by a county to pay the costs described in clauses (1) to 
 72.25  (5). 
 72.26     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 72.27  following final enactment. 
 72.28     Sec. 19.  Minnesota Statutes 2002, section 273.1398, 
 72.29  subdivision 4d, is amended to read: 
 72.30     Subd. 4d.  [AID OFFSET FOR OUT-OF-HOME PLACEMENT COSTS.] 
 72.31  For aid payable in 2004, each county's aid under subdivision 2 
 72.32  shall be permanently reduced by an amount equal to the county's 
 72.33  2004 reimbursement for nonfederal expenditures for out-of-home 
 72.34  placements, as provided in section 245.775, provided that 
 72.35  payments will be made under section 477A.0123 in calendar year 
 72.36  2004.  The counties shall provide all information requested by 
 73.1   the commissioner of human services necessary to allow the 
 73.2   commissioner to certify the previous three years' average 
 73.3   nonfederal costs to the commissioner of revenue by July 15, 2004 
 73.4   1, 2003.  The aid reduction under this subdivision must not 
 73.5   exceed the difference between (1) the amount of aid calculated 
 73.6   for the county for calendar year 2004 under subdivision 2, 
 73.7   including any addition under section 477A.07, and (2) the amount 
 73.8   of any aid reductions for the state takeover of courts contained 
 73.9   in Laws 2001, First Special Session chapter 5, article 5. 
 73.10     <h>[EFFECTIVE DATE.]</h> This section is effective for aids 
 73.11  payable in 2004 and thereafter. 
 73.12     Sec. 20.  Minnesota Statutes 2002, section 273.372, is 
 73.13  amended to read: 
 73.14     273.372 [PROCEEDINGS AND APPEALS; UTILITY OR RAILROAD 
 73.15  VALUATIONS.] 
 73.16     An appeal by a utility or railroad company concerning the 
 73.17  exemption, valuation, or classification on of property for which 
 73.18  the commissioner of revenue has provided the city or county 
 73.19  assessor with commissioner's orders valuations by order, or for 
 73.20  which the commissioner has recommended values to the city or 
 73.21  county assessor, must be brought against the commissioner in tax 
 73.22  court or in district court of the county where the property is 
 73.23  located, and not against the county or taxing district where the 
 73.24  property is located.  If the appeal to a court is of from an 
 73.25  order of the commissioner, it must be brought under chapter 
 73.26  271.  If the appeal is from the exemption, valuation, 
 73.27  classification, or tax that results from implementation of the 
 73.28  commissioner's order or recommendation, it must be brought under 
 73.29  chapter 278, and the procedures provisions in that chapter 
 73.30  apply, except that service shall be on the commissioner only and 
 73.31  not on the county officials specified in section 278.01, 
 73.32  subdivision 1.  This provision applies to the property contained 
 73.33  under described in sections 273.33, 273.35, 273.36, and 273.37, 
 73.34  but only if the appealed values have remained unchanged from 
 73.35  those provided to the city or county by the commissioner.  If 
 73.36  the exemption, valuation, or classification being appealed has 
 74.1   been changed by the city or county, then the action must be 
 74.2   brought under chapter 278 in the county where the property is 
 74.3   located and proper service must be made upon the county 
 74.4   officials as specified in section 278.01, subdivision 1. 
 74.5      Upon filing of any appeal by a utility company or railroad 
 74.6   against the commissioner, the commissioner shall give notice by 
 74.7   first class mail to each county which would be affected by the 
 74.8   appeal. 
 74.9      Companies that submit the reports under section 270.82 or 
 74.10  273.371 by the date specified in that section, or by the date 
 74.11  specified by the commissioner in an extension, may appeal 
 74.12  administratively to the commissioner under the procedures in 
 74.13  section 270.11, subdivision 6, prior to bringing an action in 
 74.14  tax court or in district court, however, instituting an 
 74.15  administrative appeal with the commissioner does not change or 
 74.16  modify the deadline in section 271.06 for appealing an order of 
 74.17  the commissioner in tax court or the deadline in section 278.01 
 74.18  for bringing an action filing a property tax claim or objection 
 74.19  in tax court or district court. 
 74.20     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 74.21  following final enactment. 
 74.22     Sec. 21.  Minnesota Statutes 2002, section 273.42, 
 74.23  subdivision 2, is amended to read: 
 74.24     Subd. 2.  Owners of land that is an agricultural or 
 74.25  nonagricultural homestead, nonhomestead agricultural land, 
 74.26  rental residential property, and both commercial and 
 74.27  noncommercial seasonal residential recreational property, as 
 74.28  those terms are defined in section 273.13 listed on records of 
 74.29  the county auditor or county treasurer over which runs a high 
 74.30  voltage transmission line as defined in section 116C.52, 
 74.31  subdivision 3 with a capacity of 200 kilovolts or more, except a 
 74.32  high voltage transmission line the construction of which was 
 74.33  commenced prior to July 1, 1974, shall receive a property tax 
 74.34  credit in an amount determined by multiplying a fraction, the 
 74.35  numerator of which is the length of high voltage transmission 
 74.36  line which runs over that parcel and the denominator of which is 
 75.1   the total length of that particular line running over all 
 75.2   property within the city or township by ten percent of the 
 75.3   transmission line tax revenue derived from the tax on that 
 75.4   portion of the line within the city or township pursuant to 
 75.5   section 273.36.  In the case of property owners in unorganized 
 75.6   townships, the property tax credit shall be determined by 
 75.7   multiplying a fraction, the numerator of which is the length of 
 75.8   the qualifying high voltage transmission line which runs over 
 75.9   the parcel and the denominator of which is the total length of 
 75.10  the qualifying high voltage transmission line running over all 
 75.11  property within all the unorganized townships within the county, 
 75.12  by the total utility property tax credit fund amount available 
 75.13  within the county for that year pursuant to subdivision 1.  
 75.14  Where a right-of-way width is shared by more than one property 
 75.15  owner, the numerator shall be adjusted by multiplying the length 
 75.16  of line on the parcel by the proportion of the total width on 
 75.17  the parcel owned by that property owner.  The amount of credit 
 75.18  for which the property qualifies shall not exceed 20 percent of 
 75.19  the total gross tax on the parcel prior to deduction of the 
 75.20  state paid agricultural credit and the state paid homestead 
 75.21  credit, provided that, if the property containing the 
 75.22  right-of-way is included in a parcel which exceeds 40 acres, the 
 75.23  total gross tax on the parcel shall be multiplied by a fraction, 
 75.24  the numerator of which is the sum of the number of acres in each 
 75.25  quarter-quarter section or portion thereof which contains a 
 75.26  right-of-way and the denominator of which is the total number of 
 75.27  acres in the parcel set forth on the tax statement, and the 
 75.28  maximum credit shall be 20 percent of the product of that 
 75.29  computation, prior to deduction of those credits.  The auditor 
 75.30  of the county in which the affected parcel is located shall 
 75.31  calculate the amount of the credit due for each parcel and 
 75.32  transmit that information to the county treasurer.  The county 
 75.33  auditor, in computing the credit received pursuant to section 
 75.34  273.135, shall reduce the gross tax by the amount of the credit 
 75.35  received pursuant to this section, unless the amount of the 
 75.36  credit would be less than $10. 
 76.1      If, after the county auditor has computed the credit to 
 76.2   those qualifying property owners in unorganized townships, there 
 76.3   is money remaining in the utility property tax credit fund, then 
 76.4   that excess amount in the fund shall be returned to the general 
 76.5   school fund of the county. 
 76.6      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 76.7   following final enactment. 
 76.8      Sec. 22.  Minnesota Statutes 2002, section 274.01, 
 76.9   subdivision 1, is amended to read: 
 76.10     Subdivision 1.  [ORDINARY BOARD; MEETINGS, DEADLINES, 
 76.11  GRIEVANCES.] (a) The town board of a town, or the council or 
 76.12  other governing body of a city, is the board of appeal and 
 76.13  equalization except (1) in cities whose charters provide for a 
 76.14  board of equalization or (2) in any city or town that has 
 76.15  transferred its local board of review power and duties to the 
 76.16  county board as provided in subdivision 3.  The county assessor 
 76.17  shall fix a day and time when the board or the board of 
 76.18  equalization shall meet in the assessment districts of the 
 76.19  county.  Notwithstanding any law or city charter to the 
 76.20  contrary, a city board of equalization shall be referred to as a 
 76.21  board of appeal and equalization.  On or before February 15 of 
 76.22  each year the assessor shall give written notice of the time to 
 76.23  the city or town clerk.  Notwithstanding the provisions of any 
 76.24  charter to the contrary, the meetings must be held between April 
 76.25  1 and May 31 each year.  The clerk shall give published and 
 76.26  posted notice of the meeting at least ten days before the date 
 76.27  of the meeting.  
 76.28     The board shall meet at the office of the clerk to review 
 76.29  the assessment and classification of property in the town or 
 76.30  city.  No changes in valuation or classification which are 
 76.31  intended to correct errors in judgment by the county assessor 
 76.32  may be made by the county assessor after the board has adjourned 
 76.33  in those cities or towns that hold a local board of review; 
 76.34  however, corrections of errors that are merely clerical in 
 76.35  nature or changes that extend homestead treatment to property 
 76.36  are permitted after adjournment until the tax extension date for 
 77.1   that assessment year.  The changes must be fully documented and 
 77.2   maintained in the assessor's office and must be available for 
 77.3   review by any person.  A copy of the changes made during this 
 77.4   period in those cities or towns that hold a local board of 
 77.5   review must be sent to the county board no later than December 
 77.6   31 of the assessment year.  
 77.7      (b) The board shall determine whether the taxable property 
 77.8   in the town or city has been properly placed on the list and 
 77.9   properly valued by the assessor.  If real or personal property 
 77.10  has been omitted, the board shall place it on the list with its 
 77.11  market value, and correct the assessment so that each tract or 
 77.12  lot of real property, and each article, parcel, or class of 
 77.13  personal property, is entered on the assessment list at its 
 77.14  market value.  No assessment of the property of any person may 
 77.15  be raised unless the person has been duly notified of the intent 
 77.16  of the board to do so.  On application of any person feeling 
 77.17  aggrieved, the board shall review the assessment or 
 77.18  classification, or both, and correct it as appears just.  The 
 77.19  board may not make an individual market value adjustment or 
 77.20  classification change that would benefit the property in cases 
 77.21  where the owner or other person having control over the property 
 77.22  will not permit the assessor to inspect the property and the 
 77.23  interior of any buildings or structures.  
 77.24     (c) A local board may reduce assessments upon petition of 
 77.25  the taxpayer but the total reductions must not reduce the 
 77.26  aggregate assessment made by the county assessor by more than 
 77.27  one percent.  If the total reductions would lower the aggregate 
 77.28  assessments made by the county assessor by more than one 
 77.29  percent, none of the adjustments may be made.  The assessor 
 77.30  shall correct any clerical errors or double assessments 
 77.31  discovered by the board without regard to the one percent 
 77.32  limitation.  
 77.33     (d) A local board does not have authority to grant an 
 77.34  exemption or to order property removed from the tax rolls. 
 77.35     (e) A majority of the members may act at the meeting, and 
 77.36  adjourn from day to day until they finish hearing the cases 
 78.1   presented.  The assessor shall attend, with the assessment books 
 78.2   and papers, and take part in the proceedings, but must not 
 78.3   vote.  The county assessor, or an assistant delegated by the 
 78.4   county assessor shall attend the meetings.  The board shall list 
 78.5   separately, on a form appended to the assessment book, all 
 78.6   omitted property added to the list by the board and all items of 
 78.7   property increased or decreased, with the market value of each 
 78.8   item of property, added or changed by the board, placed opposite 
 78.9   the item.  The county assessor shall enter all changes made by 
 78.10  the board in the assessment book.  
 78.11     (e) (f) Except as provided in subdivision 3, if a person 
 78.12  fails to appear in person, by counsel, or by written 
 78.13  communication before the board after being duly notified of the 
 78.14  board's intent to raise the assessment of the property, or if a 
 78.15  person feeling aggrieved by an assessment or classification 
 78.16  fails to apply for a review of the assessment or classification, 
 78.17  the person may not appear before the county board of appeal and 
 78.18  equalization for a review of the assessment or classification.  
 78.19  This paragraph does not apply if an assessment was made after 
 78.20  the local board meeting, as provided in section 273.01, or if 
 78.21  the person can establish not having received notice of market 
 78.22  value at least five days before the local board meeting.  
 78.23     (f) (g) The local board must complete its work and adjourn 
 78.24  within 20 days from the time of convening stated in the notice 
 78.25  of the clerk, unless a longer period is approved by the 
 78.26  commissioner of revenue.  No action taken after that date is 
 78.27  valid.  All complaints about an assessment or classification 
 78.28  made after the meeting of the board must be heard and determined 
 78.29  by the county board of equalization.  A nonresident may, at any 
 78.30  time, before the meeting of the board file written objections to 
 78.31  an assessment or classification with the county assessor.  The 
 78.32  objections must be presented to the board at its meeting by the 
 78.33  county assessor for its consideration. 
 78.34     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 78.35  following final enactment. 
 78.36     Sec. 23.  Minnesota Statutes 2002, section 274.13, 
 79.1   subdivision 1, is amended to read: 
 79.2      Subdivision 1.  [MEMBERS; MEETINGS; RULES FOR EQUALIZING 
 79.3   ASSESSMENTS.] The county commissioners, or a majority of them, 
 79.4   with the county auditor, or, if the auditor cannot be present, 
 79.5   the deputy county auditor, or, if there is no deputy, the court 
 79.6   administrator of the district court, shall form a board for the 
 79.7   equalization of the assessment of the property of the county, 
 79.8   including the property of all cities whose charters provide for 
 79.9   a board of equalization.  This board shall be referred to as the 
 79.10  county board of appeal and equalization.  The board shall meet 
 79.11  annually, on the date specified in section 274.14, at the office 
 79.12  of the auditor.  Each member shall take an oath to fairly and 
 79.13  impartially perform duties as a member.  The board shall examine 
 79.14  and compare the returns of the assessment of property of the 
 79.15  towns or districts, and equalize them so that each tract or lot 
 79.16  of real property and each article or class of personal property 
 79.17  is entered on the assessment list at its market value, subject 
 79.18  to the following rules: 
 79.19     (1) The board shall raise the valuation of each tract or 
 79.20  lot of real property which in its opinion is returned below its 
 79.21  market value to the sum believed to be its market value.  The 
 79.22  board must first give notice of intention to raise the valuation 
 79.23  to the person in whose name it is assessed, if the person is a 
 79.24  resident of the county.  The notice must fix a time and place 
 79.25  for a hearing.  
 79.26     (2) The board shall reduce the valuation of each tract or 
 79.27  lot which in its opinion is returned above its market value to 
 79.28  the sum believed to be its market value. 
 79.29     (3) The board shall raise the valuation of each class of 
 79.30  personal property which in its opinion is returned below its 
 79.31  market value to the sum believed to be its market value.  It 
 79.32  shall raise the aggregate value of the personal property of 
 79.33  individuals, firms, or corporations, when it believes that the 
 79.34  aggregate valuation, as returned, is less than the market value 
 79.35  of the taxable personal property possessed by the individuals, 
 79.36  firms, or corporations, to the sum it believes to be the market 
 80.1   value.  The board must first give notice to the persons of 
 80.2   intention to do so.  The notice must set a time and place for a 
 80.3   hearing. 
 80.4      (4) The board shall reduce the valuation of each class of 
 80.5   personal property that is returned above its market value to the 
 80.6   sum it believes to be its market value.  Upon complaint of a 
 80.7   party aggrieved, the board shall reduce the aggregate valuation 
 80.8   of the individual's personal property, or of any class of 
 80.9   personal property for which the individual is assessed, which in 
 80.10  its opinion has been assessed at too large a sum, to the sum it 
 80.11  believes was the market value of the individual's personal 
 80.12  property of that class.  
 80.13     (5) The board must not reduce the aggregate value of all 
 80.14  the property of its county, as submitted to the county board of 
 80.15  equalization, with the additions made by the auditor under this 
 80.16  chapter, by more than one percent of its whole valuation.  The 
 80.17  board may raise the aggregate valuation of real property, and of 
 80.18  each class of personal property, of the county, or of any town 
 80.19  or district of the county, when it believes it is below the 
 80.20  market value of the property, or class of property, to the 
 80.21  aggregate amount it believes to be its market value. 
 80.22     (6) The board shall change the classification of any 
 80.23  property which in its opinion is not properly classified. 
 80.24     (7) The board does not have the authority to grant an 
 80.25  exemption or to order property removed from the tax rolls. 
 80.26     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 80.27  following final enactment. 
 80.28     Sec. 24.  Minnesota Statutes 2002, section 275.025, 
 80.29  subdivision 1, is amended to read: 
 80.30     Subdivision 1.  [LEVY AMOUNT.] The state general levy is 
 80.31  levied against commercial-industrial property and 
 80.32  seasonal residential recreational property, as defined in this 
 80.33  section.  The state general levy base amount is $592,000,000 for 
 80.34  taxes payable in 2002.  For taxes payable in subsequent years, 
 80.35  the levy base amount is increased each year by multiplying the 
 80.36  levy base amount for the prior year by the sum of one plus the 
 81.1   rate of increase, if any, in the implicit price deflator for 
 81.2   government consumption expenditures and gross investment for 
 81.3   state and local governments prepared by the Bureau of Economic 
 81.4   Analysts of the United States Department of Commerce for the 
 81.5   12-month period ending March 31 of the year prior to the year 
 81.6   the taxes are payable.  The tax under this section is not 
 81.7   treated as a local tax rate under section 469.177 and is not the 
 81.8   levy of a governmental unit under chapters 276A and 473F.  
 81.9   Beginning in fiscal year 2004, and in each year thereafter, the 
 81.10  commissioner of finance shall deposit in an education reserve 
 81.11  account, which account is hereby established, the increased 
 81.12  amount of the state general levy received for deposit in the 
 81.13  general fund for that year over the amount of the state general 
 81.14  levy received for deposit in the general fund in fiscal year 
 81.15  2003.  The amounts in the education reserve account do not lapse 
 81.16  or cancel each year, but remain until appropriated by law for 
 81.17  education aid or higher education funding. 
 81.18     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
 81.19  payable in 2004 and thereafter, except that the change from 
 81.20  "seasonal recreational property" to "seasonal residential 
 81.21  recreational property" is effective the day following final 
 81.22  enactment. 
 81.23     Sec. 25.  Minnesota Statutes 2002, section 275.025, 
 81.24  subdivision 3, is amended to read: 
 81.25     Subd. 3.  [SEASONAL RESIDENTIAL RECREATIONAL TAX CAPACITY.] 
 81.26  For the purposes of this section, "seasonal residential 
 81.27  recreational tax capacity" means the tax capacity of all class 
 81.28  4c(1) property under section 273.13, subdivision 25, except that 
 81.29  the first $76,000 of market value of each noncommercial class 
 81.30  4c(1) property has a tax capacity for this purpose equal to 40 
 81.31  percent of its tax capacity under section 273.13. 
 81.32     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 81.33  following final enactment. 
 81.34     Sec. 26.  Minnesota Statutes 2002, section 275.025, 
 81.35  subdivision 4, is amended to read: 
 81.36     Subd. 4.  [APPORTIONMENT AND LEVY OF STATE GENERAL TAX.] 
 82.1   The state general tax must be distributed among the counties by 
 82.2   applying a uniform rate to each county's commercial-industrial 
 82.3   tax capacity and its seasonal residential recreational tax 
 82.4   capacity.  Within each county, the tax must be levied by 
 82.5   applying a uniform rate against commercial-industrial tax 
 82.6   capacity and seasonal residential recreational tax capacity.  By 
 82.7   November On or before October 1 each year, the commissioner of 
 82.8   revenue shall certify the a preliminary state general levy rate 
 82.9   to each county auditor that must be used to prepare the notices 
 82.10  of proposed property taxes for taxes payable in the following 
 82.11  year.  By January 1 of each year, the commissioner shall certify 
 82.12  the final state general levy rate to each county auditor that 
 82.13  shall be used in spreading taxes.  
 82.14     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
 82.15  payable in 2004 and thereafter, except that the change from 
 82.16  "seasonal recreational tax capacity" to "seasonal residential 
 82.17  recreational tax capacity" is effective the day following final 
 82.18  enactment. 
 82.19     Sec. 27.  Minnesota Statutes 2002, section 276.10, is 
 82.20  amended to read: 
 82.21     276.10 [APPORTIONMENT AND DISTRIBUTION OF FUNDS.] 
 82.22     On the settlement day determined in section 276.09 for each 
 82.23  year, the county auditor and county treasurer shall distribute 
 82.24  all undistributed funds in the treasury.  The funds must be 
 82.25  apportioned as provided by law, and credited to the state, town, 
 82.26  city, school district, special district and each county fund.  
 82.27  Within 20 days after the distribution is completed, the county 
 82.28  auditor shall report to the state auditor in the form prescribed 
 82.29  by the state auditor.  The county auditor shall issue a warrant 
 82.30  for the payment of money in the county treasury to the credit of 
 82.31  the state, town, city, school district, or special districts on 
 82.32  application of the persons entitled to receive the payment.  The 
 82.33  county auditor may apply the local tax rate from the year before 
 82.34  the year of distribution when apportioning and distributing 
 82.35  delinquent tax proceeds, if the composition of the previous 
 82.36  year's local tax rate between taxing districts is not 
 83.1   significantly different from the local tax rate that existed for 
 83.2   the year of the delinquency.  
 83.3      <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
 83.4   payable in 2004 and thereafter. 
 83.5      Sec. 28.  Minnesota Statutes 2002, section 276.11, 
 83.6   subdivision 1, is amended to read: 
 83.7      Subdivision 1.  [GENERALLY.] As soon as practical after the 
 83.8   settlement day determined in section 276.09, the county 
 83.9   treasurer shall pay to the state treasurer or the treasurer of a 
 83.10  town, city, school district, or special district, on the warrant 
 83.11  of the county auditor, all receipts of taxes levied by the 
 83.12  taxing district and deliver up all orders and other evidences of 
 83.13  indebtedness of the taxing district, taking triplicate receipts 
 83.14  for them.  The treasurer shall file one of the receipts with the 
 83.15  county auditor, and shall return one by mail on the day of its 
 83.16  receipt to the clerk of the town, city, school district, or 
 83.17  special district to which payment was made.  The clerk shall 
 83.18  keep the receipt in the clerk's office.  Upon written request of 
 83.19  the taxing district, to the extent practicable, the county 
 83.20  treasurer shall make partial payments of amounts collected 
 83.21  periodically in advance of the next settlement and 
 83.22  distribution.  A statement prepared by the county treasurer must 
 83.23  accompany each payment.  It must state the years for which taxes 
 83.24  included in the payment were collected and, for each year, the 
 83.25  amount of the taxes and any penalties on the tax.  Upon written 
 83.26  request of a taxing district, except school districts, the 
 83.27  county treasurer shall pay at least 70 percent of the estimated 
 83.28  collection within 30 days after the settlement date determined 
 83.29  in section 276.09.  Within seven business days after the due 
 83.30  date, or 28 calendar days after the postmark date on the 
 83.31  envelopes containing real or personal property tax statements, 
 83.32  whichever is latest, the county treasurer shall pay to the 
 83.33  treasurer of the school districts 50 percent of the estimated 
 83.34  collections arising from taxes levied by and belonging to the 
 83.35  school district, unless the school district elects to receive 50 
 83.36  percent of the estimated collections arising from taxes levied 
 84.1   by and belonging to the school district after making a 
 84.2   proportionate reduction to reflect any loss in collections as 
 84.3   the result of any delay in mailing tax statements.  In that 
 84.4   case, 50 percent of those adjusted, estimated collections shall 
 84.5   be paid by the county treasurer to the treasurer of the school 
 84.6   district within seven business days of the due date.  The 
 84.7   remaining 50 percent of the estimated collections must be paid 
 84.8   to the treasurer of the school district within the next seven 
 84.9   business days of the later of the dates in the preceding 
 84.10  sentence, unless the school district elects to receive the 
 84.11  remainder of its estimated collections after a proportionate 
 84.12  reduction has been made to reflect any loss in collections as 
 84.13  the result of any delay in mailing tax statements.  In that 
 84.14  case, the remaining 50 percent of those adjusted, estimated 
 84.15  collections shall be paid by the county treasurer to the 
 84.16  treasurer of the school district within 14 days of the due 
 84.17  date.  The treasurer shall pay the balance of the amounts 
 84.18  collected to the state before June 30, or to a municipal 
 84.19  corporation or other body within 60 days after the settlement 
 84.20  date determined in section 276.09.  After 45 days interest at an 
 84.21  annual rate of eight percent accrues and must be paid to the 
 84.22  taxing district.  Interest must be paid upon appropriation from 
 84.23  the general revenue fund of the county.  If not paid, it may be 
 84.24  recovered by the taxing district, in a civil action. 
 84.25     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
 84.26  payable in 2004 and thereafter. 
 84.27     Sec. 29.  [276.112] [STATE PROPERTY TAXES; COUNTY 
 84.28  TREASURER.] 
 84.29     On or before January 25 each year, for the period ending 
 84.30  December 31 of the prior year, and on or before June 29 each 
 84.31  year, for the period ending on the most recent settlement day 
 84.32  determined in section 276.09, and on or before December 2 each 
 84.33  year, for the period ending November 20, the county treasurer 
 84.34  must make full settlement with the county auditor according to 
 84.35  sections 276.09, 276.10, and 276.111 for all receipts of state 
 84.36  property taxes levied under section 275.025, and must transmit 
 85.1   those receipts to the commissioner of revenue by electronic 
 85.2   means. 
 85.3      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 85.4   following final enactment. 
 85.5      Sec. 30.  Minnesota Statutes 2002, section 277.20, 
 85.6   subdivision 2, is amended to read: 
 85.7      Subd. 2.  [FILING OF LIEN FOR ENFORCEABILITY.] The lien 
 85.8   imposed by subdivision 1 is not enforceable against any 
 85.9   purchaser, mortgagee, pledgee, holder of a Uniform Commercial 
 85.10  Code security interest, mechanic's lienor, or judgment lien 
 85.11  creditor until a notice of lien has been filed by the county 
 85.12  treasurer in the office of the county recorder of the county in 
 85.13  which the property is situated, or, in the case of personal 
 85.14  property belonging to an individual who is not a resident of 
 85.15  this state, or that is a corporation, partnership, or other 
 85.16  organization, in the office of the secretary of state.  Priority 
 85.17  of a lien created under Laws 1991, chapter 291, article 15, 
 85.18  shall be determined in accordance with the provisions of section 
 85.19  507.34.  Liens filed in the office of the county recorder shall 
 85.20  be filed with the state tax liens filed pursuant to section 
 85.21  270.69, and the index shall indicate the name of the county for 
 85.22  which the lien was filed.  If the land is registered, the notice 
 85.23  of lien shall be filed in the office of the registrar of titles 
 85.24  of the county in which the property is registered.  
