1.1 	A bill for an act
1.2 	relating to public finance; authorizing purchases of
1.3 	certain guaranteed investment contracts; authorizing a
1.4 	special levy; modifying a taconite fund provision;
1.5 	modifying the authority of cities and counties to
1.6 	finance purchases of computers and related items;
1.7 	extending the term of certain notes; clarifying the
1.8 	financing of conservation easements; extending sunsets
1.9 	on establishment of special service districts and
1.10 	housing improvement areas; authorizing municipalities
1.11 	to improve streets and roads outside municipal
1.12 	boundaries; providing for financing of certain
1.13 	improvements; extending the maximum maturity of
1.14 	certain bonds; revising time for certain notices of
1.15 	issues; exempting obligations issued to pay judgments
1.16 	from net debt limits; modifying limits on city capital
1.17 	improvement bonds and enabling certain towns to issue
1.18 	bonds under a capital improvement plan; authorizing
1.19 	the issuance of certain revenue bonds; modifying
1.20 	certain tax increment financing provisions; providing
1.21 	a bidding exception; increasing reserve from public
1.22 	facilities pool for certain purposes; providing for
1.23 	payment of certain refunding bonds; abolishing the
1.24 	housing bond credit enhancement program and providing
1.25 	for debt service on the bonds; authorizing a tax
1.26 	abatement extension; appropriating money for certain
1.27 	refunds; amending Minnesota Statutes 2004, sections
1.28 	13.55, by adding a subdivision; 116J.556; 118A.05,
1.29 	subdivision 5; 272.02, subdivision 64; 272.0212,
1.30 	subdivisions 1, 2; 275.70, subdivision 5; 298.223,
1.31 	subdivision 1; 343.11; 373.01, subdivision 3; 373.40,
1.32 	subdivision 1; 410.32; 412.301; 428A.101; 428A.21;
1.33 	469.015, subdivision 4; 469.034, subdivision 2;
1.34 	469.158; 469.174, subdivisions 11, 25; 469.175,
1.35 	subdivisions 1, 2, 4a, 5, 6; 469.176, subdivisions 2,
1.36 	4d; 469.1761, subdivisions 1, 3; 469.1763,
1.37 	subdivisions 2, 6; 469.177, subdivision 1; 469.1771,
1.38 	subdivision 5; 469.178, subdivision 1; 469.1813,
1.39 	subdivision 6; 473.197, subdivision 4; 473.39, by
1.40 	adding subdivisions; 474A.061, subdivision 2c;
1.41 	474A.131, subdivision 1; 475.51, subdivision 4;
1.42 	475.52, subdivisions 1, 3, 4; 475.521, subdivisions 1,
1.43 	2, 3, 4; 475.58, subdivision 3b; 477A.013, by adding a
1.44 	subdivision; Laws 1996, chapter 412, article 5,
1.45 	section 24; Laws 1998, chapter 389, article 11,
1.46 	section 19, subdivision 3; Laws 2003, chapter 127,
2.1 	article 12, section 38; proposing coding for new law
2.2 	in Minnesota Statutes, chapters 429; 452; repealing
2.3 	Minnesota Statutes 2004, sections 469.176, subdivision
2.4 	1a; 469.1766; 473.197, subdivisions 1, 2, 3, 5;
2.5 	473.39, subdivision 1f; Laws 1994, chapter 587,
2.6 	article 9, section 20, subdivision 4.
2.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.8 	ARTICLE 1
2.9 	PUBLIC FINANCE

2.10 	Section 1. Minnesota Statutes 2004, section 13.55, is
2.11 	amended by adding a subdivision to read:
2.12 		Subd. 4.City of st. paul data. (a) For purposes of this
2.13 	subdivision, "nonprofit organization" means the nonprofit
2.14 	organization with which the city of St. Paul contracts to market
2.15 	and promote the city as a tourist or convention center.
2.16 	(b) Data collected, received, created, or maintained by the
2.17 	nonprofit organization in the course of preparing or submitting
2.18 	any responses to requests for proposals or requests for bids
2.19 	relating to events hosted, conducted, or sponsored by the
2.20 	nonprofit organization is classified as nonpublic data under
2.21 	section 13.02, subdivision 9; or private data under section
2.22 	13.02, subdivision 12, until the time provided in subdivision 2,
2.23 	paragraph (a) or (b), of this section.  The nonprofit
2.24 	organization is a "civic center authority" for purposes of this
2.25 	section.

2.26 	Sec. 2. Minnesota Statutes 2004, section 118A.05,
2.27 	subdivision 5, is amended to read:
2.28 		Subd. 5.Guaranteed investment contracts.  Agreements or
2.29 	contracts for guaranteed investment contracts may be entered
2.30 	into if they are issued or guaranteed by United States
2.31 	commercial banks, domestic branches of foreign banks, United
2.32 	States insurance companies, or their Canadian subsidiaries, or
2.33 	the domestic affiliates of any of the foregoing.  The credit
2.34 	quality of the issuer's or guarantor's short- and long-term
2.35 	unsecured debt must be rated in one of the two highest
2.36 	categories by a nationally recognized rating agency.  Should the
2.37 	issuer's or guarantor's credit quality be downgraded below "A",
2.38 	the government entity must have withdrawal rights.

3.1 	Sec. 3. Minnesota Statutes 2004, section 275.70,
3.2 	subdivision 5, is amended to read:
3.3 		Subd. 5.Special levies.  "Special levies" means those
3.4 	portions of ad valorem taxes levied by a local governmental unit
3.5 	for the following purposes or in the following manner:
3.6 	(1) to pay the costs of the principal and interest on
3.7 	bonded indebtedness or to reimburse for the amount of liquor
3.8 	store revenues used to pay the principal and interest due on
3.9 	municipal liquor store bonds in the year preceding the year for
3.10 	which the levy limit is calculated;
3.11 	(2) to pay the costs of principal and interest on
3.12 	certificates of indebtedness issued for any corporate purpose
3.13 	except for the following:
3.14 	(i) tax anticipation or aid anticipation certificates of
3.15 	indebtedness;
3.16 	(ii) certificates of indebtedness issued under sections
3.17 	298.28 and 298.282;
3.18 	(iii) certificates of indebtedness used to fund current
3.19 	expenses or to pay the costs of extraordinary expenditures that
3.20 	result from a public emergency; or
3.21 	(iv) certificates of indebtedness used to fund an
3.22 	insufficiency in tax receipts or an insufficiency in other
3.23 	revenue sources;
3.24 	(3) to provide for the bonded indebtedness portion of
3.25 	payments made to another political subdivision of the state of
3.26 	Minnesota;
3.27 	(4) to fund payments made to the Minnesota State Armory
3.28 	Building Commission under section 193.145, subdivision 2, to
3.29 	retire the principal and interest on armory construction bonds;
3.30 	(5) property taxes approved by voters which are levied
3.31 	against the referendum market value as provided under section
3.32 	275.61;
3.33 	(6) to fund matching requirements needed to qualify for
3.34 	federal or state grants or programs to the extent that either
3.35 	(i) the matching requirement exceeds the matching requirement in
3.36 	calendar year 2001, or (ii) it is a new matching requirement
4.1 	that did not exist prior to 2002;
4.2 	(7) to pay the expenses reasonably and necessarily incurred
4.3 	in preparing for or repairing the effects of natural disaster
4.4 	including the occurrence or threat of widespread or severe
4.5 	damage, injury, or loss of life or property resulting from
4.6 	natural causes, in accordance with standards formulated by the
4.7 	Emergency Services Division of the state Department of Public
4.8 	Safety, as allowed by the commissioner of revenue under section
4.9 	275.74, subdivision 2;
4.10 	(8) pay amounts required to correct an error in the levy
4.11 	certified to the county auditor by a city or county in a levy
4.12 	year, but only to the extent that when added to the preceding
4.13 	year's levy it is not in excess of an applicable statutory,
4.14 	special law or charter limitation, or the limitation imposed on
4.15 	the governmental subdivision by sections 275.70 to 275.74 in the
4.16 	preceding levy year;
4.17 	(9) to pay an abatement under section 469.1815;
4.18 	(10) to pay any costs attributable to increases in the
4.19 	employer contribution rates under chapter 353 that are effective
4.20 	after June 30, 2001;
4.21 	(11) to pay the operating or maintenance costs of a county
4.22 	jail as authorized in section 641.01 or 641.262, or of a
4.23 	correctional facility as defined in section 241.021, subdivision
4.24 	1, paragraph (f), to the extent that the county can demonstrate
4.25 	to the commissioner of revenue that the amount has been included
4.26 	in the county budget as a direct result of a rule, minimum
4.27 	requirement, minimum standard, or directive of the Department of
4.28 	Corrections, or to pay the operating or maintenance costs of a
4.29 	regional jail as authorized in section 641.262.  For purposes of
4.30 	this clause, a district court order is not a rule, minimum
4.31 	requirement, minimum standard, or directive of the Department of
4.32 	Corrections.  If the county utilizes this special levy, except
4.33 	to pay operating or maintenance costs of a new regional jail
4.34 	facility under sections 641.262 to 641.264 which will not
4.35 	replace an existing jail facility, any amount levied by the
4.36 	county in the previous levy year for the purposes specified
5.1 	under this clause and included in the county's previous year's
5.2 	levy limitation computed under section 275.71, shall be deducted
5.3 	from the levy limit base under section 275.71, subdivision 2,
5.4 	when determining the county's current year levy limitation.  The
5.5 	county shall provide the necessary information to the
5.6 	commissioner of revenue for making this determination;
5.7 	(12) to pay for operation of a lake improvement district,
5.8 	as authorized under section 103B.555.  If the county utilizes
5.9 	this special levy, any amount levied by the county in the
5.10 	previous levy year for the purposes specified under this clause
5.11 	and included in the county's previous year's levy limitation
5.12 	computed under section 275.71 shall be deducted from the levy
5.13 	limit base under section 275.71, subdivision 2, when determining
5.14 	the county's current year levy limitation.  The county shall
5.15 	provide the necessary information to the commissioner of revenue
5.16 	for making this determination;
5.17 	(13) to repay a state or federal loan used to fund the
5.18 	direct or indirect required spending by the local government due
5.19 	to a state or federal transportation project or other state or
5.20 	federal capital project.  This authority may only be used if the
5.21 	project is not a local government initiative;
5.22 	(14) to pay for court administration costs as required
5.23 	under section 273.1398, subdivision 4b, less the (i) county's
5.24 	share of transferred fines and fees collected by the district
5.25 	courts in the county for calendar year 2001 and (ii) the aid
5.26 	amount certified to be paid to the county in 2004 under section
5.27 	273.1398, subdivision 4c; however, for taxes levied to pay for
5.28 	these costs in the year in which the court financing is
5.29 	transferred to the state, the amount under this clause is
5.30 	limited to the amount of aid the county is certified to receive
5.31 	under section 273.1398, subdivision 4a; and 
5.32 	(15) to fund a police or firefighters relief association as
5.33 	required under section 69.77 to the extent that the required
5.34 	amount exceeds the amount levied for this purpose in 2001; and 
5.35 	(16) for purposes of a storm sewer improvement district,
5.36 	pursuant to section 444.20.

6.1 	Sec. 4. Minnesota Statutes 2004, section 298.223,
6.2 	subdivision 1, is amended to read:
6.3 		Subdivision 1.Creation; purposes.  A fund called the
6.4 	taconite environmental protection fund is created for the
6.5 	purpose of reclaiming, restoring and enhancing those areas of
6.6 	northeast Minnesota located within the taconite assistance area
6.7 	defined in section 273.1341, that are adversely affected by the
6.8 	environmentally damaging operations involved in mining taconite
6.9 	and iron ore and producing iron ore concentrate and for the
6.10 	purpose of promoting the economic development of northeast
6.11 	Minnesota.  The taconite environmental protection fund shall be
6.12 	used for the following purposes:
6.13 	(a) to initiate investigations into matters the Iron Range
6.14 	Resources and Rehabilitation Board determines are in need of
6.15 	study and which will determine the environmental problems
6.16 	requiring remedial action;
6.17 	(b) reclamation, restoration, or reforestation of minelands
6.18 	not otherwise provided for by state law;
6.19 	(c) local economic development projects including
6.20 	construction of sewer and water systems, and other but only if
6.21 	those projects are approved by the board, and public works,
6.22 	including construction of sewer and water systems located within
6.23 	the taconite assistance area defined in section 273.1341;
6.24 	(d) monitoring of mineral industry related health problems
6.25 	among mining employees.
6.26 	
EFFECTIVE DATE. This section is effective the day
6.27 	following final enactment.

6.28 	Sec. 5. Minnesota Statutes 2004, section 343.11, is
6.29 	amended to read:
6.30 	343.11 ACQUISITION OF PROPERTY, APPROPRIATIONS.
6.31 	Every county and district society for the prevention of
6.32 	cruelty to animals may acquire, by purchase, gift, grant, or
6.33 	devise, and hold, use, or convey, real estate and personal
6.34 	property, and lease, mortgage, sell, or use the same in any
6.35 	manner conducive to its interest, to the same extent as natural
6.36 	persons.  The county board of any county, or the council of any
7.1 	city, in which such societies exist, may, in its discretion,
7.2 	appropriate for the maintenance and support of such societies in
7.3 	the transaction of the work for which they are organized, any
7.4 	sums of money not otherwise appropriated, not to exceed in any
7.5 	one year the sum of $4,800 or the sum of 50 cents $1 per capita
7.6 	based upon the county's or city's population as of the most
7.7 	recent federal census, whichever is greater; provided, that no
7.8 	part of the appropriation shall be expended for the payment of
7.9 	the salary of any officer of the society.

7.10 	EFFECTIVE DATE. This section is effective January 1, 2006.

7.11 	Sec. 6. Minnesota Statutes 2004, section 373.01,
7.12 	subdivision 3, is amended to read:
7.13 		Subd. 3.Capital notes. (a) A county board may, by
7.14 	resolution and without referendum, issue capital notes subject
7.15 	to the county debt limit to purchase capital equipment useful
7.16 	for county purposes that has an expected useful life at least
7.17 	equal to the term of the notes.  The notes shall be payable in
7.18 	not more than five ten years and shall be issued on terms and in
7.19 	a manner the board determines.  A tax levy shall be made for
7.20 	payment of the principal and interest on the notes, in
7.21 	accordance with section 475.61, as in the case of bonds.
7.22 	(b) For purposes of this subdivision, "capital equipment"
7.23 	means:
7.24 	(1) public safety, ambulance, road construction or
7.25 	maintenance, and medical equipment,;and
7.26 	(2) computer hardware and original operating system 
7.27 	software, whether bundled with machinery or equipment or
7.28 	unbundled.  The authority to issue capital notes for original
7.29 	operating systems software expires on July 1, 2005 2007.

7.30 	Sec. 7. Minnesota Statutes 2004, section 373.40,
7.31 	subdivision 1, is amended to read:
7.32 		Subdivision 1.Definitions.  For purposes of this
7.33 	section, the following terms have the meanings given.
7.34 	(a) "Bonds" means an obligation as defined under section
7.35 	475.51.
7.36 	(b) "Capital improvement" means acquisition or betterment
8.1 	of public lands, development rights in the form of conservation
8.2 	easements under chapter 84C,buildings, or other improvements
8.3 	within the county for the purpose of a county courthouse,
8.4 	administrative building, health or social service facility,
8.5 	correctional facility, jail, law enforcement center, hospital,
8.6 	morgue, library, park, qualified indoor ice arena, and roads and
8.7 	bridges, and the acquisition of development rights in the form
8.8 	of conservation easements under chapter 84C.  An improvement
8.9 	must have an expected useful life of five years or more to
8.10 	qualify.  "Capital improvement" does not include light rail
8.11 	transit or any activity related to it or a recreation or sports
8.12 	facility building (such as, but not limited to, a gymnasium, ice
8.13 	arena, racquet sports facility, swimming pool, exercise room or
8.14 	health spa), unless the building is part of an outdoor park
8.15 	facility and is incidental to the primary purpose of outdoor
8.16 	recreation.
8.17 	(c) "Commissioner" means the commissioner of employment and
8.18 	economic development.
8.19 	(d) "Metropolitan county" means a county located in the
8.20 	seven-county metropolitan area as defined in section 473.121 or
8.21 	a county with a population of 90,000 or more.
8.22 	(e) "Population" means the population established by the
8.23 	most recent of the following (determined as of the date the
8.24 	resolution authorizing the bonds was adopted):
8.25 	(1) the federal decennial census,
8.26 	(2) a special census conducted under contract by the United
8.27 	States Bureau of the Census, or
8.28 	(3) a population estimate made either by the Metropolitan
8.29 	Council or by the state demographer under section 4A.02.
8.30 	(f) "Qualified indoor ice arena" means a facility that
8.31 	meets the requirements of section 373.43.
8.32 	(g) "Tax capacity" means total taxable market value, but
8.33 	does not include captured market value.

