Legislative Session number- 83

Bill Name: SF1547

Relating to financing and operation of state and local governmentARTICLE 1 �
INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXExpressing the intent of the
legislature relating to certain +individual income and corporate franchise tax
increases; modifying certain income and +franchise tax provisions; modifying the
characteristic to qualify as a foreign +operating corporation relating to
assignment to locations of property and +payrolls; expanding and updating for
inflation the individual income tax +brackets; eliminating the exclusion of
certain wages from income not derived +from conduct of a trade or business;
excluding certain dividends, interest, +royalties or capital gains of foreign
operating corporations from deemed dividends+ under the unitary business
principle ARTICLE 2 � PROPERTY TAXTemporarily increasing the commercial
industrial property tax rate +and delaying the reduction in the tax rate for
rental property under certain +conditions; modifying the market value homestead
credit reimbursement; providing +temporary court administration cost aid to
counties remaining without state +takeover of court costs, specifying certain
appropriation limits; changing county+ homestead and agricultural aid (HACA) to
county program aid to be payable by +the commissioner of revenue; increasing the
state general levy for taxes +payable on commercial industrial property and
setting the levy for seasonal +recreational property, requiring the commissioner
to increase or decrease the +preliminary or final rate to account for certain
errors and tax base changes; +eliminating the exclusion of electric generation
attached machinery from the +definition commercial industrial tax capacity for
state property tax purposes; +modifying the definition of city net tax capacity
for aids payable in 2004 and + under certain conditions; modifying the
population decline percentage for +certain larger cities; modifying the
definition of city revenue need; +defining rental housing unit percentage, road
accidents factor, metropolitan area +factor and population density for local
government aids payment purposes; +modifying city formula aid and distribution
and the LGA appropriation for 2004; +providing an option for payment of public
defense services costs, authorizing +payment from county program aid; defining
certain terms for property tax and LGA +payment purposes; providing for certain
2003 and 2004 aid payment reductions;+ repealing county criminal justice, family
preservation, attached machinery, low+ income housing and rental housing tax
base replacement aids, the county +homestead and agricultural credit aid formula
and manufactured home HACA, the +definitions of city aid base and base reduction
percentage for aid payment purposes, reimbursements to counties for certain
child out of home placement +costs and certain additional money for city aid
payment purposes ARTICLE 3 � PROPERTY TAX FREEZE"State/Local Fiscal
Relations: Truth in Taxation Act", recognizing +the implications of addressing
the state budget deficit without increases+ in local property tax rates in 2004
and 2005; freezing the levy for local +police and fire relief association
pension liabilities and the benefit ratio for+ city apportionment of levies to
rural service districts at the 2003 level; prohibiting local government units
and special taxing districts from +incurring new debt by issuing obligations or
authorizing installment or lease +purchase contracts or agreements after a
certain date, exceptions; imposing +certain levy limits for taxes payable in
2004 and 2005; freezing local match and +fiscal disparities (revenue
distribution) requirements in the metropolitan +and taconite tax relief areas
and suspending local salary or budget +increase appeals authority and proposed
property tax notice (truth in +taxation) and hearing requirements; requiring
levy reductions or adjustments under +certain conditions; savings clauseARTICLE
4 � TOBACCO AND EXCISE TAXESSpecifying the intent of the legislature for the
use of tobacco and +excise tax increase proceeds, requiring use to provide
medical coverage for +pregnant women, newborns, individuals and families without
access to health +care; redirecting the distribution of medical education funds
to the +university of Minnesota to instructional costs of health professional
programs at +the academic health center, authorizing the use of certain funds
for +administrative expenses and requiring the annual transfer of a certain
amount of the+ proceeds dedicated to the Minnesota future resources fund to the
commissioner +of health for distribution to the academic health center;
increasing and +eliminating the repeal of the accelerated June sales tax payment
liability of certain retailers; increasing the tax rates on cigarettes and
tobacco +products and eliminating the distributor stamp discount rate; requiring
and +providing for accelerated payment of the estimated June tax liability by
certain +cigarette and tobacco products distributors and liquor manufacturers
and +wholesalers and redirecting certain portions of the proceeds to the
academic health +center, the medical education and research costs and the
tobacco use prevention +special revenue funds; imposing a fee on the
distribution of cigarettes from manufacturers outside the tobacco settlement
agreement; imposing a +floor stocks tax on cigarettes and tobacco products for
deposit in the health care+ access fund ARTICLE 5 � ECONOMIC
DEVELOPMENTExcluding income from biotechnology and health sciences industry
+zones from the corporate franchise and alternative minimum (AMT) taxes and the
+minimum fee; providing an income tax credit for investments in qualifying