 85.25  Notwithstanding any other law to the contrary, the county 
 85.26  treasurer is exempt from the payment of fees when the lien is 
 85.27  offered for filing or recording; the fee for filing or recording 
 85.28  the lien must be paid at the time the release of lien is offered 
 85.29  for filing or recording.  Notwithstanding any law to the 
 85.30  contrary, the fee for filing or recording the lien or the 
 85.31  release of lien is $15.  
 85.32     <h>[EFFECTIVE DATE.]</h> This section is effective for liens filed 
 85.33  on or after the day following final enactment. 
 85.34     Sec. 31.  Minnesota Statutes 2002, section 279.06, 
 85.35  subdivision 1, is amended to read: 
 85.36     Subdivision 1.  [LIST AND NOTICE.] Within five days after 
 86.1   the filing of such list, the court administrator shall return a 
 86.2   copy thereof to the county auditor, with a notice prepared and 
 86.3   signed by the court administrator, and attached thereto, which 
 86.4   may be substantially in the following form: 
 86.5      State of Minnesota        )                            
 86.6                                ) ss.                        
 86.7      County of ............... )                            
 86.8                                               District Court
 86.9                                .......... Judicial District.
 86.10     The state of Minnesota, to all persons, companies, or 
 86.11  corporations who have or claim any estate, right, title, or 
 86.12  interest in, claim to, or lien upon, any of the several parcels 
 86.13  of land described in the list hereto attached: 
 86.14     The list of taxes and penalties on real property for the 
 86.15  county of ............................... remaining delinquent 
 86.16  on the first Monday in January, ......., has been filed in the 
 86.17  office of the court administrator of the district court of said 
 86.18  county, of which that hereto attached is a copy.  Therefore, 
 86.19  you, and each of you, are hereby required to file in the office 
 86.20  of said court administrator, on or before the 20th day after the 
 86.21  publication of this notice and list, your answer, in writing, 
 86.22  setting forth any objection or defense you may have to the 
 86.23  taxes, or any part thereof, upon any parcel of land described in 
 86.24  the list, in, to, or on which you have or claim any estate, 
 86.25  right, title, interest, claim, or lien, and, in default thereof, 
 86.26  judgment will be entered against such parcel of land for the 
 86.27  taxes on such list appearing against it, and for all penalties, 
 86.28  interest, and costs.  Based upon said judgment, the land shall 
 86.29  be sold to the state of Minnesota on the second Monday in May, 
 86.30  .......  The period of redemption for all lands sold to the 
 86.31  state at a tax judgment sale shall be three years from the date 
 86.32  of sale to the state of Minnesota if the land is within an 
 86.33  incorporated area unless it is: 
 86.34     (a) nonagricultural homesteaded land as defined in section 
 86.35  273.13, subdivision 22; 
 86.36     (b) homesteaded agricultural land as defined in section 
 87.1   273.13, subdivision 23, paragraph (a); 
 87.2      (c) seasonal residential recreational land as defined in 
 87.3   section 273.13, subdivisions 22, paragraph (c), and 25, 
 87.4   paragraph (c) (d), clause (5) (1), in which event the period of 
 87.5   redemption is five years from the date of sale to the state of 
 87.6   Minnesota; 
 87.7      (d) abandoned property and pursuant to section 281.173 a 
 87.8   court order has been entered shortening the redemption period to 
 87.9   five weeks; or 
 87.10     (e) vacant property as described under section 281.174, 
 87.11  subdivision 2, and for which a court order is entered shortening 
 87.12  the redemption period under section 281.174. 
 87.13     The period of redemption for all other lands sold to the 
 87.14  state at a tax judgment sale shall be five years from the date 
 87.15  of sale.  
 87.16     Inquiries as to the proceedings set forth above can be made 
 87.17  to the county auditor of ..... county whose address is ..... .  
 87.18      (Signed) ............................................., 
 87.19      Court Administrator of the District Court of the County 
 87.20      of .................................................... 
 87.21      (Here insert list.) 
 87.22     The list referred to in the notice shall be substantially 
 87.23  in the following form: 
 87.24     List of real property for the county of 
 87.25  ......................., on which taxes remain delinquent on the 
 87.26  first Monday in January, .......: 
 87.27                        Town of (Fairfield), 
 87.28                     Township (40), Range (20), 
 87.29   Names (and 
 87.30   Current Filed 
 87.31   Addresses) for 
 87.32   the Taxpayers 
 87.33   and Fee Owners 
 87.34   and in Addition 
 87.35   Those Parties 
 87.36   Who Have Filed 
 88.1    Their Addresses                            Tax 
 88.2    Pursuant to     Subdivision of            Parcel   Total Tax 
 88.3    section 276.041    Section       Section  Number  and Penalty
 88.4                                                        $ cts.
 88.5    John Jones  S.E. 1/4 of S.W. 1/4    10    23101       2.20  
 88.6    (825 Fremont  
 88.7    Fairfield, MN 
 88.8    55000) 
 88.9    Bruce Smith  That part of N.E. 1/4 
 88.10   (2059 Hand   of S.W. 1/4 desc. as 
 88.11   Fairfield,   follows:  Beg. at the 
 88.12   MN 55000)    S.E. corner of said 
 88.13   and          N.E. 1/4 of S.W. 1/4;  
 88.14   Fairfield    thence N. along the E.  
 88.15   State Bank   line of said N.E. 1/4 
 88.16   (100 Main    of S.W. 1/4 a distance 
 88.17   Street       of 600 ft.; thence W. 
 88.18   Fairfield,   parallel with the S. 
 88.19   MN 55000)    line of said N.E. 1/4 
 88.20                of S.W. 1/4 a distance 
 88.21                of 600 ft.; thence S. 
 88.22                parallel with said E. 
 88.23                line a distance of 600 
 88.24                ft. to S. line of said 
 88.25                N.E. 1/4 of S.W. 1/4;
 88.26                thence E. along said S. 
 88.27                line a distance of 600 
 88.28                ft. to the point of 
 88.29                beg. ...............    21    33211       3.15  
 88.30     As to platted property, the form of heading shall conform 
 88.31  to circumstances and be substantially in the following form:  
 88.32                        City of (Smithtown) 
 88.33                  Brown's Addition, or Subdivision 
 88.34   Names (and 
 88.35   Current Filed 
 88.36   Addresses) for 
 89.1    the Taxpayers 
 89.2    and Fee Owners 
 89.3    and in Addition 
 89.4    Those Parties 
 89.5    Who have Filed 
 89.6    Their Addresses                         Tax 
 89.7    Pursuant to                            Parcel      Total Tax 
 89.8    section 276.041     Lot     Block      Number     and Penalty
 89.9                                                        $ cts.
 89.10   John Jones           15         9      58243          2.20 
 89.11   (825 Fremont 
 89.12   Fairfield, 
 89.13   MN 55000) 
 89.14   Bruce Smith          16         9      58244          3.15 
 89.15   (2059 Hand 
 89.16   Fairfield, 
 89.17   MN 55000) 
 89.18   and 
 89.19   Fairfield 
 89.20   State Bank 
 89.21   (100 Main Street 
 89.22   Fairfield, 
 89.23   MN 55000) 
 89.24     The names, descriptions, and figures employed in 
 89.25  parentheses in the above forms are merely for purposes of 
 89.26  illustration. 
 89.27     The name of the town, township, range or city, and addition 
 89.28  or subdivision, as the case may be, shall be repeated at the 
 89.29  head of each column of the printed lists as brought forward from 
 89.30  the preceding column.  
 89.31     Errors in the list shall not be deemed to be a material 
 89.32  defect to affect the validity of the judgment and sale. 
 89.33     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 89.34  following final enactment. 
 89.35     Sec. 32.  Minnesota Statutes 2002, section 281.17, is 
 89.36  amended to read: 
 90.1      281.17 [PERIOD FOR REDEMPTION.] 
 90.2      Except for properties for which the period of redemption 
 90.3   has been limited under sections 281.173 and 281.174, the 
 90.4   following periods for redemption apply. 
 90.5      The period of redemption for all lands sold to the state at 
 90.6   a tax judgment sale shall be three years from the date of sale 
 90.7   to the state of Minnesota if the land is within an incorporated 
 90.8   area unless it is:  (a) nonagricultural homesteaded land as 
 90.9   defined in section 273.13, subdivision 22; (b) homesteaded 
 90.10  agricultural land as defined in section 273.13, subdivision 23, 
 90.11  paragraph (a); or (c) seasonal residential recreational land as 
 90.12  defined in section 273.13, subdivision 22, paragraph (c), or 25, 
 90.13  paragraph (d), clause (1), for which the period of redemption is 
 90.14  five years from the date of sale to the state of Minnesota. 
 90.15     The period of redemption for homesteaded lands as defined 
 90.16  in section 273.13, subdivision 22, located in a targeted 
 90.17  neighborhood as defined in Laws 1987, chapter 386, article 6, 
 90.18  section 4, and sold to the state at a tax judgment sale is three 
 90.19  years from the date of sale.  The period of redemption for all 
 90.20  lands located in a targeted neighborhood as defined in Laws 
 90.21  1987, chapter 386, article 6, section 4, except (1) homesteaded 
 90.22  lands as defined in section 273.13, subdivision 22, and (2) for 
 90.23  periods of redemption beginning after June 30, 1991, but before 
 90.24  July 1, 1996, lands located in the Loring Park targeted 
 90.25  neighborhood on which a notice of lis pendens has been served, 
 90.26  and sold to the state at a tax judgment sale is one year from 
 90.27  the date of sale. 
 90.28     The period of redemption for all real property constituting 
 90.29  a mixed municipal solid waste disposal facility that is a 
 90.30  qualified facility under section 115B.39, subdivision 1, is one 
 90.31  year from the date of the sale to the state of Minnesota. 
 90.32     The period of redemption for all other lands sold to the 
 90.33  state at a tax judgment sale shall be five years from the date 
 90.34  of sale, except that the period of redemption for nonhomesteaded 
 90.35  agricultural land as defined in section 273.13, subdivision 23, 
 90.36  paragraph (b), shall be two years from the date of sale if at 
 91.1   that time that property is owned by a person who owns one or 
 91.2   more parcels of property on which taxes are delinquent, and the 
 91.3   delinquent taxes are more than 25 percent of the prior year's 
 91.4   school district levy. 
 91.5      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 91.6   following final enactment. 
 91.7      Sec. 33.  Minnesota Statutes 2002, section 282.01, 
 91.8   subdivision 7a, is amended to read: 
 91.9      Subd. 7a.  [CITY SALES; ALTERNATE PROCEDURES.] Land located 
 91.10  in a home rule charter or statutory city, or in a town which 
 91.11  cannot be improved because of noncompliance with local 
 91.12  ordinances regarding minimum area, shape, frontage or access may 
 91.13  be sold by the county auditor pursuant to this subdivision if 
 91.14  the auditor determines that a nonpublic sale will encourage the 
 91.15  approval of sale of the land by the city or town and promote its 
 91.16  return to the tax rolls.  If the physical characteristics of the 
 91.17  land indicate that its highest and best use will be achieved by 
 91.18  combining it with an adjoining parcel and the city or town has 
 91.19  not adopted a local ordinance governing minimum area, shape, 
 91.20  frontage, or access, the land may also be sold pursuant to this 
 91.21  subdivision.  If the property consists of an undivided interest 
 91.22  in land or land and improvements, the property may also be sold 
 91.23  to the other owners under this subdivision.  The sale of land 
 91.24  pursuant to this subdivision shall be subject to any conditions 
 91.25  imposed by the county board pursuant to section 282.03.  The 
 91.26  governing body of the city or town may recommend to the county 
 91.27  board conditions to be imposed on the sale.  The county auditor 
 91.28  may restrict the sale to owners of lands adjoining the land to 
 91.29  be sold.  The county auditor shall conduct the sale by sealed 
 91.30  bid or may select another means of sale.  The land shall be sold 
 91.31  to the highest bidder but in no event shall the land be sold for 
 91.32  less than its appraised value.  All owners of land adjoining the 
 91.33  land to be sold shall be given a written notice at least 30 days 
 91.34  prior to the sale.  
 91.35     This subdivision shall be liberally construed to encourage 
 91.36  the sale and utilization of tax-forfeited land, to eliminate 
 92.1   nuisances and dangerous conditions and to increase compliance 
 92.2   with land use ordinances. 
 92.3      <h>[EFFECTIVE DATE.]</h> This section is effective for sales 
 92.4   occurring on or after the day following final enactment. 
 92.5      Sec. 34.  Minnesota Statutes 2002, section 282.08, is 
 92.6   amended to read: 
 92.7      282.08 [APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.] 
 92.8      The net proceeds from the sale or rental of any parcel of 
 92.9   forfeited land, or from the sale of products from the forfeited 
 92.10  land, must be apportioned by the county auditor to the taxing 
 92.11  districts interested in the land, as follows: 
 92.12     (1) the amounts necessary to pay the state general tax levy 
 92.13  against the parcel for taxes payable in the year for which the 
 92.14  tax judgment was entered, and for each subsequent payable year 
 92.15  up to and including the year of forfeiture, must be apportioned 
 92.16  to the state; 
 92.17     (2) the portion required to pay any amounts included in the 
 92.18  appraised value under section 282.01, subdivision 3, as 
 92.19  representing increased value due to any public improvement made 
 92.20  after forfeiture of the parcel to the state, but not exceeding 
 92.21  the amount certified by the clerk of the municipality must be 
 92.22  apportioned to the municipal subdivision entitled to it; 
 92.23     (2) (3) the portion required to pay any amount included in 
 92.24  the appraised value under section 282.019, subdivision 5, 
 92.25  representing increased value due to response actions taken after 
 92.26  forfeiture of the parcel to the state, but not exceeding the 
 92.27  amount of expenses certified by the pollution control agency or 
 92.28  the commissioner of agriculture, must be apportioned to the 
 92.29  agency or the commissioner of agriculture and deposited in the 
 92.30  fund from which the expenses were paid; 
 92.31     (3) (4) the portion of the remainder required to discharge 
 92.32  any special assessment chargeable against the parcel for 
 92.33  drainage or other purpose whether due or deferred at the time of 
 92.34  forfeiture, must be apportioned to the municipal subdivision 
 92.35  entitled to it; and 
 92.36     (4) (5) any balance must be apportioned as follows: 
 93.1      (i) The county board may annually by resolution set aside 
 93.2   no more than 30 percent of the receipts remaining to be used for 
 93.3   timber development on tax-forfeited land and dedicated memorial 
 93.4   forests, to be expended under the supervision of the county 
 93.5   board.  It must be expended only on projects approved by the 
 93.6   commissioner of natural resources. 
 93.7      (ii) The county board may annually by resolution set aside 
 93.8   no more than 20 percent of the receipts remaining to be used for 
 93.9   the acquisition and maintenance of county parks or recreational 
 93.10  areas as defined in sections 398.31 to 398.36, to be expended 
 93.11  under the supervision of the county board. 
 93.12     (iii) Any balance remaining must be apportioned as 
 93.13  follows:  county, 40 percent; town or city, 20 percent; and 
 93.14  school district, 40 percent, provided, however, that in 
 93.15  unorganized territory that portion which would have accrued to 
 93.16  the township must be administered by the county board of 
 93.17  commissioners. 
 93.18     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
 93.19  payable in 2004 and thereafter. 
 93.20     Sec. 35.  Minnesota Statutes 2002, section 290C.02, 
 93.21  subdivision 3, is amended to read: 
 93.22     Subd. 3.  [CLAIMANT.] "Claimant" means a person, as that 
 93.23  term is defined in section 290.01, subdivision 2, who owns 
 93.24  forest land in Minnesota and files an application authorized by 
 93.25  the Sustainable Forest Incentive Act.  For purposes of section 
 93.26  290C.11, claimant also includes any person bound by the covenant 
 93.27  required in section 290C.04.  No more than one claimant is 
 93.28  entitled to a payment under this chapter with respect to any 
 93.29  tract, parcel, or piece of land enrolled under this chapter that 
 93.30  has been assigned the same parcel identification number.  When 
 93.31  enrolled forest land is owned by two or more persons, the owners 
 93.32  must determine between them which person may claim the payments 
 93.33  provided under sections 290C.01 to 290C.11. 
 93.34     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 93.35  following final enactment. 
 93.36     Sec. 36.  Minnesota Statutes 2002, section 290C.02, 
 94.1   subdivision 7, is amended to read: 
 94.2      Subd. 7.  [FOREST MANAGEMENT PLAN.] "Forest management 
 94.3   plan" means a written document providing a framework for 
 94.4   site-specific healthy, productive, and sustainable forest 
 94.5   resources.  A forest management plan must include at least the 
 94.6   following:  (i) owner-specific forest management goals for the 
 94.7   property land; (ii) a reliable field inventory of the individual 
 94.8   forest cover types, their age, and density; (iii) a description 
 94.9   of the soil type and quality; (iv) an aerial photo and/or map of 
 94.10  the vegetation and other natural features of the property land 
 94.11  clearly indicating the boundaries of the property land and of 
 94.12  the forest land; (v) the proposed future conditions of the 
 94.13  property land; (vi) prescriptions to meet proposed future 
 94.14  conditions of the property land; (vii) a recommended timetable 
 94.15  for implementing the prescribed activities; and (viii) a legal 
 94.16  description of the parcels land encompassing the parcels 
 94.17  included in the plan.  All management activities prescribed in a 
 94.18  plan must be in accordance with the recommended timber 
 94.19  harvesting and forest management guidelines.  The commissioner 
 94.20  of natural resources shall provide a framework for plan content 
 94.21  and updating and revising plans. 
 94.22     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 94.23  following final enactment. 
 94.24     Sec. 37.  Minnesota Statutes 2002, section 290C.03, is 
 94.25  amended to read: 
 94.26     290C.03 [ELIGIBILITY REQUIREMENTS.] 
 94.27     (a) Property Land may be enrolled in the sustainable forest 
 94.28  incentive program under this chapter if all of the following 
 94.29  conditions are met: 
 94.30     (1) property the land consists of at least 20 contiguous 
 94.31  acres and at least 50 percent of the land must meet the 
 94.32  definition of forest land in section 88.01, subdivision 7, 
 94.33  during the enrollment; 
 94.34     (2) a forest management plan for the property land must be 
 94.35  prepared by an approved plan writer and implemented during the 
 94.36  period in which the land is enrolled; 
 95.1      (3) timber harvesting and forest management guidelines must 
 95.2   be used in conjunction with any timber harvesting or forest 
 95.3   management activities conducted on the land during the period in 
 95.4   which the land is enrolled; 
 95.5      (4) the property land must be enrolled for a minimum of 
 95.6   eight years; 
 95.7      (5) there are no delinquent property taxes on the property 
 95.8   land; and 
 95.9      (6) claimants enrolling more than 1,920 acres in the 
 95.10  sustainable forest incentive program must allow year-round, 
 95.11  nonmotorized access to fish and wildlife resources on enrolled 
 95.12  land except within one-fourth mile of a permanent dwelling or 
 95.13  during periods of high fire hazard as determined by the 
 95.14  commissioner of natural resources. 
 95.15     (b) Claimants required to allow access under paragraph (a), 
 95.16  clause (6), do not by that action: 
 95.17     (1) extend any assurance that the land is safe for any 
 95.18  purpose; 
 95.19     (2) confer upon the person the legal status of an invitee 
 95.20  or licensee to whom a duty of care is owed; or 
 95.21     (3) assume responsibility for or incur liability for any 
 95.22  injury to the person or property caused by an act or omission of 
 95.23  the person. 
 95.24     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 95.25  following final enactment. 
 95.26     Sec. 38.  Minnesota Statutes 2002, section 290C.07, is 
 95.27  amended to read: 
 95.28     290C.07 [CALCULATION OF INCENTIVE PAYMENT.] 
 95.29     An approved claimant under the sustainable forest incentive 
 95.30  program is eligible to receive an annual payment.  The payment 
 95.31  shall equal the greater of: 
 95.32     (1) the difference between the property tax that would be 
 95.33  paid on the property land using the previous year's statewide 
 95.34  average total township tax rate and the class rate for class 2b 
 95.35  timberland under section 273.13, subdivision 23, paragraph (b), 
 95.36  if the property land were valued at (i) the average statewide 
 96.1   timberland market value per acre calculated under section 
 96.2   290C.06, and (ii) the average statewide timberland current use 
 96.3   value per acre calculated under section 290C.02, subdivision 5; 
 96.4      (2) two-thirds of the property tax amount determined by 
 96.5   using the previous year's statewide average total township tax 
 96.6   rate, the estimated market value per acre as calculated in 
 96.7   section 290C.06, and the class rate for 2b timberland under 
 96.8   section 273.13, subdivision 23, paragraph (b); or 
 96.9      (3) $1.50 per acre for each acre enrolled in the 
 96.10  sustainable forest incentive program. 
 96.11     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 96.12  following final enactment. 
 96.13     Sec. 39.  Minnesota Statutes 2002, section 290C.09, is 
 96.14  amended to read: 
 96.15     290C.09 [REMOVAL FOR PROPERTY TAX DELINQUENCY.] 
 96.16     The commissioner shall immediately remove any property land 
 96.17  enrolled in the sustainable forest incentive program for which 
 96.18  taxes are determined to be delinquent as provided in chapter 279 
 96.19  and shall notify the claimant of such action.  Lands terminated 
 96.20  from the sustainable forest incentive program under this section 
 96.21  are not entitled to any payments provided in this chapter and 
 96.22  are subject to removal penalties prescribed in section 290C.11.  
 96.23  The claimant has 60 days from the receipt of notice from the 
 96.24  commissioner under this section to pay the delinquent taxes.  If 
 96.25  the delinquent taxes are paid within this 60-day period, the 
 96.26  lands shall be reinstated in the program as if they had not been 
 96.27  withdrawn and without the payment of a penalty. 
 96.28     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 96.29  following final enactment. 
 96.30     Sec. 40.  Minnesota Statutes 2002, section 290C.10, is 
 96.31  amended to read: 
 96.32     290C.10 [WITHDRAWAL PROCEDURES.] 
 96.33     An approved claimant under the sustainable forest incentive 
 96.34  program for a minimum of four years may notify the commissioner 
 96.35  of the intent to terminate enrollment.  Within 90 days of 
 96.36  receipt of notice to terminate enrollment, the commissioner 
 97.1   shall inform the claimant in writing, acknowledging receipt of 
 97.2   this notice and indicating the effective date of termination 
 97.3   from the sustainable forest incentive program.  Termination of 
 97.4   enrollment in the sustainable forest incentive program occurs on 
 97.5   January 1 of the fifth calendar year that begins after receipt 
 97.6   by the commissioner of the termination notice.  After the 
 97.7   commissioner issues an effective date of termination, a claimant 
 97.8   wishing to continue the property's land's enrollment in the 
 97.9   sustainable forest incentive program beyond the termination date 
 97.10  must apply for enrollment as prescribed in section 290C.04.  A 
 97.11  claimant who withdraws a parcel of land from this program may 
 97.12  not reenroll the parcel for a period of three years.  Within 90 
 97.13  days after the termination date, the commissioner shall execute 
 97.14  and acknowledge a document releasing the land from the covenant 
 97.15  required under this chapter.  The document must be mailed to the 
 97.16  claimant and is entitled to be recorded.  The commissioner may 
 97.17  allow early withdrawal from the Sustainable Forest Incentive Act 
 97.18  without penalty in cases of condemnation for a public purpose 
 97.19  notwithstanding the provisions of this section. 
 97.20     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 97.21  following final enactment. 
 97.22     Sec. 41.  Minnesota Statutes 2002, section 290C.11, is 
 97.23  amended to read: 
 97.24     290C.11 [PENALTIES FOR REMOVAL.] 
 97.25     (a) If the commissioner determines that property land 
 97.26  enrolled in the sustainable forest incentive program is in 
 97.27  violation of the conditions for enrollment as specified in 
 97.28  section 290C.03, the commissioner shall notify the claimant of 
 97.29  the intent to remove all enrolled land from the sustainable 
 97.30  forest incentive program.  The claimant has 60 days to appeal 
 97.31  this determination. The appeal must be made in writing to the 
 97.32  commissioner, who shall, within 60 days, notify the claimant as 
 97.33  to the outcome of the appeal.  Within 60 days after the 
 97.34  commissioner denies an appeal, or within 120 days after the 
 97.35  commissioner received a written appeal if the commissioner has 
 97.36  not made a determination in that time, the owner may appeal to 
 98.1   tax court under chapter 271 as if the appeal is from an order of 
 98.2   the commissioner. 
 98.3      (b) If the commissioner determines the property land is to 
 98.4   be removed from the sustainable forest incentive program, the 
 98.5   claimant is liable for payment to the commissioner in the amount 
 98.6   equal to the payments received under this chapter for the 
 98.7   previous four-year period, plus interest.  The claimant has 90 
 98.8   days to satisfy the payment for removal of land from the 
 98.9   sustainable forest incentive program under this section.  If the 
 98.10  penalty is not paid within the 90-day period under this 
 98.11  paragraph, the commissioner shall certify the amount to the 
 98.12  county auditor for collection as a part of the general ad 
 98.13  valorem real property taxes on the land in the following taxes 
 98.14  payable year.  
 98.15     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 98.16  following final enactment. 
 98.17     Sec. 42.  [290C.12] [DEATH OF CLAIMANT.] 
 98.18     Within one year after the death of the claimant, the 
 98.19  claimant's heir, devisee, or estate must either: 
 98.20     (1) notify the commissioner of election to terminate 
 98.21  enrollment in the sustainable forest incentive program; or 
 98.22     (2) make an application under this chapter to continue 
 98.23  enrollment of the land in the program.  