8.34 	Sec. 8. Minnesota Statutes 2004, section 410.32, is
8.35 	amended to read:
8.36 	410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL
9.1 	EQUIPMENT.
9.2 	(a) Notwithstanding any contrary provision of other law or
9.3 	charter, a home rule charter city may, by resolution and without
9.4 	public referendum, issue capital notes subject to the city debt
9.5 	limit to purchase capital equipment.
9.6 	(b) For purposes of this section, "capital equipment" means:
9.7 	(1) public safety equipment, ambulance and other medical
9.8 	equipment, road construction and maintenance equipment, and
9.9 	other capital equipment;and
9.10 	(2) computer hardware and original operating system 
9.11 	software, provided whether bundled with machinery or equipment
9.12 	or unbundled.
9.13 	(c) The equipment or software has must have an expected
9.14 	useful life at least as long as the term of the notes.  The
9.15 	authority to issue capital notes for original operating system 
9.16 	software expires on July 1, 2005 2007.
9.17 	(d) The notes shall be payable in not more than five ten 
9.18 	years and be issued on terms and in the manner the city
9.19 	determines.  The total principal amount of the capital notes
9.20 	issued in a fiscal year shall not exceed 0.03 percent of the
9.21 	market value of taxable property in the city for that year.
9.22 	(e) A tax levy shall be made for the payment of the
9.23 	principal and interest on the notes, in accordance with section
9.24 	475.61, as in the case of bonds.
9.25 	(f) Notes issued under this section shall require an
9.26 	affirmative vote of two-thirds of the governing body of the city.
9.27 	(g) Notwithstanding a contrary provision of other law or
9.28 	charter, a home rule charter city may also issue capital notes
9.29 	subject to its debt limit in the manner and subject to the
9.30 	limitations applicable to statutory cities pursuant to section
9.31 	412.301.

9.32 	Sec. 9. Minnesota Statutes 2004, section 412.301, is
9.33 	amended to read:
9.34 	412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.
9.35 	(a) The council may issue certificates of indebtedness or
9.36 	capital notes subject to the city debt limits to
10.1 	purchase capital equipment.
10.2 	(b) For purposes of this section, "capital equipment" means:
10.3 	(1) public safety equipment, ambulance and other medical 
10.4 	equipment, road construction or and maintenance equipment, and
10.5 	other capital equipment;and
10.6 	(2) computer hardware and original operating system 
10.7 	software, provided whether bundled with machinery or equipment
10.8 	or unbundled.
10.9 	(c) The equipment or software has must have an expected
10.10 	useful life at least as long as the terms of the certificates or
10.11 	notes.  The authority to issue capital notes for original
10.12 	operating system software expires on July 1, 2005 2007.
10.13 	(d) Such certificates or notes shall be payable in not more
10.14 	than five ten years and shall be issued on such terms and in
10.15 	such manner as the council may determine.
10.16 	(e) If the amount of the certificates or notes to be issued
10.17 	to finance any such purchase exceeds 0.25 percent of the market
10.18 	value of taxable property in the city, they shall not be issued
10.19 	for at least ten days after publication in the official
10.20 	newspaper of a council resolution determining to issue them; and
10.21 	if before the end of that time, a petition asking for an
10.22 	election on the proposition signed by voters equal to ten
10.23 	percent of the number of voters at the last regular municipal
10.24 	election is filed with the clerk, such certificates or notes
10.25 	shall not be issued until the proposition of their issuance has
10.26 	been approved by a majority of the votes cast on the question at
10.27 	a regular or special election.
10.28 	(f) A tax levy shall be made for the payment of the
10.29 	principal and interest on such certificates or notes, in
10.30 	accordance with section 475.61, as in the case of bonds.

10.31 	Sec. 10. Minnesota Statutes 2004, section 428A.101, is
10.32 	amended to read:
10.33 	428A.101 DEADLINE FOR SPECIAL SERVICE DISTRICT UNDER
10.34 	GENERAL LAW.
10.35 	The establishment of a new special service district after
10.36 	June 30, 2005 2009, requires enactment of a special law
11.1 	authorizing the establishment.

11.2 	Sec. 11. Minnesota Statutes 2004, section 428A.21, is
11.3 	amended to read:
11.4 	428A.21  SUNSET DEADLINE FOR HOUSING IMPROVEMENT DISTRICTS
11.5 	UNDER GENERAL LAW.
11.6 	No The establishment of a new housing improvement areas may
11.7 	be established under sections 428A.11 to 428A.20area after June
11.8 	30, 2005.  After June 30, 2005, a city may establish a housing
11.9 	improvement area, provided that it receives enabling legislation 
11.10 	2009, requires enactment of a special law authorizing the
11.11 	establishment of the area.

11.12 	Sec. 12. [429.052] STREET OR ROAD IMPROVEMENTS OUTSIDE
11.13 	MUNICIPAL BOUNDARIES.
11.14 	A municipality may construct street or road improvements
11.15 	outside its jurisdiction with the consent of the affected
11.16 	township, or if the property is located in unorganized
11.17 	territory, the county.  When property is brought within the
11.18 	corporate limits of the municipality, the municipality may
11.19 	subsequently reimburse itself for all or any portion of the cost
11.20 	of the improvement for which municipal funds have been expended,
11.21 	by levying an assessment upon any property abutting on, but not
11.22 	previously assessed for, the improvement.  No assessment may be
11.23 	so levied unless the property to be assessed was given notice
11.24 	and hearing of the improvements under section 429.031 at the
11.25 	time the improvement was ordered, and subsequently in accordance
11.26 	with the notice, hearing, and appeal rights, provided for under
11.27 	sections 429.061 and 429.081.

11.28 	EFFECTIVE DATE. This section is effective for street and
11.29 	road improvements first ordered after August 1, 2005.

11.30 	Sec. 13. [452.26] UTILITY JOINT VENTURE.
11.31 	To provide reduced cost financing or to otherwise help in
11.32 	carrying out its functions, a municipal gas agency created under
11.33 	chapter 453A and any municipal utility authorized to provide gas
11.34 	facilities or services may enter into a joint venture that was
11.35 	incorporated before June 30, 2004, under section 452.25.  The
11.36 	joint venture, and any municipal gas agency which is a member of
12.1 	the joint venture, may provide gas utility service.

12.2 	EFFECTIVE DATE. This section is effective the day
12.3 	following final enactment.

12.4 	Sec. 14. Minnesota Statutes 2004, section 469.015,
12.5 	subdivision 4, is amended to read:
12.6 		Subd. 4.Exceptions.  (a) An authority need not require
12.7 	competitive bidding in the following circumstances:
12.8 	(1) in the case of a contract for the acquisition of a
12.9 	low-rent housing project:
12.10 	(i) for which financial assistance is provided by the
12.11 	federal government;
12.12 	(ii) which does not require any direct loan or grant of
12.13 	money from the municipality as a condition of the federal
12.14 	financial assistance; and
12.15 	(iii) for which the contract provides for the construction
12.16 	of the project upon land that is either owned by the authority
12.17 	for redevelopment purposes or not owned by the authority at the
12.18 	time of the contract but the contract provides for the
12.19 	conveyance or lease to the authority of the project or
12.20 	improvements upon completion of construction;
12.21 	(2) with respect to a structured parking facility:
12.22 	(i) constructed in conjunction with, and directly above or
12.23 	below, a development; and
12.24 	(ii) financed with the proceeds of tax increment or parking
12.25 	ramp general obligation or revenue bonds; and 
12.26 	(3) until August 1, 2009, with respect to a facility built
12.27 	for the purpose of facilitating the operation of public transit
12.28 	or encouraging its use:
12.29 	(i) constructed in conjunction with, and directly above or
12.30 	below, a development; and 
12.31 	(ii) financed with the proceeds of parking ramp general
12.32 	obligation or revenue bonds or with at least 60 percent of the
12.33 	construction cost being financed with funding provided by the
12.34 	federal government; and 
12.35 	(4) in the case of any building in which at least 75
12.36 	percent of the usable square footage constitutes a housing
13.1 	development project if:
13.2 	(i) the project is financed with the proceeds of bonds
13.3 	issued under section 469.034 or from nongovernmental sources;
13.4 	(ii) the project is either located on land that is owned or
13.5 	is being acquired by the authority only for development
13.6 	purposes, or is not owned by the authority at the time the
13.7 	contract is entered into but the contract provides for
13.8 	conveyance or lease to the authority of the project or
13.9 	improvements upon completion of construction; and
13.10 	(iii) the authority finds and determines that elimination
13.11 	of the public bidding requirements is necessary in order for the
13.12 	housing development project to be economical and feasible.
13.13 	(b) An authority need not require a performance bond for
13.14 	the following projects:
13.15 	(1) a contract described in paragraph (a), clause (1);
13.16 	(2) a construction change order for a housing project in
13.17 	which 30 percent of the construction has been completed;
13.18 	(3) a construction contract for a single-family housing
13.19 	project in which the authority acts as the general construction
13.20 	contractor; or
13.21 	(4) a services or materials contract for a housing project.
13.22 	For purposes of this paragraph, "services or materials
13.23 	contract" does not include construction contracts.

13.24 	Sec. 15. Minnesota Statutes 2004, section 469.034,
13.25 	subdivision 2, is amended to read:
13.26 		Subd. 2.General obligation revenue bonds.  (a) An
13.27 	authority may pledge the general obligation of the general
13.28 	jurisdiction governmental unit as additional security for bonds
13.29 	payable from income or revenues of the project or the
13.30 	authority.  The authority must find that the pledged revenues
13.31 	will equal or exceed 110 percent of the principal and interest
13.32 	due on the bonds for each year.  The proceeds of the bonds must
13.33 	be used for a qualified housing development project or
13.34 	projects.  The obligations must be issued and sold in the manner
13.35 	and following the procedures provided by chapter 475, except the
13.36 	obligations are not subject to approval by the electors,and the
14.1 	maturities may extend to not more than 30 35 years from the
14.2 	estimated date of completion of the project for obligations sold
14.3 	to finance housing for the elderly and 40 years for other
14.4 	obligations issued under this subdivision.  The authority is the
14.5 	municipality for purposes of chapter 475.
14.6 	(b) The principal amount of the issue must be approved by
14.7 	the governing body of the general jurisdiction governmental unit
14.8 	whose general obligation is pledged.  Public hearings must be
14.9 	held on issuance of the obligations by both the authority and
14.10 	the general jurisdiction governmental unit.  The hearings must
14.11 	be held at least 15 days, but not more than 120 days, before the
14.12 	sale of the obligations.
14.13 	(c) The maximum amount of general obligation bonds that may
14.14 	be issued and outstanding under this section equals the greater
14.15 	of (1) one-half of one percent of the taxable market value of
14.16 	the general jurisdiction governmental unit whose general
14.17 	obligation which includes a tax on property is pledged, or (2)
14.18 	$3,000,000.  In the case of county or multicounty general
14.19 	obligation bonds, the outstanding general obligation bonds of
14.20 	all cities in the county or counties issued under this
14.21 	subdivision must be added in calculating the limit under clause
14.22 	(1).
14.23 	(d) "General jurisdiction governmental unit" means the city
14.24 	in which the housing development project is located.  In the
14.25 	case of a county or multicounty authority, the county or
14.26 	counties may act as the general jurisdiction governmental unit.
14.27 	In the case of a multicounty authority, the pledge of the
14.28 	general obligation is a pledge of a tax on the taxable property
14.29 	in each of the counties.
14.30 	(e) "Qualified housing development project" means a housing
14.31 	development project providing housing either for the elderly or
14.32 	for individuals and families with incomes not greater than 80
14.33 	percent of the median family income as estimated by the United
14.34 	States Department of Housing and Urban Development for the
14.35 	standard metropolitan statistical area or the nonmetropolitan
14.36 	county in which the project is located, and will .  The project
15.1 	must be owned for the term of the bonds either by the
15.2 	authority for the term of the bonds.or by a limited partnership
15.3 	or other entity in which the authority or another entity under
15.4 	the sole control of the authority is the sole general partner
15.5 	and the partnership or other entity must receive (1) an
15.6 	allocation from the Department of Finance or an entitlement
15.7 	issuer of tax-exempt bonding authority for the project and a
15.8 	preliminary determination by the Minnesota Housing Finance
15.9 	Agency or the applicable suballocator of tax credits that the
15.10 	project will qualify for four percent low-income housing tax
15.11 	credits or (2) a reservation of nine percent low-income housing
15.12 	tax credits from the Minnesota Housing Finance Agency or a
15.13 	suballocator of tax credits for the project.A qualified
15.14 	housing development project may admit nonelderly individuals and
15.15 	families with higher incomes if:
15.16 	(1) three years have passed since initial occupancy;
15.17 	(2) the authority finds the project is experiencing
15.18 	unanticipated vacancies resulting in insufficient revenues,
15.19 	because of changes in population or other unforeseen
15.20 	circumstances that occurred after the initial finding of
15.21 	adequate revenues; and
15.22 	(3) the authority finds a tax levy or payment from general
15.23 	assets of the general jurisdiction governmental unit will be
15.24 	necessary to pay debt service on the bonds if higher income
15.25 	individuals or families are not admitted.

15.26 	Sec. 16. Minnesota Statutes 2004, section 469.158, is
15.27 	amended to read:
15.28 	469.158 MANNER OF ISSUANCE OF BONDS; INTEREST RATE.
15.29 	Bonds authorized under sections 469.152 to 469.165 must be
15.30 	issued in accordance with the provisions of chapter 475 relating
15.31 	to bonds payable from income of revenue producing conveniences,
15.32 	except that public sale is not required, the provisions of
15.33 	sections 475.62 and 475.63 do not apply, and the bonds may
15.34 	mature at the time or times, in the amount or amounts, within 30 
15.35 	40 years from date of issue, and may be sold at a price equal to
15.36 	the percentage of the par value thereof, plus accrued interest,
16.1 	and bearing interest at the rate or rates agreed by the
16.2 	contracting party, the purchaser, and the municipality or
16.3 	redevelopment agency, notwithstanding any limitation of interest
16.4 	rate or cost or of the amounts of annual maturities contained in
16.5 	any other law.  Bonds issued to refund bonds previously issued
16.6 	pursuant to sections 469.152 to 469.165 may be issued in amounts
16.7 	determined by the municipality or redevelopment agency
16.8 	notwithstanding the provisions of section 475.67, subdivision 3.

16.9 	Sec. 17. Minnesota Statutes 2004, section 469.1813,
16.10 	subdivision 6, is amended to read:
16.11 		Subd. 6.Duration limit.  (a) A political subdivision may
16.12 	grant an abatement for a period no longer than ten 15 years,
16.13 	except as provided under paragraph (b).  The subdivision may
16.14 	specify in the abatement resolution a shorter duration.  If the
16.15 	resolution does not specify a period of time, the abatement is
16.16 	for eight years.  If an abatement has been granted to a parcel
16.17 	of property and the period of the abatement has expired, the
16.18 	political subdivision that granted the abatement may not grant
16.19 	another abatement for eight years after the expiration of the
16.20 	first abatement.  This prohibition does not apply to
16.21 	improvements added after and not subject to the first abatement.
16.22 	(b) A political subdivision proposing to abate taxes for a
16.23 	parcel may request, in writing, that the other political
16.24 	subdivisions in which the parcel is located grant an abatement
16.25 	for the property.  If one of the other political subdivisions
16.26 	declines, in writing, to grant an abatement or if 90 days pass
16.27 	after receipt of the request to grant an abatement without a
16.28 	written response from one of the political subdivisions, the
16.29 	duration limit for an abatement for the parcel by the requesting
16.30 	political subdivision and any other participating political
16.31 	subdivision is increased to 15 20 years.  If the political
16.32 	subdivision which declined to grant an abatement later grants an
16.33 	abatement for the parcel, the 15-year 20-year duration limit is
16.34 	reduced by one year for each year that the declining political
16.35 	subdivision grants an abatement for the parcel during the period
16.36 	of the abatement granted by the requesting political
17.1 	subdivision.  The duration limit may not be reduced below the
17.2 	limit under paragraph (a).