regional+ angel investment network funds and in international economic
development +zones, including a jobs credit; providing an apportionment formula
for +businesses in international economic development zones; providing sales tax
+exemptions for purchases in and for international economic development and
+biotechnology and health sciences industry zones; authorizing counties in the
+metropolitan area to grant economic development authority powers to existing
county +housing and redevelopment authorities; providing for greater Minnesota
regional +center economic development infrastructure and initiative and regional
+bridge economic recovery aids; providing for the designation of biotechnology
and +health sciences industry tax free zones by the commissioner of trade and
+economic development (DTED) and for the designation of international economic
development zones, providing certain corporate franchise, sales and +property
tax exemptions within the zones; granting the Anoka county HRA +certain expanded
economic development authority, specifying certain limits ARTICLE 6 �
MINERAL TAXATIONProviding for the taxation of mining and refining nonferrous
ores, +metals and minerals; subjecting property used in mining or refining the
ores to +the net proceeds tax and exempting associated property from property
and +sales taxes and mining corporations from the franchise tax; modifying the
+definition of municipality and defining taconite assistance area for property
tax +purposes; requiring a levy reduction and providing for distribution to the
iron+ range resources and rehabilitation board for revenue distribution (fiscal
disparities) purposes; changing the term taconite tax relief area to +precious
minerals tax relief area, defining the precious minerals tax relief +area;
modifying the distribution of proceeds; requiring the segregation of +certain
funds; imposing a royalty tax; expanding the grant and loan authority+ of the
IRRRB commissioner relating to federal money; delaying the tax +increase;
defining commercial production for temporary direct reduced ore tax +exemption
purposes and extending the exemption to noncommercial production; +modifying the
taxation of school districts; authorizing use of the Douglas J. +Johnson
economic protection trust fund for loan guarantees or equity +investments;
providing for redistribution of producer grants upon sale of taconite production
facilities after cessation of operations; repealing +certain deductions from the
production tax and a certain taconite tax credit ARTICLE 7 � GENERAL
EDUCATION Making a technical correction from capital outlay to general fund in
+a certain provision providing for the distribution of consolidated
conservation+ areas account funds to counties; increasing the early recognition
of +property tax revenue by school districts; modifying the schedule for the
payment +of general education revenue to charter schools; eliminating the
requirement for+ school districts to maintain separate record systems for
students +participating in learning year programs; establishing a reserve
account within the +community service fund; authorizing adult basic education
consortia providing +approved adult basic education programs to serve as fiscal
agent for the +consortia and entitling the consortia to state aid payments
directly from the +commissioner; modifying the definition of pupil of limited
English proficiency and +the revenue formula for LEP programs aid; accelerating
the date for +counting children eligible for free or reduced price lunches as
eligible in +the fall; modifying the referendum equalization revenue formula;
making +referendum tax base replacement aid permanent for school districts,
authorizing +renewal or approval of new referendum authority; eliminating the
authority of +the department of children, families and learning (CFL) to grant
school +districts in statutory operating debt extensions to file plans and to
hold +referenda on an alternate date; authorizing and providing for low property
wealth +equity aid; requiring certain education aid reductions and levy revenue
+recognition adjustments; modifying certain school district aid payment
+percentages, reducing certain other aid and payment formulas and providing
+additional payments to school districts for certain later fiscal years;
+eliminating the requirement for the commissioner of children, families and
learning +(CFL) to report excess debt redemption fund balances to county
auditors; +delaying implementation of the airport runway impact zone aid program
for +independent school district #280, Richfield; reducing the amount of basic
revenue+ for staff development for fiscal years 2004 and 2005 only; modifying
the lease +rate for certain state land used as public campgrounds in Cook
county, +requiring and providing for annual inflation adjustments; requiring the
+commissioner to include certain items as part of the recommendations of the
K-12 +education task force on school finance reform; appropriating money to the
department+ for general education, referendum tax base replacement, abatement,
+consolidation transition, nonpublic pupil and transportation and low property
+wealth equity aids, for enrollment options transportation, for a grant to
+independent school district #2190, Yellow Medicine East for tornado impact
declining +enrollment aid and for declining pupil aid to independent school
districts #241,+ Albert Lea, #2711, Mesabi East and #682, Roseau, for a grant to
independent +school district #690, Warroad to operate the Angle Inlet school and
for +grants to private contacted alternative uncommon schools located in
independent+ school districts #273, Edina and #622 North St. Paul-Maplewood
ARTICLE 8 � EDUCATIONAL EXCELLENCE AND OTHER POLICYSpecifying certain