 98.24     Upon notification under clause (1), the commissioner shall 
 98.25  terminate the enrollment and issue a document releasing the land 
 98.26  from the covenant as provided in section 290C.04, paragraph 
 98.27  (c).  Penalties under section 290C.11 shall not apply.  If the 
 98.28  application under clause (2) is approved, the land is enrolled 
 98.29  in the program without a break.  If the commissioner does not 
 98.30  receive notification within one year after the date of death, 
 98.31  enrollment in the program shall be terminated and penalties 
 98.32  under section 290C.11 shall not apply. 
 98.33     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 98.34  following final enactment, except in the case of claimants dying 
 98.35  prior to the day following final enactment, heirs, devisees, or 
 98.36  estates may make the election either six months after the 
 99.1   effective date of this provision or one year after the death of 
 99.2   the claimant, whichever is later. 
 99.3      Sec. 43.  Minnesota Statutes 2002, section 469.1792, 
 99.4   subdivision 3, is amended to read: 
 99.5      Subd. 3.  [ACTIONS AUTHORIZED.] (a) An authority with a 
 99.6   district qualifying under this section may take either or both 
 99.7   of the following actions for any or all of its preexisting 
 99.8   districts: 
 99.9      (1) the authority may elect that the original local tax 
 99.10  rate under section 469.177, subdivision 1a, does not apply to 
 99.11  the district; and 
 99.12     (2) the authority may elect the fiscal disparities 
 99.13  contribution will be computed under section 469.177, subdivision 
 99.14  3, paragraph (a), regardless of the election that was made for 
 99.15  the district. 
 99.16     (b) The authority may take action under this subdivision 
 99.17  only after the municipality approves the action, by resolution, 
 99.18  after notice and public hearing in the manner provided under 
 99.19  section 469.175, subdivision 2.  To be effective for taxes 
 99.20  payable in the following year, the resolution must be adopted 
 99.21  and the county auditor must be notified of the adoption on or 
 99.22  before July 1. 
 99.23     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
 99.24  payable in 2004 and thereafter. 
 99.25     Sec. 44.  Minnesota Statutes 2002, section 473F.07, 
 99.26  subdivision 4, is amended to read: 
 99.27     Subd. 4.  [DISTRIBUTION NET TAX CAPACITY.] The 
 99.28  administrative auditor shall determine the proportion which the 
 99.29  index of each municipality bears to the sum of the indices of 
 99.30  all municipalities and shall then multiply this proportion in 
 99.31  the case of each municipality, by the areawide net tax capacity, 
 99.32  provided that if the distribution net tax capacity for a 
 99.33  municipality is less than 95 percent of the municipality's 
 99.34  previous year distribution net tax capacity, and more than ten 
 99.35  percent of the municipality's fiscal capacity consists of 
 99.36  manufactured home property, the municipality's distribution net 
100.1   tax capacity will be increased to 95 percent of the previous 
100.2   year net tax capacity and the distribution net tax capacity of 
100.3   other municipalities in the area will be proportionately reduced.
100.4      <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
100.5   payable in 2004 and subsequent years. 
100.6      Sec. 45.  Minnesota Statutes 2002, section 515B.1-116, is 
100.7   amended to read: 
100.8      515B.1-116 [RECORDING.] 
100.9      (a) A declaration, bylaws, any amendment to a declaration 
100.10  or bylaws, and any other instrument affecting a common interest 
100.11  community shall be entitled to be recorded.  In those counties 
100.12  which have a tract index, the county recorder shall enter the 
100.13  declaration in the tract index for each unit affected.  The 
100.14  registrar of titles shall file the declaration in accordance 
100.15  with section 508.351 or 508A.351. 
100.16     (b) The recording officer shall upon request promptly 
100.17  assign a number (CIC number) to a common interest community to 
100.18  be formed or to a common interest community resulting from the 
100.19  merger of two or more common interest communities. 
100.20     (c) Documents recorded pursuant to this chapter shall in 
100.21  the case of registered land be filed, and references to the 
100.22  recording of documents shall mean filed in the case of 
100.23  registered land. 
100.24     (d) Subject to any specific requirements of this chapter, 
100.25  if a recorded document relating to a common interest community 
100.26  purports to require a certain vote or signatures approving any 
100.27  restatement or amendment of the document by a certain number or 
100.28  percentage of unit owners or secured parties, and if the 
100.29  amendment or restatement is to be recorded pursuant to this 
100.30  chapter, an affidavit of the president or secretary of the 
100.31  association stating that the required vote or signatures have 
100.32  been obtained shall be attached to the document to be recorded 
100.33  and shall constitute prima facie evidence of the representations 
100.34  contained therein. 
100.35     (e) If a common interest community is located on registered 
100.36  land, the recording fee for any document affecting two or more 
101.1   units shall be the then-current fee for registering the document 
101.2   on the certificates of title for the first ten affected 
101.3   certificates and one-third of the then-current fee for each 
101.4   additional affected certificate.  This provision shall not apply 
101.5   to recording fees for deeds of conveyance, with the exception of 
101.6   deeds given pursuant to sections 515B.2-119 and 515B.3-112. 
101.7      (f) Except as permitted under this subsection, a recording 
101.8   officer shall not file or record a declaration creating a new 
101.9   common interest community, unless the county treasurer has 
101.10  certified that the property taxes payable in the current year 
101.11  for the real estate included in the proposed common interest 
101.12  community have been paid.  This certification is in addition to 
101.13  the certification for delinquent taxes required by section 
101.14  272.12.  In the case of preexisting common interest communities, 
101.15  the recording officer shall accept, file, and record the 
101.16  following instruments, without requiring a certification as to 
101.17  the current or delinquent taxes on any of the units in the 
101.18  common interest community:  (i) a declaration subjecting the 
101.19  common interest community to this chapter; (ii) a declaration 
101.20  changing the form of a common interest community pursuant to 
101.21  section 515B.2-123; or (iii) an amendment to or restatement of 
101.22  the declaration, bylaws, or CIC plat.  In order for the 
101.23  instruments an instrument to be accepted and recorded under the 
101.24  preceding sentence, the assessor must certify or otherwise 
101.25  inform the recording officer that, for taxes payable in the 
101.26  current year, the assessor has allocated taxable values to each 
101.27  unit or has separately assessed each unit instrument must not 
101.28  create or change unit or common area boundaries. 
101.29     <h>[EFFECTIVE DATE.]</h> This section is effective for deeds or 
101.30  instruments accepted for recording or registration on or after 
101.31  July 1, 2003. 
101.32     Sec. 46.  Laws 2001, First Special Session chapter 5, 
101.33  article 3, section 61, the effective date, is amended to read: 
101.34     <h>[EFFECTIVE DATE.]</h> This section is effective August 1, 2001, 
101.35  for deeds issued on or after August 1, 2001.  This section is 
101.36  effective August 1, 2006, for deeds issued before August 1, 2001.
102.1      Sec. 47.  Laws 2001, First Special Session chapter 5, 
102.2   article 3, section 63, the effective date, is amended to read: 
102.3      <h>[EFFECTIVE DATE.]</h> This section is effective August 1, 2001, 
102.4   for deeds issued on or after August 1, 2001.  This section is 
102.5   effective August 1, 2006, for deeds issued before August 1, 2001.
102.6      Sec. 48.  Laws 2002, chapter 377, article 6, section 4, the 
102.7   effective date, is amended to read: 
102.8      <h>[EFFECTIVE DATE.]</h> This section is effective for aids 
102.9   payable in 2004 May 16, 2002, and thereafter. 
102.10     Sec. 49.  [REPEALER.] 
102.11     (a) Minnesota Statutes 2002, section 274.04, is repealed. 
102.12     (b) Minnesota Statutes 2002, section 477A.065, is repealed 
102.13  effective for aid payable in 2004 and thereafter. 
102.14     (c) Minnesota Rules, parts 8106.0100, subparts 11, 15, and 
102.15  16; and 8106.0200, are repealed effective the day following 
102.16  final enactment. 
102.17                             ARTICLE 6 
102.18              DEPARTMENT SALES AND USE TAX INITIATIVES 
102.19     Section 1.  Minnesota Statutes 2002, section 289A.50, 
102.20  subdivision 2a, is amended to read: 
102.21     Subd. 2a.  [REFUND OF SALES TAX TO PURCHASERS.] (a) If a 
102.22  vendor has collected from a purchaser a tax on a transaction 
102.23  that is not subject to the tax imposed by chapter 297A, the 
102.24  purchaser may apply directly to the commissioner for a refund 
102.25  under this section if: 
102.26     (a) (1) the purchaser is currently registered or was 
102.27  registered during the period of the claim, to collect and remit 
102.28  the sales tax or to remit the use tax; and 
102.29     (2) either 
102.30     (b) (i) the amount of the refund to be applied for exceeds 
102.31  $500, or 
102.32     (ii) the amount of the refund to be applied for does not 
102.33  exceed $500, but the purchaser also applies for a capital 
102.34  equipment claim at the same time, and the total of the two 
102.35  refunds exceeds $500. 
102.36     (b) The purchaser may not file more than two applications 
103.1   for refund under this subdivision in a calendar year. 
103.2      <h>[EFFECTIVE DATE.]</h> This section is effective for claims 
103.3   filed on or after the day following final enactment. 
103.4      Sec. 2.  Minnesota Statutes 2002, section 289A.60, is 
103.5   amended by adding a subdivision to read: 
103.6      Subd. 25.  [PENALTY FOR FAILURE TO PROPERLY COMPLETE SALES 
103.7   TAX RETURN.] A person who fails to report local sales tax on a 
103.8   sales tax return or who fails to report local sales tax on 
103.9   separate tax lines on the sales tax return is subject to a 
103.10  penalty of five percent of the amount of tax not properly 
103.11  reported on the return.  A person who files a consolidated tax 
103.12  return but fails to report location information is subject to a 
103.13  $500 penalty for each return not containing location 
103.14  information.  In addition, the commissioner may revoke the 
103.15  privilege for a taxpayer to file consolidated returns and may 
103.16  require the taxpayer to separately register each location and to 
103.17  file a tax return for each location. 
103.18     <h>[EFFECTIVE DATE.]</h> This section is effective for returns 
103.19  filed after June 30, 2003. 
103.20     Sec. 3.  Minnesota Statutes 2002, section 297A.61, 
103.21  subdivision 3, is amended to read: 
103.22     Subd. 3.  [SALE AND PURCHASE.] (a) "Sale" and "purchase" 
103.23  include, but are not limited to, each of the transactions listed 
103.24  in this subdivision. 
103.25     (b) Sale and purchase include: 
103.26     (1) any transfer of title or possession, or both, of 
103.27  tangible personal property, whether absolutely or conditionally, 
103.28  for a consideration in money or by exchange or barter; and 
103.29     (2) the leasing of or the granting of a license to use or 
103.30  consume, for a consideration in money or by exchange or barter, 
103.31  tangible personal property, other than a manufactured home used 
103.32  for residential purposes for a continuous period of 30 days or 
103.33  more. 
103.34     (c) Sale and purchase include the production, fabrication, 
103.35  printing, or processing of tangible personal property for a 
103.36  consideration for consumers who furnish either directly or 
104.1   indirectly the materials used in the production, fabrication, 
104.2   printing, or processing. 
104.3      (d) Sale and purchase include the preparing for a 
104.4   consideration of food.  Notwithstanding section 297A.67, 
104.5   subdivision 2, taxable food includes, but is not limited to, the 
104.6   following: 
104.7      (1) prepared food sold by the retailer; 
104.8      (2) soft drinks; 
104.9      (3) candy; and 
104.10     (4) all food sold through vending machines. 
104.11     (e) A sale and a purchase includes the furnishing for a 
104.12  consideration of electricity, gas, water, or steam for use or 
104.13  consumption within this state. 
104.14     (f) A sale and a purchase includes the transfer for a 
104.15  consideration of computer software.  
104.16     (g) A sale and a purchase includes the furnishing for a 
104.17  consideration of the following services: 
104.18     (1) the privilege of admission to places of amusement, 
104.19  recreational areas, or athletic events, and the making available 
104.20  of amusement devices, tanning facilities, reducing salons, steam 
104.21  baths, turkish baths, health clubs, and spas or athletic 
104.22  facilities; 
104.23     (2) lodging and related services by a hotel, rooming house, 
104.24  resort, campground, motel, or trailer camp and the granting of 
104.25  any similar license to use real property other than the renting 
104.26  or leasing of it for a continuous period of 30 days or more; 
104.27     (3) nonresidential parking services, whether on a 
104.28  contractual, hourly, or other periodic basis, except for parking 
104.29  at a meter; 
104.30     (4) the granting of membership in a club, association, or 
104.31  other organization if: 
104.32     (i) the club, association, or other organization makes 
104.33  available for the use of its members sports and athletic 
104.34  facilities, without regard to whether a separate charge is 
104.35  assessed for use of the facilities; and 
104.36     (ii) use of the sports and athletic facility is not made 
105.1   available to the general public on the same basis as it is made 
105.2   available to members.  
105.3   Granting of membership means both onetime initiation fees and 
105.4   periodic membership dues.  Sports and athletic facilities 
105.5   include golf courses; tennis, racquetball, handball, and squash 
105.6   courts; basketball and volleyball facilities; running tracks; 
105.7   exercise equipment; swimming pools; and other similar athletic 
105.8   or sports facilities; 
105.9      (5) delivery of aggregate materials and concrete block by a 
105.10  third party if the delivery would be subject to the sales tax if 
105.11  provided by the seller of the aggregate material or concrete 
105.12  block; and 
105.13     (6) services as provided in this clause: 
105.14     (i) laundry and dry cleaning services including cleaning, 
105.15  pressing, repairing, altering, and storing clothes, linen 
105.16  services and supply, cleaning and blocking hats, and carpet, 
105.17  drapery, upholstery, and industrial cleaning.  Laundry and dry 
105.18  cleaning services do not include services provided by coin 
105.19  operated facilities operated by the customer; 
105.20     (ii) motor vehicle washing, waxing, and cleaning services, 
105.21  including services provided by coin operated facilities operated 
105.22  by the customer, and rustproofing, undercoating, and towing of 
105.23  motor vehicles; 
105.24     (iii) building and residential cleaning, maintenance, and 
105.25  disinfecting and exterminating services; 
105.26     (iv) detective, security, burglar, fire alarm, and armored 
105.27  car services; but not including services performed within the 
105.28  jurisdiction they serve by off-duty licensed peace officers as 
105.29  defined in section 626.84, subdivision 1, or services provided 
105.30  by a nonprofit organization for monitoring and electronic 
105.31  surveillance of persons placed on in-home detention pursuant to 
105.32  court order or under the direction of the Minnesota department 
105.33  of corrections; 
105.34     (v) pet grooming services; 
105.35     (vi) lawn care, fertilizing, mowing, spraying and sprigging 
105.36  services; garden planting and maintenance; tree, bush, and shrub 
106.1   pruning, bracing, spraying, and surgery; indoor plant care; 
106.2   tree, bush, shrub, and stump removal; and tree trimming for 
106.3   public utility lines.  Services performed under a construction 
106.4   contract for the installation of shrubbery, plants, sod, trees, 
106.5   bushes, and similar items are not taxable; 
106.6      (vii) massages, except when provided by a licensed health 
106.7   care facility or professional or upon written referral from a 
106.8   licensed health care facility or professional for treatment of 
106.9   illness, injury, or disease; and 
106.10     (viii) the furnishing of lodging, board, and care services 
106.11  for animals in kennels and other similar arrangements, but 
106.12  excluding veterinary and horse boarding services. 
106.13     In applying the provisions of this chapter, the terms 
106.14  "tangible personal property" and "sales at retail" include 
106.15  taxable services listed in clause (6), items (i) to (vi) and 
106.16  (viii) and the provision of these taxable services, unless 
106.17  specifically provided otherwise.  Services performed by an 
106.18  employee for an employer are not taxable.  Services performed by 
106.19  a partnership or association for another partnership or 
106.20  association are not taxable if one of the entities owns or 
106.21  controls more than 80 percent of the voting power of the equity 
106.22  interest in the other entity.  Services performed between 
106.23  members of an affiliated group of corporations are not taxable.  
106.24  For purposes of this section the preceding sentence, "affiliated 
106.25  group of corporations" includes those entities that would be 
106.26  classified as members of an affiliated group under United States 
106.27  Code, title 26, section 1504, and that are eligible to file a 
106.28  consolidated tax return for federal income tax purposes. 
106.29     (h) A sale and a purchase includes the furnishing for a 
106.30  consideration of tangible personal property or taxable services 
106.31  by the United States or any of its agencies or 
106.32  instrumentalities, or the state of Minnesota, its agencies, 
106.33  instrumentalities, or political subdivisions. 
106.34     (i) A sale and a purchase includes the furnishing for a 
106.35  consideration of telecommunications services, including cable 
106.36  television services and direct satellite services.  
107.1   Telecommunications services are taxed to the extent allowed 
107.2   under federal law if those services: 
107.3      (1) either (i) originate and terminate in this state; or 
107.4   (ii) originate in this state and terminate outside the state and 
107.5   the service is charged to a telephone number telecommunications 
107.6   customer located in this state or to the account of any 
107.7   transmission instrument in this state; or (iii) originate 
107.8   outside this state and terminate in this state and the service 
107.9   is charged to a telephone number telecommunications customer 
107.10  located in this state or to the account of any transmission 
107.11  instrument in this state; or 
107.12     (2) are rendered by providing a private communications 
107.13  service for which the customer has one or more locations within 
107.14  Minnesota connected to the service and the service is charged to 
107.15  a telephone number telecommunications customer located in this 
107.16  state or to the account of any transmission instrument in this 
107.17  state. 
107.18     All charges for mobile telecommunications services, as 
107.19  defined in United States Code, title 4, section 124, are deemed 
107.20  to be provided by the customer's home service provider and 
107.21  sourced to the customer's place of primary use and are subject 
107.22  to tax based upon the customer's place of primary use in 
107.23  accordance with the Mobile Telecommunications Sourcing Act, 
107.24  United States Code, title 4, sections 116 to 126.  All other 
107.25  definitions and provisions of the Mobile Telecommunications 
107.26  Sourcing Act as provided in United States Code, title 4, are 
107.27  hereby adopted. 
107.28     (j) A sale and a purchase includes the furnishing for a 
107.29  consideration of installation if the installation charges would 
107.30  be subject to the sales tax if the installation were provided by 
107.31  the seller of the item being installed. 
107.32     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
107.33  following final enactment. 
107.34     Sec. 4.  Minnesota Statutes 2002, section 297A.61, 
107.35  subdivision 12, is amended to read: 
107.36     Subd. 12.  [FARM MACHINERY.] (a) "Farm machinery" means new 
108.1   or used machinery, equipment, implements, accessories, and 
108.2   contrivances used directly and principally in the agricultural 
108.3   production for sale, but not including the processing, of 
108.4   livestock, dairy animals, dairy products, poultry and poultry 
108.5   products, fruits, vegetables, trees and shrubs, plants, forage, 
108.6   grains, and bees and apiary products.  
108.7      (b) Farm machinery includes including, but not limited to: 
108.8      (1) machinery for the preparation, seeding, or cultivation 
108.9   of soil for growing agricultural crops and sod, for the 
108.10  harvesting and threshing of agricultural products, or for the 
108.11  harvesting or mowing of sod; 
108.12     (2) barn cleaners, milking systems, grain dryers, feeding 
108.13  systems including stationary feed bunks, and similar 
108.14  installations, whether or not the equipment is installed by the 
108.15  seller and becomes part of the real property; and 
108.16     (3) irrigation equipment sold for exclusively agricultural 
108.17  use, including pumps, pipe fittings, valves, sprinklers, and 
108.18  other equipment necessary to the operation of an irrigation 
108.19  system when sold as part of an irrigation system, whether or not 
108.20  the equipment is installed by the seller and becomes part of the 
108.21  real property;. 
108.22     (4) logging equipment, including chain saws used for 
108.23  commercial logging; 
108.24     (5) fencing used for the containment of farmed cervidae, as 
108.25  defined in section 17.451, subdivision 2; 
108.26     (6) primary and backup generator units used to generate 
108.27  electricity for the purpose of operating farm machinery, as 
108.28  defined in this subdivision, or providing light or space heating 
108.29  necessary for the production of livestock, dairy animals, dairy 
108.30  products, or poultry and poultry products; 
108.31     (7) aquaculture production equipment as defined in 
108.32  subdivision 13; and 
108.33     (8) equipment used for maple syrup harvesting.  
108.34     (c) (b) Farm machinery does not include: 
108.35     (1) repair or replacement parts; 
108.36     (2) tools, shop equipment, grain bins, fencing material 
109.1   except fencing material covered by paragraph (b), clause (5), 
109.2   communication equipment, and other farm supplies; 
109.3      (3) motor vehicles taxed under chapter 297B; 
109.4      (4) snowmobiles or snow blowers; or 
109.5      (5) lawn mowers except those used in the production of sod 
109.6   for sale, or garden-type tractors or garden tillers; or 
109.7      (6) machinery, equipment, implements, accessories, and 
109.8   contrivances used directly in the production of horses not 
109.9   raised for slaughter, fur-bearing animals, or research animals. 
109.10     <h>[EFFECTIVE DATE.]</h> This section is effective for sales and 
109.11  purchases made after June 30, 2003. 
109.12     Sec. 5.  Minnesota Statutes 2002, section 297A.61, 
109.13  subdivision 34, is amended to read: 
109.14     Subd. 34.  [FOOD SOLD THROUGH VENDING MACHINES.] "Food sold 
109.15  through vending machines" means food dispensed from a machine or 
109.16  other mechanical device that accepts payment including honor 
109.17  payments. 
109.18     <h>[EFFECTIVE DATE.]</h> This section is effective for sales and 
109.19  purchases made on or after the day following final enactment. 
109.20     Sec. 6.  Minnesota Statutes 2002, section 297A.61, is 
109.21  amended by adding a subdivision to read: 
109.22     Subd. 35.  [AGRICULTURAL PRODUCTION.] "Agricultural 
109.23  production" includes, but is not limited to, horticulture, 
109.24  silviculture, floriculture, maple syrup harvesting, and the 
109.25  raising of pets, livestock as defined in section 17A.03, 
109.26  subdivision 5, poultry, dairy and poultry products, bees and 
109.27  apiary products, the raising and harvesting of agricultural 
109.28  crops, sod, fur-bearing animals, research animals, and horses. 
109.29     <h>[EFFECTIVE DATE.]</h> This section is effective for sales and 
109.30  purchases made after June 30, 2003. 
109.31     Sec. 7.  Minnesota Statutes 2002, section 297A.665, is 
109.32  amended to read: 
109.33     297A.665 [PRESUMPTION OF TAX; BURDEN OF PROOF.] 
109.34     (a) For the purpose of the proper administration of this 
109.35  chapter and to prevent evasion of the tax, until the contrary is 
109.36  established, it is presumed that:  
110.1      (1) all gross receipts are subject to the tax; and 
110.2      (2) all retail sales for delivery in Minnesota are for 
110.3   storage, use, or other consumption in Minnesota.  
110.4      (b) The burden of proving that a sale is not a taxable 
110.5   retail sale is on the seller.  However, the seller may take from 
110.6   the purchaser at the time of the sale an a fully completed 
110.7   exemption certificate claiming that the property purchased is 
110.8   for resale or that the sale is otherwise exempt from the tax 
110.9   imposed by this chapter which conclusively relieves the seller 
110.10  from collecting and remitting the tax.  This relief from 
110.11  liability does not apply to a seller who fraudulently fails to 
110.12  collect the tax or solicits purchasers to participate in the 
110.13  unlawful claim of an exemption.  If a seller claiming that 
110.14  certain sales are exempt, who does is not possess in possession 
110.15  of the required exemption certificates, must acquire the 
110.16  certificates within 60 days after receiving written notice from 
110.17  the commissioner that the certificates are required, deductions 
110.18  claimed by the seller that required delivery of the certificates 
110.19  must be disallowed.  If the certificates are not 
110.20  obtained delivered to the commissioner within the 60-day period, 
110.21  the sales are considered taxable sales under this 
110.22  chapter. commissioner may verify the reason or basis for the 
110.23  exemption claimed in the certificates before allowing any 
110.24  deductions.  A deduction must not be granted on the basis of 
110.25  certificates delivered to the commissioner after the 60-day 
110.26  period. 
110.27     (c) A purchaser of tangible personal property or any items 
110.28  listed in section 297A.63 that are shipped or brought to 
110.29  Minnesota by the purchaser has the burden of proving that the 
110.30  property was not purchased from a retailer for storage, use, or 
110.31  consumption in Minnesota.  
110.32     <h>[EFFECTIVE DATE.]</h> This section is effective for exemption 
110.33  certificates received for sales occurring after June 30, 2003. 
110.34     Sec. 8.  Minnesota Statutes 2002, section 297A.67, 
110.35  subdivision 2, is amended to read: 
110.36     Subd. 2.  [FOOD AND FOOD INGREDIENTS.] Food and food 
111.1   ingredients are exempt.  For purposes of this subdivision, 
111.2   "food" and "food ingredients" mean substances, whether in 
111.3   liquid, concentrated, solid, frozen, dried, or dehydrated form, 
111.4   that are sold for ingestion or chewing by humans and are 
111.5   consumed for their taste or nutritional value.  Food and food 
111.6   ingredients exempt under this subdivision do not include candy, 
111.7   soft drinks, food sold through vending machines, and prepared 
111.8   foods.  Food and food ingredients do not include alcoholic 
111.9   beverages, dietary supplements, and tobacco.  For purposes of 
111.10  this subdivision, "alcoholic beverages" means beverages that are 
111.11  suitable for human consumption and contain one-half of one 
111.12  percent or more of alcohol by volume.  For purposes of this 
111.13  subdivision, "tobacco" means cigarettes, cigars, chewing or pipe 
111.14  tobacco, or any other item that contains tobacco.  For purposes 
111.15  of this subdivision, "dietary supplements" means any product, 
111.16  other than tobacco, intended to supplement the diet that: 
111.17     (1) contains one or more of the following dietary 
111.18  ingredients: 
111.19     (i) a vitamin; 
111.20     (ii) a mineral; 
111.21     (iii) an herb or other botanical; 
111.22     (iv) an amino acid; 
111.23     (v) a dietary substance for use by humans to supplement the 
111.24  diet by increasing the total dietary intake; and 
111.25     (vi) a concentrate, metabolite, constituent, extract, or 
111.26  combination of any ingredient described in items (i) to (v); 
111.27     (2) is intended for ingestion in tablet, capsule, powder, 
111.28  softgel, gelcap, or liquid form, or if not intended for 
111.29  ingestion in such form, is not represented as conventional food 
111.30  and is not represented for use as a sole item of a meal or of 
111.31  the diet; and 
111.32     (3) is required to be labeled as a dietary supplement, 
111.33  identifiable by the supplement facts box found on the label and 
111.34  as required pursuant to Code of Federal Regulations, title 21, 
111.35  section 101.36. 