17.3 	Sec. 18. Minnesota Statutes 2004, section 473.197,
17.4 	subdivision 4, is amended to read:
17.5 		Subd. 4.Debt reserve; levy.  To provide money to pay
17.6 	debt service on bonds issued under the credit enhancement
17.7 	program if pledged revenues are insufficient to pay debt service 
17.8 	in repealed subdivision 1 of Minnesota Statutes 2004, section
17.9 	473.197, the council must maintain a debt reserve fund in the
17.10 	manner and with the effect provided by section 118A.04 for
17.11 	public funds until such a reserve is no longer pledged or
17.12 	otherwise needed to pay debt service on such bonds. To provide
17.13 	funds for the debt reserve fund, the council may use up to
17.14 	$3,000,000 of the proceeds of solid waste bonds issued by the
17.15 	council under section 473.831 before its repeal.  To provide
17.16 	additional funds for the debt reserve fund, the council may levy
17.17 	a tax on all taxable property in the metropolitan area and must
17.18 	levy the tax If sums in the debt reserve fund are insufficient
17.19 	to cure any deficiency in the debt service fund established for
17.20 	the bonds, the council must levy a tax on all taxable property
17.21 	in the metropolitan area in the amount needed to cure the
17.22 	deficiency.  The tax authorized by this section does not affect
17.23 	the amount or rate of taxes that may be levied by the council
17.24 	for other purposes and is not subject to limit as to rate or
17.25 	amount.

17.26 	Sec. 19. Minnesota Statutes 2004, section 473.39, is
17.27 	amended by adding a subdivision to read:
17.28 		Subd. 1k.Obligations. After July 1, 2005, in addition
17.29 	to the authority in subdivisions 1a, 1b, 1c, 1d, 1e, 1g, 1h, 1i,
17.30 	and 1j, the council may issue certificates of indebtedness,
17.31 	bonds, or other obligations under this section in an amount not
17.32 	exceeding $64,000,000 for capital expenditures as prescribed in
17.33 	the council's regional transit master plan and transit capital
17.34 	improvement program and for related costs, including the costs
17.35 	of issuance and sale of the obligations.

17.36 	Sec. 20. Minnesota Statutes 2004, section 473.39, is
18.1 	amended by adding a subdivision to read:
18.2 		Subd. 2a.Uses of investment income. Interest or other
18.3 	investment earnings on the proceeds of bonds issued under this
18.4 	section and on a debt service account for bonds issued under
18.5 	this section must be used only to:
18.6 	(1) pay capital expenditures and related expenses for which
18.7 	the obligations were authorized by this section;
18.8 	(2) to pay debt service on the obligations or to reduce the
18.9 	council's property tax levy imposed to pay debt service on
18.10 	obligations issued under this section;
18.11 	(3) pay rebate or yield reduction payments for the bonds to
18.12 	the United States;
18.13 	(4) redeem or purchase the bonds; or 
18.14 	(5) make other payments with respect to the bonds that are
18.15 	necessary or desirable to comply with federal tax rules
18.16 	applicable to the bonds or to comply with covenants made with
18.17 	respect to the bonds.
18.18 	
EFFECTIVE DATE. This section is effective for investment
18.19 	earnings received after June 30, 2005.

18.20 	Sec. 21. Minnesota Statutes 2004, section 474A.061,
18.21 	subdivision 2c, is amended to read:
18.22 		Subd. 2c.Public facilities pool allocation.  From the
18.23 	beginning of the calendar year and continuing for a period of
18.24 	120 days, the commissioner shall reserve $3,000,000 $5,000,000 
18.25 	of the available bonding authority from the public facilities
18.26 	pool for applications for public facilities projects to be
18.27 	financed by the Western Lake Superior Sanitary District.
18.28 	Commencing on the second Tuesday in January and continuing on
18.29 	each Monday through the last Monday in July, the commissioner
18.30 	shall allocate available bonding authority from the public
18.31 	facilities pool to applications for eligible public facilities
18.32 	projects received on or before the Monday of the preceding
18.33 	week.  If there are two or more applications for public
18.34 	facilities projects from the pool and there is insufficient
18.35 	available bonding authority to provide allocations for all
18.36 	projects in any one week, the available bonding authority shall
19.1 	be awarded by lot unless otherwise agreed to by the respective
19.2 	issuers.

19.3 	Sec. 22. Minnesota Statutes 2004, section 474A.131,
19.4 	subdivision 1, is amended to read:
19.5 		Subdivision 1.Notice of issue.  Each issuer that issues
19.6 	bonds with an allocation received under this chapter shall
19.7 	provide a notice of issue to the department on forms provided by
19.8 	the department stating:
19.9 	(1) the date of issuance of the bonds;
19.10 	(2) the title of the issue;
19.11 	(3) the principal amount of the bonds;
19.12 	(4) the type of qualified bonds under federal tax law;
19.13 	(5) the dollar amount of the bonds issued that were subject
19.14 	to the annual volume cap; and
19.15 	(6) for entitlement issuers, whether the allocation is from
19.16 	current year entitlement authority or is from carryforward
19.17 	authority.
19.18 	For obligations that are issued as a part of a series of
19.19 	obligations, a notice must be provided for each series.  A
19.20 	penalty of one-half of the amount of the application deposit not
19.21 	to exceed $5,000 shall apply to any issue of obligations for
19.22 	which a notice of issue is not provided to the department within
19.23 	five business days after issuance or before the last Monday 4:30
19.24 	p.m. on the last business day in December, whichever occurs
19.25 	first.  Within 30 days after receipt of a notice of issue the
19.26 	department shall refund a portion of the application deposit
19.27 	equal to one percent of the amount of the bonding authority
19.28 	actually issued if a one percent application deposit was made,
19.29 	or equal to two percent of the amount of the bonding authority
19.30 	actually issued if a two percent application deposit was made,
19.31 	less any penalty amount.

19.32 	Sec. 23. Minnesota Statutes 2004, section 475.51,
19.33 	subdivision 4, is amended to read:
19.34 		Subd. 4.Net debt.  "Net debt" means the amount remaining
19.35 	after deducting from its gross debt the amount of current
19.36 	revenues which are applicable within the current fiscal year to
20.1 	the payment of any debt and the aggregate of the principal of
20.2 	the following:
20.3 	(1) Obligations issued for improvements which are payable
20.4 	wholly or partly from the proceeds of special assessments levied
20.5 	upon property specially benefited thereby, including those which
20.6 	are general obligations of the municipality issuing them, if the
20.7 	municipality is entitled to reimbursement in whole or in part
20.8 	from the proceeds of the special assessments.
20.9 	(2) Warrants or orders having no definite or fixed maturity.
20.10 	(3) Obligations payable wholly from the income from revenue
20.11 	producing conveniences.
20.12 	(4) Obligations issued to create or maintain a permanent
20.13 	improvement revolving fund.
20.14 	(5) Obligations issued for the acquisition, and betterment
20.15 	of public waterworks systems, and public lighting, heating or
20.16 	power systems, and of any combination thereof or for any other
20.17 	public convenience from which a revenue is or may be derived.
20.18 	(6) Debt service loans and capital loans made to a school
20.19 	district under the provisions of sections 126C.68 and 126C.69.
20.20 	(7) Amount of all money and the face value of all
20.21 	securities held as a debt service fund for the extinguishment of
20.22 	obligations other than those deductible under this subdivision.
20.23 	(8) Obligations to repay loans made under section 216C.37.
20.24 	(9) Obligations to repay loans made from money received
20.25 	from litigation or settlement of alleged violations of federal
20.26 	petroleum pricing regulations.
20.27 	(10) Obligations issued to pay pension fund liabilities
20.28 	under section 475.52, subdivision 6, or any charter authority.
20.29 	(11) Obligations issued to pay judgments against the
20.30 	municipality under section 475.52, subdivision 6, or any charter
20.31 	authority.
20.32 	(12) All other obligations which under the provisions of
20.33 	law authorizing their issuance are not to be included in
20.34 	computing the net debt of the municipality.

20.35 	Sec. 24. Minnesota Statutes 2004, section 475.52,
20.36 	subdivision 1, is amended to read:
21.1 		Subdivision 1.Statutory cities.  Any statutory city may
21.2 	issue bonds or other obligations for the acquisition or
21.3 	betterment of public buildings, means of garbage disposal,
21.4 	hospitals, nursing homes, homes for the aged, schools,
21.5 	libraries, museums, art galleries, parks, playgrounds, stadia,
21.6 	sewers, sewage disposal plants, subways, streets, sidewalks,
21.7 	warning systems; for any utility or other public convenience
21.8 	from which a revenue is or may be derived; for a permanent
21.9 	improvement revolving fund; for changing, controlling or
21.10 	bridging streams and other waterways; for the acquisition and
21.11 	betterment of bridges and roads within two miles of the
21.12 	corporate limits;for the acquisition of development rights in
21.13 	the form of conservation easements under chapter 84C; and for
21.14 	acquisition of equipment for snow removal, street construction
21.15 	and maintenance, or fire fighting.  Without limitation by the
21.16 	foregoing the city may issue bonds to provide money for any
21.17 	authorized corporate purpose except current expenses.

21.18 	Sec. 25. Minnesota Statutes 2004, section 475.52,
21.19 	subdivision 3, is amended to read:
21.20 		Subd. 3.Counties.  Any county may issue bonds for the
21.21 	acquisition or betterment of courthouses, county administrative
21.22 	buildings, health or social service facilities, correctional
21.23 	facilities, law enforcement centers, jails, morgues, libraries,
21.24 	parks, and hospitals, for roads and bridges within the county or
21.25 	bordering thereon and for road equipment and machinery and for
21.26 	ambulances and related equipment;for the acquisition of
21.27 	development rights in the form of conservation easements under
21.28 	chapter 84C, and for capital equipment for the administration
21.29 	and conduct of elections providing the equipment is uniform
21.30 	countywide, except that the power of counties to issue bonds in
21.31 	connection with a library shall not exist in Hennepin County.

21.32 	Sec. 26. Minnesota Statutes 2004, section 475.52,
21.33 	subdivision 4, is amended to read:
21.34 		Subd. 4.Towns.  Any town may issue bonds for the
21.35 	acquisition and betterment of town halls, town roads and
21.36 	bridges, nursing homes and homes for the aged, and for
22.1 	acquisition of equipment for snow removal, road construction or
22.2 	maintenance, and fire fighting;for the acquisition of
22.3 	development rights in the form of conservation easements under
22.4 	chapter 84C;and for the acquisition and betterment of any
22.5 	buildings to house and maintain town equipment.

22.6 	Sec. 27. Minnesota Statutes 2004, section 475.521,
22.7 	subdivision 1, is amended to read:
22.8 		Subdivision 1.Definitions.  For purposes of this
22.9 	section, the following terms have the meanings given.
22.10 	(a) "Bonds" mean an obligation defined under section 475.51.
22.11 	(b) "Capital improvement" means acquisition or betterment
22.12 	of public lands, buildings or other improvements for the purpose
22.13 	of a city hall, town hall, library,public safety facility, and
22.14 	public works facility.  An improvement must have an expected
22.15 	useful life of five years or more to qualify.  Capital
22.16 	improvement does not include light rail transit or any activity
22.17 	related to it, or a park, library,road, bridge, administrative
22.18 	building other than a city or town hall, or land for any of
22.19 	those facilities.
22.20 	(c) "City" "Municipality" means a home rule charter or
22.21 	statutory city or a town described in section 368.01,
22.22 	subdivision 1 or 1a.

22.23 	Sec. 28. Minnesota Statutes 2004, section 475.521,
22.24 	subdivision 2, is amended to read:
22.25 		Subd. 2.Election requirement.  (a) Bonds issued by a
22.26 	city municipality to finance capital improvements under an
22.27 	approved capital improvements plan are not subject to the
22.28 	election requirements of section 475.58. The bonds are subject
22.29 	to the net debt limits under section 475.53.The bonds must be
22.30 	approved by an affirmative vote of three-fifths of the members
22.31 	of a five-member city council governing body.  In the case of
22.32 	a city council governing body having more or less than five
22.33 	members, the bonds must be approved by a vote of at least
22.34 	two-thirds of the city council members of the governing body.
22.35 	(b) Before the issuance of bonds qualifying under this
22.36 	section, the city municipality must publish a notice of its
23.1 	intention to issue the bonds and the date and time of the
23.2 	hearing to obtain public comment on the matter.  The notice must
23.3 	be published in the official newspaper of the city municipality 
23.4 	or in a newspaper of general circulation in the city 
23.5 	municipality.  Additionally, the notice may be posted on the
23.6 	official Web site, if any, of the city municipality.  The notice
23.7 	must be published at least 14 but not more than 28 days before
23.8 	the date of the hearing.
23.9 	(c) A city municipality may issue the bonds only after
23.10 	obtaining the approval of a majority of the voters voting on the
23.11 	question of issuing the obligations, if a petition requesting a
23.12 	vote on the issuance is signed by voters equal to five percent
23.13 	of the votes cast in the city municipality in the last general
23.14 	election and is filed with the city clerk within 30 days after
23.15 	the public hearing.  The commissioner of revenue shall prepare a
23.16 	suggested form of the question to be presented at the election.

23.17 	Sec. 29. Minnesota Statutes 2004, section 475.521,
23.18 	subdivision 3, is amended to read:
23.19 		Subd. 3.Capital improvement plan.  (a) A city 
23.20 	municipality may adopt a capital improvement plan.  The plan
23.21 	must cover at least a five-year period beginning with the date
23.22 	of its adoption.  The plan must set forth the estimated
23.23 	schedule, timing, and details of specific capital improvements
23.24 	by year, together with the estimated cost, the need for the
23.25 	improvement, and sources of revenue to pay for the improvement.
23.26 	In preparing the capital improvement plan, the city council 
23.27 	governing body must consider for each project and for the
23.28 	overall plan:
23.29 	(1) the condition of the city's municipality's existing
23.30 	infrastructure, including the projected need for repair or
23.31 	replacement;
23.32 	(2) the likely demand for the improvement;
23.33 	(3) the estimated cost of the improvement;
23.34 	(4) the available public resources;
23.35 	(5) the level of overlapping debt in the city municipality;
23.36 	(6) the relative benefits and costs of alternative uses of
24.1 	the funds;
24.2 	(7) operating costs of the proposed improvements; and
24.3 	(8) alternatives for providing services most efficiently
24.4 	through shared facilities with other cities municipalities or
24.5 	local government units.
24.6 	(b) The capital improvement plan and annual amendments to
24.7 	it must be approved by the city council governing body after
24.8 	public hearing.

24.9 	Sec. 30. Minnesota Statutes 2004, section 475.521,
24.10 	subdivision 4, is amended to read:
24.11 		Subd. 4.Limitations on amount.  A city municipality may
24.12 	not issue bonds under this section if the maximum amount of
24.13 	principal and interest to become due in any year on all the
24.14 	outstanding bonds issued under this section, including the bonds
24.15 	to be issued, will equal or exceed 0.05367 0.16 percent of the 
24.16 	taxable market value of property in the county municipality.
24.17 	Calculation of the limit must be made using the taxable market
24.18 	value for the taxes payable year in which the obligations are
24.19 	issued and sold. In the case of a municipality with a
24.20 	population of 2,500 or more, the bonds are subject to the net
24.21 	debt limits under section 475.53.  In the case of a shared
24.22 	facility in which more than one municipality participates, upon
24.23 	compliance by each participating municipality with the
24.24 	requirements of subdivision 2, the limitations in this
24.25 	subdivision and the net debt represented by the bonds shall be
24.26 	allocated to each participating municipality in proportion to
24.27 	its required financial contribution to the financing of the
24.28 	shared facility, as set forth in the joint powers agreement
24.29 	relating to the shared facility.This section does not limit
24.30 	the authority to issue bonds under any other special or general
24.31 	law.

24.32 	Sec. 31. Minnesota Statutes 2004, section 475.58,
24.33 	subdivision 3b, is amended to read:
24.34 		Subd. 3b.Street reconstruction.  (a) A municipality may,
24.35 	without regard to the election requirement under subdivision 1,
24.36 	issue and sell obligations for street reconstruction, if the
25.1 	following conditions are met:
25.2 	(1) the streets are reconstructed under a street
25.3 	reconstruction plan that describes the streets to be
25.4 	reconstructed, the estimated costs, and any planned
25.5 	reconstruction of other streets in the municipality over the
25.6 	next five years, and the plan and issuance of the obligations
25.7 	has been approved by a vote of all of the members of the
25.8 	governing body following a public hearing for which notice has
25.9 	been published in the official newspaper at least ten days but
25.10 	not more than 28 days prior to the hearing; and
25.11 	(2) if a petition requesting a vote on the issuance is
25.12 	signed by voters equal to five percent of the votes cast in the
25.13 	last municipal general election and is filed with the municipal
25.14 	clerk within 30 days of the public hearing, the municipality may
25.15 	issue the bonds only after obtaining the approval of a majority
25.16 	of the voters voting on the question of the issuance of the
25.17 	obligations.
25.18 	(b) Obligations issued under this subdivision are subject
25.19 	to the debt limit of the municipality and are not excluded from
25.20 	net debt under section 475.51, subdivision 4.
25.21 	(c) For purposes of this subdivision, street reconstruction
25.22 	includes utility replacement and relocation and other activities
25.23 	incidental to the street reconstruction, but turn lanes and
25.24 	other improvements having a substantial public safety function,
25.25 	realignments, other modifications to intersect with state and
25.26 	county roads, and the local share of state and county road
25.27 	projects.
25.28 	(d) Except in the case of turn lanes, safety improvements,
25.29 	realignments, intersection modifications, and the local share of
25.30 	state and county road projects, street reconstruction does not
25.31 	include the portion of project cost allocable to widening a
25.32 	street or adding curbs and gutters where none previously existed.