reporting requirements of school districts and sites participating in the
alternative teacher compensation +program and clarifying the timing for payment
of alternative compensation aid; +adjusting charter school building lease aid
and eliminating integration aid +grant eligibility for the schools; clarifying
the intended use of revenue for the transition system for +children with a
disability and modifying compliance requirements, changing +transition programs
to career and technical education programs, defining +essential personnel,
requiring aid payments to comply with certain rules and +conditions; increasing
the local share and reducing the state share of +integration revenue; providing
for metropolitan magnet school direct receipt of special +education aid and
granting the schools certain tuition charging authority; +authorizing school
districts to levy for career and technical programs for 2004 +and 2005;
requiring the commissioner of children, families and learning (CFL) +to include
a career and technical education program plan as part of the +recommendations of
the K-12 task force on school finance reform; authorizing school +districts to
elect to charge transportation fees under certain conditions; +appropriating
money to the commissioner for charter school building lease and start+ up aids
and integration grants, for integration aid, for magnet school grants+ and start
up aid, for interdistrict desegregation and integration +transportation grants,
for American Indian success for the future, scholarships and teacher preparation
grants, for tribal contact schools and early childhood +programs at the schools,
for statewide testing support, for best practices +seminars, for advanced
placement (AP) and international baccalaureate (IB) +examination fees and
teacher training and support programs, for first grade +preparedness grants, for
the youthworks program, for student organizations, for HIV/STI +education
regional training sites, for collaborative urban educator recruitment+ and
training programs grants and reading competency grants and for +integration
programs; repealing a certain requirement for the commissioner to +contract with
an independent school evaluation services contractor to evaluate and +report on
the academic and financial performance of school districts, a certain+ reading
competency requirement for the St. Croix education district and +charter school
start up aid ARTICLE 9 � SPECIAL PROGRAMSRequiring first grade preparedness
revenue to be placed in a reserve +account and restricting use of the revenue to
the programs at qualifying +school sites; appropriating money to the
commissioner of children, families and +learning (CFL) for special education,
children with disabilities, travel for +home based services, special education
excess costs and disabled students +transition aids, for court placed special
education revenue and for special education +out of state tuition; repealing the
reimbursement for special education +litigation costs ARTICLE 10 � EDUCATION
REFORM; FACILITIES AND TECHNOLOGY; FUND +TRANSFERSProviding for a principled pay
practices system to attract and retain+ high quality teachers and for the
payment of principled pay practices aid;+ excluding alternative facilities
levies from the second tier debt service +equalization revenue formula and
certain large projects from health and safety +revenue eligibility, placing the
projects under the alternative facilities +bonding and levy program and reducing
the debt service appropriation; expanding +the authorized uses of health and
safety revenue and prohibiting use for replacement of building materials or
facilities; providing for +limited participation in the alternative facilities
bonding and levy program +for certain school districts, specifying certain long
term plan and +published notice requirements; granting school districts not
issuing bonds +certain levy authority; providing for the temporary payment of
deferred +maintenance revenue to school districts ineligible for the alternative
facilities bonding+ and levy program; establishing a temporary education
telecommunications fund +account and imposing a surcharge (access fee) on end
user bills issued by +communications providers for customer wirelines or
wireless access lines for voice +or data telecommunications services for deposit
in the account to fund the +kindergarten through grade 12 schools and public
library portions of the learning +network of Minnesota formerly funded through
the department of children, +families and learning (CFL), specifying certain
eligible expenditures and certain +duties of the Minnesota education
telecommunications council (METC); +authorizing and providing for school
districts or charter schools to establish online+ courses and establishing
online course revenue; authorizing independent +school district #621, Mounds
View to issue bonds for certain previously approved +projects; extending the
disabled access levy authority of independent school +district #500, Southland;
authorizing independent school district #806, +Elgin-Millville to levy for
handicapped access and fire safety improvements to school buildings, specifying
certain levy limits; authorizing independent +school district #740, Sartell to
annually levy to lease a school bus storage+ facility; authorizing independent
school district #15, St. Francis to redirect +the proceeds from the sale of
certain school property for creation or +improvement of safe walking routes for
students; authorizing certain permanent +fund transfers in independent school
districts #695, Chisholm, #486, +Swanville and #277, Westonka; authorizing
independent school district #914, +Ulen-Hitterdal to submit to the commissioner
an application for the demolition of a +portion of the Ulen high school building