111.36     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
112.1   following final enactment. 
112.2      Sec. 9.  Minnesota Statutes 2002, section 297A.68, 
112.3   subdivision 5, is amended to read: 
112.4      Subd. 5.  [CAPITAL EQUIPMENT.] (a) Capital equipment is 
112.5   exempt.  The tax must be imposed and collected as if the rate 
112.6   under section 297A.62, subdivision 1, applied, and then refunded 
112.7   in the manner provided in section 297A.75. 
112.8      "Capital equipment" means machinery and equipment purchased 
112.9   or leased, and used in this state by the purchaser or lessee 
112.10  primarily for manufacturing, fabricating, mining, or refining 
112.11  tangible personal property to be sold ultimately at retail if 
112.12  the machinery and equipment are essential to the integrated 
112.13  production process of manufacturing, fabricating, mining, or 
112.14  refining.  Capital equipment also includes machinery and 
112.15  equipment used to electronically transmit results retrieved by a 
112.16  customer of an online computerized data retrieval system. 
112.17     (b) Capital equipment includes, but is not limited to: 
112.18     (1) machinery and equipment used to operate, control, or 
112.19  regulate the production equipment; 
112.20     (2) machinery and equipment used for research and 
112.21  development, design, quality control, and testing activities; 
112.22     (3) environmental control devices that are used to maintain 
112.23  conditions such as temperature, humidity, light, or air pressure 
112.24  when those conditions are essential to and are part of the 
112.25  production process; 
112.26     (4) materials and supplies used to construct and install 
112.27  machinery or equipment; 
112.28     (5) repair and replacement parts, including accessories, 
112.29  whether purchased as spare parts, repair parts, or as upgrades 
112.30  or modifications to machinery or equipment; 
112.31     (6) materials used for foundations that support machinery 
112.32  or equipment; 
112.33     (7) materials used to construct and install special purpose 
112.34  buildings used in the production process; and 
112.35     (8) ready-mixed concrete trucks equipment in which the 
112.36  ready-mixed concrete is mixed as part of the delivery 
113.1   process regardless if mounted on a chassis and leases of 
113.2   ready-mixed concrete trucks. 
113.3      (c) Capital equipment does not include the following: 
113.4      (1) motor vehicles taxed under chapter 297B; 
113.5      (2) machinery or equipment used to receive or store raw 
113.6   materials; 
113.7      (3) building materials, except for materials included in 
113.8   paragraph (b), clauses (6) and (7); 
113.9      (4) machinery or equipment used for nonproduction purposes, 
113.10  including, but not limited to, the following:  plant security, 
113.11  fire prevention, first aid, and hospital stations; support 
113.12  operations or administration; pollution control; and plant 
113.13  cleaning, disposal of scrap and waste, plant communications, 
113.14  space heating, cooling, lighting, or safety; 
113.15     (5) farm machinery and aquaculture production equipment as 
113.16  defined by section 297A.61, subdivisions 12 and 13; 
113.17     (6) machinery or equipment purchased and installed by a 
113.18  contractor as part of an improvement to real property; or 
113.19     (7) any other item that is not essential to the integrated 
113.20  process of manufacturing, fabricating, mining, or refining. 
113.21     (d) For purposes of this subdivision: 
113.22     (1) "Equipment" means independent devices or tools separate 
113.23  from machinery but essential to an integrated production 
113.24  process, including computers and computer software, used in 
113.25  operating, controlling, or regulating machinery and equipment; 
113.26  and any subunit or assembly comprising a component of any 
113.27  machinery or accessory or attachment parts of machinery, such as 
113.28  tools, dies, jigs, patterns, and molds.  
113.29     (2) "Fabricating" means to make, build, create, produce, or 
113.30  assemble components or property to work in a new or different 
113.31  manner. 
113.32     (3) "Integrated production process" means a process or 
113.33  series of operations through which tangible personal property is 
113.34  manufactured, fabricated, mined, or refined.  For purposes of 
113.35  this clause, (i) manufacturing begins with the removal of raw 
113.36  materials from inventory and ends when the last process prior to 
114.1   loading for shipment has been completed; (ii) fabricating begins 
114.2   with the removal from storage or inventory of the property to be 
114.3   assembled, processed, altered, or modified and ends with the 
114.4   creation or production of the new or changed product; (iii) 
114.5   mining begins with the removal of overburden from the site of 
114.6   the ores, minerals, stone, peat deposit, or surface materials 
114.7   and ends when the last process before stockpiling is completed; 
114.8   and (iv) refining begins with the removal from inventory or 
114.9   storage of a natural resource and ends with the conversion of 
114.10  the item to its completed form. 
114.11     (4) "Machinery" means mechanical, electronic, or electrical 
114.12  devices, including computers and computer software, that are 
114.13  purchased or constructed to be used for the activities set forth 
114.14  in paragraph (a), beginning with the removal of raw materials 
114.15  from inventory through completion of the product, including 
114.16  packaging of the product. 
114.17     (4) (5) "Machinery and equipment used for pollution control"
114.18  means machinery and equipment used solely to eliminate, prevent, 
114.19  or reduce pollution resulting from an activity described in 
114.20  paragraph (a).  
114.21     (5) (6) "Manufacturing" means an operation or series of 
114.22  operations where raw materials are changed in form, composition, 
114.23  or condition by machinery and equipment and which results in the 
114.24  production of a new article of tangible personal property.  For 
114.25  purposes of this subdivision, "manufacturing" includes the 
114.26  generation of electricity or steam to be sold at retail. 
114.27     (6) (7) "Mining" means the extraction of minerals, ores, 
114.28  stone, or peat. 
114.29     (7) (8) "Online data retrieval system" means a system whose 
114.30  cumulation of information is equally available and accessible to 
114.31  all its customers. 
114.32     (8) (9) "Primarily" means machinery and equipment used 50 
114.33  percent or more of the time in an activity described in 
114.34  paragraph (a). 
114.35     (9) (10) "Refining" means the process of converting a 
114.36  natural resource to a an intermediate or finished product, 
115.1   including the treatment of water to be sold at retail. 
115.2      <h>[EFFECTIVE DATE.]</h> This section is effective for sales and 
115.3   purchases made after December 31, 2003. 
115.4      Sec. 10.  Minnesota Statutes 2002, section 297A.68, is 
115.5   amended by adding a subdivision to read: 
115.6      Subd. 39.  [PREEXISTING BIDS OR CONTRACTS.] (a) The sale of 
115.7   tangible personal property or services is exempt from tax for a 
115.8   period of six months from the effective date of the law change 
115.9   that results in the imposition of the tax under this chapter if: 
115.10     (1) the act imposing the tax does not have transitional 
115.11  effective date language for existing construction contracts and 
115.12  construction bids; and 
115.13     (2) the requirements of paragraph (b) are met. 
115.14     (b) A sale is tax exempt under paragraph (a) if it meets 
115.15  the requirements of either clause (1) or (2): 
115.16     (1) For a construction contract: 
115.17     (i) the goods or services sold must be used for the 
115.18  performance of a bona fide written lump sum or fixed price 
115.19  construction contract; 
115.20     (ii) the contract must be entered into before the date the 
115.21  goods or services become subject to the sales tax; 
115.22     (iii) the contract must not provide for allocation of 
115.23  future taxes; and 
115.24     (iv) for each qualifying contract the contractor must give 
115.25  the seller documentation of the contract on which an exemption 
115.26  is to be claimed. 
115.27     (2) For a bid: 
115.28     (i) the goods or services sold must be used pursuant to an 
115.29  obligation of a bid or bids; 
115.30     (ii) the bid or bids must be submitted and accepted before 
115.31  the date the goods or services became subject to the sales tax; 
115.32     (iii) the bid or bids must not be able to be withdrawn, 
115.33  modified, or changed without forfeiting a bond; and 
115.34     (iv) for each qualifying bid, the contractor must give the 
115.35  seller documentation of the bid on which an exemption is to be 
115.36  claimed. 
116.1      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
116.2   following final enactment. 
116.3      Sec. 11.  Minnesota Statutes 2002, section 297A.69, 
116.4   subdivision 2, is amended to read: 
116.5      Subd. 2.  [MATERIALS CONSUMED IN AGRICULTURAL PRODUCTION.] 
116.6   (a) Materials stored, used, or consumed in agricultural 
116.7   production of personal property intended to be sold ultimately 
116.8   at retail are exempt, whether or not the item becomes an 
116.9   ingredient or constituent part of the property produced.  
116.10  Materials that qualify for this exemption include, but are not 
116.11  limited to, the following: 
116.12     (1) feeds, seeds, trees, fertilizers, and herbicides, 
116.13  including when purchased for use by farmers in a federal or 
116.14  state farm or conservation program; 
116.15     (2) materials sold to a veterinarian to be used or consumed 
116.16  in the care, medication, and treatment of agricultural 
116.17  production animals and horses; 
116.18     (3) chemicals, including chemicals used for cleaning food 
116.19  processing machinery and equipment; 
116.20     (4) materials, including chemicals, fuels, and electricity 
116.21  purchased by persons engaged in agricultural production to treat 
116.22  waste generated as a result of the production process; 
116.23     (5) fuels, electricity, gas, and steam used or consumed in 
116.24  the production process, except that electricity, gas, or steam 
116.25  used for space heating, cooling, or lighting is exempt if (i) it 
116.26  is in excess of the average climate control or lighting for the 
116.27  production area, and (ii) it is necessary to produce that 
116.28  particular product; 
116.29     (6) petroleum products and lubricants; 
116.30     (7) packaging materials, including returnable containers 
116.31  used in packaging food and beverage products; and 
116.32     (8) accessory tools and equipment that are separate 
116.33  detachable units with an ordinary useful life of less than 12 
116.34  months used in producing a direct effect upon the product. 
116.35  Machinery, equipment, implements, tools, accessories, 
116.36  appliances, contrivances, and furniture and fixtures, except 
117.1   those listed in this clause are not included within this 
117.2   exemption. 
117.3      (b) For purposes of this subdivision, "agricultural 
117.4   production" includes, but is not limited to, horticulture, 
117.5   floriculture, maple syrup harvesting, and the raising of pets, 
117.6   fur-bearing animals, research animals, horses, farmed cervidae 
117.7   as defined in section 17.451, subdivision 2, llamas as defined 
117.8   in section 17.455, subdivision 2, and ratitae as defined in 
117.9   section 17.453, subdivision 3. 
117.10     <h>[EFFECTIVE DATE.]</h> This section is effective for sales and 
117.11  purchases made after December 31, 2003. 
117.12     Sec. 12.  Minnesota Statutes 2002, section 297A.69, 
117.13  subdivision 3, is amended to read: 
117.14     Subd. 3.  [FARM MACHINERY REPAIR AND REPLACEMENT PARTS.] 
117.15  Repair and replacement parts, except tires, used for maintenance 
117.16  or repair of farm machinery, logging equipment, and aquaculture 
117.17  production equipment are exempt, if the part replaces a farm 
117.18  machinery part assigned a specific or generic part number by the 
117.19  manufacturer of the farm machinery.  
117.20     <h>[EFFECTIVE DATE.]</h> This section is effective for sales and 
117.21  purchases made after June 30, 2003. 
117.22     Sec. 13.  Minnesota Statutes 2002, section 297A.69, 
117.23  subdivision 4, is amended to read: 
117.24     Subd. 4.  [FARM MACHINERY, EQUIPMENT, AND FENCING.] The 
117.25  following machinery, equipment, and fencing is exempt: 
117.26     (1) farm machinery is exempt.; 
117.27     (2) logging equipment, including chain saws used for 
117.28  commercial logging; 
117.29     (3) fencing used for the containment of farmed cervidae, as 
117.30  defined in section 17.451, subdivision 2; 
117.31     (4) primary and backup generator units used to generate 
117.32  electricity for the purpose of operating farm machinery, 
117.33  aquacultural production equipment, or logging equipment, or 
117.34  providing light or space heating necessary for the production of 
117.35  livestock, dairy animals, dairy products, or poultry and poultry 
117.36  products; and 
118.1      (5) aquaculture production equipment.  
118.2      <h>[EFFECTIVE DATE.]</h> This section is effective for sales and 
118.3   purchases made after June 30, 2003. 
118.4      Sec. 14.  Minnesota Statutes 2002, section 297B.025, 
118.5   subdivision 1, is amended to read: 
118.6      Subdivision 1.  [NONCOLLECTOR VEHICLE.] Purchase or use of 
118.7   a passenger automobile as defined in section 168.011, 
118.8   subdivision 7, shall be taxed pursuant to section 297B.02, 
118.9   subdivision 2, if the passenger automobile is (1) is in the 
118.10  tenth or subsequent year of vehicle life, and (2) is not an 
118.11  above-market automobile as designated by the registrar of motor 
118.12  vehicles does not have a resale value of $3,000 or more, as 
118.13  determined using nationally recognized sources of information on 
118.14  automobile resale values, as designated by the registrar of 
118.15  motor vehicles. 
118.16     The registrar of motor vehicles shall prepare, and 
118.17  distribute to all deputy motor vehicle registrars by July 15, 
118.18  1985, a listing by make, model, and year of above-market 
118.19  automobiles.  Except as provided by subdivision 2, the registrar 
118.20  must include in the list all automobiles with a resale value of 
118.21  $3,000 or more, as determined using nationally recognized 
118.22  sources of information on automobile resale values.  The 
118.23  registrar shall revise the list by February 1 of each year.  The 
118.24  initial list and all subsequent revisions must include only 
118.25  those automobiles which are in the tenth or subsequent year of 
118.26  vehicle life.  
118.27     <h>[EFFECTIVE DATE.]</h> This section is effective for vehicles 
118.28  purchased after June 30, 2003. 
118.29     Sec. 15.  Minnesota Statutes 2002, section 297B.025, 
118.30  subdivision 2, is amended to read: 
118.31     Subd. 2.  [COLLECTOR VEHICLE.] A passenger automobile that 
118.32  is registered under section 168.10, subdivision 1a, 1b, 1c, 1d, 
118.33  or 1h, or a fire truck registered under section 168.10, 
118.34  subdivision 1c, shall be taxed under section 297B.02, 
118.35  subdivision 3, and the registrar shall not designate as an 
118.36  above-market automobile a passenger automobile or a fire truck 
119.1   registered under those subdivisions.  If the vehicle is 
119.2   subsequently registered in another class not under section 
119.3   168.10, subdivision 1a, 1b, 1c, 1d, or 1h, within one year of 
119.4   the date of registration under those subdivisions, it shall be 
119.5   subject to the full excise tax imposed under subdivision 1. 
119.6      <h>[EFFECTIVE DATE.]</h> This section is effective for vehicles 
119.7   purchased after December 31, 2003. 
119.8      Sec. 16.  Minnesota Statutes 2002, section 297B.035, 
119.9   subdivision 1, is amended to read: 
119.10     Subdivision 1.  [ORDINARY COURSE OF BUSINESS.] Except as 
119.11  provided in this section, motor vehicles purchased for resale in 
119.12  the ordinary course of business or used by any motor vehicle 
119.13  dealer, as defined in section 168.011, subdivision 21, who is 
119.14  licensed under section 168.27, subdivision 2 or 3, which bear 
119.15  dealer plates as authorized by section 168.27, subdivision 16, 
119.16  shall be exempt from the provisions of this chapter. 
119.17     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
119.18  following final enactment. 
119.19     Sec. 17.  [REPEALER.] 
119.20     (a) Minnesota Statutes 2002, section 297A.72, subdivision 
119.21  1, is repealed effective for exemption certificates received for 
119.22  sales occurring after June 30, 2003. 
119.23     (b) Minnesota Statutes 2002, section 297A.97, is repealed 
119.24  effective for sales and purchases occurring after December 31, 
119.25  2003. 
119.26     (c) Minnesota Rules, parts 8130.0800, subparts 5 and 12; 
119.27  8130.1300; 8130.1600, subpart 5; 8130.1700, subparts 3 and 4; 
119.28  8130.4800, subpart 2; 8130.7500, subpart 5; 8130.8000; and 
119.29  8130.8300, are repealed effective the day following final 
119.30  enactment. 
119.31                             ARTICLE 7 
119.32                DEPARTMENT SPECIAL TAXES INITIATIVES 
119.33     Section 1.  Minnesota Statutes 2002, section 115B.24, 
119.34  subdivision 8, is amended to read: 
119.35     Subd. 8.  [PENALTIES; ENFORCEMENT.] The audit, penalty and 
119.36  enforcement provisions applicable to corporate franchise taxes 
120.1   imposed under chapter 290 apply to the taxes imposed under 
120.2   section 115B.22 and those provisions shall be administered by 
120.3   the commissioner.  
120.4      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
120.5   following final enactment. 
120.6      Sec. 2.  Minnesota Statutes 2002, section 295.50, 
120.7   subdivision 9b, is amended to read: 
120.8      Subd. 9b.  [PATIENT SERVICES.] (a) "Patient services" means 
120.9   inpatient and outpatient services and other goods and services 
120.10  provided by hospitals, surgical centers, or health care 
120.11  providers.  They include the following health care goods and 
120.12  services provided to a patient or consumer: 
120.13     (1) bed and board; 
120.14     (2) nursing services and other related services; 
120.15     (3) use of hospitals, surgical centers, or health care 
120.16  provider facilities; 
120.17     (4) medical social services; 
120.18     (5) drugs, biologicals, supplies, appliances, and 
120.19  equipment; 
120.20     (6) other diagnostic or therapeutic items or services; 
120.21     (7) medical or surgical services; 
120.22     (8) items and services furnished to ambulatory patients not 
120.23  requiring emergency care; 
120.24     (9) emergency services; and 
120.25     (10) covered services listed in section 256B.0625 and in 
120.26  Minnesota Rules, parts 9505.0170 to 9505.0475. 
120.27     (b) "Patient services" does not include:  
120.28     (1) services provided to nursing homes licensed under 
120.29  chapter 144A; and 
120.30     (2) examinations for purposes of utilization reviews, 
120.31  insurance claims or eligibility, litigation, and employment, 
120.32  including reviews of medical records for those purposes; 
120.33     (3) services provided by community residential mental 
120.34  health facilities licensed under Minnesota Rules, parts 
120.35  9520.0500 to 9520.0690; 
120.36     (4) services provided by community support programs and 
121.1   family community support programs approved under Minnesota 
121.2   Rules, parts 9535.1700 to 9535.1760; 
121.3      (5) services provided by community mental health centers as 
121.4   defined in section 245.62, subdivision 2; 
121.5      (6) services provided by assisted living programs and 
121.6   congregate housing programs; and 
121.7      (7) hospice care services. 
121.8      <h>[EFFECTIVE DATE.]</h> This section is effective for gross 
121.9   revenues received after December 31, 2002. 
121.10     Sec. 3.  Minnesota Statutes 2002, section 295.53, 
121.11  subdivision 1, is amended to read: 
121.12     Subdivision 1.  [EXEMPTIONS.] (a) The following payments 
121.13  are excluded from the gross revenues subject to the hospital, 
121.14  surgical center, or health care provider taxes under sections 
121.15  295.50 to 295.57 295.59: 
121.16     (1) payments received for services provided under the 
121.17  Medicare program, including payments received from the 
121.18  government, and organizations governed by sections 1833 and 1876 
121.19  of title XVIII of the federal Social Security Act, United States 
121.20  Code, title 42, section 1395, and enrollee deductibles, 
121.21  coinsurance, and copayments, whether paid by the Medicare 
121.22  enrollee or by a Medicare supplemental coverage as defined in 
121.23  section 62A.011, subdivision 3, clause (10).  Payments for 
121.24  services not covered by Medicare are taxable; 
121.25     (2) medical assistance payments including payments received 
121.26  directly from the government or from a prepaid plan; 
121.27     (3) payments received for home health care services; 
121.28     (4) payments received from hospitals or surgical centers 
121.29  for goods and services on which liability for tax is imposed 
121.30  under section 295.52 or the source of funds for the payment is 
121.31  exempt under clause (1), (2), (7), (8), (10), (13), 
121.32  or (20) (17); 
121.33     (5) payments received from health care providers for goods 
121.34  and services on which liability for tax is imposed under this 
121.35  chapter or the source of funds for the payment is exempt under 
121.36  clause (1), (2), (7), (8), (10), (13), or (20) (17); 
122.1      (6) amounts paid for legend drugs, other than nutritional 
122.2   products, to a wholesale drug distributor who is subject to tax 
122.3   under section 295.52, subdivision 3, reduced by reimbursements 
122.4   received for legend drugs otherwise exempt under this chapter; 
122.5      (7) payments received under the general assistance medical 
122.6   care program including payments received directly from the 
122.7   government or from a prepaid plan; 
122.8      (8) payments received for providing services under the 
122.9   MinnesotaCare program including payments received directly from 
122.10  the government or from a prepaid plan and enrollee deductibles, 
122.11  coinsurance, and copayments.  For purposes of this clause, 
122.12  coinsurance means the portion of payment that the enrollee is 
122.13  required to pay for the covered service; 
122.14     (9) payments received by a health care provider or the 
122.15  wholly owned subsidiary of a health care provider for care 
122.16  provided outside Minnesota; 
122.17     (10) payments received from the chemical dependency fund 
122.18  under chapter 254B; 
122.19     (11) payments received in the nature of charitable 
122.20  donations that are not designated for providing patient services 
122.21  to a specific individual or group; 
122.22     (12) payments received for providing patient services 
122.23  incurred through a formal program of health care research 
122.24  conducted in conformity with federal regulations governing 
122.25  research on human subjects.  Payments received from patients or 
122.26  from other persons paying on behalf of the patients are subject 
122.27  to tax; 
122.28     (13) payments received from any governmental agency for 
122.29  services benefiting the public, not including payments made by 
122.30  the government in its capacity as an employer or insurer; 
122.31     (14) payments received for services provided by community 
122.32  residential mental health facilities licensed under Minnesota 
122.33  Rules, parts 9520.0500 to 9520.0690, community support programs 
122.34  and family community support programs approved under Minnesota 
122.35  Rules, parts 9535.1700 to 9535.1760, and community mental health 
122.36  centers as defined in section 245.62, subdivision 2; 
123.1      (15) (14) government payments received by a regional 
123.2   treatment center; 
123.3      (16) payments received for hospice care services; 
123.4      (17) (15) payments received by a health care provider for 
123.5   hearing aids and related equipment or prescription eyewear 
123.6   delivered outside of Minnesota; 
123.7      (18) (16) payments received by an educational institution 
123.8   from student tuition, student activity fees, health care service 
123.9   fees, government appropriations, donations, or grants.  Fee for 
123.10  service payments and payments for extended coverage are taxable; 
123.11  and 
123.12     (19) payments received for services provided by:  assisted 
123.13  living programs and congregate housing programs; and 
123.14     (20) (17) payments received under the federal Employees 
123.15  Health Benefits Act, United States Code, title 5, section 
123.16  8909(f), as amended by the Omnibus Reconciliation Act of 1990. 
123.17     (b) Payments received by wholesale drug distributors for 
123.18  legend drugs sold directly to veterinarians or veterinary bulk 
123.19  purchasing organizations are excluded from the gross revenues 
123.20  subject to the wholesale drug distributor tax under sections 
123.21  295.50 to 295.59. 
123.22     <h>[EFFECTIVE DATE.]</h> This section is effective for gross 
123.23  revenues received after December 31, 2002. 
123.24     Sec. 4.  Minnesota Statutes 2002, section 297F.01, 
123.25  subdivision 21a, is amended to read: 
123.26     Subd. 21a.  [UNLICENSED SELLER.] "Unlicensed seller" means 
123.27  anyone who is not licensed under section 297F.03 or 461.12 to 
123.28  sell the particular product to the purchaser or possessor of the 
123.29  product. 
123.30     <h>[EFFECTIVE DATE.]</h> This section is effective July 1, 2003. 
123.31     Sec. 5.  Minnesota Statutes 2002, section 297F.01, 
123.32  subdivision 23, is amended to read: 
123.33     Subd. 23.  [WHOLESALE SALES PRICE.] "Wholesale sales price" 
123.34  means the established price stated on the price list in effect 
123.35  at the time of sale for which a manufacturer or person sells a 
123.36  tobacco product to a distributor, exclusive of any discount, 
124.1   promotional offer, or other reduction.  For purposes of this 
124.2   subdivision, "price list" means the manufacturer's price at 
124.3   which tobacco products are made available for sale to all 
124.4   distributors on an ongoing basis. 
124.5      <h>[EFFECTIVE DATE.]</h> This section is effective July 1, 2003. 
124.6      Sec. 6.  Minnesota Statutes 2002, section 297F.06, 
124.7   subdivision 4, is amended to read: 
124.8      Subd. 4.  [TOBACCO PRODUCTS USE TAX.] The tobacco products 
124.9   use tax does not apply to the possession, use, or storage of 
124.10  tobacco products in quantities of: that have an aggregate cost 
124.11  in any calendar month to the consumer of $100 or less. 
124.12     (1) not more than 50 cigars; 
124.13     (2) not more than ten ounces snuff or snuff powder; 
124.14     (3) not more than one pound smoking or chewing tobacco or 
124.15  any other tobacco product in the possession of any one consumer. 
124.16     <h>[EFFECTIVE DATE.]</h> This section is effective July 1, 2003. 
124.17     Sec. 7.  Minnesota Statutes 2002, section 297F.20, 
124.18  subdivision 1, is amended to read: 
124.19     Subdivision 1.  [PENALTIES FOR FAILURE TO FILE OR PAY.] (a) 
124.20  A person or consumer required to file a return, report, or other 
124.21  document with the commissioner who fails to do so is guilty of a 
124.22  misdemeanor. 
124.23     (b) A person or consumer required to pay or to collect and 
124.24  remit a tax under this chapter, who fails to do so when 
124.25  required, is guilty of a misdemeanor. 
124.26     <h>[EFFECTIVE DATE.]</h> This section is effective for acts 
124.27  committed on or after July 1, 2003. 