25.33 	Sec. 32. Minnesota Statutes 2004, section 477A.013, is
25.34 	amended by adding a subdivision to read:
25.35 		Subd. 10.Levy adjustments for aid
25.36 	decreases. Notwithstanding any local ordinance or charter
26.1 	provision, a city whose certified aid under subdivision 9 is
26.2 	less than the amount it received in the previous year under the
26.3 	same subdivision may increase its levy payable in the same year
26.4 	as the certified aid is paid by an amount equal to the aid
26.5 	decrease for that year.
26.6 	
EFFECTIVE DATE. This section is effective beginning with
26.7 	property tax levies payable in 2006 and thereafter.

26.8 	Sec. 33. Laws 1996, chapter 412, article 5, section 24, is
26.9 	amended to read:

26.10 	Sec. 24. BONDS PAID FROM TACONITE PRODUCTION TAX
26.11 	REVENUES.
 26.12 		Subdivision 1.Refunding bonds. The appropriation of
26.13 	funds from the distribution of taconite production tax revenues
26.14 	to the taconite environmental protection tax fund and the
26.15 	northeast Minnesota economic protection fund made by Laws 1988,
26.16 	chapter 718, article 7, sections 62 and 63, Laws 1989, chapter
26.17 	329, article 5, section 20, Laws 1990, chapter 604, article 8,
26.18 	section 13, Laws 1992, chapter 499, article 5, section 29, and
26.19 	by sections 18 to 20 Laws 1996, chapter 412, article 5, sections
26.20 	20 to 22, and Laws 2000, chapter 489, article 5, sections 24 to
26.21 	26, shall continue to apply to bonds issued under Minnesota
26.22 	Statutes, chapter 475, to refund bonds originally issued
26.23 	pursuant to those chapters.
26.24 		Subd. 2.Local payments. School districts that are
26.25 	required in Laws 1988, chapter 718, article 7, sections 62 and
26.26 	63, Laws 1989, chapter 329, article 5, section 20, Laws 1990,
26.27 	chapter 604, article 8, section 13, Laws 1992, chapter 499,
26.28 	article 5, section 29, and by sections 18 to 20 Laws 1996,
26.29 	chapter 412, article 5, sections 20 to 22, and Laws 2000,
26.30 	chapter 489, article 5, sections 24 to 26, to impose levies to
26.31 	pay debt service on the bonds issued under those provisions to
26.32 	the extent the principal and interest on the bonds is not paid
26.33 	by distributions from the taconite environmental protection fund
26.34 	and the northeast Minnesota economic protection trust, may pay
26.35 	their portion of the principal and interest from any funds
26.36 	available to them.  To the extent a school district uses funds
27.1 	other than the proceeds of a property tax levy to pay its share
27.2 	of the principal and interest on the bonds, the requirement to
27.3 	impose a property tax to pay the local share does not apply to
27.4 	the school district.

27.5 	Sec. 34. Laws 2003, chapter 127, article 12, section 38,
27.6 	is amended to read:
27.7 	Sec. 38MEMBERS MUST AUTHORITY TO LEVY TAXES FOR
27.8 	AUTHORITY.
 27.9 	(a) A member shall, at the request of the authority, levy a
27.10 	tax in any year for the benefit of the authority.The authority
27.11 	is a special taxing district as defined in Minnesota Statutes,
27.12 	section 275.066, clause (13), with the power to adopt and
27.13 	certify a property tax levy to the county auditor.  The
27.14 	authority may levy a tax in any year for the benefit of the
27.15 	authority.The tax is,for each member,is a pro rata portion
27.16 	of the total amount of tax requested by the authority based on
27.17 	the taxable market value within a the member's jurisdiction, but
27.18 	in no event may the tax in any year exceed 0.01813 percent of
27.19 	taxable market value.  For purposes of this section, "taxable
27.20 	market value" has the meaning as given in Minnesota Statutes,
27.21 	section 273.032.
27.22 	(b) The treasurer of each member city or town shall, within
27.23 	15 days after receiving the property tax settlements from the
27.24 	county treasurer, pay to the treasurer of the authority the
27.25 	amount collected for this purpose.  The money must be used by
27.26 	the authority for the purposes provided by sections 35 to 41.

27.27 	EFFECTIVE DATE. This section is effective for taxes
27.28 	levied in 2005, payable in 2006, and thereafter.

27.29 	Sec. 35. CITY OF BEMIDJI; DURATION EXTENSION FOR TAX
27.30 	ABATEMENT.
 27.31 	Notwithstanding the limitation in Minnesota Statutes,
27.32 	section 469.1813, subdivision 6, the city of Bemidji may extend
27.33 	the duration of the tax abatement given to support development
27.34 	within the fairgrounds district of the city for an additional
27.35 	four years beyond the duration permitted under that section.

27.36 	Sec. 36. TOWN OF WHITE; OBLIGATIONS AUTHORIZED.
 28.1 		Subdivision 1.Obligations. Notwithstanding any
28.2 	provision of law or charter to the contrary, the town of White
28.3 	may pledge its general obligation, as defined in Minnesota
28.4 	Statutes, section 475.51, subdivision 10, to secure the
28.5 	financing of local improvements as provided in this section.
28.6 		Subd. 2.Special rules. (a) The obligations are subject
28.7 	to the provisions of Minnesota Statutes, chapter 429, except as
28.8 	provided in this subdivision.
28.9 	(b) The obligations must be issued to finance:
28.10 	(1) the cost of local improvements described in Minnesota
28.11 	Statutes, section 429.021, located within the area referred to
28.12 	in Laws 2003, chapter 119, section 2;
28.13 	(2) any reserves required to market the obligation; and 
28.14 	(3) the costs of issuing the obligations.
28.15 	(c) The obligations must be additionally secured by special
28.16 	assessments levied or to be levied by the city of Biwabik within
28.17 	the area referred to in paragraph (b).
28.18 	(d) The pledge of special assessments by the city of
28.19 	Biwabik for the payment of the obligations must be made by
28.20 	written agreement by and between the town of White and the city
28.21 	of Biwabik and must be filed with the county auditor.
28.22 	(e) Notwithstanding Minnesota Statutes, section 475.58, no
28.23 	election is required to approve the obligations.
28.24 	(f) The obligations are not included in computing any debt
28.25 	limitation applicable to the town of White or the city of
28.26 	Biwabik, and the levy of taxes under Minnesota Statutes, section
28.27 	475.61, to pay principal of and interest on the obligations is
28.28 	not subject to any levy limitation.
28.29 	
EFFECTIVE DATE. This section is effective upon local
28.30 	approval by the town of White and the city of Biwabik in
28.31 	compliance with the requirements of Minnesota Statutes, section
28.32 	645.021.

28.33 	Sec. 37. SAUK RIVER WATERSHED DISTRICT.
 28.34 	Notwithstanding Minnesota Statutes, section 103D.905,
28.35 	subdivision 3, the Sauk River Watershed District may annually
28.36 	levy up to 0.01 percent of taxable market value for its general
29.1 	fund.

29.2 	EFFECTIVE DATE. This section is effective, without local
29.3 	approval, beginning with the taxes levied in 2005, payable in
29.4 	2006.

29.5 	Sec. 38. CITY OF ST. PAUL; RIVERCENTRE COMPLEX
29.6 	OPERATION.
 29.7 		Subdivision 1.Definitions. (a) For the purposes of this
29.8 	section, the terms defined in this subdivision have the meanings
29.9 	given them.
29.10 	(b) "City" means the city of St. Paul, its mayor, city
29.11 	council, and any other board, authority, commission, or officer
29.12 	authorized by law, charter, or ordinance to exercise city powers
29.13 	of the nature referred to in this section.
29.14 	(c) "RiverCentre complex" means collectively the
29.15 	auditorium; convention, conference and education center; arena;
29.16 	and parking ramp facilities presently and commonly known as the
29.17 	Roy Wilkins Auditorium, St. Paul RiverCentre, Xcel Energy
29.18 	Center, and RiverCentre Parking Ramp, including all property,
29.19 	real or personal, tangible or intangible, located in the city,
29.20 	intended to be used as part of the RiverCentre complex or
29.21 	additions to or extensions of it.
29.22 		Subd. 2.Creation of nonprofit organization. As required
29.23 	under Minnesota Statutes, section 465.717, and notwithstanding
29.24 	any other law, city charter provision, or ordinance to the
29.25 	contrary, the city of St. Paul may participate in the creation
29.26 	of a nonprofit organization for the purposes provided in this
29.27 	section.
29.28 		Subd. 3.Governing board. (a) The mayor of the city,
29.29 	subject to approval by the city council, shall appoint a
29.30 	majority of the members of the governing board of the nonprofit
29.31 	organization performing all or a part of the activities
29.32 	necessary to carry out the purposes specified in this section.
29.33 	The mayor may designate any officer or employee of the city to
29.34 	serve as a member of the governing board of any nonprofit
29.35 	organization.
29.36 	(b) In addition to the appointments made by the mayor under
30.1 	paragraph (a), the mayor shall designate three members of the
30.2 	city council to serve on the governing board of the nonprofit
30.3 	organization.
30.4 	(c) Notwithstanding any provision contained in the articles
30.5 	of incorporation and bylaws of the nonprofit organization, any
30.6 	member of the governing board appointed by the mayor may be
30.7 	removed only by the mayor for cause.
30.8 	(d) The governing board of the nonprofit organization shall
30.9 	select, subject to the approval of the mayor, a president to
30.10 	serve as chief executive officer and general manager of the
30.11 	nonprofit organization.
30.12 	(e) The procedures in Minnesota Statutes, section 317A.255,
30.13 	subdivision 1, paragraph (b), relating to director conflicts of
30.14 	interest, are not required if the contract or other transaction
30.15 	is between the city and the nonprofit organization.
30.16 		Subd. 4.Rivercentre management; authority to contract
30.17 	with nonprofit organization. The city may enter into an
30.18 	agreement with the nonprofit organization created in subdivision
30.19 	2 to equip, maintain, manage, and operate all or a portion of
30.20 	the RiverCentre complex and to manage and operate a convention
30.21 	bureau to market and promote the city as a tourist or convention
30.22 	center.  Except as otherwise provided in this section, the
30.23 	nonprofit organization may only contract and utilize and expend
30.24 	funds for these purposes under the direction of its governing
30.25 	board, subject to the accounting, financial reporting, and other
30.26 	conditions that the city may prescribe in a contract made under
30.27 	this section between the city and the nonprofit organization.
30.28 	The nonprofit organization may use the services of the office of
30.29 	the city attorney and the city's purchasing department.  All
30.30 	activities performed to carry out these purposes are deemed to
30.31 	be for a public purpose.
30.32 	Subd. 5.[BONDHOLDERS' RIGHTS AND RIVERCENTRE COMPLEX TAX
30.33 	EXEMPTIONS PRESERVED.] (a) The city must protect the rights of
30.34 	holders of bonds issued for the RiverCentre complex, including
30.35 	preserving the tax-exempt status of the bonds.
30.36 	(b) The use and operation of the RiverCentre complex by the
31.1 	nonprofit organization with which the city contracts under this
31.2 	act is a use, lease, or occupancy for public, governmental, and
31.3 	municipal purposes, and the complex is exempt from taxation by
31.4 	the state or any political subdivision of the state during such
31.5 	use, to the extent it would be exempt if the complex was
31.6 	equipped, maintained, managed, and operated by the city.
31.7 	(c) Gross receipts of tickets and admissions to events at
31.8 	the RiverCentre complex sponsored by the nonprofit organization
31.9 	created in this section do not qualify for the sales tax
31.10 	exemption under Minnesota Statutes, section 297A.70, subdivision
31.11 	10.
31.12 		Subd. 6.Applicable general laws. The following statutes
31.13 	apply to the nonprofit organization with which the city
31.14 	contracts under this section the same as they apply to the city:
31.15 	(1) Minnesota Statutes, chapter 13D, the Minnesota Open
31.16 	Meeting Law; and 
31.17 	(2) Minnesota Statutes, chapter 13, the Government Data
31.18 	Practices Act.
31.19 		Subd. 7.Succession. The nonprofit organization with
31.20 	which the city contracts under this section is the successor to
31.21 	all powers, rights, assets, privileges, and interests held and
31.22 	enjoyed by the RiverCentre authority on the effective date of
31.23 	this section, and established by the provisions of Laws 1967,
31.24 	chapter 459, sections 1, 2, 4, and 8, subdivisions 2 and 3,
31.25 	clause (3), as amended; Laws 1982, chapter 523, article 25,
31.26 	sections 4 and 5; Laws 1998, chapter 404, sections 81 and 82;
31.27 	and Minnesota Statutes, section 297A.98.  On the effective date
31.28 	of the contract between the city and the nonprofit organization
31.29 	authorized by this section, the RiverCentre authority ceases to
31.30 	exist for only so long as the contract is in effect, and all
31.31 	other laws or provisions specifically relating to the
31.32 	RiverCentre authority and the RiverCentre complex that are not
31.33 	otherwise referenced in this section, do not apply to the
31.34 	nonprofit organization.
31.35 		Subd. 8.Liability. The nonprofit organization with
31.36 	which the city contracts under this section is a "municipality,"
32.1 	and the officers, directors, employees, and agents of the
32.2 	nonprofit organization are "employees, officers, or agents,"
32.3 	under Minnesota Statutes, chapter 466, relating to tort
32.4 	liability.  The city must defend, save harmless, and indemnify
32.5 	the nonprofit organization, including the nonprofit's officers,
32.6 	directors, employees, and agents, against any claim or demand
32.7 	arising out of the nonprofit organization's performance under
32.8 	the contract.
32.9 	
EFFECTIVE DATE. This section is effective the day after
32.10 	the city council and the chief clerical officer of the city of
32.11 	St. Paul have timely completed their compliance with Minnesota
32.12 	Statutes, section 645.023, subdivisions 2 and 3.

32.13 	Sec. 39. IRON RANGE RESOURCES AND REHABILITATION
32.14 	COMMISSIONER; BONDS AUTHORIZED.
 32.15 		Subdivision 1.Issuance; purpose. Notwithstanding any
32.16 	provision of Minnesota Statutes, chapter 298, to the contrary,
32.17 	the commissioner of Iron Range resources and rehabilitation may
32.18 	issue revenue bonds in a principal amount of $15,000,000 in one
32.19 	or more series, and bonds to refund those bonds.  The proceeds
32.20 	of the bonds must be used to make grants to school districts
32.21 	located in the taconite tax relief area defined in Minnesota
32.22 	Statutes, section 273.134, or the taconite assistance area
32.23 	defined in Minnesota Statutes, section 273.1341, to be used by
32.24 	the school districts to pay for health, safety, and maintenance
32.25 	improvements but only if the school district has levied the
32.26 	maximum amount allowable under law for those purposes.
32.27 		Subd. 2.Appropriation. There is annually appropriated
32.28 	from the distribution of taconite production tax revenues to the
32.29 	taconite environmental protection fund pursuant to Minnesota
32.30 	Statutes, section 298.28, subdivision 11, and to the Douglas J.
32.31 	Johnson economic protection trust pursuant to Minnesota
32.32 	Statutes, section 298.28, subdivisions 9 and 11, in equal
32.33 	shares, an amount sufficient to pay when due the principal and
32.34 	interest on the bonds issued pursuant to subdivision 1.  If the
32.35 	annual distribution to the Douglas J. Johnson economic
32.36 	protection trust is insufficient to pay its share after
33.1 	fulfilling any obligations of the trust under Minnesota
33.2 	Statutes, section 298.225 or 298.293, the deficiency is
33.3 	appropriated from the taconite environmental protection fund.
33.4 	The appropriation under this subdivision terminates upon payment
33.5 	or maturity of the last of the bonds issued under this section.
33.6 		Subd. 3.Credit enhancement. The bonds issued under this
33.7 	section are "debt obligations" and the commissioner of Iron
33.8 	Range resources and rehabilitation is a "district" for purposes
33.9 	of Minnesota Statutes, section 126C.55, provided that advances
33.10 	made under Minnesota Statutes, section 126C.55, subdivision 2,
33.11 	are not subject to Minnesota Statutes, section 126C.55,
33.12 	subdivisions 4 to 7.
33.13 	
EFFECTIVE DATE. This section is effective the day
33.14 	following final enactment.