to be included in health and safety +revenue for fiscal year 2005; appropriating
money to the commissioner of +children, families and learning for health and
safety, debt service equalization, +alternative facilities bonding and
principled pay practices and for online course+ and deferred maintenance
revenues; repealing the alternative teacher +compensation system and aid ARTICLE
11 � NUTRITION PROGRAMSAppropriating money to the department of children,
families and +learning (CFL) for school and breakfast and summer school service
replacement aids +and for the fast break to learning breakfast program ARTICLE
12 � LIBRARIESEstablishing the Minnesota state library board for libraries
advocacy+ purposes, specifying certain membership requirements and powers and
duties, +requiring and providing for board selection of a state librarian and
transferring +certain responsibilities of the commissioner of children, families
and +learning (CFL) to the board, transitional provision; expanding the
authorized +projects under regional library basic system support grants to
special services for +all non-English speaking persons and temporarily modifying
grant +eligibility; appropriating money to the commissioner for basic support
grants, for multicounty, multitype library systems and for the electronic
+library; specifying certain terminology change instructions to the revisor of
+statutes ARTICLE 13 � FAMILY AND EARLY CHILDHOOD EDUCATIONClarifying the
coverage of head start programs and certain federal requirements, modifying the
allocation of head start funds and +specifying certain work plan preparation and
submittal requirements of head +start grantees; modifying the early childhood
family education and school +readiness aid reserve account limits; appropriating
money to the commissioner +of children, families and learning (CFL) for the
school readiness, head +start and way to grow programs and for ECFE and health
and developmental +screening aids ARTICLE 14 � PREVENTIONEstablishing a
community education revenue reserve account limit for +school districts,
providing for waiver of the limit by the commissioner of +children, families and
learning (CFL) under certain conditions; appropriating +money to the
commissioner for community education and adults with disabilities+ program aids,
for hearing impaired adults programs, for violence prevention +education and
after school enrichment grants and for school age child care +revenue ARTICLE
15 � SELF SUFFICIENCY AND LIFELONG LERNINGIncreasing the state total adult
basic education aid amount, +modifying the formula and providing for aid
adjustments; setting the adult basic +education program aid limit for fiscal
year 2004 and later years; eliminating +certain program audit requirements;
appropriating money to the commissioner +of children, families and learning
(CFL) for adult basic education and +graduation aids, for GED tests and for lead
abatement ARTICLE 16 - STATE AGENCIESSetting the fee for teachers and
administrators licenses; eliminating+ the authority of the commissioner of
children, families and learning +(CFL) to appoint a certain number of deputy
commissioners; requesting the +legislative audit commission (LAC) to consider a
program evaluation of projected +additional costs associated compliance with the
federal no child left behind act+ of 2001 by the state and local school
districts; appropriating money to the commissioner for the department for the
Minnesota children's museum +and academy of science, the boards of teaching and
of school administrators, for +the division of program finance, for
implementation of new academic +standards, for the state library board and for
the department name change, to the +Minnesota state academies and to the Perpich
center for arts education ARTICLE 17 � ADMINISTRATIVE AMENDMENT AND REPEAL OF
CERTAIN PROVISIONSClarifying the authority of the commissioner of children,
families +and learning (CFL) to close schools relating to the state aid penalty;
changing +the name of the Minnesota Indian scholarship committee to the American
Indian +education committee; eliminating certain instructional hours
requirements of +area learning centers and education districts; modifying the
calculation +of referendum revenue for certain reorganized school districts;
+expanding the authority of school boards to lease real property and changing
+references to capital expenditure funds to operating capital accounts; reducing
the+ health and safety and school age care levy limits; modifying the building
+construction down payment program, providing for capital project referendum
+accounts and levies; expanding the definitions of regular and excess
+transportation relating to nonresident pupils for transportation aid
entitlement purposes; +clarifying the responsibility of school districts
enrolling nonresident pupils +in alternative attendance programs to provide
transportation to the +pupils; clarifying certain provisions under the
post-secondary enrollment +options (PSEO) program; modifying the formula for the
payment of general +education revenue to charter schools relating to the
transportation transition +allowance; transferring the authority for approval of
school boards use of +nonlicensed community education directors from the
commissioner to the Minnesota +board of school administrators; modifying the
total community education levy +formula; regulating the payment of aid for
access to the transition system for children with disabilities; expanding
certain +budget approval requirements for the payment of integration revenue;
+modifying the definition of high school relating to districts without secondary
+schools for general education revenue purposes; eliminating the requirement for