124.28     Sec. 8.  Minnesota Statutes 2002, section 297F.20, 
124.29  subdivision 2, is amended to read: 
124.30     Subd. 2.  [PENALTIES FOR KNOWING FAILURE TO FILE OR PAY.] 
124.31  (a) A person or consumer required to file a return, report, or 
124.32  other document with the commissioner, who knowingly, rather than 
124.33  accidentally, inadvertently, or negligently, fails to file it 
124.34  when required, is guilty of a gross misdemeanor.  
124.35     (b) A person or consumer required to pay or to collect and 
124.36  remit a tax under this chapter, who knowingly, rather than 
125.1   accidentally, inadvertently, or negligently, fails to file it 
125.2   when required, is guilty of a gross misdemeanor. 
125.3      <h>[EFFECTIVE DATE.]</h> This section is effective for acts 
125.4   committed on or after July 1, 2003. 
125.5      Sec. 9.  Minnesota Statutes 2002, section 297F.20, 
125.6   subdivision 3, is amended to read: 
125.7      Subd. 3.  [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 
125.8   person or consumer who files with the commissioner a return, 
125.9   report, or other document, or who maintains or provides invoices 
125.10  subject to review by the commissioner under this chapter, known 
125.11  by the person or consumer to be fraudulent or false concerning a 
125.12  material matter, is guilty of a felony. 
125.13     (b) A person or consumer who knowingly aids or assists in, 
125.14  or advises in the preparation or presentation of a return, 
125.15  report, invoice, or other document that is fraudulent or false 
125.16  concerning a material matter, whether or not the falsity or 
125.17  fraud is committed with the knowledge or consent of the 
125.18  person or consumer authorized or required to present the return, 
125.19  report, invoice, or other document, is guilty of a felony. 
125.20     <h>[EFFECTIVE DATE.]</h> This section is effective for acts 
125.21  committed on or after July 1, 2003. 
125.22     Sec. 10.  Minnesota Statutes 2002, section 297F.20, 
125.23  subdivision 6, is amended to read: 
125.24     Subd. 6.  [UNSTAMPED CIGARETTES; UNTAXED TOBACCO PRODUCTS.] 
125.25  (a) A person, other than a licensed distributor or a consumer, 
125.26  who possesses, receives, or transports more than 200 but fewer 
125.27  than 5,000 unstamped cigarettes, or up to $100 $350 worth of 
125.28  untaxed tobacco products is guilty of a misdemeanor. 
125.29     (b) A person, other than a licensed distributor or a 
125.30  consumer, who possesses, receives, or transports 5,000 or more, 
125.31  but fewer than 20,001 unstamped cigarettes, or up to $500 more 
125.32  than $350 but less than $1,400 worth of untaxed tobacco products 
125.33  is guilty of a gross misdemeanor. 
125.34     (c) A person, other than a licensed distributor or a 
125.35  consumer, who possesses, receives, or transports more than 
125.36  20,000 unstamped cigarettes, or $500 $1,400 or more worth of 
126.1   untaxed tobacco products is guilty of a felony. 
126.2      (d) For purposes of this subdivision, an individual in 
126.3   possession of more than 4,999 unstamped cigarettes, or more than 
126.4   $350 worth of untaxed tobacco products, is presumed not to be a 
126.5   consumer. 
126.6      <h>[EFFECTIVE DATE.]</h> This section is effective for acts 
126.7   committed on or after July 1, 2003. 
126.8      Sec. 11.  Minnesota Statutes 2002, section 297F.20, 
126.9   subdivision 9, is amended to read: 
126.10     Subd. 9.  [PURCHASES FROM UNLICENSED SELLERS.] (a) No 
126.11  retailer or subjobber shall purchase cigarettes or tobacco 
126.12  products from any person who is not licensed under section 
126.13  297F.03 as a licensed distributor or subjobber. 
126.14     (b) A retailer, or subjobber, or consumer who purchases 
126.15  from an unlicensed seller more than 200 but fewer than 5,000 
126.16  cigarettes or up to $100 $350 worth of tobacco products is 
126.17  guilty of a misdemeanor. 
126.18     (b) (c) A retailer, or subjobber, or consumer who 
126.19  purchases from an unlicensed seller 5,000 or more, but fewer 
126.20  than 20,001 cigarettes or up to $500 more than $350 but less 
126.21  than $1,400 worth of untaxed tobacco products is guilty of a 
126.22  gross misdemeanor. 
126.23     (c) (d) A retailer, or subjobber, or consumer who 
126.24  purchases from an unlicensed seller more than 20,000 cigarettes 
126.25  or $500 $1,400 or more worth of tobacco products is guilty of a 
126.26  felony. 
126.27     <h>[EFFECTIVE DATE.]</h> This section is effective for acts 
126.28  committed on or after July 1, 2003. 
126.29     Sec. 12.  Minnesota Statutes 2002, section 297I.01, 
126.30  subdivision 9, is amended to read: 
126.31     Subd. 9.  [GROSS PREMIUMS.] "Gross premiums" means total 
126.32  premiums paid by policyholders and applicants of policies, 
126.33  whether received in the form of money or other valuable 
126.34  consideration, on property, persons, lives, interests and other 
126.35  risks located, resident, or to be performed in this state, but 
126.36  excluding consideration and premiums for reinsurance assumed 
127.1   from other insurance companies.  The term "gross premiums" 
127.2   includes the total consideration paid to bail bond agents for 
127.3   bail bonds.  For title insurance companies, "gross premiums" 
127.4   means the charge for title insurance made by a title insurance 
127.5   company or its agents according to the company's rate filing 
127.6   approved by the commissioner of commerce without a deduction for 
127.7   commissions paid to or retained by the agent.  Gross premiums of 
127.8   a title insurance company does not include any other charge or 
127.9   fee for abstracting, searching, or examining the title, or 
127.10  escrow, closing, or other related services.  The term "gross 
127.11  premiums" includes any workers' compensation special 
127.12  compensation fund premium surcharge pursuant to section 176.129. 
127.13     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
127.14  following final enactment. 
127.15     Sec. 13.  Minnesota Statutes 2002, section 297I.20, is 
127.16  amended to read: 
127.17     297I.20 [GUARANTY ASSOCIATION ASSESSMENT OFFSET OFFSETS 
127.18  AGAINST PREMIUM TAXES.] 
127.19     Subdivision 1.  [GUARANTY ASSOCIATION ASSESSMENT OFFSETS.] 
127.20  (a) An insurance company may offset against its premium tax 
127.21  liability to this state any amount paid for assessments made for 
127.22  insolvencies which occur after July 31, 1994, under sections 
127.23  60C.01 to 60C.22; and any amount paid for assessments made after 
127.24  July 31, 1994, under Minnesota Statutes 1992, sections 61B.01 to 
127.25  61B.16, or under sections 61B.18 to 61B.32 as follows: 
127.26     (1) Each such assessment shall give rise to an amount of 
127.27  offset equal to 20 percent of the amount of the assessment for 
127.28  each of the five calendar years following the year in which the 
127.29  assessment was paid. 
127.30     (2) The amount of offset initially determined for each 
127.31  taxable year is the sum of the amounts determined under clause 
127.32  (1) for that taxable year. 
127.33     (b)(1) Each year the commissioner shall compare total 
127.34  guaranty association assessments levied over the preceding five 
127.35  calendar years to the sum of all premium tax and corporate 
127.36  franchise tax revenues collected from insurance companies, 
128.1   without reduction for any guaranty association assessment offset 
128.2   in the preceding calendar year, referred to in this subdivision 
128.3   as "preceding year insurance tax revenues." 
128.4      (2) If total guaranty association assessments levied over 
128.5   the preceding five years exceed the preceding year insurance tax 
128.6   revenues, insurance companies must be allowed only a 
128.7   proportionate part of the premium tax offset calculated under 
128.8   paragraph (a) for the current calendar year. 
128.9      (3) The proportionate part of the premium tax offset 
128.10  allowed in the current calendar year is determined by 
128.11  multiplying the amount calculated under paragraph (a) by a 
128.12  fraction.  The numerator of the fraction equals the preceding 
128.13  year insurance tax revenues, and its denominator equals total 
128.14  guaranty association assessments levied over the preceding 
128.15  five-year period. 
128.16     (4) The proportionate part of the premium tax offset that 
128.17  is not allowed must be carried forward to subsequent tax years 
128.18  and added to the amount of premium tax offset calculated under 
128.19  paragraph (a) prior to application of the limitation imposed by 
128.20  this paragraph. 
128.21     (5) Any amount carried forward from prior years must be 
128.22  allowed before allowance of the offset for the current year 
128.23  calculated under paragraph (a). 
128.24     (6) The premium tax offset limitation must be calculated 
128.25  separately for (i) insurance companies subject to assessment 
128.26  under sections 60C.01 to 60C.22, and (ii) insurance companies 
128.27  subject to assessment under Minnesota Statutes 1992, sections 
128.28  61B.01 to 61B.16, or 61B.18 to 61B.32. 
128.29     (7) When the premium tax offset is limited by this 
128.30  provision, the commissioner shall notify affected insurance 
128.31  companies on a timely basis for purposes of completing premium 
128.32  and corporate franchise tax returns.  
128.33     (8) The guaranty associations created under sections 60C.01 
128.34  to 60C.22, Minnesota Statutes 1992, sections 61B.01 to 61B.16, 
128.35  and 61B.18 to 61B.32, shall provide the commissioner with the 
128.36  necessary information on guaranty association assessments. 
129.1      (c)(1) If the offset determined by the application of 
129.2   paragraphs (a) and (b) exceeds the insurance company's premium 
129.3   tax liability under this section prior to allowance of the 
129.4   credit for premium taxes, then the insurance company may carry 
129.5   forward the excess, referred to in this subdivision as the 
129.6   "carryforward credit" to subsequent taxable years. 
129.7      (2) The carryforward credit is allowed as an offset against 
129.8   premium tax liability for the first succeeding year to the 
129.9   extent that the premium tax liability for that year exceeds the 
129.10  amount of the allowable offset for the year determined under 
129.11  paragraphs (a) and (b). 
129.12     (3) The carryforward credit must be reduced, but not below 
129.13  zero, by the amount of the carryforward credit allowed as an 
129.14  offset against the premium tax under this paragraph.  The 
129.15  remainder, if any, of the carryforward credit must be carried 
129.16  forward to succeeding taxable years until the entire 
129.17  carryforward credit has been credited against the insurance 
129.18  company's liability for premium tax under this chapter if 
129.19  applicable for that taxable year. 
129.20     (d) When an insurer has offset against taxes its payment of 
129.21  an assessment of the Minnesota life and health guaranty 
129.22  association, and the association pays the insurer a refund with 
129.23  respect to the assessment under Minnesota Statutes 1992, section 
129.24  61B.07, subdivision 6, or 61B.24, subdivision 6, then the refund 
129.25  reduces the insurer's carryforward credit under paragraph (c).  
129.26  If the refund exceeds the amount of the carryforward credit, the 
129.27  excess amount must be repaid to the state by the insurers to the 
129.28  extent of the offset in the manner the commissioner requires. 
129.29     Subd. 2.  [JOINT UNDERWRITING ASSOCIATION OFFSET.] An 
129.30  assessment made pursuant to section 62I.06, subdivision 6, shall 
129.31  be deductible by the member from past or future premium taxes 
129.32  due the state. 
129.33     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
129.34  following final enactment. 
129.35     Sec. 14.  [REVISOR'S INSTRUCTION.] 
129.36     In the next edition of Minnesota Rules, the revisor shall 
130.1   delete any references to the sections repealed in section 15, 
130.2   paragraph (a). 
130.3      Sec. 15.  [REPEALER.] 
130.4      (a) Minnesota Statutes 2002, sections 294.01; 294.02; 
130.5   294.021; 294.03; 294.06; 294.07; 294.08; 294.09; 294.10; 294.11; 
130.6   and 294.12, are repealed effective the day following final 
130.7   enactment. 
130.8      (b) Minnesota Rules, parts 8125.1000; 8125.1300, subpart 1; 
130.9   and 8125.1400, are repealed effective the day following final 
130.10  enactment. 
130.11                             ARTICLE 8 
130.12         DEPARTMENT COLLECTIONS AND COMPLIANCE INITIATIVES 
130.13     Section 1.  [270.278] [PENALTY FOR FILING CERTAIN DOCUMENTS 
130.14  AGAINST DEPARTMENT OF REVENUE EMPLOYEES.] 
130.15     Subdivision 1.  [DEFINITIONS.] (a) "Recording office" means 
130.16  a county recorder, registrar of titles, or secretary of state in 
130.17  this state or another state. 
130.18     (b) "Filing party" means the person or persons requesting 
130.19  or causing another person to request that the recording office 
130.20  accept documents or instruments for recording or filing. 
130.21     Subd. 2.  [INVALID DOCUMENTS NAMING THE COMMISSIONER OR 
130.22  DEPARTMENT OF REVENUE EMPLOYEES.] Filing a document, including a 
130.23  nonconsensual common law lien under section 514.99, that 
130.24  purports to create a claim against the commissioner of revenue 
130.25  or an employee of the department of revenue based on performance 
130.26  or nonperformance of duties by the commissioner or employee is 
130.27  invalid unless accompanied by a specific order from a court of 
130.28  competent jurisdiction authorizing the filing of the document or 
130.29  unless a specific statute authorizes the filing of the document. 
130.30     Subd. 3.  [CIVIL PENALTY.] If a filing party causes a 
130.31  document described in subdivision 2 to be recorded in a 
130.32  recording office, the commissioner may assess a penalty against 
130.33  the filing party of $1,000 per document filed, payable to the 
130.34  general fund.  An order assessing a penalty under this section 
130.35  is reviewable administratively under section 289A.65 and is 
130.36  appealable to tax court under chapter 271.  The penalty is 
131.1   collected and paid in the same manner as income tax.  The 
131.2   penalty is in addition to any other remedy available to the 
131.3   commissioner of revenue or to an employee of the department of 
131.4   revenue against whom the document has been filed.  
131.5      <h>[EFFECTIVE DATE.]</h> This section is effective for documents 
131.6   filed on or after July 1, 2003. 
131.7      Sec. 2.  Minnesota Statutes 2002, section 270.69, is 
131.8   amended by adding a subdivision to read: 
131.9      Subd. 16.  [ATTACHMENT TO PROCEEDS OF PROPERTY.] Any lien 
131.10  imposed under this section attaches to the proceeds of property 
131.11  with the same priority that the lien has with respect to the 
131.12  property itself.  "Proceeds of property" means proceeds from the 
131.13  sale, lease, license, exchange, or other disposition of the 
131.14  property, including insurance proceeds arising from the loss or 
131.15  destruction of the property. 
131.16     <h>[EFFECTIVE DATE.]</h> This section is effective for all liens, 
131.17  whether imposed prior to, on, or after the day following final 
131.18  enactment. 
131.19     Sec. 3.  Minnesota Statutes 2002, section 270.701, 
131.20  subdivision 2, is amended to read: 
131.21     Subd. 2.  [NOTICE OF SALE.] The commissioner shall as soon 
131.22  as practicable after the seizure of the property give notice of 
131.23  sale of the property to the owner, in the manner of service 
131.24  prescribed in subdivision 1.  In the case of personal property, 
131.25  the notice shall be served at least 10 days prior to the sale.  
131.26  In the case of real property, the notice shall be served at 
131.27  least four weeks prior to the sale.  The commissioner shall also 
131.28  cause public notice of each sale to be made.  In the case of 
131.29  personal property, notice shall be posted at least 10 days prior 
131.30  to the sale at the county courthouse for the county where the 
131.31  seizure is made, and in not less than two other public 
131.32  places.  For purposes of this requirement, the Internet is a 
131.33  public place for posting the information.  In the case of real 
131.34  property, six weeks' published notice shall be given prior to 
131.35  the sale, in a newspaper published or generally circulated in 
131.36  the county.  The notice of sale provided in this subdivision 
132.1   shall specify the property to be sold, and the time, place, 
132.2   manner and conditions of the sale.  Whenever levy is made 
132.3   without regard to the 30-day period provided in section 270.70, 
132.4   subdivision 2, public notice of sale of the property seized 
132.5   shall not be made within the 30-day period unless section 
132.6   270.702 (relating to sale of perishable goods) is applicable.  
132.7      <h>[EFFECTIVE DATE.]</h> This section is effective for notices of 
132.8   sales posted on or after the day following final enactment. 
132.9      Sec. 4.  Minnesota Statutes 2002, section 270.701, is 
132.10  amended by adding a subdivision to read: 
132.11     Subd. 7.  [SALE OF SEIZED SECURITIES.] (a) At the time of 
132.12  levy on securities, the commissioner shall provide notice to the 
132.13  taxpayer that the securities may be sold after ten days from the 
132.14  date of seizure.  
132.15     (b) If the commissioner levies upon nonexempt publicly 
132.16  traded securities and the value of the securities is less than 
132.17  or equal to the total obligation for which the levy is done, 
132.18  after ten days the person who possesses or controls the 
132.19  securities shall liquidate the securities in a commercially 
132.20  reasonable manner.  After liquidation, the person shall transfer 
132.21  the proceeds to the commissioner, less any applicable 
132.22  commissions or fees, or both, which are charged in the normal 
132.23  course of business.  
132.24     (c) If the commissioner levies upon nonexempt publicly 
132.25  traded securities and the value of the securities exceeds the 
132.26  total amount of the levy, the owner of the securities may, 
132.27  within seven days after receipt of the department's notice of 
132.28  levy given pursuant to subdivision 1, instruct the person who 
132.29  possesses or controls the securities which securities are to be 
132.30  sold to satisfy the obligation.  If the owner does not provide 
132.31  instructions for liquidation, the person who possesses or 
132.32  controls the securities shall liquidate the securities in an 
132.33  amount sufficient to pay the obligation, plus any applicable 
132.34  commissions or fees, or both, which are charged in the normal 
132.35  course of business, beginning with the nonexempt securities 
132.36  purchased most recently.  After liquidation, the person who 
133.1   possesses or controls the securities shall transfer to the 
133.2   commissioner the amount of money needed to satisfy the levy. 
133.3      <h>[EFFECTIVE DATE.]</h> This section is effective for sales of 
133.4   securities seized on or after the day following final enactment. 
133.5      Sec. 5.  Minnesota Statutes 2002, section 270.72, 
133.6   subdivision 2, is amended to read: 
133.7      Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
133.8   following terms have the meanings given.  
133.9      (a) "Taxes" are mean all taxes payable to the commissioner 
133.10  including penalties and interest due on the taxes. 
133.11     (b) "Delinquent taxes" do not include a tax liability if 
133.12  (i) an administrative or court action which contests the amount 
133.13  or validity of the liability has been filed or served, (ii) the 
133.14  appeal period to contest the tax liability has not expired, or 
133.15  (iii) the applicant has entered into a payment agreement and is 
133.16  current with the payments.  
133.17     (c) "Applicant" means an individual if the license is 
133.18  issued to or in the name of an individual or the corporation or 
133.19  partnership if the license is issued to or in the name of a 
133.20  corporation or partnership.  "Applicant" also means an officer 
133.21  of a corporation, a member of a partnership, or an individual 
133.22  who is liable for delinquent taxes, either for the entity for 
133.23  which the license is at issue or for another entity for which 
133.24  the liability was incurred, or personally as a licensee.  In the 
133.25  case of a license transfer, "applicant" also means both the 
133.26  transferor and the transferee of the license.  "Applicant" also 
133.27  means any holder of a license. 
133.28     (d) "License" includes means any permit, registration, 
133.29  certification, or other form of approval authorized by statute 
133.30  or rule to be issued by the state or a political subdivision of 
133.31  the state as a condition of doing business or conducting a 
133.32  trade, profession, or occupation in Minnesota, specifically 
133.33  including, but not limited to, a contract for space rental at 
133.34  the Minnesota state fair and authorization to operate 
133.35  concessions or rides at county and local fairs, festivals, or 
133.36  events. 
134.1      (e) "Licensing authority" includes the Minnesota state fair 
134.2   board and county and local boards or governing bodies. 
134.3      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
134.4   following final enactment. 
134.5      Sec. 6.  Minnesota Statutes 2002, section 270A.03, 
134.6   subdivision 2, is amended to read: 
134.7      Subd. 2.  [CLAIMANT AGENCY.] "Claimant agency" means any 
134.8   state agency, as defined by section 14.02, subdivision 2, the 
134.9   regents of the University of Minnesota, any district court of 
134.10  the state, any county, any statutory or home rule charter city 
134.11  presenting a claim for a municipal hospital or a public library 
134.12  or a municipal ambulance service, a hospital district, a private 
134.13  nonprofit hospital that leases its building from the county in 
134.14  which it is located, any public agency responsible for child 
134.15  support enforcement, any public agency responsible for the 
134.16  collection of court-ordered restitution, and any public agency 
134.17  established by general or special law that is responsible for 
134.18  the administration of a low-income housing program, and the 
134.19  Minnesota collection enterprise as defined in section 16D.02, 
134.20  subdivision 8, for the purpose of collecting the costs imposed 
134.21  under section 16D.11. 
134.22     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
134.23  following final enactment. 
134.24     Sec. 7.  Minnesota Statutes 2002, section 289A.31, 
134.25  subdivision 3, is amended to read: 
134.26     Subd. 3.  [TRANSFEREES AND FIDUCIARIES.] The amounts of the 
134.27  following liabilities are, except as otherwise provided in 
134.28  section 289A.38, subdivision 13, assessed, collected, and paid 
134.29  in the same manner and subject to the same provisions and 
134.30  limitations as a deficiency in a tax imposed by chapter 290, 
134.31  including any provisions of law for the collection of taxes: 
134.32     (1) the liability, at law or in equity, of a transferee of 
134.33  property of a taxpayer for tax or overpayment of a refund, 
134.34  including interest, additional amounts, and additions to the tax 
134.35  or overpayment provided by law, imposed upon the taxpayer by 
134.36  chapter 290 or provided for in chapter 290A; and 
135.1      (2) the liability of a fiduciary under subdivision 4 for 
135.2   the payment of tax from the estate of the taxpayer.  The 
135.3   liability may reflect the amount of tax shown on the return or 
135.4   any deficiency in tax.  
135.5      <h>[EFFECTIVE DATE.]</h> This section is effective for refunds 
135.6   paid on or after the day following final enactment. 
135.7      Sec. 8.  Minnesota Statutes 2002, section 289A.31, 
135.8   subdivision 4, is amended to read: 
135.9      Subd. 4.  [TAX AS A PERSONAL DEBT OF A FIDUCIARY.] The A 
135.10  tax imposed by chapter 290 and an overpayment of a refund 
135.11  provided for in chapter 290A, and interest and penalties, is a 
135.12  personal debt of the taxpayer from the time the liability 
135.13  arises, regardless of when the time for discharging the 
135.14  liability by payment occurs.  The debt is, in the case of the 
135.15  personal representative of the estate of a decedent and in the 
135.16  case of any fiduciary, that of the individual in the 
135.17  individual's official or fiduciary capacity only, unless the 
135.18  individual has voluntarily distributed the assets held in that 
135.19  capacity without reserving sufficient assets to pay the tax, 
135.20  interest, and penalties, in which event the individual is 
135.21  personally liable for the deficiency.  
135.22     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
135.23  imposed and property tax refunds claimed on or after the day 
135.24  following final enactment. 
135.25     Sec. 9.  Minnesota Statutes 2002, section 289A.36, 
135.26  subdivision 7, is amended to read: 
135.27     Subd. 7.  [APPLICATION TO COURT FOR ENFORCEMENT OF 
135.28  SUBPOENA.] (a) Disobedience of subpoenas issued under this 
135.29  section shall be punished by the district court of the district 
135.30  in which the party served with the subpoena is located, in the 
135.31  same manner as contempt of the district court.  
135.32     (b) Disobedience of a subpoena issued under subdivision 9 
135.33  shall be punished by the district court for Ramsey county in the 
135.34  same manner as contempt of the district court.  In addition to 
135.35  contempt remedies, the court may issue any order the court deems 
135.36  reasonably necessary to enforce compliance with the subpoena. 
136.1      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
136.2   following final enactment. 
136.3      Sec. 10.  Minnesota Statutes 2002, section 289A.36, is 
136.4   amended by adding a subdivision to read: 
136.5      Subd. 9.  [ACCESS TO RECORDS IN CONNECTION WITH EXAMINATION 
136.6   OF BUSINESSES LOCATED OUTSIDE THE STATE.] (a) In order to 
136.7   determine whether a business located outside the state of 
136.8   Minnesota is required to file a return under this chapter, the 
136.9   commissioner may examine the relevant records and files of the 
136.10  business. 
136.11     (b) To the full extent permitted by the Minnesota and 
136.12  United States constitutions, the commissioner may compel 
136.13  production of those relevant records and files by subpoena.  The 
136.14  subpoena may be served on the secretary of state along with the 
136.15  address to which service of the subpoena is to be sent and a fee 
136.16  of $50.  The secretary of state shall forward a copy of the 
136.17  subpoena to the business using the procedures for service of 
136.18  process in section 5.25, subdivision 6.  
136.19     (c) The commissioner shall pay the reasonable cost of 
136.20  producing records subject to subpoena under this subdivision if: 
136.21     (1) the subpoenaed party cannot produce the records without 
136.22  undue burden; and 
136.23     (2) the examination made pursuant to paragraph (a) shows 
136.24  that the subpoenaed party is not required to file a return under 
136.25  this chapter. 
136.26     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
136.27  following final enactment. 
136.28     Sec. 11.  Minnesota Statutes 2002, section 289A.36, is 
136.29  amended by adding a subdivision to read: 
136.30     Subd. 10.  [PENALTY.] In addition to sanctions imposed 
136.31  under subdivision 7, a penalty of $250 per day is imposed on any 
136.32  business that is in violation of a court order to comply with a 
136.33  subpoena that is seeking information necessary for the 
136.34  commissioner to be able to determine whether the business is 
136.35  required to file a return or pay a tax.  The maximum penalty is 
136.36  $25,000.  Upon the request of the commissioner, the court shall 
137.1   determine the amount of the penalty and enter it as a judgment 
137.2   in favor of the commissioner.  The penalty is not payable until 
137.3   the judgment is entered. 
137.4      <h>[EFFECTIVE DATE.]</h> This section is effective for violations 
137.5   of court orders to enforce subpoenas issued on or after the day 
137.6   following final enactment. 
137.7      Sec. 12.  Minnesota Statutes 2002, section 297A.85, is 
137.8   amended to read: 
137.9      297A.85 [CANCELLATION OF PERMITS.] 