33.15 	Sec. 40. CROW WING COUNTY SEWER DISTRICT; PILOT PROJECT.
 33.16 		Subdivision 1.Powers. In addition to the powers granted
33.17 	in Minnesota Statutes, chapter 116A, the county board for Crow
33.18 	Wing County, by resolution, may grant the following powers to a
33.19 	sewer district created by the county board under Minnesota
33.20 	Statutes, chapter 116A:
33.21 	(1) provide that an authorized representative of the
33.22 	district, after presentation of credentials, may enter at
33.23 	reasonable times any premise to inspect or maintain an
33.24 	individual sewage treatment system, as defined in Minnesota
33.25 	Statutes, section 115.55, subdivision 1, paragraph (g);
33.26 	(2) include areas of the county within the sewer district
33.27 	that are not contiguous and establish different systems for
33.28 	wastewater treatment in specific areas of the county;
33.29 	(3) provide that each special service area that is managed
33.30 	by the sewer system or combination thereof constitutes a system
33.31 	under Minnesota Statutes, chapter 116A;
33.32 	(4) delegate to the sewer district, by resolution, all or a
33.33 	portion of its administrative and enforcement obligations with
33.34 	respect to individual sewage treatment systems under Minnesota
33.35 	Statutes, chapter 115, and rules adopted by the Pollution
33.36 	Control Agency;
34.1 	(5) modify any individual sewage treatment system to
34.2 	provide reasonable access to it for inspection and maintenance;
34.3 	and 
34.4 	(6) neither the approval nor the waiver of the county
34.5 	board, nor confirmation by order of the district court, is
34.6 	required for the sewer commission to exercise the powers set
34.7 	forth in Minnesota Statutes, section 116A.24.
34.8 		Subd. 2.Report. If the Crow Wing County Board exercises
34.9 	the powers granted under subdivision 1, the county shall report
34.10 	by January 15, 2009, to the senate and house committees with
34.11 	jurisdiction over environmental policy and taxes on the
34.12 	establishment and operation of the sewer district.  The report
34.13 	must include:
34.14 	(1) a description of the implementation of the additional
34.15 	powers granted under subdivision 1;
34.16 	(2) available information on the effectiveness of the
34.17 	additional powers to control pollution in the county; and 
34.18 	(3) any recommendations for changes to Minnesota Statutes,
34.19 	chapter 116A, to broaden the authority for sewer districts to
34.20 	include any of the additional powers granted under subdivision 1.
34.21 	
EFFECTIVE DATE. This section is effective the day
34.22 	following compliance with Minnesota Statutes, section 645.021,
34.23 	subdivision 2.

34.24 	Sec. 41. CITY OF WHITE BEAR LAKE.
 34.25 		Subdivision 1.Payment required. The commissioner of
34.26 	revenue must make payments of $52,482 on each of July 20, 2005,
34.27 	and December 26, 2005, to the city of White Bear Lake.
34.28 		Subd. 2.Appropriation. $104,964 is appropriated from
34.29 	the general fund to the commissioner of revenue to make the
34.30 	payments required in this section.

34.31 	Sec. 42. APPLICATION.
 34.32 	Sections 18, 19, 20, and 43 apply in the counties of Anoka,
34.33 	Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.

34.34 	Sec. 43. REPEALER.
 34.35 	Minnesota Statutes 2004, sections 473.197, subdivisions 1,
34.36 	2, 3, and 5; and 473.39, subdivision 1f, are repealed.

35.1 	Sec. 44. EFFECTIVE DATE.
 35.2 	(a) Section 1 is effective the day after the city council
35.3 	and the chief clerical officer of the city of St. Paul have
35.4 	timely completed their compliance with Minnesota Statutes,
35.5 	section 645.023, subdivisions 2 and 3.
35.6 	(b) Except as otherwise provided, this article is effective
35.7 	the day following final enactment.

35.8 	ARTICLE 2
35.9 	TAX INCREMENT FINANCING

35.10 	Section 1. Minnesota Statutes 2004, section 116J.556, is
35.11 	amended to read:
35.12 	116J.556 LOCAL MATCH REQUIREMENT.
35.13 	(a) In order to qualify for a grant under sections 116J.551
35.14 	to 116J.557, the municipality must pay for at least one-quarter
35.15 	of the project costs as a local match.  The municipality shall
35.16 	pay an amount of the project costs equal to at least 12 percent
35.17 	of the cleanup costs from the municipality's general fund, a
35.18 	property tax levy for that purpose, or other unrestricted money
35.19 	available to the municipality (excluding tax increments).  These
35.20 	unrestricted moneys may be spent for project costs, other than
35.21 	cleanup costs, and qualify for the local match payment equal to
35.22 	12 percent of cleanup costs.  The rest of the local match may be
35.23 	paid with tax increments, regional, state, or federal money
35.24 	available for the redevelopment of brownfields or any other
35.25 	money available to the municipality.
35.26 	(b) If the development authority establishes a tax
35.27 	increment financing district or hazardous substance subdistrict
35.28 	on the site to pay for part of the local match requirement, the
35.29 	district or subdistrict must be decertified when an amount of
35.30 	tax increments equal to no more than three times the costs of
35.31 	implementing the response action plan for the site and the
35.32 	administrative costs for the district or subdistrict have been
35.33 	received, after deducting the amount of the state grant.

35.34 	EFFECTIVE DATE. This section is effective the day
35.35 	following final enactment.

35.36 	Sec. 2. Minnesota Statutes 2004, section 272.02,
36.1 	subdivision 64, is amended to read:
36.2 		Subd. 64.Job opportunity building zone property.  (a)
36.3 	Improvements to real property, and personal property, classified
36.4 	under section 273.13, subdivision 24, and located within a job
36.5 	opportunity building zone, designated under section 469.314, are
36.6 	exempt from ad valorem taxes levied under chapter 275.
36.7 	(b) Improvements to real property, and tangible personal
36.8 	property, of an agricultural production facility located within
36.9 	an agricultural processing facility zone, designated under
36.10 	section 469.314, is exempt from ad valorem taxes levied under
36.11 	chapter 275.
36.12 	(c) For property to qualify for exemption under paragraph
36.13 	(a), the occupant must be a qualified business, as defined in
36.14 	section 469.310.
36.15 	(d) The exemption applies beginning for the first
36.16 	assessment year after designation of the job opportunity
36.17 	building zone by the commissioner of employment and economic
36.18 	development.  The exemption applies to each assessment year that
36.19 	begins during the duration of the job opportunity building zone
36.20 	and to property occupied by July 1 of the assessment year by a
36.21 	qualified business.  This exemption does not apply to:
36.22 	(1) the levy under section 475.61 or similar levy
36.23 	provisions under any other law to pay general obligation bonds;
36.24 	or
36.25 	(2) a levy under section 126C.17, if the levy was approved
36.26 	by the voters before the designation of the job opportunity
36.27 	building zone.
36.28 	(e) This subdivision does not apply to captured net tax
36.29 	capacity in a tax increment financing district to the extent
36.30 	necessary to meet the debt repayment obligations of the
36.31 	authority if the property is also located within an agricultural
36.32 	processing zone.
36.33 	
EFFECTIVE DATE. This section is effective beginning for
36.34 	taxes payable in 2006.

36.35 	Sec. 3. Minnesota Statutes 2004, section 272.0212,
36.36 	subdivision 1, is amended to read:
37.1 		Subdivision 1.Exemption.  All qualified property in a
37.2 	zone is exempt to the extent and for a period up to the duration
37.3 	provided by the zone designation and under sections 469.1731 to
37.4 	469.1735.
37.5 	
EFFECTIVE DATE. This section is effective for development
37.6 	agreements approved after the day following final enactment and
37.7 	beginning for property taxes payable in 2006.

37.8 	Sec. 4. Minnesota Statutes 2004, section 272.0212,
37.9 	subdivision 2, is amended to read:
37.10 		Subd. 2.Limits on exemption. (a) Property in a zone is
37.11 	not exempt under this section from the following:
37.12 	(1) special assessments;
37.13 	(2) ad valorem property taxes specifically levied for the
37.14 	payment of principal and interest on debt obligations; and
37.15 	(3) all taxes levied by a school district, except school
37.16 	referendum levies as defined in section 126C.17.
37.17 	(b) The city may limit the property tax exemption to a
37.18 	shorter period than the duration of the zone or to a percentage
37.19 	of the property taxes payable or both.
37.20 	
EFFECTIVE DATE. This section is effective for development
37.21 	agreements approved after the day following final enactment and
37.22 	beginning for property taxes payable in 2006.

37.23 	Sec. 5. Minnesota Statutes 2004, section 469.174,
37.24 	subdivision 11, is amended to read:
37.25 		Subd. 11.Housing district.  "Housing district" means a
37.26 	type of tax increment financing district which consists of a
37.27 	project, or a portion of a project, intended for occupancy, in
37.28 	part, by persons or families of low and moderate income, as
37.29 	defined in chapter 462A, Title II of the National Housing Act of
37.30 	1934, the National Housing Act of 1959, the United States
37.31 	Housing Act of 1937, as amended, Title V of the Housing Act of
37.32 	1949, as amended, any other similar present or future federal,
37.33 	state, or municipal legislation, or the regulations promulgated
37.34 	under any of those acts.  A district does not qualify as a
37.35 	housing district under this subdivision if the fair market value
37.36 	of the improvements which are constructed in the district for
38.1 	commercial uses or for uses other than low and moderate income
38.2 	housing consists of more than 20 percent of the total fair
38.3 	market value of the planned improvements in the development plan
38.4 	or agreement.  The fair market value of the improvements may be
38.5 	determined using the cost of construction, capitalized income,
38.6 	or other appropriate method of estimating market value , and that
38.7 	satisfies the requirements of section 469.1761.  Housing project
38.8 	means a project, or a portion of a project, that meets all of
38.9 	the qualifications of a housing district under this subdivision,
38.10 	whether or not actually established as a housing district.
38.11 	
EFFECTIVE DATE. This section is effective for districts
38.12 	for which the request for certification was filed with the
38.13 	county auditor after October 5, 1989, except (1) the new
38.14 	language is effective for requests for certification made after
38.15 	June 30, 2005, and (2) the fair market value of the improvements
38.16 	which are constructed for commercial uses in a district for
38.17 	which the request for certification was filed with the county
38.18 	auditor after October 5, 1989, and before July 1, 2005, may not
38.19 	exceed more than 20 percent of total fair market value of the
38.20 	planned improvements in the development plan or agreement.

38.21 	Sec. 6. Minnesota Statutes 2004, section 469.174,
38.22 	subdivision 25, is amended to read:
38.23 		Subd. 25.Increment.  "Increment," "tax increment," "tax
38.24 	increment revenues," "revenues derived from tax increment," and
38.25 	other similar terms for a district include:
38.26 	(1) taxes paid by the captured net tax capacity, but
38.27 	excluding any excess taxes, as computed under section 469.177;
38.28 	(2) the proceeds from the sale or lease of property,
38.29 	tangible or intangible, to the extent the property was purchased
38.30 	by the authority with tax increments;
38.31 	(3) principal and interest received on loans or other
38.32 	advances made by the authority with tax increments; and 
38.33 	(4) interest or other investment earnings on or from tax
38.34 	increments;
38.35 	(5) repayments or return of tax increments made to the
38.36 	authority under agreements for districts for which the request
39.1 	for certification was made after August 1, 1993; and 
39.2 	(6) the market value homestead credit paid to the authority
39.3 	under section 273.1384.
39.4 	
EFFECTIVE DATE. This section is effective for tax
39.5 	increment financing districts, regardless of when the request
39.6 	for certification was made, including districts for which the
39.7 	request for certification was made before August 1, 1979,
39.8 	provided that the amendment to clause (2) applies only to the
39.9 	extent that the underlying provisions of clause (2) apply to the
39.10 	district and to the sale or lease under prior law.  This
39.11 	effective date does not affect the application of clause (1),
39.12 	(3), or (4).

39.13 	Sec. 7. Minnesota Statutes 2004, section 469.175,
39.14 	subdivision 1, is amended to read:
39.15 		Subdivision 1.Tax increment financing plan.  A tax
39.16 	increment financing plan shall contain:
39.17 	(1) a statement of objectives of an authority for the
39.18 	improvement of a project;
39.19 	(2) a statement as to the development program for the
39.20 	project, including the property within the project, if any, that
39.21 	the authority intends to acquire, identified by parcel number,
39.22 	identifiable property name, block, or other appropriate means
39.23 	indicating the area in which the authority intends to acquire
39.24 	properties;
39.25 	(3) a list of any development activities that the plan
39.26 	proposes to take place within the project, for which contracts
39.27 	have been entered into at the time of the preparation of the
39.28 	plan, including the names of the parties to the contract, the
39.29 	activity governed by the contract, the cost stated in the
39.30 	contract, and the expected date of completion of that activity;
39.31 	(4) identification or description of the type of any other
39.32 	specific development reasonably expected to take place within
39.33 	the project, and the date when the development is likely to
39.34 	occur;
39.35 	(5) estimates of the following:
39.36 	(i) cost of the project, including administrative expenses,
40.1 	except that if part of the cost of the project is paid or
40.2 	financed with increment from the tax increment financing
40.3 	district, the tax increment financing plan for the district must
40.4 	contain an estimate of the amount of the cost of the project,
40.5 	including administrative expenses, that will be paid or financed
40.6 	with tax increments from the district;
40.7 	(ii) amount of bonded indebtedness to be incurred;
40.8 	(iii) sources of revenue to finance or otherwise pay public
40.9 	costs;
40.10 	(iv) the most recent net tax capacity of taxable real
40.11 	property within the tax increment financing district and within
40.12 	any subdistrict;
40.13 	(v) the estimated captured net tax capacity of the tax
40.14 	increment financing district at completion; and
40.15 	(vi) the duration of the tax increment financing district's
40.16 	and any subdistrict's existence;
40.17 	(6) statements of the authority's alternate estimates of
40.18 	the impact of tax increment financing on the net tax capacities
40.19 	of all taxing jurisdictions in which the tax increment financing
40.20 	district is located in whole or in part.  For purposes of one
40.21 	statement, the authority shall assume that the estimated
40.22 	captured net tax capacity would be available to the taxing
40.23 	jurisdictions without creation of the district, and for purposes
40.24 	of the second statement, the authority shall assume that none of
40.25 	the estimated captured net tax capacity would be available to
40.26 	the taxing jurisdictions without creation of the district or
40.27 	subdistrict;
40.28 	(7) identification and description of studies and analyses
40.29 	used to make the determination set forth in subdivision 3,
40.30 	clause (2); and
40.31 	(8) identification of all parcels to be included in the
40.32 	district or any subdistrict.
40.33 	
EFFECTIVE DATE. This section is effective for tax
40.34 	increment financing plans and amendments to tax increment
40.35 	financing plans approved after June 30, 2005.

40.36 	Sec. 8. Minnesota Statutes 2004, section 469.175,
41.1 	subdivision 2, is amended to read:
41.2 		Subd. 2.Consultations; comment and filing. (a) Before
41.3 	formation of a tax increment financing district, the authority
41.4 	shall provide the county auditor and clerk of the school board
41.5 	with the proposed tax increment financing plan for the district
41.6 	and the authority's estimate of the fiscal and economic
41.7 	implications of the proposed tax increment financing district.
41.8 	The authority must provide the proposed tax increment financing
41.9 	plan and the information on the fiscal and economic implications
41.10 	of the plan to the county auditor and the clerk of the school
41.11 	district board at least 30 days before the public hearing
41.12 	required by subdivision 3.  The information on the fiscal and
41.13 	economic implications may be included in or as part of the tax
41.14 	increment financing plan.  The county auditor and clerk of the
41.15 	school board shall provide copies to the members of the boards,
41.16 	as directed by their respective boards.  The 30-day requirement
41.17 	is waived if the boards of the county and school district submit
41.18 	written comments on the proposal and any modification of the
41.19 	proposal to the authority after receipt of the information.
41.20 	(b) For purposes of this subdivision, "fiscal and economic
41.21 	implications of the proposed tax increment financing district"
41.22 	includes:
41.23 	(1) an estimate of the total amount of tax increment that
41.24 	will be generated over the life of the district;
41.25 	(2) a description of the probable impact of the district on
41.26 	city-provided services such as police and fire protection,
41.27 	public infrastructure, and borrowing costs attributable to the
41.28 	district;
41.29 	(3) the estimated amount of tax increments over the life of
41.30 	the district that would be attributable to school district
41.31 	levies, assuming the school district's share of the total local
41.32 	tax rate for all taxing jurisdictions remained the same;
41.33 	(4) the estimated amount of tax increments over the life of
41.34 	the district that would be attributable to county levies,
41.35 	assuming the county's share of the total local tax rate for all
41.36 	taxing jurisdictions remained the same; and 
42.1 	(5) any additional information requested by the county or
42.2 	the school district that would enable it to determine additional
42.3 	costs that will accrue to it due to the development proposed for
42.4 	the district.
42.5 	
EFFECTIVE DATE. This section is effective for all
42.6 	districts for which certification is requested after December
42.7 	31, 2005.