+reservation of a portion of the transition revenue adjustment under the basic
+skills revenue reservation requirement; eliminating a certain referendum +levy
assumption relating to the determination of referendum tax base +replacement aid
and modifying certain requirements for referenda to revoke or reduce +increased
revenue amounts; increasing the statutory operating debt levy +formula;
modifying certain levy procedure adjustment requirements; modifying +certain
provisions under the maximum effort school aid law relating to levies+ and
expanding eligibility for capital loans; modifying area learning +center tuition
charging requirements; modifying the formulas for determination of +certain aid
adjustments; increasing the net debt limit for special school +district #1,
Minneapolis; eliminating certain driver training course +responsibilities of the
commissioner; modifying the determination of attached machinery aid +and the
reservation requirement relating to the receipt of taconite tax +proceeds,
eliminating the use of the funds for outcome based learning programs;+ modifying
the treatment of certain surplus funds used to reduce certain levies +and state
aids; increasing the net tax capacity rate for the severance levy by independent
school district #625, St. Paul; specifying certain +reference change and
codification instructions to the revisor of statutes; repealing +certain
provisions relating to levy limits of reorganized districts, +intervention
demonstration projects, regional clearinghouses for improving +education
technology, general education levy equity, a certain uncodified +provision
requiring certain commissioner school district formula adjustments +and certain
rules relating to the teacher lunch period, pupil transportation, +services for
the blind and physically disabled, disaster plans, civil defense +construction
and the training and experience index ARTICLE 18 � TECHNICAL AMENDMENTSMaking
technical corrections to certain provisions relating to child +care programs,
teacher tenure, independent school district board +authority, school facilities,
advertising on school buses, enrollment options programs,+ charter schools, the
transition system for children with disabilities, +special education, general
education revenue, state aid reduction for debt +repayment, administrative rules
authority of the commissioner of children, +families and learning (CFL), the
payment of aids to school districts and the +expired school bus safety advisory
committee; repealing the Indian scholarship +committee, the aid reduction for
debt repayment, a certain standing appropriation to+ the commissioner for the
payment of certain adjustment aids, certain +amendatory language under certain
provisions establishing the statewide school +district telecommunications
network and extending the advisory committee to +the library for the blind and
physically handicapped and the state multicultural +education advisory
committeeARTICLE 19 � E-12 EDUCATION FORECAST ADJUSTMENTSAdjusting certain
2003 appropriations to the commissioner of +children, families and learning
(CFL) for early childhood and family (ECFE) and K-12 +education programs to
reflect the state budget forecast ARTICLE 20 � MOSQUITO CONTROL
DISTRICTModifying certain provisions regulating the metropolitan mosquito
+control district; expanding the authority of the district to spray +pesticides;
expanding the area of the district and increasing the membership of +the
commission, providing for inclusion of all of Carver county; +expanding the
authority of the commission to enter private property; modifying +certain
contract requirements and subjecting contracts to the uniform +municipal
contracting law; prohibiting the payment of per diems to +commissioners and
making expense reimbursements optional; providing for services to the additional
part of Carver county until the availability of levy +proceeds; repealing a
certain commissioner expense reimbursement provision ARTICLE 21 �
MISCELLANEOUSModifying certain cash flow account balance requirements and the
+allocation of unrestricted budgetary general fund balances; prohibiting state
+agency procurement contracts with corporations reincorporated in tax haven
countries and trading stock primarily in +the United States, defining tax haven
country and requiring the commissioner of administration to require vendors
submitting bids or entering into +contracts with state agencies to certify
contract eligibility, authorizing +commissioner waiver of the restriction under
certain compelling public interest determination conditions; authorizing the
commissioner of revenue to accept payments of court +fines designated for tax
law enforcement; requiring counties to remit a +certain percentage of the state
portion of the June receipts of mortgage +registry and deed tax proceeds by a
certain changed (accelerated) date; +eliminating the authority of the state fair
to retain sales taxes collected on +admissions, exempting sales before a certain
date; delaying interest payments on +sales tax refunds to certain taxpayers;
providing a partial motor vehicle sales+ tax exemption for certain clean fuel
motor vehicles; clarifying the +exemption for certain surcharges or fees from
the solid waste management tax; +requiring a certain amount of sales tax
revenues attributable to the extension of+ bar closing times to be annually
added to local government aid (LGA) and +used for public safety; appropriating
money to the commissioner of revenue for additional tax compliance activities
and reducing the appropriation +for the -2005 operating budget of the
department, prohibiting the + reduction of direct compliance activities in
response to the reduction; repealing +the used motor oil and filters collection
refund program(ra)