137.10     The commissioner may cancel a permit if one of the 
137.11  following conditions occurs: 
137.12     (1) the permit holder has not filed a sales or use tax 
137.13  return for at least one year; 
137.14     (2) the permit holder has not reported any sales or use tax 
137.15  liability on the permit holder's returns for at least two years; 
137.16  or 
137.17     (3) the permit holder requests cancellation of the permit; 
137.18  or 
137.19     (4) the permit is subject to cancellation pursuant to 
137.20  section 297A.86, subdivision 2, paragraph (a). 
137.21     <h>[EFFECTIVE DATE.]</h> This section is effective for 
137.22  cancellations of permits done on or after the day following 
137.23  final enactment. 
137.24     Sec. 13.  [REPEALER.] 
137.25     Minnesota Statutes 2002, section 270.691, subdivision 8, is 
137.26  repealed effective the day following final enactment. 
137.27                             ARTICLE 9
137.28               CENTRAL LAKES REGION SANITARY DISTRICT
137.29     Section 1.  [DEFINITIONS.] 
137.30     Subdivision 1.  [APPLICATION.] The terms defined in this 
137.31  section shall have the meaning given them unless otherwise 
137.32  provided or indicated by the context.  
137.33     Subd. 2.  [ACQUISITION AND BETTERMENT.] "Acquisition" and 
137.34  "betterment" shall have the meanings given them in Minnesota 
137.35  Statutes, section 475.51.  
137.36     Subd. 3.  [AGENCY.] "Agency" means the Minnesota pollution 
138.1   control agency created and established by Minnesota Statutes, 
138.2   chapter 116.  
138.3      Subd. 4.  [AGRICULTURAL PROPERTY.] "Agricultural property" 
138.4   means land as is classified agricultural land within the meaning 
138.5   of Minnesota Statutes, section 273.13, subdivision 23.  
138.6      Subd. 5.  [CURRENT COSTS OF ACQUISITION, BETTERMENT, AND 
138.7   DEBT SERVICE.] "Current costs of acquisition, betterment, and 
138.8   debt service" means interest and principal estimated to be due 
138.9   during the budget year on bonds issued to finance the 
138.10  acquisition and betterment and all other costs of acquisition 
138.11  and betterment estimated to be paid during the budget year from 
138.12  funds other than bond proceeds and federal or state grants. 
138.13     Subd. 6.  [DISTRICT DISPOSAL SYSTEM.] "District disposal 
138.14  system" means any and all of the interceptors or treatment works 
138.15  owned, constructed, or operated by the board unless designated 
138.16  by the board as local sanitary sewer facilities.  
138.17     Subd. 7.  [CENTRAL LAKES REGION SANITARY DISTRICT AND 
138.18  DISTRICT.] "Central Lakes Region Sanitary District" and 
138.19  "district" mean the area over which the sanitary sewer board has 
138.20  jurisdiction, including those parts of the Douglas county 
138.21  townships of Carlos, Brandon, La Grand, Leaf Valley, Miltona, 
138.22  and Moe, as more particularly described by metes and bounds in 
138.23  the comprehensive plan adopted under section 4.  
138.24     Subd. 8.  [INTERCEPTOR.] "Interceptor" means any sewer and 
138.25  necessary appurtenances to it, including but not limited to, 
138.26  mains, pumping stations, and sewage flow regulating and 
138.27  measuring stations, that is designed for or used to conduct 
138.28  sewage originating in more than one local government unit, or 
138.29  that is designed or used to conduct all or substantially all the 
138.30  sewage originating in a single local government unit from a 
138.31  point of collection in that unit to an interceptor or treatment 
138.32  works outside that unit, or that is determined by the board to 
138.33  be a major collector of sewage used or designed to serve a 
138.34  substantial area in the district.  
138.35     Subd. 9.  [LOCAL GOVERNMENT UNIT OR GOVERNMENT 
138.36  UNIT.] "Local government unit" or "government unit" means any 
139.1   municipal or public corporation or governmental or political 
139.2   subdivision or agency located in whole or in part in the 
139.3   district, authorized by law to provide for the collection and 
139.4   disposal of sewage. 
139.5      Subd. 10.  [LOCAL SANITARY SEWER FACILITIES.] "Local 
139.6   sanitary sewer facilities" means all or any part of any disposal 
139.7   system in the district other than the district disposal system.  
139.8      Subd. 11.  [MUNICIPALITY.] "Municipality" means any city or 
139.9   town located in whole or in part in the district.  
139.10     Subd. 12.  [PERSON.] "Person" means any individual, 
139.11  partnership, corporation, limited liability company, 
139.12  cooperative, or other organization or entity, public or private. 
139.13     Subd. 13.  [POLLUTION AND SEWER SYSTEM.] "Pollution" and 
139.14  "sewer system" have the meanings given them in Minnesota 
139.15  Statutes, section 115.01.  
139.16     Subd. 14.  [SANITARY SEWER BOARD OR BOARD.] "Sanitary sewer 
139.17  board" or "board" means the sanitary sewer board established for 
139.18  the Central Lakes Region Sanitary District as provided in 
139.19  section 2.  
139.20     Subd. 15.  [SEWAGE.] "Sewage" means all liquid or 
139.21  water-carried waste products from whatever sources derived, 
139.22  together with the groundwater infiltration and surface water 
139.23  that may be present.  
139.24     Subd. 16.  [TOTAL COSTS OF ACQUISITION AND BETTERMENT AND 
139.25  COSTS OF ACQUISITION AND BETTERMENT.] "Total costs of 
139.26  acquisition and betterment" and "costs of acquisition and 
139.27  betterment" mean all acquisition and betterment expenses that 
139.28  are permitted to be financed out of bond proceeds issued in 
139.29  accordance with section 12, subdivision 4, whether or not the 
139.30  expenses are in fact financed out of the bond proceeds.  
139.31     Subd. 17.  [TREATMENT WORKS AND DISPOSAL 
139.32  SYSTEM.] "Treatment works" and "disposal system" have the 
139.33  meanings given them in Minnesota Statutes, section 115.01. 
139.34     Sec. 2.  [SANITARY SEWER BOARD.] 
139.35     Subdivision 1.  [ESTABLISHMENT.] A sanitary sewer board 
139.36  with jurisdiction in the Central Lakes Region Sanitary District 
140.1   is established as a public corporation and political subdivision 
140.2   of the state with perpetual succession and all the rights, 
140.3   powers, privileges, immunities, and duties that may be validly 
140.4   granted to or imposed upon a municipal corporation, as provided 
140.5   in this article.  
140.6      Subd. 2.  [MEMBERS AND SELECTION.] The number of board 
140.7   members and method by which they are selected is as follows:  
140.8   The elected chief executive officer of any municipality and the 
140.9   town board chair of each township located in whole or part 
140.10  within the district must each separately select one member.  
140.11  Upon the board's ordering of a project to construct a sanitary 
140.12  sewer, the elected chief executive officer or town board chair 
140.13  respectively of any municipality or township must appoint one 
140.14  additional member for each full 800 special assessments included 
140.15  in the ordered project to be levied against property located in 
140.16  the municipality or township.  The term of each member is 
140.17  subject to the approval of the voting members of the city 
140.18  council or town board.  
140.19     Subd. 3.  [TIME LIMIT; ALTERNATIVE APPOINTMENT.] The 
140.20  initial board members must be selected as provided in 
140.21  subdivision 2 within 60 days after this article is effective.  A 
140.22  successor must be selected at any time within 60 days before the 
140.23  expiration of the predecessor's term in the same manner as the 
140.24  predecessor was selected.  Any vacancy on the board must be 
140.25  filled within 60 days after it occurs.  If a selection is not 
140.26  made as provided within the time prescribed, the chief judge of 
140.27  the seventh judicial district of the Minnesota district court, 
140.28  on application by any interested person, shall appoint an 
140.29  eligible person to the board. 
140.30     Subd. 4.  [VACANCIES.] If the office of any board member 
140.31  becomes vacant, the vacancy shall be filled for the unexpired 
140.32  term in the manner as provided for selection of the member who 
140.33  vacated the office.  The office shall be deemed vacant under the 
140.34  conditions specified in Minnesota Statutes, section 351.02.  
140.35     Subd. 5.  [TERMS OF OFFICE.] The terms of all board members 
140.36  shall be for one, two, three, or four calendar years to be 
141.1   determined in accordance with subdivision 2 by the governing 
141.2   body selecting such member.  Terms shall expire on January 1 of 
141.3   a calendar year, except that each member shall serve until a 
141.4   successor has been duly selected and qualified.  
141.5      Subd. 6.  [REMOVAL.] A board member may be removed by the 
141.6   unanimous vote of the appointing governing body with or without 
141.7   cause.  
141.8      Subd. 7.  [QUALIFICATIONS.] Each board member may, but need 
141.9   not be a resident of the district and may, but need not be an 
141.10  elected public official.  
141.11     Subd. 8.  [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A 
141.12  certificate of selection to a seat of every board member, 
141.13  stating the seat's term, must be made by the respective 
141.14  municipal or town clerk.  The certificate, with the approval 
141.15  attached by other authority, if required, must be filled with 
141.16  the secretary of state.  A copy must be furnished to the board 
141.17  member and the secretary of the board.  Each member must qualify 
141.18  by taking and subscribing to the oath of office prescribed by 
141.19  the Minnesota Constitution, article V, section 6.  The oath, 
141.20  duly certified by the official administering the same, must be 
141.21  filed with the secretary of state and the secretary of the board.
141.22     Subd. 9.  [COMPENSATION OF BOARD MEMBERS.] Each board 
141.23  member may be paid a per diem compensation to attend meetings 
141.24  and for other services in an amount as may be specifically 
141.25  authorized by the board from time to time.  Per diem 
141.26  compensation may not exceed $4,000 for any member in any one 
141.27  year.  All members of the board must be reimbursed for all 
141.28  reasonable expenses incurred in the performance of their duties 
141.29  as determined by the board.  
141.30     Sec. 3.  [GENERAL PROVISION FOR ORGANIZATION AND OPERATION 
141.31  OF BOARD.] 
141.32     Subdivision 1.  [OFFICERS MEETINGS; SEAL.] A majority of 
141.33  the members is a quorum at all meetings of the board, but a 
141.34  lesser number may meet and adjourn from time to time and compel 
141.35  the attendance of absent members.  The board must meet regularly 
141.36  at the time and place as the board by resolution designates.  
142.1   Special meetings may be held at any time upon call of the chair 
142.2   or any two members, upon written notice sent by mail to each 
142.3   member at least three days before the meeting, or upon the 
142.4   notice as the board by resolution may provide, or without notice 
142.5   if each member is present or files with the secretary a written 
142.6   consent to the meeting either before or after the meeting.  
142.7   Except as otherwise provided in this article, any action within 
142.8   the authority of the board may be taken by the affirmative vote 
142.9   of a majority of the board at a regular or adjourned regular 
142.10  meeting or at a duly held special meeting, but in any case only 
142.11  if a quorum is present.  All meetings of the board must be open 
142.12  to the public as provided in Minnesota Statutes, chapter 13D.  
142.13     Subd. 2.  [CHAIR.] The board must elect a chair from its 
142.14  membership.  The term of the chair expires on January 1 of each 
142.15  year.  The chair presides at all meetings of the board, if 
142.16  present, and must perform all other duties and functions usually 
142.17  incumbent upon the officer, and all administrative functions 
142.18  assigned to the chair by the board.  The board must elect a 
142.19  vice-chair from its membership to act for the chair during a 
142.20  temporary absence or disability.  
142.21     Subd. 3.  [SECRETARY AND TREASURER.] The board must select 
142.22  one or more persons who may, but need not be a member of the 
142.23  board, to act as its secretary and treasurer.  The secretary and 
142.24  treasurer hold office at the pleasure of the board, subject to 
142.25  the terms of any contract of employment that the board may enter 
142.26  into with the secretary or treasurer.  The secretary must record 
142.27  the minutes of all meetings of the board, and is custodian of 
142.28  all books and records of the board except those the board 
142.29  entrusts to the custody of a designated employee.  The board may 
142.30  appoint a deputy to perform any and all functions of either the 
142.31  secretary or the treasurer.  A secretary or treasurer or a 
142.32  deputy of either who is not a member of the board shall not have 
142.33  any right to vote.  
142.34     Subd. 4.  [GENERAL MANAGER.] The board may appoint a 
142.35  general manager who shall be selected solely upon the basis of 
142.36  training, experience, and other qualifications.  The general 
143.1   manager serves at the pleasure of the board and at a 
143.2   compensation to be determined by the board.  The general manager 
143.3   need not be a resident of the district and may also be selected 
143.4   by the board to serve as either secretary or treasurer, or both, 
143.5   of the board.  The general manager must attend all meetings of 
143.6   the board but must not vote.  The general manager must:  
143.7      (1) see that all resolutions, rules, regulations, or orders 
143.8   of the board are enforced; 
143.9      (2) appoint and remove, upon the basis of merit and 
143.10  fitness, all subordinate officers and regular employees of the 
143.11  board except the secretary and the treasurer and their deputies; 
143.12     (3) present to the board plans, studies, and other reports 
143.13  prepared for board purposes and recommend to the board for 
143.14  adoption such measures as the general manager considers 
143.15  necessary to enforce or carry out the powers and duties of the 
143.16  board, or for the efficient administration of the affairs of the 
143.17  board; 
143.18     (4) keep the board fully advised as to its financial 
143.19  condition, and prepare and submit to the board, and to the 
143.20  governing bodies of the local government units, the board's 
143.21  annual budget and other financial information the board 
143.22  requests; 
143.23     (5) recommend to the board for adoption rules recommended 
143.24  as necessary for the efficient operation of a district disposal 
143.25  system and all local sanitary sewer facilities over which the 
143.26  board may assume responsibility as provided in section 17; and 
143.27     (6) perform other duties as may be prescribed by the board. 
143.28     Subd. 5.  [PUBLIC EMPLOYEES.] The general manager and all 
143.29  persons employed by the general manager are public employees, 
143.30  and have all the rights and duties conferred on public employees 
143.31  under the Minnesota Public Employment Labor Relations Act.  The 
143.32  compensation and conditions of employment of the employees is 
143.33  not governed by any rule applicable to state employees in the 
143.34  classified service or by Minnesota Statutes, chapter 15A, except 
143.35  as specifically authorized by law. 
143.36     Subd. 6.  [PROCEDURES.] The board must adopt resolutions or 
144.1   bylaws establishing procedures for board action, personnel 
144.2   administration, record keeping, investment policy, approving 
144.3   claims, authorizing or making disbursements, safekeeping funds, 
144.4   and audit of all financial operations of the board.  
144.5      Subd. 7.  [SURETY BONDS AND INSURANCE.] The board may 
144.6   procure surety bonds for its officers and employees in such 
144.7   amounts as are considered necessary to assure proper performance 
144.8   of their duties and proper accounting for funds in their custody.
144.9   It may buy insurance against risks to property and liability of 
144.10  the board and its officers, agents, and employees for personal 
144.11  injuries or death and property damage and destruction in the 
144.12  amounts as it considers necessary or desirable, with the force 
144.13  and effect stated in Minnesota Statutes, chapter 466.  
144.14     Sec. 4.  [COMPREHENSIVE PLAN.] 
144.15     Subdivision 1.  [BOARD PLAN AND PROGRAM.] The board shall 
144.16  adopt a comprehensive plan for the collection, treatment, and 
144.17  disposal of sewage in the district for designated periods that 
144.18  the board considers proper and reasonable.  The board must 
144.19  prepare and adopt subsequent comprehensive plans for the 
144.20  collection, treatment, and disposal of sewage in the district 
144.21  for each succeeding designated period as the board considers 
144.22  proper and reasonable.  The plan must take into account the 
144.23  preservation and best and most economic use of water and other 
144.24  natural resources in the area; the preservation, use, and 
144.25  potential for use of lands adjoining waters of the state to be 
144.26  used for the disposal of sewage; and the impact such a disposal 
144.27  system will have on present and future land use in the affected 
144.28  area.  The plans shall include the following: 
144.29     (1) the exact legal description of the boundaries of the 
144.30  district; 
144.31     (2) the general location of needed interceptors and 
144.32  treatment works; 
144.33     (3) a description of the area that is to be served by the 
144.34  various interceptors and treatment works; 
144.35     (4) a long-range capital improvements program; and 
144.36     (5) such other details as the board deems appropriate. 
145.1   In developing the plans, the board shall consult with persons 
145.2   designated by the governing bodies of any municipal or public 
145.3   corporation or governmental or political subdivision or agency 
145.4   within or without the district to represent such entities and 
145.5   shall consider the data, resources, and input offered to the 
145.6   board by such entities and any planning agency acting on behalf 
145.7   of one or more such entities.  Each plan, when adopted, must be 
145.8   followed in the district and may be revised as often as the 
145.9   board considers necessary.  
145.10     Subd. 2.  [REPORT TO DOUGLAS COUNTY.] Upon adoption of any 
145.11  comprehensive plan that establishes or reestablishes the 
145.12  boundaries of the district, the board must supply the 
145.13  appropriate Douglas county offices with the boundaries of the 
145.14  district.  
145.15     Subd. 3.  [COMPREHENSIVE PLANS; HEARING.] Before adopting 
145.16  any later comprehensive plan, the board must hold a public 
145.17  hearing on the proposed plan at the time and place in the 
145.18  district it determines.  The hearing may be continued from time 
145.19  to time.  Not less than 45 days before the hearing, the board 
145.20  must publish notice of it in a newspaper or newspapers having 
145.21  general circulation in the district stating the date, time, and 
145.22  place of the hearing, and the place where the proposed plan may 
145.23  be examined by any interested person.  At the hearing, all 
145.24  interested persons must be permitted to present their views on 
145.25  the plan.  
145.26     Subd. 4.  [MUNICIPAL PLANS AND PROGRAMS; COORDINATION WITH 
145.27  BOARD'S RESPONSIBILITIES.] Before undertaking the construction 
145.28  of new sewers or other disposal facilities or the substantial 
145.29  alteration or improvement of any existing sewers or other 
145.30  disposal facilities, each local government unit may, and must if 
145.31  the construction or alteration of any sewage disposal facilities 
145.32  is contemplated by the government unit, adopt a comprehensive 
145.33  plan and program for the collection, treatment, and disposal of 
145.34  sewage for which the local government unit is responsible, 
145.35  coordinated with the board's comprehensive plan, and may revise 
145.36  the plan as often as deemed necessary.  Each local plan or 
146.1   revision must be submitted to the board for review and is 
146.2   subject to the approval of the board as to those features of the 
146.3   plan affecting the board's responsibilities as determined by the 
146.4   board.  Any features disapproved by the board must be modified 
146.5   in accordance with the board's recommendations.  No construction 
146.6   project involving those features may be undertaken by the local 
146.7   government unit unless its governing body first finds the 
146.8   project to be in accordance with the government unit's 
146.9   comprehensive plan and program as approved by the board.  Before 
146.10  approval by the board of the comprehensive plan and program of 
146.11  any local government unit in the district, no construction 
146.12  project may be undertaken by the government unit unless approval 
146.13  of the project is first gotten from the board as to those 
146.14  features of the project affecting the board's responsibilities 
146.15  as determined by the board.  
146.16     Sec. 5.  [SEWER SERVICE FUNCTION.] 
146.17     Subdivision 1.  [DUTY OF BOARD; ACQUISITION OF EXISTING 
146.18  FACILITIES; NEW FACILITIES.] At any time after the board has 
146.19  become organized, it must assume ownership of all existing 
146.20  interceptors and treatment works that are needed to implement 
146.21  the board's comprehensive plan for the collection, treatment, 
146.22  and disposal of sewage in the district, in the manner and 
146.23  subject to the conditions prescribed in subdivision 2, and must 
146.24  design, acquire, construct, better, equip, operate, and maintain 
146.25  all additional interceptors and treatment works that will be 
146.26  needed for this purpose.  The board must assume ownership of all 
146.27  treatment works owned by a local government unit if any part of 
146.28  those treatment works are so needed. 
146.29     Subd. 2.  [METHOD OF ACQUISITION; EXISTING DEBT.] The board 
146.30  may require any local government unit to transfer to the board 
146.31  all of its right, title, and interest in any interceptors or 
146.32  treatment works and all necessary appurtenances to them owned by 
146.33  the local government unit that will be needed for the purpose 
146.34  stated in subdivision 1.  Appropriate instruments of conveyance 
146.35  for all the property must be executed and delivered to the board 
146.36  by the proper officers of each local government unit concerned.  
147.1   The board, upon assuming ownership of any of the interceptors or 
147.2   treatment works, is obligated to pay to the local government 
147.3   unit amounts sufficient to pay, when due, all remaining 
147.4   principal of and interest on bonds issued by the local 
147.5   government unit for the acquisition or betterment of the 
147.6   interceptors or treatment works.  The board must also assume the 
147.7   same obligation with respect to any other existing disposal 
147.8   system owned by a local government unit that the board 
147.9   determines to have been replaced or rendered useless by the 
147.10  district disposal system.  The amounts to be paid under this 
147.11  subdivision may be offset against any amount to be paid to the 
147.12  board by the local government unit as provided in section 8.  
147.13  The board is not obligated to pay the local government unit 
147.14  anything in addition to the assumption of debt provided for in 
147.15  this subdivision.  
147.16     Subd. 3.  [EXISTING JOINT POWERS BOARD.] Effective December 
147.17  31, 2004, or an earlier date as determined by the board, the 
147.18  corporate existence of the joint powers board created by 
147.19  agreement among local government units under Minnesota Statutes, 
147.20  section 471.59, to provide the financing, acquisition, 
147.21  construction, improvement, extension, operation, and maintenance 
147.22  of facilities for the collection, treatment, and disposal of 
147.23  sewage is terminated.  All persons regularly employed by the 
147.24  joint powers board on that date become employees of the board, 
147.25  and may at their option become members of the retirement system 
147.26  applicable to persons employed directly by the board or may 
147.27  continue as members of a public retirement association under any 
147.28  other law, to which they belonged before that date, and retain 
147.29  all pension rights that they may have under the other law and 
147.30  all other rights to which they are entitled by contract or law.  
147.31  The board must make the employer's contributions to pension 
147.32  funds of its employees.  The employees must perform duties as 
147.33  may be prescribed by the board.  On December 31, 2004, or the 
147.34  earlier date, all funds of the joint powers board and all later 
147.35  collections of taxes, special assessments, or service charges, 
147.36  or any other sums due the joint powers board, or levied or 
148.1   imposed by or for the joint powers board, must be transferred to 
148.2   or made payable to the sanitary sewer board and the county 
148.3   auditor must remit the sums to the board.  The local government 
148.4   units otherwise entitled to the cash, taxes, assessments, or 
148.5   service charges must be credited with the amounts, and the 
148.6   credits must be offset against any amounts to be paid by them to 
148.7   the board as provided in section 8.  On December 31, 2004, or 
148.8   the earlier chosen date, the board shall succeed to and become 
148.9   vested with all right, title, and interest in and to any 
148.10  property, real or personal, owned or operated by the joint 
148.11  powers board.  Before that date, the proper officers of the 
148.12  joint powers board must execute and deliver to the sanitary 
148.13  sewer board all deeds, conveyances, bills of sale, and other 
148.14  documents or instruments required to vest in the board good and 
148.15  marketable title to all the real or personal property, but this 
148.16  article operates as the transfer and conveyance to the board of 
148.17  the real or personal property, if not transferred, as may be 
148.18  required under the law or under the circumstances.  On December 
148.19  31, 2004, or the earlier chosen date, the board is obligated to 
148.20  pay or assume all outstanding bonds or other debt and all 
148.21  contracts or obligations incurred by the joint powers board, and 
148.22  all bonds, obligations, or debts of the joint powers board 
148.23  outstanding on the date this article is effective, are validated.
148.24     Subd. 4.  [CONTRACTS BETWEEN LOCAL GOVERNMENT UNITS.] The 
148.25  board may terminate, upon 60 days' mailed notice to the 
148.26  contracting parties, any existing contract between or among 
148.27  local government units requiring payments by a local government 
148.28  unit to any other local government unit for the use of a 
148.29  disposal system, or as reimbursement of capital costs of a 
148.30  disposal system, all or part of which are needed to implement 
148.31  the board's comprehensive plan.  All contracts between or among 
148.32  local government units for use of a disposal system entered into 
148.33  after the date on which this article becomes effective must be 
148.34  submitted to the board for approval as to those features 
148.35  affecting the board's responsibilities as determined by the 
148.36  board and are not effective until the approval is given.  
149.1      Sec. 6.  [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 
149.2      Subdivision 1.  [POWERS.] In addition to all other powers 
149.3   conferred upon the board in this article, the board has the 
149.4   powers specified in this section. 
149.5      Subd. 2.  [DISCHARGE OF TREATED SEWAGE.] The board may 
149.6   discharge the effluent from any treatment works operated by it 
149.7   into any waters of the state, subject to approval of the agency 
149.8   if required and in accordance with any effluent or water quality 
149.9   standards lawfully adopted by the agency, any interstate agency, 
149.10  or any federal agency having jurisdiction.  
149.11     Subd. 3.  [USE OF DISTRICT SYSTEM.] The board may require 
149.12  any person or local government unit to provide for the discharge 
149.13  of any sewage, directly or indirectly, into the district 
149.14  disposal system, or to connect any disposal system or a part of 
149.15  it with the district disposal system wherever reasonable 
149.16  opportunity is provided; may regulate the manner in which the 
149.17  connections are made; may require any person or local government 
149.18  unit discharging sewage into the disposal system to provide 
149.19  preliminary treatment for it; may prohibit the discharge into 
149.20  the district disposal system of any substance it determines will 
149.21  or may be harmful to the system or any persons operating it; may 
149.22  prohibit any extraneous flow into the system; and may require 
149.23  any local government unit to discontinue the acquisition, 
149.24  betterment, or operation of any facility for the unit's disposal 
149.25  system wherever and so far as adequate service is or will be 
149.26  provided by the district disposal system.  