42.8 	Sec. 9. Minnesota Statutes 2004, section 469.175,
42.9 	subdivision 4a, is amended to read:
42.10 		Subd. 4a.Filing plan with state.  (a) The authority must
42.11 	file a copy of the tax increment financing plan and amendments
42.12 	to the plan with the commissioner of revenue and the state
42.13 	auditor.  The authority must also file a copy of the development
42.14 	plan or the project plan for the project area with the
42.15 	commissioner of revenue.  The commissioner of revenue shall
42.16 	provide a copy of a plan to the state auditor upon request and
42.17 	the state auditor.
42.18 	(b) Filing under this subdivision must be made within 60
42.19 	days after the latest of:
42.20 	(1) the filing of the request for certification of the
42.21 	district;
42.22 	(2) approval of the plan by the municipality; or
42.23 	(3) adoption of the plan by the authority.
42.24 	
EFFECTIVE DATE. This section is effective for plans and
42.25 	amendments approved after June 30, 2005.

42.26 	Sec. 10. Minnesota Statutes 2004, section 469.175,
42.27 	subdivision 5, is amended to read:
42.28 		Subd. 5.Annual disclosure.  An annual statement showing
42.29 	for each district the information required to be reported under
42.30 	subdivision 6, paragraph (c), clauses (1), (2), (3), (11),
42.31 	(12), (20), and (21) (18), and (19); the amounts of tax
42.32 	increment received and expended in the reporting period; and any
42.33 	additional information the authority deems necessary must be
42.34 	published in a newspaper of general circulation in the
42.35 	municipality that approved the tax increment financing plan.
42.36 	The annual statement must inform readers that additional
43.1 	information regarding each district may be obtained from the
43.2 	authority, and must explain how the additional information may
43.3 	be requested.  The authority must publish the annual statement
43.4 	for a year no later than August 15 of the next year.  The
43.5 	authority must identify the newspaper of general circulation in
43.6 	the municipality to which the annual statement has been or will
43.7 	be submitted for publication and provide a copy of the annual
43.8 	statement to the county board, the county auditor, the school
43.9 	board, the state auditor, and, if the authority is other than
43.10 	the municipality, the governing body of the municipality on or
43.11 	before August 1 of the year in which the statement must be
43.12 	published.
43.13 	The disclosure requirements imposed by this subdivision
43.14 	apply to districts certified before, on, or after August 1, 1979.
43.15 	
EFFECTIVE DATE. This section is effective for reports
43.16 	required to be filed after December 31, 2005.

43.17 	Sec. 11. Minnesota Statutes 2004, section 469.175,
43.18 	subdivision 6, is amended to read:
43.19 		Subd. 6.Annual financial reporting.  (a) The state
43.20 	auditor shall develop a uniform system of accounting and
43.21 	financial reporting for tax increment financing districts.  The
43.22 	system of accounting and financial reporting shall, as nearly as
43.23 	possible:
43.24 	(1) provide for full disclosure of the sources and uses of
43.25 	public funds in the district;
43.26 	(2) permit comparison and reconciliation with the affected
43.27 	local government's accounts and financial reports;
43.28 	(3) permit auditing of the funds expended on behalf of a
43.29 	district, including a single district that is part of a
43.30 	multidistrict project or that is funded in part or whole through
43.31 	the use of a development account funded with tax increments from
43.32 	other districts or with other public money;
43.33 	(4) be consistent with generally accepted accounting
43.34 	principles.
43.35 	(b) The authority must annually submit to the state auditor
43.36 	a financial report in compliance with paragraph (a).  Copies of
44.1 	the report must also be provided to the county auditor and to
44.2 	the governing body of the municipality, if the authority is not
44.3 	the municipality.  To the extent necessary to permit compliance
44.4 	with the requirement of financial reporting, the county and any
44.5 	other appropriate local government unit or private entity must
44.6 	provide the necessary records or information to the authority or
44.7 	the state auditor as provided by the system of accounting and
44.8 	financial reporting developed pursuant to paragraph (a).  The
44.9 	authority must submit the annual report for a year on or before
44.10 	August 1 of the next year.
44.11 	(c) The annual financial report must also include the
44.12 	following items:
44.13 	(1) the original net tax capacity of the district and any
44.14 	subdistrict under section 469.177, subdivision 1;
44.15 	(2) the net tax capacity for the reporting period of the
44.16 	district and any subdistrict;
44.17 	(3) the captured net tax capacity of the district;
44.18 	(4) any fiscal disparity deduction from the captured net
44.19 	tax capacity under section 469.177, subdivision 3;
44.20 	(5) the captured net tax capacity retained for tax
44.21 	increment financing under section 469.177, subdivision 2,
44.22 	paragraph (a), clause (1);
44.23 	(6) any captured net tax capacity distributed among
44.24 	affected taxing districts under section 469.177, subdivision 2,
44.25 	paragraph (a), clause (2);
44.26 	(7) the type of district;
44.27 	(8) the date the municipality approved the tax increment
44.28 	financing plan and the date of approval of any modification of
44.29 	the tax increment financing plan, the approval of which requires
44.30 	notice, discussion, a public hearing, and findings under
44.31 	subdivision 4, paragraph (a);
44.32 	(9) the date the authority first requested certification of
44.33 	the original net tax capacity of the district and the date of
44.34 	the request for certification regarding any parcel added to the
44.35 	district;
44.36 	(10) the date the county auditor first certified the
45.1 	original net tax capacity of the district and the date of
45.2 	certification of the original net tax capacity of any parcel
45.3 	added to the district;
45.4 	(11) the month and year in which the authority has received
45.5 	or anticipates it will receive the first increment from the
45.6 	district;
45.7 	(12) the date the district must be decertified;
45.8 	(13) for the reporting period and prior years of the
45.9 	district, the actual amount received from, at least, the
45.10 	following categories:
45.11 	(i) tax increments paid by the captured net tax capacity
45.12 	retained for tax increment financing under section 469.177,
45.13 	subdivision 2, paragraph (a), clause (1), but excluding any
45.14 	excess taxes;
45.15 	(ii) tax increments that are interest or other investment
45.16 	earnings on or from tax increments;
45.17 	(iii) tax increments that are proceeds from the sale or
45.18 	lease of property, tangible or intangible, purchased by the
45.19 	authority with tax increments;
45.20 	(iv) tax increments that are repayments of loans or other
45.21 	advances made by the authority with tax increments;
45.22 	(v) bond or loan proceeds;
45.23 	(vi) special assessments;
45.24 	(vii) grants; and 
45.25 	(viii) transfers from funds not exclusively associated with
45.26 	the district; and 
45.27 	(ix) the market value homestead credit paid to the
45.28 	authority under section 273.1384;
45.29 	(14) for the reporting period and for the prior years of
45.30 	the district, the actual amount expended for, at least, the
45.31 	following categories:
45.32 	(i) acquisition of land and buildings through condemnation
45.33 	or purchase;
45.34 	(ii) site improvements or preparation costs;
45.35 	(iii) installation of public utilities, parking facilities,
45.36 	streets, roads, sidewalks, or other similar public improvements;
46.1 	(iv) administrative costs, including the allocated cost of
46.2 	the authority;
46.3 	(v) public park facilities, facilities for social,
46.4 	recreational, or conference purposes, or other similar public
46.5 	improvements; and
46.6 	(vi) transfers to funds not exclusively associated with the
46.7 	district;
46.8 	(15) for properties sold to developers, the total cost of
46.9 	the property to the authority and the price paid by the
46.10 	developer;
46.11 	(16) the amount of any payments and the value of any
46.12 	in-kind benefits, such as physical improvements and the use of
46.13 	building space, that are paid or financed with tax increments
46.14 	and are provided to another governmental unit other than the
46.15 	municipality during the reporting period;
46.16 	(17) the amount of any payments for activities and
46.17 	improvements located outside of the district that are paid for
46.18 	or financed with tax increments;
46.19 	(18) (16) the amount of payments of principal and interest
46.20 	that are made during the reporting period on any nondefeased:
46.21 	(i) general obligation tax increment financing bonds;
46.22 	(ii) other tax increment financing bonds; and
46.23 	(iii) notes and pay-as-you-go contracts;
46.24 	(19) (17) the principal amount, at the end of the reporting
46.25 	period, of any nondefeased:
46.26 	(i) general obligation tax increment financing bonds;
46.27 	(ii) other tax increment financing bonds; and
46.28 	(iii) notes and pay-as-you-go contracts;
46.29 	(20) (18) the amount of principal and interest payments
46.30 	that are due for the current calendar year on any nondefeased:
46.31 	(i) general obligation tax increment financing bonds;
46.32 	(ii) other tax increment financing bonds; and
46.33 	(iii) notes and pay-as-you-go contracts;
46.34 	(21) (19) if the fiscal disparities contribution under
46.35 	chapter 276A or 473F for the district is computed under section
46.36 	469.177, subdivision 3, paragraph (a), the amount of increased
47.1 	property taxes imposed on other properties in the municipality
47.2 	that approved the tax increment financing plan as a result of
47.3 	the fiscal disparities contribution;
47.4 	(22) whether the tax increment financing plan or other
47.5 	governing document permits increment revenues to be expended:
47.6 	(i) to pay bonds, the proceeds of which were or may be
47.7 	expended on activities outside of the district;
47.8 	(ii) for deposit into a common bond fund from which money
47.9 	may be expended on activities located outside of the district;
47.10 	or 
47.11 	(iii) to otherwise finance activities located outside of
47.12 	the tax increment financing district;
47.13 	(23) (20) the estimate, if any, contained in the tax
47.14 	increment financing plan of the amount of the cost of the
47.15 	project, including administrative expenses, that will be paid or
47.16 	financed with tax increment; and
47.17 	(24) (21) any additional information the state auditor may
47.18 	require.
47.19 	(d) The commissioner of revenue shall prescribe the method
47.20 	of calculating the increased property taxes under paragraph (c),
47.21 	clause (21) (19), and the form of the statement disclosing this
47.22 	information on the annual statement under subdivision 5.
47.23 	(e) The reporting requirements imposed by this subdivision
47.24 	apply to districts certified before, on, and after August 1,
47.25 	1979.
47.26 	
EFFECTIVE DATE. This section is effective for reports
47.27 	required to be filed after December 31, 2005.

47.28 	Sec. 12. Minnesota Statutes 2004, section 469.176,
47.29 	subdivision 2, is amended to read:
47.30 		Subd. 2.Excess increments.  (a) The authority shall
47.31 	annually determine the amount of excess increments for a
47.32 	district, if any.  This determination must be based on the tax
47.33 	increment financing plan in effect on December 31 of the year
47.34 	and the increments and other revenues received as of December 31
47.35 	of the year. The authority must spend or return the excess
47.36 	increments under paragraph (c) within nine months after the end
48.1 	of the year.
48.2 	(b) For purposes of this subdivision, "excess increments"
48.3 	equals the excess of:
48.4 	(1) total increments collected from the district since its
48.5 	certification, reduced by any excess increments paid under
48.6 	paragraph (c), clause (4), for a prior year, over
48.7 	(2) the total costs authorized by the tax increment
48.8 	financing plan to be paid with increments from the district,
48.9 	reduced, but not below zero, by the sum of:
48.10 	(i) the amounts of those authorized costs that have been
48.11 	paid from sources other than tax increments from the district;
48.12 	(ii) revenues, other than tax increments from the district,
48.13 	that are dedicated for or otherwise required to be used to pay
48.14 	those authorized costs and that the authority has received and
48.15 	that are not included in item (i); and 
48.16 	(iii) the amount of principal and interest obligations due
48.17 	on outstanding bonds after December 31 of the year and not
48.18 	prepaid under paragraph (c) in a prior year; and 
48.19 	(iv) increased by the sum of the transfers of increments
48.20 	made under section 469.1763, subdivision 6, to reduce deficits
48.21 	in other districts made by December 31 of the year.
48.22 	(c) The authority shall use excess increment only to do one
48.23 	or more of the following:
48.24 	(1) prepay any outstanding bonds;
48.25 	(2) discharge the pledge of tax increment for any
48.26 	outstanding bonds;
48.27 	(3) pay into an escrow account dedicated to the payment of
48.28 	any outstanding bonds; or
48.29 	(4) return the excess amount to the county auditor who
48.30 	shall distribute the excess amount to the city or town, county,
48.31 	and school district in which the tax increment financing
48.32 	district is located in direct proportion to their respective
48.33 	local tax rates.
48.34 	(d) For purposes of a district for which the request for
48.35 	certification was made prior to August 1, 1979, excess
48.36 	increments equal the amount of increments on hand on December
49.1 	31, less the principal and interest obligations due on
49.2 	outstanding bonds or advances, qualifying under subdivision 1c,
49.3 	clauses (1), (2), and (5), after December 31 of the year and not
49.4 	prepaid under paragraph (c).
49.5 	(e) The county auditor must report to the commissioner of
49.6 	education the amount of any excess tax increment distributed to
49.7 	a school district within 30 days of the distribution.
49.8 	(f) For purposes of this subdivision, "outstanding bonds"
49.9 	means bonds which are secured by increments from the district.
49.10 	
EFFECTIVE DATE. This section is effective for districts,
49.11 	regardless of when the request for certification was made, and
49.12 	applies to calculations of excess increments beginning in
49.13 	calendar year 2005.

49.14 	Sec. 13. Minnesota Statutes 2004, section 469.176,
49.15 	subdivision 4d, is amended to read:
49.16 		Subd. 4d.Housing districts.  Revenue derived from tax
49.17 	increment from a housing district must be used solely to finance
49.18 	the cost of housing projects as defined in section sections 
49.19 	469.174, subdivision 11, and 469.1761.  The cost of public
49.20 	improvements directly related to the housing projects and the
49.21 	allocated administrative expenses of the authority may be
49.22 	included in the cost of a housing project.
49.23 	
EFFECTIVE DATE. This section is effective for all
49.24 	districts to which the provisions of Minnesota Statutes, section
49.25 	469.1761, apply.

49.26 	Sec. 14. Minnesota Statutes 2004, section 469.1761,
49.27 	subdivision 1, is amended to read:
49.28 		Subdivision 1.Requirement imposed. (a) In order for a
49.29 	tax increment financing district to qualify as a housing
49.30 	district,:
49.31 	(1) the income limitations provided in this section must be
49.32 	satisfied; and 
49.33 	(2) no more than 20 percent of the square footage of
49.34 	buildings that receive assistance from tax increments may
49.35 	consist of commercial, retail, or other nonresidential uses.
49.36 	(b) The requirements imposed by this section apply to
50.1 	residential property receiving assistance financed with tax
50.2 	increments, including interest reduction, land transfers at less
50.3 	than the authority's cost of acquisition, utility service or
50.4 	connections, roads, parking facilities,or other subsidies.  The
50.5 	provisions of this section do not apply to districts located in
50.6 	a targeted area as defined in section 462C.02, subdivision 9,
50.7 	clause (e).
50.8 	
EFFECTIVE DATE. This section is effective for districts
50.9 	for which the request for certification was made after June 30,
50.10 	2005.

50.11 	Sec. 15. Minnesota Statutes 2004, section 469.1761,
50.12 	subdivision 3, is amended to read:
50.13 		Subd. 3.Rental property.  For residential rental
50.14 	property, the property must satisfy the income requirements for
50.15 	a qualified residential rental project as defined in section
50.16 	142(d) of the Internal Revenue Code. A property also satisfies
50.17 	the requirements of section 142(d) if 50 percent of the
50.18 	residential units in the project are occupied by individuals
50.19 	whose income is 80 percent or less of area median gross income.
50.20 	The requirements of this subdivision apply for the duration of
50.21 	the tax increment financing district.
50.22 	
EFFECTIVE DATE. This section is effective for districts
50.23 	for which the request for certification was made after June 30,
50.24 	2004.

50.25 	Sec. 16. Minnesota Statutes 2004, section 469.1763,
50.26 	subdivision 2, is amended to read:
50.27 		Subd. 2.Expenditures outside district.  (a) For each tax
50.28 	increment financing district, an amount equal to at least 75
50.29 	percent of the total revenue derived from tax increments paid by
50.30 	properties in the district must be expended on activities in the
50.31 	district or to pay bonds, to the extent that the proceeds of the
50.32 	bonds were used to finance activities in the district or to pay,
50.33 	or secure payment of, debt service on credit enhanced bonds.
50.34 	For districts, other than redevelopment districts for which the
50.35 	request for certification was made after June 30, 1995, the
50.36 	in-district percentage for purposes of the preceding sentence is
51.1 	80 percent.  Not more than 25 percent of the total revenue
51.2 	derived from tax increments paid by properties in the district
51.3 	may be expended, through a development fund or otherwise, on
51.4 	activities outside of the district but within the defined
51.5 	geographic area of the project except to pay, or secure payment
51.6 	of, debt service on credit enhanced bonds.  For districts, other
51.7 	than redevelopment districts for which the request for
51.8 	certification was made after June 30, 1995, the pooling
51.9 	percentage for purposes of the preceding sentence is 20
51.10 	percent.  The revenue derived from tax increments for the
51.11 	district that are expended on costs under section 469.176,
51.12 	subdivision 4h, paragraph (b), may be deducted first before
51.13 	calculating the percentages that must be expended within and
51.14 	without the district.
51.15 	(b) In the case of a housing district, a housing project,
51.16 	as defined in section 469.174, subdivision 11, is an activity in
51.17 	the district.
51.18 	(c) All administrative expenses are for activities outside
51.19 	of the district, except that if the only expenses for activities
51.20 	outside of the district under this subdivision are for the
51.21 	purposes described in paragraph (d), administrative expenses
51.22 	will be considered as expenditures for activities in the
51.23 	district.
51.24 	(d) The authority may elect, in the tax increment financing
51.25 	plan for the district, to increase by up to ten percentage
51.26 	points the permitted amount of expenditures for activities
51.27 	located outside the geographic area of the district under
51.28 	paragraph (a).  As permitted by section 469.176, subdivision 4k,
51.29 	the expenditures, including the permitted expenditures under
51.30 	paragraph (a), need not be made within the geographic area of
51.31 	the project.  Expenditures that meet the requirements of this
51.32 	paragraph are legally permitted expenditures of the district,
51.33 	notwithstanding section 469.176, subdivisions 4b, 4c, and 4j.
51.34 	To qualify for the increase under this paragraph, the
51.35 	expenditures must:
51.36 	(1) be used exclusively to assist housing that meets the
52.1 	requirement for a qualified low-income building, as that term is
52.2 	used in section 42 of the Internal Revenue Code;
52.3 	(2) not exceed the qualified basis of the housing, as
52.4 	defined under section 42(c) of the Internal Revenue Code, less
52.5 	the amount of any credit allowed under section 42 of the
52.6 	Internal Revenue Code; and
52.7 	(3) be used to:
52.8 	(i) acquire and prepare the site of the housing;
52.9 	(ii) acquire, construct, or rehabilitate the housing; or
52.10 	(iii) make public improvements directly related to the
52.11 	housing.
52.12 	(e) For a district created within a biotechnology and
52.13 	health sciences industry zone as defined in section 469.330,
52.14 	subdivision 6, tax increment derived from such a district may be
52.15 	expended outside of the district but within the zone only for
52.16 	expenditures required for the construction of public
52.17 	infrastructure necessary to support the activities of the zone.

52.18 	Sec. 17. Minnesota Statutes 2004, section 469.1763,
52.19 	subdivision 6, is amended to read:
52.20 		Subd. 6.Pooling permitted for deficits.  (a) This
52.21 	subdivision applies only to districts for which the request for
52.22 	certification was made before August 1, 2001, and without regard
52.23 	to whether the request for certification was made prior to
52.24 	August 1, 1979.
52.25 	(b) The municipality for the district may transfer
52.26 	available increments from another tax increment financing
52.27 	district located in the municipality, if the transfer is
52.28 	necessary to eliminate a deficit in the district to which the
52.29 	increments are transferred.  A deficit in the district for
52.30 	purposes of this subdivision means the lesser of the following
52.31 	two amounts:
52.32 	(1)(i) the amount due during the calendar year to pay
52.33 	preexisting obligations of the district; minus
52.34 	(ii) the total increments collected or to be collected from
52.35 	properties located within the district that are available for
52.36 	the calendar year including amounts collected in prior years
53.1 	that are currently available; plus
53.2 	(iii) total increments from properties located in other
53.3 	districts in the municipality including amounts collected in
53.4 	prior years that are available to be used to meet the district's
53.5 	obligations under this section, excluding this subdivision, or
53.6 	other provisions of law (but excluding a special tax under
53.7 	section 469.1791 and the grant program under Laws 1997, chapter
53.8 	231, article 1, section 19, or Laws 2001, First Special Session
53.9 	chapter 5); or
53.10 	(2) the reduction in increments collected from properties
53.11 	located in the district for the calendar year as a result of the
53.12 	changes in class rates in Laws 1997, chapter 231, article 1;
53.13 	Laws 1998, chapter 389, article 2; and Laws 1999, chapter 243,
53.14 	and Laws 2001, First Special Session chapter 5, or the
53.15 	elimination of the general education tax levy under Laws 2001,
53.16 	First Special Session chapter 5.
53.17 	The authority may compute the deficit amount under clause
53.18 	(1) only (without regard to the limit under clause (2)) if the
53.19 	authority makes an irrevocable commitment, by resolution, to use
53.20 	increments from the district to which increments are to be
53.21 	transferred and any transferred increments are only used to pay
53.22 	preexisting obligations and administrative expenses for the
53.23 	district that are required to be paid under section 469.176,
53.24 	subdivision 4h, paragraph (a).
53.25 	(c) A preexisting obligation means:
53.26 	(1) bonds issued and sold before August 1, 2001, or bonds
53.27 	issued pursuant to a binding contract requiring the issuance of
53.28 	bonds entered into before July 1, 2001, and bonds issued to
53.29 	refund such bonds or to reimburse expenditures made in
53.30 	conjunction with a signed contractual agreement entered into
53.31 	before August 1, 2001, to the extent that the bonds are secured
53.32 	by a pledge of increments from the tax increment financing
53.33 	district; and
53.34 	(2) binding contracts entered into before August 1, 2001,
53.35 	to the extent that the contracts require payments secured by a
53.36 	pledge of increments from the tax increment financing district.
54.1 	(d) The municipality may require a development authority,
54.2 	other than a seaway port authority, to transfer available
54.3 	increments including amounts collected in prior years that are
54.4 	currently available for any of its tax increment financing
54.5 	districts in the municipality to make up an insufficiency in
54.6 	another district in the municipality, regardless of whether the
54.7 	district was established by the development authority or another
54.8 	development authority.  This authority applies notwithstanding
54.9 	any law to the contrary, but applies only to a development
54.10 	authority that:
54.11 	(1) was established by the municipality; or
54.12 	(2) the governing body of which is appointed, in whole or
54.13 	part, by the municipality or an officer of the municipality or
54.14 	which consists, in whole or part, of members of the governing
54.15 	body of the municipality.  The municipality may use this
54.16 	authority only after it has first used all available increments
54.17 	of the receiving development authority to eliminate the
54.18 	insufficiency and exercised any permitted action under section
54.19 	469.1792, subdivision 3, for preexisting districts of the
54.20 	receiving development authority to eliminate the insufficiency.
54.21 	(e) The authority under this subdivision to spend tax
54.22 	increments outside of the area of the district from which the
54.23 	tax increments were collected:
54.24 	(1) is an exception to the restrictions under section
54.25 	469.176, subdivision subdivisions 4b, 4c, 4d, 4e,4i, and 4j;
54.26 	the expenditure limits under section 469.176, subdivision 1c;
54.27 	and the other provisions of this section,;and the percentage
54.28 	restrictions under subdivision 2 must be calculated after
54.29 	deducting increments spent under this subdivision from the total
54.30 	increments for the district; and
54.31 	(2) applies notwithstanding the provisions of the Tax
54.32 	Increment Financing Act in effect for districts for which the
54.33 	request for certification was made before June 30, 1982, or any
54.34 	other law to the contrary.
54.35 	(f) If a preexisting obligation requires the development
54.36 	authority to pay an amount that is limited to the increment from
55.1 	the district or a specific development within the district and
55.2 	if the obligation requires paying a higher amount to the extent
55.3 	that increments are available, the municipality may determine
55.4 	that the amount due under the preexisting obligation equals the
55.5 	higher amount and may authorize the transfer of increments under
55.6 	this subdivision to pay up to the higher amount.  The existence
55.7 	of a guarantee of obligations by the individual or entity that
55.8 	would receive the payment under this paragraph is disregarded in
55.9 	the determination of eligibility to pool under this
55.10 	subdivision.  The authority to transfer increments under this
55.11 	paragraph may only be used to the extent that the payment of all
55.12 	other preexisting obligations in the municipality due during the
55.13 	calendar year have been satisfied.
55.14 	(g) For transfers of increments made in calendar year 2005
55.15 	and later, the reduction in increments as a result of the
55.16 	elimination of the general education tax levy for purposes of
55.17 	paragraph (b), clause (2), for a taxes payable year equals the
55.18 	general education tax rate for the school district under
55.19 	Minnesota Statutes 2000, section 273.1382, subdivision 1, for
55.20 	taxes payable in 2001, multiplied by the captured tax capacity
55.21 	of the district for the current taxes payable year.
55.22 	
EFFECTIVE DATE. This section applies to transfers of
55.23 	increments made after the effective date of the original
55.24 	enactment of Minnesota Statutes, section 469.1763, subdivision 6.

55.25 	Sec. 18. Minnesota Statutes 2004, section 469.177,
55.26 	subdivision 1, is amended to read:
55.27 		Subdivision 1.Original net tax capacity.  (a) Upon or
55.28 	after adoption of a tax increment financing plan, the auditor of
55.29 	any county in which the district is situated shall, upon request
55.30 	of the authority, certify the original net tax capacity of the
55.31 	tax increment financing district and that portion of the
55.32 	district overlying any subdistrict as described in the tax
55.33 	increment financing plan and shall certify in each year
55.34 	thereafter the amount by which the original net tax capacity has
55.35 	increased or decreased as a result of a change in tax exempt
55.36 	status of property within the district and any subdistrict,
56.1 	reduction or enlargement of the district or changes pursuant to
56.2 	subdivision 4.
56.3 	(b) If the classification under section 273.13 of property
56.4 	located in a district changes to a classification that has a
56.5 	different assessment ratio, the original net tax capacity of
56.6 	that property must be redetermined at the time when its use is
56.7 	changed as if the property had originally been classified in the
56.8 	same class in which it is classified after its use is changed.
56.9 	(c) The amount to be added to the original net tax capacity
56.10 	of the district as a result of previously tax exempt real
56.11 	property within the district becoming taxable equals the net tax
56.12 	capacity of the real property as most recently assessed pursuant
56.13 	to section 273.18 or, if that assessment was made more than one
56.14 	year prior to the date of title transfer rendering the property
56.15 	taxable, the net tax capacity assessed by the assessor at the
56.16 	time of the transfer.  If improvements are made to tax exempt
56.17 	property after certification of the district and before the
56.18 	parcel becomes taxable, the assessor shall, at the request of
56.19 	the authority, separately assess the estimated market value of
56.20 	the improvements.  If the property becomes taxable, the county
56.21 	auditor shall add to original net tax capacity, the net tax
56.22 	capacity of the parcel, excluding the separately assessed
56.23 	improvements.  If substantial taxable improvements were made to
56.24 	a parcel after certification of the district and if the property
56.25 	later becomes tax exempt, in whole or part, as a result of the
56.26 	authority acquiring the property through foreclosure or exercise
56.27 	of remedies under a lease or other revenue agreement or as a
56.28 	result of tax forfeiture, the amount to be added to the original
56.29 	net tax capacity of the district as a result of the property
56.30 	again becoming taxable is the amount of the parcel's value that
56.31 	was included in original net tax capacity when the parcel was
56.32 	first certified.  The amount to be added to the original net tax
56.33 	capacity of the district as a result of enlargements equals the
56.34 	net tax capacity of the added real property as most recently
56.35 	certified by the commissioner of revenue as of the date of
56.36 	modification of the tax increment financing plan pursuant to
57.1 	section 469.175, subdivision 4.
57.2 	(d) If the net tax capacity of a property increases because
57.3 	the property no longer qualifies under the Minnesota
57.4 	Agricultural Property Tax Law, section 273.111; the Minnesota
57.5 	Open Space Property Tax Law, section 273.112; or the
57.6 	Metropolitan Agricultural Preserves Act, chapter 473H, or
57.7 	because platted, unimproved property is improved or three years
57.8 	pass market value is increased after approval of the plat under
57.9 	section 273.11, subdivision 1 14, 14a, or 14b, the increase in
57.10 	net tax capacity must be added to the original net tax capacity.
57.11 	(e) The amount to be subtracted from the original net tax
57.12 	capacity of the district as a result of previously taxable real
57.13 	property within the district becoming tax exempt, or a reduction
57.14 	in the geographic area of the district, shall be the amount of
57.15 	original net tax capacity initially attributed to the property
57.16 	becoming tax exempt or being removed from the district.  If the
57.17 	net tax capacity of property located within the tax increment
57.18 	financing district is reduced by reason of a court-ordered
57.19 	abatement, stipulation agreement, voluntary abatement made by
57.20 	the assessor or auditor or by order of the commissioner of
57.21 	revenue, the reduction shall be applied to the original net tax
57.22 	capacity of the district when the property upon which the
57.23 	abatement is made has not been improved since the date of
57.24 	certification of the district and to the captured net tax
57.25 	capacity of the district in each year thereafter when the
57.26 	abatement relates to improvements made after the date of
57.27 	certification.  The county auditor may specify reasonable form
57.28 	and content of the request for certification of the authority
57.29 	and any modification thereof pursuant to section 469.175,
57.30 	subdivision 4.
57.31 	(f) If a parcel of property contained a substandard
57.32 	building that was demolished or removed and if the authority
57.33 	elects to treat the parcel as occupied by a substandard building
57.34 	under section 469.174, subdivision 10, paragraph (b), the
57.35 	auditor shall certify the original net tax capacity of the
57.36 	parcel using the greater of (1) the current net tax capacity of
58.1 	the parcel, or (2) the estimated market value of the parcel for
58.2 	the year in which the building was demolished or removed, but
58.3 	applying the class rates for the current year.
58.4 	(g) For a redevelopment district qualifying under section
58.5 	469.174, subdivision 10, paragraph (a), clause (4), as a
58.6 	qualified disaster area, the auditor shall certify the value of
58.7 	the land as the original tax capacity for any parcel in the
58.8 	district that contains a building that suffered substantial
58.9 	damage as a result of the disaster or emergency.
58.10 	
EFFECTIVE DATE. This section is effective for land
58.11 	platted on or after August 1, 1991.

58.12 	Sec. 19. Minnesota Statutes 2004, section 469.1771,
58.13 	subdivision 5, is amended to read:
58.14 		Subd. 5.Disposition of payments.  If the authority does
58.15 	not have sufficient increments or other available money to make
58.16 	a payment required by this section, the municipality that
58.17 	approved the district must use any available money to make the
58.18 	payment including the levying of property taxes.  Money received
58.19 	by the county auditor under this section must be distributed as
58.20 	excess increments under section 469.176, subdivision 2,
58.21 	paragraph (a) (c), clause (4), except that if the county auditor
58.22 	receives the payment after (1) 60 days from a municipality's
58.23 	receipt of the state auditor's notification under subdivision 1,
58.24 	paragraph (c), of noncompliance requiring the payment, or (2)
58.25 	the commencement of an action by the county attorney to compel
58.26 	the payment, then no distributions may be made to the
58.27 	municipality that approved the tax increment financing district.
58.28 	
EFFECTIVE DATE. This section is effective at the same
58.29 	time as the amendments to Minnesota Statutes, section 469.176,
58.30 	subdivision 2, by Laws 2003, chapter 127, article 10, section 11.

58.31 	Sec. 20. Minnesota Statutes 2004, section 469.178,
58.32 	subdivision 1, is amended to read:
58.33 		Subdivision 1.Generally.  Notwithstanding any other law,
58.34 	no bonds, payment for which tax increment is pledged, shall be
58.35 	issued in connection with any project for which tax increment
58.36 	financing has been undertaken except as authorized in this
59.1 	section.  The proceeds from the bonds shall be used only in
59.2 	accordance with section 469.176, subdivision subdivisions 4 to
59.3 	4l, as if the proceeds were tax increment, except that a tax
59.4 	increment financing plan need not be adopted for any project for
59.5 	which tax increment financing has been undertaken prior to
59.6 	August 1, 1979, pursuant to laws not requiring a tax increment
59.7 	financing plan.  The bonds are not included for purposes of
59.8 	computing the net debt of any municipality.
59.9 	
EFFECTIVE DATE. This section is effective for tax
59.10 	increment financing districts for which the request for
59.11 	certification was made after August 1, 1979.

59.12 	Sec. 21. Laws 1998, chapter 389, article 11, section 19,
59.13 	subdivision 3, is amended to read:
59.14 		Subd. 3.Duration of district. Notwithstanding the
59.15 	provisions of Minnesota Statutes, section 469.176, subdivision
59.16 	1b, no tax increment may be paid to the authority or the city 
59.17 	after 18 years from the date of receipt by the authority of the
59.18 	first increment generated from the final phase of
59.19 	redevelopment.  In no case may increments be paid to the
59.20 	authority after 30 years from approval of the tax increment
59.21 	plan. "Final phase of redevelopment" means that phase of
59.22 	redevelopment activity which completes the rehabilitation of the
59.23 	Lake Street site.
59.24 	
EFFECTIVE DATE. This section is effective upon compliance
59.25 	with Minnesota Statutes, sections 469.1782, subdivision 2, and
59.26 	645.021, subdivision 2.