149.27     Sec. 7.  [BUDGET.] 
149.28     Except as otherwise specifically provided in this article, 
149.29  the board is subject to Minnesota Statutes, section 275.065, the 
149.30  Truth in Taxation Act.  The board shall prepare and adopt, on or 
149.31  before September 15 of each year, a budget showing for the 
149.32  following calendar year or other fiscal year determined by the 
149.33  board, sometimes referred to in this article as the budget year, 
149.34  estimated receipts of money from all sources, including but not 
149.35  limited to, payments by each local government unit, federal or 
149.36  state grants, taxes on property, and funds on hand at the 
150.1   beginning of the year, and estimated expenditures for:  
150.2      (1) costs of operation, administration, and maintenance of 
150.3   the district disposal system; 
150.4      (2) cost acquisition and betterment of the district 
150.5   disposal system; and 
150.6      (3) debt service, including principal and interest, on 
150.7   general obligation bonds and certificates issued under section 
150.8   12, obligations and debts assumed under section 5, subdivisions 
150.9   2 and 3, and any money judgments entered by a court of competent 
150.10  jurisdiction.  Expenditures within these general categories, and 
150.11  others that the board may from time to time determine, must be 
150.12  itemized in the detail the board prescribes.  The board and its 
150.13  officers, agents, and employees must not spend money for any 
150.14  purpose other than debt service without having set forth the 
150.15  expense in the budget, nor may they spend in excess of the 
150.16  amount in the budget, and an excess expenditure or one for an 
150.17  unauthorized purpose is enforceable except as the obligation of 
150.18  the person incurring it; but the board may amend the budget at 
150.19  any time by transferring from one budgetary purpose to another 
150.20  any sums, except money for debt service and bond proceeds, or by 
150.21  increasing expenditures in any amount by which cash receipts 
150.22  during the budget year actually exceed the total amounts 
150.23  designated in the original budget.  The creation of any 
150.24  obligation pursuant to section 12 or the receipts of any federal 
150.25  or state grant is a sufficient budget designation of the 
150.26  proceeds for the purpose for which it is authorized, and of the 
150.27  tax or other revenue pledged to pay the obligation and interest 
150.28  on it, whether or not specifically included in any annual budget.
150.29     Sec. 8.  [ALLOCATION OF COSTS.] 
150.30     Subdivision 1.  [DEFINITION OF CURRENT COSTS.] The 
150.31  estimated cost of administration, operation, maintenance, and 
150.32  debt service of the district disposal system to be paid by the 
150.33  board in each fiscal year and the estimated costs of acquisition 
150.34  and betterment of the system that are to be paid during the year 
150.35  from funds other than state or federal grants and bond proceeds 
150.36  and all other previously unallocated payments made by the board 
151.1   under this article in the fiscal year are referred to as current 
151.2   costs.  
151.3      Subd. 2.  [COLLECTION OF CURRENT COSTS.] Current costs 
151.4   shall be collected as described in paragraphs (a) and (b).  
151.5      (a) Current costs may be allocated to local government 
151.6   units in the district on an equitable basis as the board may 
151.7   from time to time determine by resolution to be fair and 
151.8   reasonable and in the best interests of the district.  In making 
151.9   the allocation, the board may provide for the deferment of 
151.10  payment of all or part of current costs, the reallocation of 
151.11  deferred costs, and the reimbursement of reallocated deferred 
151.12  costs on an equitable basis as the board may from time to time 
151.13  determine by resolution to be fair and reasonable and in the 
151.14  best interests of the district.  The adoption or revision of a 
151.15  method of allocation, deferment, reallocation, or reimbursement 
151.16  used by the board shall be made by the affirmative vote of at 
151.17  least two-thirds of the members of the board.  
151.18     (b) Upon approval of at least two-thirds of the members of 
151.19  the board, the board may provide for direct collection of 
151.20  current costs by monthly or other periodic billing of sewer 
151.21  users.  
151.22     Sec. 9.  [GOVERNMENT UNITS; PAYMENTS TO BOARD.] 
151.23     Subdivision 1.  [OBLIGATIONS OF GOVERNMENT UNITS TO THE 
151.24  BOARD.] Each government unit must pay to the board all sums 
151.25  charged to it as provided in section 8, at the times and in the 
151.26  manner determined by the board.  The governing body of each 
151.27  government unit must take all action necessary to provide the 
151.28  funds required for the payments and to make the payments when 
151.29  due.  
151.30     Subd. 2.  [AMOUNTS DUE BOARD; WHEN PAYABLE.] Charges 
151.31  payable to the board by local government units may be made 
151.32  payable at the times during each year as the board determines, 
151.33  after it has taken into account the dates on which taxes, 
151.34  assessments, revenue collections, and other funds become 
151.35  available to the government unit required to pay such charges.  
151.36     Subd. 3.  [GENERAL POWERS OF GOVERNMENT UNITS; LOCAL TAX 
152.1   LEVIES.] To accomplish any duty imposed on it by the board, the 
152.2   governing body of every government unit may, in addition to the 
152.3   powers granted in this article and in any other law or charter, 
152.4   exercise the powers granted any municipality by Minnesota 
152.5   Statutes, chapters 117, 412, 429, and 475, and sections 115.46, 
152.6   444.075, and 471.59, with respect to the area of the government 
152.7   unit located in the district.  In addition, the governing body 
152.8   of every government unit located in whole or in part within the 
152.9   district may levy taxes upon all taxable property in that part 
152.10  of the government unit located in this district for all or a 
152.11  part of the amount payable to the board.  If the levy is for 
152.12  only part of the amount payable to the board, the governing body 
152.13  of the government unit may levy additional taxes on the entire 
152.14  net tax capacity of all taxable property of the government unit 
152.15  for all or a part of the balance remaining payable.  The taxes 
152.16  levied under this subdivision must be assessed and extended as a 
152.17  tax upon the taxable property by the county auditor for the next 
152.18  calendar year, free from any limit of rate or amount imposed by 
152.19  law or charter.  The tax must be collected and remitted in the 
152.20  same manner as other general taxes of the government unit. 
152.21     Subd. 4.  [ALTERNATE LEVY.] In place of levying taxes on 
152.22  all taxable property under subdivision 3, the governing body of 
152.23  the government unit may elect to levy taxes upon the net tax 
152.24  capacity of all taxable property, except agricultural property, 
152.25  and upon only 25 percent of the net tax capacity of all 
152.26  agricultural property, in that part of the government unit 
152.27  located in the district for all or a part of the amount payable 
152.28  to the board.  If the levy is for only part of the amount 
152.29  payable to the board, the governing body may levy additional 
152.30  taxes on the entire net tax capacity of all the property, 
152.31  including agricultural property, for all or a part of the 
152.32  balance.  The taxes must be assessed and extended as a tax upon 
152.33  the taxable property by the county auditor for the next calendar 
152.34  year, free from any limit of rate or amount imposed by law or 
152.35  charter, and must be collected and remitted in the same manner 
152.36  as other general taxes of the government unit.  In computing the 
153.1   tax capacity under this subdivision, the county auditor must 
153.2   include only 25 percent of the net tax capacity of all taxable 
153.3   agricultural property and 100 percent of the net tax capacity of 
153.4   all other taxable property in that part of the government unit 
153.5   located within the district and, in spreading the levy, the 
153.6   auditor must apply the tax rate upon the same percentages of 
153.7   agricultural and nonagricultural taxable property.  If the 
153.8   government unit elects to levy taxes under this subdivision and 
153.9   any of the taxable agricultural property is reclassified so as 
153.10  to no longer qualify as agricultural property, it is subject to 
153.11  additional taxes.  The additional taxes must be in an amount 
153.12  which, together with any additional taxes previously levied and 
153.13  the estimated collection of additional taxes subsequently levied 
153.14  on any other reclassified property, is determined by the 
153.15  governing body of the government unit to be at least sufficient 
153.16  to reimburse each other government unit for any excess current 
153.17  costs reallocated to it as a result of the board deferring any 
153.18  current cost under section 8 on account of the difference 
153.19  between the amount of the current costs initially allocated to 
153.20  each government unit based on the total net tax capacity of all 
153.21  taxable property in the district and the amount of the current 
153.22  costs reallocated to each government unit based on 25 percent of 
153.23  the net tax capacity of agricultural property and 100 percent of 
153.24  the net tax capacity of all other taxable property in the 
153.25  district.  Any reimbursement must be made on terms which the 
153.26  board determines to be just and reasonable.  These additional 
153.27  taxes may be levied in any greater amount as the governing body 
153.28  of the government unit determines to be appropriate, but the 
153.29  total amount of the additional taxes must not exceed the 
153.30  difference between: 
153.31     (1) the total amount of taxes that would have been levied 
153.32  upon the reclassified property to help pay current costs charged 
153.33  in each year to the government unit by the board if that part of 
153.34  the costs, if any, initially allocated by the board solely on 
153.35  the basis of 100 percent of the net tax capacity of all taxable 
153.36  property in the district and then reallocated on the basis of 
154.1   inclusion of only 25 percent of the net tax capacity of 
154.2   agricultural property in the district was not reallocated and if 
154.3   the amount of taxes levied by the government unit each year 
154.4   under this subdivision to pay current costs had been based on 
154.5   the initial allocation and had been imposed upon 100 percent of 
154.6   the net tax capacity of all taxable property, including 
154.7   agricultural property, in that part of the government unit 
154.8   located in the district; and 
154.9      (2) the amount of taxes levied each year under this 
154.10  subdivision upon reclassified property, plus interest on the 
154.11  cumulative amount of the difference accruing each year at the 
154.12  approximate average annual rate borne by bonds issued by the 
154.13  board and outstanding at the beginning of the year or, if no 
154.14  bonds are then outstanding, at a rate of interest which may be 
154.15  determined by the board, but not exceeding the maximum rate of 
154.16  interest that may then be paid on bonds issued by the board.  
154.17  The additional taxes are a lien upon the reclassified property 
154.18  assessed in the same manner and for the same duration as all 
154.19  other ad valorem taxes levied upon the property.  The additional 
154.20  taxes must be extended against the reclassified property on the 
154.21  tax list for the current year and must be collected and remitted 
154.22  in the same manner as other general taxes of the government 
154.23  unit.  No penalties or additional interest may be levied on the 
154.24  additional taxes if timely paid. 
154.25     Subd. 5.  [DEBT LIMIT.] Any ad valorem taxes levied under 
154.26  subdivision 3, by the governing body of a government unit to pay 
154.27  any sums charged to it by the board pursuant to this article are 
154.28  not subject to, or counted toward, any limit imposed by law on 
154.29  the levy of taxes upon taxable property within any governmental 
154.30  unit. 
154.31     Subd. 6.  [DEFICIENCY TAX LEVIES.] If the local government 
154.32  unit fails to make a payment to the board when due, the board 
154.33  may certify to the Douglas county auditor the amount required 
154.34  for payment, with interest at not more than the maximum rate per 
154.35  year authorized at that time on assessments under Minnesota 
154.36  Statutes, section 429.061, subdivision 2.  The auditor must levy 
155.1   and extend the amount as a tax upon all taxable property in that 
155.2   part of the government unit located in the district, for the 
155.3   next calendar year, free from any limits imposed by law or 
155.4   charter.  The tax must be collected in the same manner as other 
155.5   general taxes of the government unit, and the proceeds, when 
155.6   collected, shall be paid by the county treasurer to the 
155.7   treasurer of the board and credited to the government unit for 
155.8   which the tax was levied. 
155.9      Sec. 10.  [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 
155.10     Subdivision 1.  [PUBLIC HEARING REQUIREMENT ON SPECIFIC 
155.11  PROJECT.] Before the board orders any project involving the 
155.12  acquisition or betterment of any interceptor or treatment works, 
155.13  all or a part of the cost of which will be allocated to local 
155.14  government units under section 8 as current costs, the board 
155.15  must hold a public hearing on the proposed project following two 
155.16  publications in a newspaper or newspapers having general 
155.17  circulation in the district, stating the time and place of the 
155.18  hearing, the general nature and location of the project, the 
155.19  estimated total cost of acquisition and betterment, that portion 
155.20  of costs estimated to be paid out of federal and state grants, 
155.21  and that portion of costs estimated to be allocated to each 
155.22  local government unit affected.  The two publications must be a 
155.23  week apart and the hearing must be at least three days after the 
155.24  last publication.  Not less than 45 days before the hearing, 
155.25  notice must also be mailed to each clerk of all local government 
155.26  units in the district, but failure to give mailed notice of any 
155.27  defects in the notice does not invalidate the proceedings.  The 
155.28  project may include all or part of one or more interceptors or 
155.29  treatment works.  A hearing is not required with respect to a 
155.30  project, no part of the costs of which are to be allocated to 
155.31  local government units as the current cost of acquisition, 
155.32  betterment, and debt service.  
155.33     Subd. 2.  [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 
155.34  governing body of a local government unit in the district 
155.35  proposes to assess against benefited property within units, all 
155.36  or any part of the allocable costs of the project as provided in 
156.1   subdivision 5, the governing body must, not less than ten days 
156.2   before the hearing provided for in subdivision 1 mail a notice 
156.3   of the hearing to the owner of each parcel within the area 
156.4   proposed to be specially assessed and must also give one week's 
156.5   published notice of the hearing.  The notice of hearing must 
156.6   contain the same information provided in the notice published by 
156.7   the board under subdivision 1, and in addition, a description of 
156.8   the area proposed to be assessed by the local government unit.  
156.9   To give mailed notice, owners must be those shown to be on the 
156.10  records of the county auditor or, in a county where tax 
156.11  statements are mailed by the county treasurer, on the records of 
156.12  the county treasurer; but other appropriate records may be used 
156.13  for this purpose.  However, for properties that are tax exempt 
156.14  or subject to taxation on a gross earnings basis and are not 
156.15  listed on the records of the county auditor or the county 
156.16  treasurer, the owners may be ascertained by any practicable 
156.17  means and mailed notice must be given to them.  Failure to give 
156.18  mailed notice or any defects in the notice does not invalidate 
156.19  the proceedings of the board or the local governing body.  
156.20     Subd. 3.  [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before 
156.21  adoption of the resolution calling for the hearing, the board 
156.22  shall get from the district engineer, or other competent person 
156.23  of the board's selection, a preliminary report advising whether 
156.24  the proposed project is feasible, necessary, and cost-effective, 
156.25  and whether it should best be made as proposed or in connection 
156.26  with another project, and the estimated costs of the project as 
156.27  recommended.  No error or omission in the report invalidates the 
156.28  proceeding.  The board may also take steps before the hearing 
156.29  that will, in its judgment, provide helpful information in 
156.30  determining the desirability and feasibility of the project 
156.31  including, but not limited to, preparation of plans and 
156.32  specifications and advertisement for bids.  The hearing may be 
156.33  adjourned from time to time and a resolution ordering the 
156.34  project may be adopted at any time within six months after the 
156.35  date of hearing.  In ordering the project, the board may reduce 
156.36  but not increase the extent of the project as stated in the 
157.1   notice of hearing, unless another hearing is held, and must find 
157.2   that the project as ordered is in accordance with the 
157.3   comprehensive plan and program adopted by the board under 
157.4   section 4.  
157.5      Subd. 4.  [EMERGENCY ACTION.] If the board by resolution 
157.6   adopted by the affirmative vote of not less than two-thirds of 
157.7   its members determines that an emergency exists requiring the 
157.8   immediate purchase of materials or supplies or the making of 
157.9   emergency repairs, it may order the purchase of the supplies and 
157.10  materials and the making of the repairs before any hearing 
157.11  required under this section.  But the board must set as early a 
157.12  date as practicable for that hearing at the time it declares the 
157.13  emergency.  All other provisions of this section must be 
157.14  followed in giving notice of and conducting a hearing.  This 
157.15  subdivision does not prevent the board or its agents from 
157.16  purchasing maintenance supplies or incurring maintenance costs 
157.17  without regard to the requirements of this section.  
157.18     Subd. 5.  [POWER OF GOVERNMENT UNIT TO SPECIALLY ASSESS.] A 
157.19  local government unit may specially assess all or part of the 
157.20  costs of acquisition and betterment of any project ordered by 
157.21  the board under this section.  A special assessment must be 
157.22  levied in accordance with Minnesota Statutes, sections 429.051 
157.23  to 429.081, except as otherwise provided in this subdivision.  
157.24  No other provisions of Minnesota Statutes, chapter 429, apply.  
157.25  For purposes of levying special assessments, the hearing on the 
157.26  project required in subdivision 1 must serve as the hearing on 
157.27  the making of the original improvement provided for by Minnesota 
157.28  Statutes, section 429.051.  The area assessed may be less than 
157.29  but must not exceed the area proposed to be assessed as stated 
157.30  in the notice of hearing on the project provided for in 
157.31  subdivision 2.  To determine the allocable cost of the project 
157.32  to the local government units, the government unit may adopt one 
157.33  of the procedures in paragraph (a) or (b).  
157.34     (a) At any time after a contract is let for the project, 
157.35  the local government unit may get from the board a current 
157.36  written estimate, on the basis of historical and reasonably 
158.1   projected data, of that part of the total cost of acquisition 
158.2   and betterment of the project or of some part of the project 
158.3   that will be allocated to the local government unit and the 
158.4   number of years over which such costs will be allocated as 
158.5   current costs of acquisition, betterment, and debt service under 
158.6   section 8.  The board is not bound by this estimate for 
158.7   allocating the costs of the project to local government units. 
158.8      (b) The governing body may get from the board a written 
158.9   statement showing, for the prior period that the governing body 
158.10  designates, that part of the costs previously allocated to the 
158.11  local government unit as current costs of acquisition, 
158.12  betterment, and debt service only, of all or any part of the 
158.13  project designated by the governing body.  In addition to the 
158.14  allocable costs, the local government unit may include in the 
158.15  total expense, as a basis for levying assessments, all other 
158.16  expenses incurred directly by the local government unit in 
158.17  connection with the project.  Special assessments levied by the 
158.18  government unit with respect to previously allocated costs 
158.19  ascertained under this paragraph are payable in equal annual 
158.20  installments extending over a period not exceeding by more than 
158.21  one year the number of years that the costs have been allocated 
158.22  to the local government unit or the estimated useful life of the 
158.23  project, or part of the project, whichever number of years is 
158.24  the lesser.  No limit is placed on the number of times the 
158.25  governing body of a local government unit may assess the 
158.26  previously allocated costs not previously assessed by the 
158.27  government unit.  The power to specially assess provided for in 
158.28  this section is in addition and supplemental to all other powers 
158.29  of local government units to levy special assessments. 
158.30     Sec. 11.  [INITIAL COSTS.] 
158.31     Subdivision 1.  [CONTRIBUTIONS OR ADVANCES FROM LOCAL 
158.32  GOVERNMENT UNITS.] The board may, at the time it considers 
158.33  necessary and proper, request from a local government unit 
158.34  necessary money to defray the costs of any obligations assumed 
158.35  under section 5 and the costs of administration, operation, and 
158.36  maintenance.  Before making a request, the board must, by formal 
159.1   resolution, determine the necessity for the money, setting forth 
159.2   the purposes for which the money is needed and the estimated 
159.3   amount for each purpose.  Upon receiving a request, the 
159.4   governing body of each local government unit may provide for 
159.5   payment of the amount requested as it considers fair and 
159.6   reasonable.  The money may be paid out of general revenue funds 
159.7   or any other available funds of any local government unit and 
159.8   its governing body thereof may levy taxes to provide funds, free 
159.9   from any existing limit imposed by law or charter.  Money may be 
159.10  provided by government units with or without interest, but if 
159.11  interest is charged it must not exceed five percent per year.  
159.12  The board must credit the local government unit for the payments 
159.13  in allocating current costs under section 8, on the terms and at 
159.14  the times as are agreed to with the local government unit. 
159.15     Subd. 2.  [LIMITED TAX LEVY.] The board may levy ad valorem 
159.16  taxes on all taxable property in the district to defray any of 
159.17  the costs described in subdivision 1, provided the costs have 
159.18  not been defrayed by contribution under subdivision 1.  Before 
159.19  certifying a levy to the county auditor, the board must 
159.20  determine the need for the money to be derived from the levy by 
159.21  formal resolution setting forth the purposes for which the tax 
159.22  money will be used and the amount proposed to be used for each 
159.23  purpose.  In allocating current costs under section 8, the board 
159.24  must credit the government units for taxes collected under the 
159.25  levy made under this subdivision on the terms and at the time 
159.26  the board considers fair and reasonable and on terms consistent 
159.27  with section 8, subdivision 2. 
159.28     Sec. 12.  [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 
159.29     Subdivision 1.  [BUDGET ANTICIPATION CERTIFICATES OF 
159.30  INDEBTEDNESS.] (a) Before adopting its annual budget and in 
159.31  anticipation of the collection of tax and other revenues 
159.32  estimated and set forth by the board in the budget, the board 
159.33  may by resolution, authorize the issuance, negotiation, and sale 
159.34  in accordance with subdivision 5 in such form and manner and 
159.35  upon such terms as it may determine of its negotiable general 
159.36  obligation certificates of indebtedness in aggregate principal 
160.1   amounts not exceeding 50 percent of the total amount of such tax 
160.2   collections and other revenues and maturing not later than three 
160.3   months after the close of the budget year in which issued.  
160.4   Revenues listed in clauses (1) to (3) must not be anticipated 
160.5   for this purpose: 
160.6      (1) taxes already anticipated by the issuance of 
160.7   certificates under subdivision 2; 
160.8      (2) deficiency taxes levied pursuant to this subdivision; 
160.9   and 
160.10     (3) taxes levied for the payment of certificates issued 
160.11  pursuant to subdivision 3. 
160.12     (b) The proceeds of the sale of the certificates must be 
160.13  used only for the purposes for which tax collections and other 
160.14  revenues are to be expended under the budget. 
160.15     (c) All tax collections and other revenues included in the 
160.16  budget for the budget year, after the expenditures of tax 
160.17  collections and other revenues in accordance with the budget, 
160.18  must be irrevocably pledged and appropriated to a special fund 
160.19  to pay the principal and interest on the certificates when due.  
160.20     (d) If for any reason the tax collections and other 
160.21  revenues are insufficient to pay the certificates and interest 
160.22  when due, the board must levy a tax in the amount of the 
160.23  deficiency on all taxable property in the district and must 
160.24  appropriate this amount when received to the special fund.  
160.25     Subd. 2.  [TAX LEVY ANTICIPATION CERTIFICATES OF 
160.26  INDEBTEDNESS.] After a tax is levied by the board under section 
160.27  11, subdivision 2, and certified to the county auditors in 
160.28  anticipation of the collection of the tax, if the tax has not 
160.29  been anticipated by the issuance of certificates under 
160.30  subdivision 1, the board may, by resolution, authorize the 
160.31  issuance, negotiation, and sale in accordance with subdivision 5 
160.32  in the form and manner and on the terms and conditions as it 
160.33  determines its negotiable general obligation tax levy 
160.34  anticipation certificates of indebtedness in aggregate principal 
160.35  amounts not exceeding 50 percent of the uncollected tax for 
160.36  which no penalty for nonpayment or delinquency has been 
161.1   attached.  The certificates must mature not later than April 1 
161.2   in the year after the year in which the tax is collectible.  The 
161.3   proceeds of the tax in anticipation of which the certificates 
161.4   were issued and other funds that may become available must be 
161.5   applied to the extent necessary to repay the certificates.  
161.6      Subd. 3.  [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 
161.7   any budget year the receipts of tax and other revenues for some 
161.8   unforeseen cause become insufficient to pay the board's current 
161.9   expenses, or if any calamity or other public emergency subjects 
161.10  it to the necessity of making extraordinary expenditures, the 
161.11  board may by resolution authorize the issuance, negotiation, and 
161.12  sale in accordance with subdivision 5 in the form and manner and 
161.13  on the terms and conditions as it may determine of its 
161.14  negotiable general obligation certificates of indebtedness in an 
161.15  amount sufficient to meet the deficiency, and the board must 
161.16  levy on all taxable property in the district a tax sufficient to 
161.17  pay the certificates and interest and shall appropriate all 
161.18  collections of the tax to a special fund created for the payment 
161.19  of the certificates and interest. 
161.20     Subd. 4.  [GENERAL OBLIGATION BONDS.] The board may by 
161.21  resolution authorize the issuance of general obligation bonds 
161.22  maturing serially in one or more annual or semiannual 
161.23  installments for the acquisition or betterment of any part of 
161.24  the district disposal system, including but not limited to, the 
161.25  payment of interest during construction and for a reasonable 
161.26  period thereafter, or for the refunding of outstanding bonds, 
161.27  certificates of indebtedness, or judgments.  The board must 
161.28  pledge its full faith and credit and taxing power for the 
161.29  payment of the bonds and shall provide for the issuance and sale 
161.30  and for the security of the bonds in the manner provided in 
161.31  Minnesota Statutes, chapter 475, and must have the same powers 
161.32  and duties as a municipality issuing bonds under that law.  An 
161.33  election is not required to authorize the issuance of bonds and 
161.34  the debt limit of Minnesota Statutes, chapter 475, do not apply 
161.35  to the bonds.  The board may also pledge for the payment of the 
161.36  bonds and deduct from the amount of any tax levy required under 
162.1   Minnesota Statutes, section 475.61, subdivision 1, any sums 
162.2   receivable under section 9 or any state and federal grants 
162.3   anticipated by the board and may covenant to refund the bonds if 
162.4   and when and to the extent that for any reason the revenues, 
162.5   together with other funds properly available and appropriated 
162.6   for the purpose, are not sufficient to pay all principal and 
162.7   interest due or about to become due; if the revenues have not 
162.8   been anticipated by the issuance of certificates under 
162.9   subdivision 1.  All bonds that have been or shall hereafter be 
162.10  issued and sold in conformity with the provisions of this 
162.11  subdivision, and otherwise in conformity with law, are hereby 
162.12  authorized, legalized, and validated. 
162.13     Subd. 5.  [MANNER OF SALE AND ISSUANCE OF 
162.14  CERTIFICATES.] Certificates issued under subdivisions 1, 2, and 
162.15  3 may be issued and sold by negotiation, without public sale, 
162.16  and may be sold at a price equal to the percentage of their par 
162.17  value, plus accrued interest, and bearing interest at the rate 
162.18  or rates as may be determined by the board.  No election is 
162.19  required to authorize the issuance of certificates.  
162.20  Certificates must bear the same rate of interest after maturity 
162.21  as before and the full faith and credit and taxing power of the 
162.22  board must be pledged to the payment of the certificates.  