59.27 	Sec. 22. EXTENSION OF TIME TO EXPEND TAX INCREMENT.
 59.28 	Notwithstanding any contrary provision of law or charter,
59.29 	for tax increment financing district number 3, established on
59.30 	December 19, 1994, by Brooklyn Center Resolution No. 94-273,
59.31 	Minnesota Statutes, section 469.1763, subdivision 3, applies to
59.32 	the district by permitting a period of 13 years for commencement
59.33 	of activities within the district.

59.34 	EFFECTIVE DATE. This section is effective upon approval
59.35 	by the governing body of the city of Brooklyn Center and
59.36 	compliance with Minnesota Statutes, section 645.021, subdivision
60.1 	3.

60.2 	Sec. 23. FAIRMONT; ABATEMENT AUTHORITY.
 60.3 	The city of Fairmont, Martin County, and Independent School
60.4 	District No. 2752, Fairmont Area Schools, may each grant an
60.5 	abatement under Minnesota Statutes, sections 469.1812 to
60.6 	469.1815, for property located in tax increment financing
60.7 	district No. 20 in the city of Fairmont, notwithstanding any law
60.8 	to the contrary.  The total amount of the abatement for each
60.9 	political subdivision may not exceed the taxes paid by the
60.10 	original tax capacity of the district for each year of its
60.11 	existence.  Notwithstanding Minnesota Statutes, section 471.87,
60.12 	or any other law governing conflicts of interest, a local
60.13 	elected official may have a financial interest in and benefit
60.14 	from the tax abatement authorized in this section if the
60.15 	official discloses the interest and potential benefit on the
60.16 	record, and abstains from voting on the matter.

60.17 	EFFECTIVE DATE. This section is effective the day
60.18 	following final enactment.

60.19 	Sec. 24. WABASHA TAX INCREMENT FINANCING DISTRICT.
 60.20 		Subdivision 1.District extension. The governing body of
60.21 	the city of Wabasha may elect to compute the duration of its
60.22 	redevelopment tax increment financing district number 3 without
60.23 	regard to any increment received for taxes payable in 2001.
60.24 		Subd. 2.Five-year rule. The requirements of Minnesota
60.25 	Statutes, section 469.1763, subdivision 3, that activities must
60.26 	be undertaken within a five-year period from the date of
60.27 	certification of a tax increment financing district must be
60.28 	considered to be met for the city of Wabasha redevelopment tax
60.29 	increment district number 3, if the activities are undertaken
60.30 	within ten years from the date of certification of the district.
60.31 		Subd. 3.National eagle center. Notwithstanding the
60.32 	provisions of Minnesota Statutes, section 469.176, subdivision
60.33 	4l, or any other law, the city of Wabasha may spend the proceeds
60.34 	of tax increment bonds issued prior to January 1, 2000, to pay
60.35 	the costs of acquiring and constructing a National Eagle Center
60.36 	in the city.  The city of Wabasha may also use tax increment
61.1 	from its tax increment districts to pay the debt service on such
61.2 	bonds, or any bonds issued to refund such bonds, subject to
61.3 	legal restrictions on the pooling of tax increment.  These bonds
61.4 	may not be treated as preexisting obligations under Minnesota
61.5 	Statutes, section 469.1794.
61.6 	
EFFECTIVE DATE. Subdivision 1 is effective upon
61.7 	compliance with Minnesota Statutes, sections 469.1782,
61.8 	subdivision 2, and 645.021.  Subdivisions 2 and 3 are effective
61.9 	upon compliance by the governing body of the city of Wabasha
61.10 	with Minnesota Statutes, section 645.021.

61.11 	Sec. 25. CITY OF RICHFIELD; TAX INCREMENT FINANCING
61.12 	DISTRICT.
 61.13 		Subdivision 1.Authorization. The city of Richfield may
61.14 	create a tax increment financing district consisting of an area
61.15 	lying west of Trunk Highway 77 extending:  to 16th Avenue
61.16 	between Crosstown Highway 62 and 66th Street; to 17th Avenue
61.17 	between 66th and 69th Streets; and to 18th Avenue between 69th
61.18 	and 72nd Streets.  The city or its housing and redevelopment
61.19 	authority may be the authority for the purposes of Minnesota
61.20 	Statutes, sections 469.174 to 469.179.
61.21 		Subd. 2.District is redevelopment district. The
61.22 	redevelopment tax increment district created pursuant to
61.23 	subdivision 1 is deemed to be a redevelopment district and is
61.24 	subject to Minnesota Statutes, sections 469.174 to 469.179,
61.25 	except that:
61.26 	(1) expenditures for activities as defined in Minnesota
61.27 	Statutes, section 469.1763, subdivision 1, paragraph (b),
61.28 	anywhere in the district are deemed to be the costs of
61.29 	correcting conditions that allow the designation of
61.30 	redevelopment districts pursuant to Minnesota Statutes, section
61.31 	469.174, subdivision 10; and 
61.32 	(2) the five-year rule under Minnesota Statutes, section
61.33 	469.1763, subdivision 3, does not apply.
61.34 	
EFFECTIVE DATE. This section is effective upon local
61.35 	approval by the city of Richfield in compliance with Minnesota
61.36 	Statutes, section 645.021.

62.1 	Sec. 26. CITY OF MOUNDS VIEW; TAX INCREMENT FINANCING
62.2 	DISTRICT.
 62.3 		Subdivision 1.Establishment. (a) The city of Mounds
62.4 	View may establish within the corporate boundaries of the city
62.5 	one or more economic development tax increment financing
62.6 	districts subject to the special rules under subdivision 2.  The
62.7 	districts must be located on property that is exempt from
62.8 	taxation for property taxes payable in 2005 and within the area
62.9 	defined in paragraph (b).
62.10 	(b) For purposes of this section, "area" is bounded by, and
62.11 	including, on the north County Road J west of Coral Sea Street
62.12 	and 82nd Lane NE east of Coral Sea Street, on the east Coral Sea
62.13 	Street north of 82nd Lane NE and Interstate Highway 35W south of
62.14 	82nd Lane NE, on the south and southwest U.S. Highway 10, and on
62.15 	the west the western boundary of Outlot A, Sysco, according to
62.16 	the recorded plat thereof, and situated in Ramsey County,
62.17 	Minnesota.
62.18 		Subd. 2.Special rules. (a) If the city elects upon the
62.19 	adoption of the tax increment financing plan for the district,
62.20 	the rules under this section apply to the district.
62.21 	(b) The duration limit under Minnesota Statutes, section
62.22 	469.176, subdivision 1b, clause (3), is extended to 25 years
62.23 	after receipt of the first increment.
62.24 	(c) The five-year rule under Minnesota Statutes, section
62.25 	469.1763, subdivision 3, is extended to a ten-year period.
62.26 	(d) The limitations on spending increment outside of the
62.27 	district under Minnesota Statutes, section 469.1763, subdivision
62.28 	2, and on spending increment for developments more than 15
62.29 	percent of the square footage of which is used for purposes
62.30 	other than those listed in Minnesota Statutes, section 469.176,
62.31 	subdivision 4c, do not apply.  Except as provided in paragraph
62.32 	(e), increments may only be expended within the area defined in
62.33 	subdivision 1, paragraph (b), and related to development
62.34 	occurring within the area defined in subdivision 1, paragraph
62.35 	(b), whether or not included in a tax increment financing
62.36 	district.  Increments may only be spent on one or more of the
63.1 	following costs, improvements, or activities:
63.2 	(1) acquisition and removal of existing billboards;
63.3 	(2) acquisition of land and easements, if the parcel is
63.4 	occupied by a building constructed before 1990;
63.5 	(3) sanitary sewer, sewer, and water improvements;
63.6 	(4) road improvements;
63.7 	(5) parking, including structured parking;
63.8 	(6) administrative expenses;
63.9 	(7) wetland mitigation;
63.10 	(8) soils correction; and 
63.11 	(9) environmental cleanup.
63.12 	(e) Increments may be expended on costs, improvements, or
63.13 	activities outside the area defined in subdivision 1, paragraph
63.14 	(b), wherever located, whether or not included in a tax
63.15 	increment financing district, for sanitary sewer, sewer, and
63.16 	water improvements and improvements to Coral Sea Street, Airport
63.17 	Road, 82nd Lane NE, County Road J, U.S. Highway 10, and
63.18 	Interstate Highway 35W so long as the improvements are related
63.19 	to development within the area defined in subdivision 1,
63.20 	paragraph (b).
63.21 	(f) The limitation on the ability to elect the method of
63.22 	computation under Minnesota Statutes, section 469.177,
63.23 	subdivision 3, for an economic development district does not
63.24 	apply and the city or authority may elect the method of
63.25 	computation under paragraph (a) or (b) of section 469.177,
63.26 	subdivision 3.
63.27 		Subd. 3.Expiration. The authority to approve tax
63.28 	increment financing plans to establish a tax increment financing
63.29 	district under this section expires on December 31, 2015.
63.30 	
EFFECTIVE DATE. This section is effective upon approval
63.31 	by the governing body of the city of Mounds View and upon
63.32 	compliance by the city with Minnesota Statutes, sections
63.33 	469.1782, subdivision 2, and 645.021, subdivision 3.

63.34 	Sec. 27. CONVEYANCE OF STATE INTEREST IN REAL PROPERTY TO
63.35 	CITY OF MOUNDS VIEW.
 63.36 	(a) Notwithstanding Minnesota Statutes, section 16B.281,
64.1 	16B.282, 92.45, or any other law to the contrary, the
64.2 	commissioner of transportation shall convey to the city of
64.3 	Mounds View all right, title, and interest of the state of
64.4 	Minnesota created by corrective deed dated March 16, 1989, in
64.5 	the land located in Ramsey County, described as:
64.6 	The South Half of the Northeast Quarter of Section 5,
64.7 	Township 30 North, Range 23 West, Ramsey County, Minnesota;
64.8 	which lies northerly and westerly of the following
64.9 	described line:  Commencing at the center of said Section
64.10 	5; thence north on an azimuth of 359 degrees 23 minutes 10
64.11 	seconds (azimuth oriented to Minnesota State Plane
64.12 	Coordinate System) along the north and south quarter line
64.13 	of said Section 5 for 781.42 feet to the point of beginning
64.14 	of the line to be described; thence on an azimuth of 108
64.15 	degrees 12 minutes 41 seconds, 231.14 feet; thence on an
64.16 	azimuth of 98 degrees 27 minutes 03 seconds, 1486.78 feet;
64.17 	thence run northeasterly for 447.16 feet on a nontangential
64.18 	curve, concave to the northwest, having a radius of 720
64.19 	feet, a delta angle of 35 degrees 35 minutes 02 seconds and
64.20 	a chord azimuth of 76 degrees 55 minutes 11 seconds; thence
64.21 	on an azimuth of 59 degrees 07 minutes 40 seconds, 192.89
64.22 	feet; thence run northerly 398.14 feet on a nontangential
64.23 	curve, concave to the northwest, having a radius of 850
64.24 	feet, a delta angle of 26 degrees 50 minutes 15 seconds and
64.25 	a chord azimuth of 29 degrees 26 minutes 05 seconds; thence
64.26 	on an azimuth of 16 degrees 00 minutes 57 seconds, 303.65
64.27 	feet to the north line of said Tract A and there
64.28 	terminating;
64.29 	Containing 40.41 acres, more or less.
64.30 	(b) The conveyance shall be for consideration according to
64.31 	paragraph (d) in a form approved by the attorney general.
64.32 	(c) This property was acquired by the Department of
64.33 	Transportation for construction of a new portion of Trunk
64.34 	Highway 10 west of Interstate Highway 35W.  The property was not
64.35 	needed for highway purposes.  In 1988, the commissioner of
64.36 	transportation deeded the property to the city of Mounds View
64.37 	subject to a right of reverter.
64.38 	(d) If the city of Mounds View enters into a fully executed
64.39 	development agreement to redevelop the land described in
64.40 	paragraph (a) by January 1, 2007, the city shall pay the
64.41 	commissioner of transportation $1,000,000 for deposit in the
64.42 	trunk highway fund.  If the city of Mounds View does not enter
64.43 	into a fully executed development agreement to redevelop the
64.44 	land described in paragraph (a) by January 1, 2007, all right,
64.45 	title, and interest in the land shall revert back to the
64.46 	Department of Transportation unless the land is still used for a
64.47 	public purpose.  If the land is not subject to a fully executed
65.1 	development agreement and is still used for a public purpose on
65.2 	or after January 1, 2007, the land may continue to be used for
65.3 	such public purpose by the city of Mounds View, subject to a
65.4 	right of reverter if the land ceases to be used for a public
65.5 	purpose.

65.6 	Sec. 28. ST. PAUL; HOUSING AND REDEVELOPMENT AUTHORITY.
 65.7 		Subdivision 1.Housing and redevelopment
65.8 	subdistricts. For its tax increment financing districts
65.9 	identified in subdivision 2, the Housing and Redevelopment
65.10 	Authority of the city of St. Paul may establish subdistricts up
65.11 	to the number set forth for each tax increment financing
65.12 	district in subdivision 2.  The subdistricts shall be treated as
65.13 	set forth in subdivision 3, notwithstanding the provisions of
65.14 	any other law to the contrary.
65.15 		Subd. 2.Division into subdistricts; authority. The tax
65.16 	increment financing districts with the following Ramsey County
65.17 	identification numbers may be divided into a number of
65.18 	subdistricts not to exceed the number set forth as follows:  No.
65.19 	224/233, six subdistricts; No. 225, six subdistricts; No. 228,
65.20 	three subdistricts; and No. 234, two subdistricts.
65.21 		Subd. 3.Designation of parcels. All parcels in a tax
65.22 	increment financing district listed in subdivision 2 must be
65.23 	assigned to a subdistrict.  Each subdistrict established
65.24 	pursuant to this section shall consist of those parcels in the
65.25 	tax increment financing district which are designated by the
65.26 	commissioners of the Housing and Redevelopment Authority of the
65.27 	city of St. Paul by resolution, which parcels need not be
65.28 	contiguous.  For purposes of determining tax increments and the
65.29 	parcels treated as paying tax increments, each subdistrict shall
65.30 	be treated as a separate tax increment district.
65.31 	
EFFECTIVE DATE. This section is effective the day after
65.32 	the governing body of the city of St. Paul and its chief
65.33 	clerical officer comply with Minnesota Statutes, section
65.34 	645.021, subdivisions 2 and 3.

65.35 	Sec. 29. CITY OF BROOKLYN PARK TAX INCREMENT FINANCING
65.36 	DISTRICT EXTENSION.
 66.1 	Notwithstanding Minnesota Statutes, section 469.176,
66.2 	subdivision 1b, or any other law to the contrary, the duration
66.3 	limit that applies to the economic development tax increment
66.4 	financing district established under Laws 1994, chapter 587,
66.5 	article 9, section 20, is extended to December 31, 2006.  The
66.6 	city and county may prepare a plan for submission to the
66.7 	legislature by February 1, 2006, providing for expenditure of
66.8 	increment resulting from an additional duration extension of the
66.9 	district.  The plan must specify the proposed duration
66.10 	extension, as well the planned uses of the increment.

66.11 	Sec. 30. CITY OF FERGUS FALLS; ECONOMIC DEVELOPMENT
66.12 	PROPERTY.
 66.13 	The provisions of Minnesota Statutes, section 272.02,
66.14 	subdivision 39, apply to property located in the city of Fergus
66.15 	Falls as if the city had a population of 5,000 or less.

66.16 	EFFECTIVE DATE. This section is effective for taxes
66.17 	levied in 2005, payable in 2006, and thereafter.

66.18 	Sec. 31. REPEALER.
 66.19 	Minnesota Statutes 2004, sections 469.176, subdivision 1a;
66.20 	and 469.1766 are repealed.
66.21 	Laws 1994, chapter 587, article 9, section 20, subdivision
66.22 	4, is repealed.

66.23 	EFFECTIVE DATE. The repeal of Minnesota Statutes, section
66.24 	469.1766, is effective for districts for which the request for
66.25 	certification was made after August 1, 1993.  The repeal of
66.26 	Minnesota Statutes, section 469.176, subdivision 1a, is
66.27 	effective the day following final enactment, provided that
66.28 	Minnesota Statutes, section 469.176, subdivision 1a, is
66.29 	satisfied for any district to which it applies, if bonds have
66.30 	been issued, property acquired, or public improvements
66.31 	constructed before the end of the three-year period, regardless
66.32 	of whether the action was undertaken before or after
66.33 	certification of the district.