162.23     Sec. 13.  [TAX LEVIES.] 
162.24     The board may levy taxes to pay the bonds or other 
162.25  obligations assumed by the district under section 5 and for debt 
162.26  service of the district disposal system authorized in section 12 
162.27  upon all taxable property within the district without limit of 
162.28  rate or amount and without affecting the amount or rate of taxes 
162.29  that may be levied by the board for other purposes or by any 
162.30  local government unit in the district.  No other provision of 
162.31  law relating to debt limit shall restrict or in any way limit 
162.32  the power of the board to issue the bonds and certificates 
162.33  authorized in section 12.  The board may also levy taxes as 
162.34  provided in sections 9 and 11.  The county auditor must annually 
162.35  assess and extend upon the tax rolls the part of the taxes 
162.36  levied by the board in each year that is certified to the 
163.1   auditor by the board.  The county treasurer must collect and 
163.2   make settlement of the taxes with the treasurer of the board. 
163.3      Sec. 14.  [DEPOSITORIES.] 
163.4      The board must from time to time designate one or more 
163.5   national or state banks or trust companies authorized to do a 
163.6   banking business as official depositories for money of the 
163.7   board, and must require the treasurer to deposit all or a part 
163.8   of the money in those institutions.  The designation must be in 
163.9   writing and must set forth all the terms and conditions on which 
163.10  the deposits are made, and must be signed by the chair and 
163.11  treasurer, and made a part of the minutes of the board.  A 
163.12  designated bank or trust company must qualify as a depository by 
163.13  furnishing a corporate surety bond or collateral in the amount 
163.14  required by Minnesota Statutes, section 118A.03.  But, no bond 
163.15  or collateral is required to secure any deposit insofar as it is 
163.16  insured under federal law. 
163.17     Sec. 15.  [MONEY; ACCOUNTS AND INVESTMENTS.] 
163.18     Subdivision 1.  [RECEIPT AND APPLICATION.] All money 
163.19  received by the board must be deposited or invested by the 
163.20  treasurer and disposed of as the board directs in accordance 
163.21  with its budget.  But any money that has been pledged or 
163.22  dedicated by the board to the payment of obligations or interest 
163.23  on them or expenses incident to them, or for any other specific 
163.24  purpose authorized by law, must be paid by the treasurer into 
163.25  the fund to which they have been pledged.  
163.26     Subd. 2.  [FUNDS AND ACCOUNTS.] The board's treasurer must 
163.27  establish funds and accounts as necessary or convenient to 
163.28  handle the receipts and disbursements of the board in an orderly 
163.29  fashion.  
163.30     Subd. 3.  [DEPOSIT AND INVESTMENT.] The money on hand in 
163.31  the board's funds and accounts may be deposited in the official 
163.32  depositories of the board or invested as provided in this 
163.33  subdivision.  The amount not currently needed or required by law 
163.34  to be kept in cash on deposit may be invested in obligations 
163.35  authorized by law for the investment of municipal sinking 
163.36  funds.  The money may also be held under certificates of deposit 
164.1   issued by any official depository of the board.  All investments 
164.2   by the board must conform to an investment policy adopted by the 
164.3   board as amended from time to time.  
164.4      Subd. 4.  [BOND PROCEEDS.] The use of proceeds of all bonds 
164.5   issued by the board for the acquisition and betterment of the 
164.6   district disposal system, and the use, other than investment, of 
164.7   all money on hand in any sinking fund or funds of the board must 
164.8   be governed by Minnesota Statutes, chapter 475, this article, 
164.9   and the resolutions authorizing the issuance of the bonds.  The 
164.10  bond proceeds, when received, must be transferred to the 
164.11  treasurer of the board for safekeeping, investment, and payment 
164.12  of the costs for which they were issued.  
164.13     Subd. 5.  [AUDIT.] The board must provide for and pay the 
164.14  cost of an independent annual audit of its official books and 
164.15  records by the state public examiner or a certified public 
164.16  accountant.  
164.17     Sec. 16.  [GENERAL POWERS OF BOARD.] 
164.18     Subdivision 1.  [ALL NECESSARY OR CONVENIENT POWERS.] The 
164.19  board has powers necessary or convenient to discharge the duties 
164.20  imposed upon it by law.  The powers include those specified in 
164.21  this article, but the express grant or enumeration of powers 
164.22  does not limit the generality or scope of the grant of power in 
164.23  this subdivision. 
164.24     Subd. 2.  [LAWSUITS.] The board may sue or be sued.  
164.25     Subd. 3.  [CONTRACTS.] The board may enter into any 
164.26  contract necessary or proper for the exercise of its powers or 
164.27  the accomplishment of its purposes.  
164.28     Subd. 4.  [RULES.] The board may adopt rules relating to 
164.29  the board's responsibilities and may provide penalties not 
164.30  exceeding the maximum penalty specified for a misdemeanor, and 
164.31  the cost of prosecution may be added to the penalties imposed.  
164.32  Any rule prescribing a penalty for violation must be published 
164.33  at least once in a newspaper having general circulation in the 
164.34  district.  A violation may be prosecuted before any court in the 
164.35  district having jurisdiction of misdemeanor, and every court has 
164.36  jurisdiction of violations.  A constable or other peace officer 
165.1   of any municipality in the district may make arrests for 
165.2   violations committed anywhere in the district in the manner and 
165.3   with the effect as for violations of local ordinances or for 
165.4   statutory misdemeanors.  All fines collected must be deposited 
165.5   in the treasury of the board, or may be allocated between the 
165.6   board and the municipality in which the prosecution occurs on 
165.7   terms agreed to by the board and the municipality.  
165.8      Subd. 5.  [GIFTS; GRANTS.] The board may accept gifts, may 
165.9   apply for and accept grants or loans of money or other property 
165.10  from the United States, the state, or any person for any of its 
165.11  purposes, may enter into any agreement required to get the gift, 
165.12  grant, loan, or other property; and may hold, use, and dispose 
165.13  of money or property in accordance with the terms of the gift, 
165.14  grant, loan or agreement.  With respect to any loans or grants 
165.15  of funds or real or personal property or other assistance from 
165.16  any state or federal government or any agency or instrumentality 
165.17  of the government, the board may contract to do and perform all 
165.18  acts and things required as a condition or consideration under 
165.19  state or federal law or rule or regulation, whether or not 
165.20  included among the powers expressly granted to the board in this 
165.21  article.  
165.22     Subd. 6.  [JOINT POWERS.] The board may act under Minnesota 
165.23  Statutes, section 471.59, or any other appropriate law providing 
165.24  for joint or cooperative action between government units.  
165.25     Subd. 7.  [RESEARCH; HEARINGS; INVESTIGATIONS; ADVISE.] The 
165.26  board may conduct research studies and programs, collect and 
165.27  analyze data, prepare reports, maps, charts, and tables, and 
165.28  conduct all necessary hearings and investigations in connection 
165.29  with the design, construction, and operation of the district 
165.30  disposal system, and may advise and assist other government 
165.31  units on system planning matters within the scope of its powers, 
165.32  duties, and objectives, and may provide at the request of any 
165.33  governmental unit other technical and administrative assistance 
165.34  as the board considers appropriate for the government unit to 
165.35  carry out the powers and duties vested in the government unit 
165.36  under this article or imposed on or by the board.  
166.1      Subd. 8.  [EMPLOYEES; CONTRACTORS; INSURANCE.] The board 
166.2   may employ on the terms it considers advisable, persons or firms 
166.3   performing engineering, legal, or other services of a 
166.4   professional nature; require any employee to get and file with 
166.5   it an individual bond or fidelity insurance policy; and procure 
166.6   insurance in the amounts it considers necessary against 
166.7   liability of the board or its officers or both, for personal 
166.8   injury or death and property damage or destruction, with the 
166.9   force and effect stated in Minnesota Statutes, chapter 466, and 
166.10  against risks of damage to or destruction of any of its 
166.11  facilities, equipment, or other property as it considers 
166.12  necessary.  
166.13     Subd. 9.  [PROPERTY.] The board may acquire by purchase, 
166.14  lease, condemnation, gift, or grant, real or personal property 
166.15  including positive and negative easements and water and air 
166.16  rights, and it may construct, enlarge, improve, replace, repair, 
166.17  maintain, and operate any interceptor, treatment works, or water 
166.18  facility determined to be necessary or convenient for the 
166.19  collection and disposal of sewage in the district.  Any local 
166.20  government unit and the commissioners of transportation and 
166.21  natural resources may convey to or permit the use of these 
166.22  facilities owned or controlled by the board, subject to the 
166.23  rights of the holders of any bonds issued with respect to them 
166.24  with or without compensation and without an election or approval 
166.25  by any other government unit or agency.  All powers conferred by 
166.26  this subdivision may be exercised both within or outside the 
166.27  district as may be necessary for the exercise by the board of 
166.28  its powers or the accomplishment of its purposes.  The board may 
166.29  hold, lease, convey, or otherwise dispose of such property for 
166.30  its purposes, upon the terms and in the manner it deems 
166.31  advisable.  Unless otherwise provided, the right to acquire 
166.32  lands and property rights by condemnation must be exercised in 
166.33  accordance with Minnesota Statutes, chapter 117, and must apply 
166.34  to any property or interest in property owned by any local 
166.35  government unit, but property devoted to an actual public use at 
166.36  the time, or held to be devoted to such use within a reasonable 
167.1   time, must not be so acquired unless a court of competent 
167.2   jurisdiction determines that the use proposed by the board is 
167.3   paramount.  In case of property in actual public use, the board 
167.4   may take possession of any property of which condemnation 
167.5   proceedings have begun at any time after the issuance of a court 
167.6   order appointing commissioners for its condemnation.  
167.7      Subd. 10.  [RIGHTS-OF-WAY.] The board may construct or 
167.8   maintain its systems or facilities in, along, on, under, over, 
167.9   or through public waters, streets, bridges, viaducts, and other 
167.10  public rights-of-way without first getting a franchise from any 
167.11  county or local government unit having jurisdiction over them, 
167.12  but the facilities must be constructed and maintained in 
167.13  accordance with the ordinances and resolutions of the county or 
167.14  government unit relating to construction, installation, and 
167.15  maintenance of similar facilities on public properties and must 
167.16  not unnecessarily obstruct the public use of the rights-of-way. 
167.17     Subd. 11.  [DISPOSAL OF PROPERTY.] The board may sell, 
167.18  lease, or otherwise dispose of any real or personal property 
167.19  acquired by it that is no longer required to accomplish its 
167.20  purposes.  The property may be sold in the manner provided by 
167.21  Minnesota Statutes, section 469.065, insofar as practical.  The 
167.22  board may give notice of sale it considers appropriate.  When 
167.23  the board determines that any property or any part of the 
167.24  district disposal system that has been acquired from a local 
167.25  government unit without compensation is no longer required, but 
167.26  is required as a local facility by the government unit from 
167.27  which is was acquired, the board may by resolution transfer it 
167.28  to the government unit.  
167.29     Subd. 12.  [JOINT OPERATIONS.] The board may contract with 
167.30  the United States or an agency of it, any state or agency of it, 
167.31  or any regional public planning body in the state with 
167.32  jurisdiction over any part of the district, or any other 
167.33  municipal or public corporation, or governmental subdivision in 
167.34  any state, for the joint use of any facility owned by the board 
167.35  or the entity, for the operation by the entity of any system or 
167.36  facility of the board, or for the performance on the board's 
168.1   behalf of any service including, but not limited to, planning, 
168.2   on the terms that may be agreed to by the contracting parties.  
168.3   Unless designated by the board as a local sanitary sewer 
168.4   facility, any treatment works or interceptor jointly used, or 
168.5   operated on behalf of the board, as provided in this 
168.6   subdivision, must be considered to be operated by the board to 
168.7   include the facilities in the district disposal system.  
168.8      Sec. 17.  [LOCAL FACILITIES.] 
168.9      Subdivision 1.  [SANITARY SEWER FACILITIES.] Except as 
168.10  otherwise provided in this article, local government units must 
168.11  retain responsibility for the planning, design, acquisition, 
168.12  betterment, operation, administration, and maintenance of all 
168.13  local sanitary sewer facilities as provided by law.  
168.14     Subd. 2.  [ASSUMPTION OF RESPONSIBILITY OVER LOCAL SANITARY 
168.15  SEWER FACILITIES.] The board must upon request of any government 
168.16  unit assume, either alone or jointly with the local government 
168.17  unit, all or any part of the responsibility of the local 
168.18  government unit described in subdivision 1.  Except as provided 
168.19  in subdivision 4 and to exercise the responsibility, the board 
168.20  has all the powers and duties elsewhere conferred in this 
168.21  article with the same force and effect as if the local sanitary 
168.22  sewer facilities were a part of the district disposal system.  
168.23     Subd. 3.  [WATER AND STREET FACILITIES.] The board may, on 
168.24  request of any governmental unit, enter into an agreement under 
168.25  which the board may assume, either alone or jointly with such 
168.26  unit, the responsibility to get and construct water and street 
168.27  facilities in conjunction with any project for the acquisition 
168.28  or betterment of the district disposal system or any project 
168.29  undertaken by the board under subdivision 2.  Except as provided 
168.30  in subdivision 4, and to exercise any responsibilities under 
168.31  this subdivision, the board has all the powers and duties 
168.32  elsewhere conferred in this article with the same force and 
168.33  effect as if the water or street facilities were a part of the 
168.34  district disposal system.  
168.35     Subd. 4.  [ALLOCATION OF CURRENT COSTS.] All current costs 
168.36  attributable to responsibilities assumed by the board over local 
169.1   sanitary sewer facilities and water and street facilities as 
169.2   provided in this section must be allocated solely to the local 
169.3   unit for or with whom the responsibilities are assumed on the 
169.4   terms and over a period as the board determines to be equitable 
169.5   and in the best interest of the district.  But if two or more 
169.6   government units form a region in accordance with this section 
169.7   all or part of the current costs attributable to the region 
169.8   must, at the request of its joint board, be allocated to the 
169.9   region and provided in the agreement establishing the region.  
169.10     Subd. 5.  [PART OF DISTRICT SYSTEM.] This section or any 
169.11  other part of this article does not prevent the board from 
169.12  including, where appropriate, treatment works or interceptors, 
169.13  previously designated or treated as local sanitary sewer 
169.14  facilities, as a part of the district disposal system. 
169.15     Sec. 18.  [SERVICE CONTRACTS WITH GOVERNMENTS OUTSIDE 
169.16  DISTRICT.] 
169.17     The board may contract with the United States or any agency 
169.18  of it, any state or any agency of it, or any municipal or public 
169.19  corporation, governmental subdivision or agency, or political 
169.20  subdivision in any state, outside the jurisdiction of the board, 
169.21  for furnishing to the entities any services which the board may 
169.22  furnish to local government units in the district under this 
169.23  article including, but not limited to, planning for and the 
169.24  acquisition, betterment, operation, administration, and 
169.25  maintenance of any or all interceptors, treatment works, and 
169.26  local sanitary sewer facilities; if the board may further 
169.27  include as one of the terms of the contract that the entity also 
169.28  pay to the board an amount as may be agreed upon as a reasonable 
169.29  estimate of the proportionate share properly allocable to the 
169.30  entity of costs of acquisition, betterment, and debt service 
169.31  previously allocated to local government units in the district.  
169.32  When the payments are made by the entities to the board, they 
169.33  must be applied in reduction of the total amount of costs 
169.34  allocated after that to each local government unit in the 
169.35  district, on the equitable basis the board considers to be in 
169.36  the best interest of the district.  Any municipality in the 
170.1   state may enter into the contract and perform all acts and 
170.2   things required as a condition or consideration for it 
170.3   consistent with the purpose of this article, whether or not 
170.4   included among the powers otherwise granted to the municipality 
170.5   by law or charter, the powers to include those powers set out in 
170.6   section 9, subdivisions 3, 3a, and 4. 
170.7      Sec. 19.  [CONSTRUCTION, MATERIALS, SUPPLIES, EQUIPMENT; 
170.8   CONTRACTS.] 
170.9      Subdivision 1.  [PLANS AND SPECIFICATIONS.] When the board 
170.10  orders a project involving the acquisition or betterment of a 
170.11  part of the district disposal system, it must cause plans and 
170.12  specifications of this project to be made, or if previously 
170.13  made, to be modified, if necessary, and to be approved by the 
170.14  agency if required, and after any required approval by the 
170.15  agency, one or more contracts for work and materials called for 
170.16  by the plans and specification may be awarded as provided in 
170.17  this section.  
170.18     Subd. 2.  [UNIFORM MUNICIPAL CONTRACTING LAW.] Except as 
170.19  otherwise provided in this section, all contracts for work to be 
170.20  done or for purchases of materials, supplies, or equipment must 
170.21  be done in accordance with Minnesota Statutes, section 471.345.  
170.22     Subd. 3.  [CONTRACTS OR PURCHASES.] The board may without 
170.23  advertising for bids, enter into any contract or purchase any 
170.24  materials, supplies, or equipment of the type referred to in 
170.25  subdivision 2 in accordance with applicable state law.  
170.26     Sec. 20.  [ANNEXATION OF TERRITORY.] 
170.27     Any municipality in Douglas county, upon resolution adopted 
170.28  by a four-fifths vote of its governing body, may petition the 
170.29  board for annexation to the district of the area then comprising 
170.30  the municipality or any part of it and, if accepted by the 
170.31  board, the area must be considered annexed to the district and 
170.32  subject to the jurisdiction of the board under the terms and 
170.33  provisions of this article.  The territory so annexed is subject 
170.34  to taxation and assessment under this article and is subject to 
170.35  taxation by the board like other property in the district for 
170.36  the payment of principal and interest thereafter becoming due on 
171.1   general obligations of the board, whether authorized or issued 
171.2   before or after the annexation.  The board may condition 
171.3   approval of the annexation upon the contribution, by or on 
171.4   behalf of the municipality petitioning for annexation, to the 
171.5   board of an amount as may be agreed upon as being a reasonable 
171.6   estimate of the proportionate share, properly allocable to the 
171.7   municipality, of cost or acquisition, betterment, and debt 
171.8   service previously allocated to local government units in the 
171.9   district, on the terms as may be agreed upon and in place of or 
171.10  in addition to further conditions as the board deems in the best 
171.11  interests of the district.  Notwithstanding any other provisions 
171.12  of this article to the contrary, the conditions established for 
171.13  annexation may include the requirement that the annexed 
171.14  municipality pay for, contract for, and oversee the construction 
171.15  of local sanitary sewer facilities and interceptor sewers as 
171.16  those terms are defined in section 1.  To pay the contribution 
171.17  or satisfy any other condition established by the board, the 
171.18  municipality petitioning annexation may exercise the powers 
171.19  conferred in section 9.  When the contributions are made by the 
171.20  municipality to the board, they must be applied to reduce the 
171.21  total amount of costs thereafter allocated to each local 
171.22  government unit in the district, on the equitable basis as the 
171.23  board considers to be in the best interests of the district, 
171.24  applying so far as practicable and appropriate the criteria set 
171.25  forth in section 8, subdivision 2.  On annexation of the 
171.26  territory, the secretary of the board must certify to the 
171.27  auditor and treasurer of the county in which the municipality is 
171.28  located the fact of the annexation and a legal description of 
171.29  the territory annexed.  
171.30     Sec. 21.  [PROPERTY EXEMPT FROM TAXATION.] 
171.31     Any properties, real or personal, owned, leased, 
171.32  controlled, used, or occupied by the sanitary sewer board for 
171.33  any purpose under this article are declared to be acquired, 
171.34  owned, leased, controlled, used, and occupied for public, 
171.35  governmental, and municipal purposes, and are exempt from 
171.36  taxation by the state or any political subdivision of the state; 
172.1   but the properties are subject to special assessments levied by 
172.2   a political subdivision for a local improvement in amounts 
172.3   proportionate to and not exceeding the special benefit received 
172.4   by the properties from the improvement.  No possible use of any 
172.5   of the properties in any manner different from their use as part 
172.6   of the disposal system at the time may be considered in 
172.7   determining the special benefit received by the properties.  All 
172.8   of the assessments are subject to final approval by the board, 
172.9   whose determination of the benefits is conclusive upon the 
172.10  political subdivision levying the assessment. 
172.11     Sec. 22.  [RELATION TO EXISTING LAWS.] 
172.12     This article prevails over any law or charter inconsistent 
172.13  with it.  The powers conferred on the board under this article 
172.14  do not diminish or supersede the powers conferred on the agency 
172.15  by Minnesota Statutes, chapters 115 and 116.  
172.16     Sec. 23.  [APPLICATION.] 
172.17     This article applies to the townships of Carlos, Brandon, 
172.18  La Grand, Leaf Valley, Miltona, and Moe in Douglas county. 
172.19     Sec. 24.  [LOCAL APPROVAL.] 
172.20     Sections 1 to 23 take effect for those townships that have 
172.21  approved it the day after each of the governing bodies of at 
172.22  least four of the local governmental units referred to in 
172.23  section 23 have complied with Minnesota Statutes, section 
172.24  645.021, subdivision 3.  A township listed in section 23 that 
172.25  has not complied with Minnesota Statutes, section 645.021, 
172.26  subdivision 3, by the date when the first four townships have 
172.27  done so may opt back in to the district at a later time by 
172.28  annexation as provided in this article. 
172.29                             ARTICLE 10
172.30                           MISCELLANEOUS
172.31     Section 1.  Minnesota Statutes 2002, section 325D.421, is 
172.32  amended by adding a subdivision to read: 
172.33     Subd. 1a.  [CIGARETTES IN INTERSTATE COMMERCE.] (a) A 
172.34  person may not transport or cause to be transported from this 
172.35  state cigarettes for sale in another state without first 
172.36  affixing to the cigarettes the stamp required by the state in 
173.1   which the cigarettes are to be sold or paying any other excise 
173.2   tax on the cigarettes imposed by the state in which the 
173.3   cigarettes are to be sold. 
173.4      (b) A person may not affix to cigarettes the stamp required 
173.5   by another state or pay any other excise tax on the cigarettes 
173.6   imposed by another state if the other state prohibits stamps 
173.7   from being affixed to the cigarettes, prohibits the payment of 
173.8   any other excise tax on the cigarettes, or prohibits the sale of 
173.9   the cigarettes. 
173.10     (c) Not later than 15 days after the end of each calendar 
173.11  quarter, a person who transports or causes to be transported 
173.12  from this state cigarettes for sale in another state shall 
173.13  submit to the attorney general a report identifying the quantity 
173.14  and style of each brand of the cigarettes transported or caused 
173.15  to be transported in the preceding calendar quarter, and the 
173.16  name and address of each recipient of the cigarettes. 
173.17     (d) For purposes of this subdivision, "person" has the 
173.18  meaning given in section 297F.01, subdivision 12, and includes a 
173.19  common or contract carrier or a public warehouse only if the 
173.20  carrier or warehouse is owned, in whole or in part, directly or 
173.21  indirectly, by such a person. 
173.22     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
173.23  following final enactment. 
173.24     Sec. 2.  Minnesota Statutes 2002, section 325D.421, 
173.25  subdivision 2, is amended to read: 
173.26     Subd. 2.  [PRIVATE CAUSE OF ACTION.] (a) In addition to any 
173.27  other private remedy provided by law, any person that sustains 
173.28  economic damages or commercial injury as a result of any 
173.29  violation of subdivision 1 or 1a may bring an action for 
173.30  appropriate injunctive or other equitable relief, actual 
173.31  damages, if any, sustained by reason of the violation, and, as 
173.32  determined by the court, interest on the damages from the date 
173.33  of the complaint, taxable costs, and reasonable attorney fees.  
173.34     (b) If the trier of fact finds that the violation is 
173.35  egregious, it may increase the recovery to an amount not in 
173.36  excess of three times the actual damages sustained by reason of 
174.1   the violation.  The trier of fact may, in addition, award 
174.2   exemplary damages for violations of subdivision 1, paragraph 
174.3   (c), equal to the difference between the permitted legal price 
174.4   and the actual price for the sales. 
174.5      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
174.6   following final enactment. 
174.7      Sec. 3.  Minnesota Statutes 2002, section 469.1731, 
174.8   subdivision 3, is amended to read: 
174.9      Subd. 3.  [FILING.] The city must file a copy of the 
174.10  resolution and development plan with the commissioner of trade 
174.11  and economic development.  The designation takes effect for the 
174.12  first calendar year that begins more than 90 30 days after the 
174.13  filing. 
174.14     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
174.15  following final enactment. 
174.16     Sec. 4.  [CITY OF DULUTH; TAX INCREMENT FINANCING 
174.17  DISTRICT.] 
174.18     Subdivision 1.  [AUTHORIZATION.] Upon approval of the 
174.19  governing body of the city of Duluth, the Duluth economic 
174.20  development authority may create an economic development tax 
174.21  increment financing district for aircraft related facilities.  
174.22  The authority may establish a district only after entering a 
174.23  development agreement, which provides for construction of an 
174.24  aircraft maintenance facility with a minimum square footage of 
174.25  150,000 and requires employment of a minimum of 200 individuals 
174.26  with average annual compensation in excess of $30,000.  Except 
174.27  as otherwise provided in this section, the provisions of 
174.28  Minnesota Statutes, sections 469.174 to 469.179 apply to the 
174.29  district. 
174.30     Subd. 2.  [SPECIAL RULES.] (a) Notwithstanding the 
174.31  provisions of Minnesota Statutes, section 469.176, subdivision 
174.32  1b, paragraph (a), clause (3), no tax increment shall be paid to 
174.33  the authority after 25 years after receipt by the authority of 
174.34  the first tax increment for the district authorized by this 
174.35  section. 
174.36     (b) The development in the district authorized by this 
175.1   section shall be deemed to be a purpose authorized under 
175.2   Minnesota Statutes, section 469.176, subdivision 4c, paragraph 
175.3   (a). 
175.4      (c) For purposes of Minnesota Statutes, section 469.177, 
175.5   subdivision 12, the applicable maximum duration limit of the 
175.6   district authorized by this section shall be as set forth in 
175.7   paragraph (a). 
175.8      <h>[EFFECTIVE DATE.]</h> This section is effective upon compliance 
175.9   with the requirements of Minnesota Statutes, sections 469.1782 
175.10  and 645.021. 
175.11     Sec. 5.  [REPEALER.] 
175.12     Laws 1984, chapter 652, section 2, is repealed. 
175.13     <h>[EFFECTIVE DATE.]</h> This section is effective for Benton 
175.14  county the day after the governing body of Benton county and its 
175.15  chief clerical officer timely complete their compliance with 
175.16  Minnesota Statutes, section 645.021, subdivisions 2 and 3.  
175.17     This section is effective for Stearns county the day after 
175.18  the governing body of Stearns county and its chief clerical 
175.19  officer timely complete their compliance with Minnesota 
175.20  Statutes, section 645.021, subdivisions 2 and 3.