HF 3

1st Committee Engrossment - 85th Legislature (2007 - 2008) Posted on 12/22/2009 12:37pm

1.1A bill for an act

1.2relating to taxation; providing property tax relief; providing for school aids
1.3and levies; providing aids to local governments; providing for property tax
1.4exemptions, credits, refunds, and deferrals; changing property tax provisions
1.5relating to sales ratios, homesteads, valuation, classification, class rates, truth in
1.6taxation, payment, collection, appeals, and abatement; providing for special
1.7assessments deferral and payments in lieu of taxes; limiting authority to
1.8impose local sales taxes; authorizing certain local taxes; providing for studies;
1.9appropriating money;amending Minnesota Statutes 2006, sections 97A.061,
1.10subdivision 2; 123B.53, subdivisions 4, 5; 126C.01, by adding subdivisions;
1.11126C.10, subdivision 13a; 126C.17, subdivision 6; 127A.48, subdivision 3, by
1.12adding a subdivision; 272.02, by adding subdivisions; 272.115, subdivision
1.131; 273.11, subdivision 1a, by adding a subdivision; 273.111, by adding a
1.14subdivision; 273.124, subdivisions 1, 14; 273.128, subdivision 1, by adding a
1.15subdivision; 273.13, subdivisions 22, 23, 24, 25, 33, by adding a subdivision;
1.16273.1384, subdivision 1; 273.1393; 275.065, subdivision 3, by adding
1.17subdivisions; 275.07, subdivision 2; 275.08, subdivision 1b; 276.04, subdivision
1.182; 278.05, subdivision 6; 279.01, by adding a subdivision; 279.37, subdivision
1.191a; 289A.08, subdivision 13; 289A.40, subdivision 4; 290A.03, subdivision 13;
1.20290A.04, subdivisions 2a, 2h, 4, by adding a subdivision; 290B.03, subdivisions
1.211, 2; 290B.04, subdivisions 3, 4; 290B.05, subdivision 1; 290B.07; 297A.99,
1.22subdivision 1; 298.75, by adding a subdivision; 435.193; 469.1813, subdivision
1.231a; 473F.01, subdivision 2; 473F.08, subdivisions 5, 7a; 477A.011, subdivisions
1.2434, 36; 477A.0124, subdivision 5; 477A.013, subdivisions 8, 9, by adding a
1.25subdivision; 477A.03; Laws 1980, chapter 511, section 1, subdivision 2, as
1.26amended; Laws 2005, First Special Session chapter 3, article 5, section 39;
1.27proposing coding for new law in Minnesota Statutes, chapter 123B; proposing
1.28coding for new law as Minnesota Statutes, chapter 290D; repealing Minnesota
1.29Statutes 2006, sections 290A.04, subdivision 2; 473F.08, subdivision 3a.
1.30BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.1ARTICLE 1

2.2HOMESTEAD CREDIT STATE REFUND

2.3HOMEOWNERS AND RENTERS

2.4    Section 1. Minnesota Statutes 2006, section 273.1384, subdivision 1, is amended to
2.5read:
2.6    Subdivision 1. Residential homestead market value credit. (a) Each county
2.7auditor shall determine a homestead credit for each class 1a, 1b, and 2a homestead
2.8property within the county equal to 0.4 percent of the first $76,000 of market value
2.9of the property minus .09 percent of the market value in excess of $76,000. The credit
2.10amount may not be less than zero. In the case of an agricultural or resort homestead, only
2.11the market value of the house, garage, and immediately surrounding one acre of land is
2.12eligible in determining the property's homestead credit. In the case of a property that
2.13is classified as part homestead and part nonhomestead, (i) the credit shall apply only
2.14to the homestead portion of the property, but (ii) if a portion of a property is classified
2.15as nonhomestead solely because not all the owners occupy the property, not all the
2.16owners have qualifying relatives occupying the property, or solely because not all the
2.17spouses of owners occupy the property, the credit amount shall be initially computed as
2.18if that nonhomestead portion were also in the homestead class and then prorated to the
2.19owner-occupant's percentage of ownership. For the purpose of this section, when an
2.20owner-occupant's spouse does not occupy the property, the percentage of ownership for
2.21the owner-occupant spouse is one-half of the couple's ownership percentage.
2.22    (b) For property taxes payable in 2008 and thereafter, the county auditor shall
2.23determine the amount of the homestead credit under paragraph (a) and this paragraph.
2.24The county auditor shall report the amount of the credit to the taxpayer on the property
2.25tax statement or in another manner, as authorized by the commissioner of revenue. The
2.26amount of the credit allowed for the property taxes payable year is to be computed as the
2.27following percentage of the credit amount under paragraph (a):
2.28    (1) for property taxes payable in 2008, 100 percent;
2.29    (2) for property taxes payable in 2009, 60 percent;
2.30    (3) for property taxes payable in 2010, 30 percent; and
2.31    (4) for property taxes payable in 2011 or thereafter, no credit is allowed.
2.32EFFECTIVE DATE.This section is effective beginning for property taxes payable
2.33in 2008.

3.1    Sec. 2. Minnesota Statutes 2006, section 276.04, subdivision 2, is amended to read:
3.2    Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the
3.3printing of the tax statements. The commissioner of revenue shall prescribe the form
3.4of the property tax statement and its contents. The statement must contain a tabulated
3.5statement of the dollar amount due to each taxing authority and the amount of the state
3.6tax from the parcel of real property for which a particular tax statement is prepared. The
3.7dollar amounts attributable to the county, the state tax, the voter approved school tax, the
3.8other local school tax, the township or municipality, and the total of the metropolitan
3.9special taxing districts as defined in section 275.065, subdivision 3, paragraph (i), must
3.10be separately stated. The amounts due all other special taxing districts, if any, may be
3.11aggregated except that any levies made by the regional rail authorities in the county of
3.12Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A
3.13shall be listed on a separate line directly under the appropriate county's levy. If the county
3.14levy under this paragraph includes an amount for a lake improvement district as defined
3.15under sections 103B.501 to 103B.581, the amount attributable for that purpose must be
3.16separately stated from the remaining county levy amount. In the case of Ramsey County,
3.17if the county levy under this paragraph includes an amount for public library service
3.18under section 134.07, the amount attributable for that purpose may be separated from the
3.19remaining county levy amount. The amount of the tax on homesteads qualifying under the
3.20senior citizens' property tax deferral program under chapter 290B is the total amount of
3.21property tax before subtraction of the deferred property tax amount. The amount of the
3.22tax on contamination value imposed under sections 270.91 to 270.98, if any, must also
3.23be separately stated. The dollar amounts, including the dollar amount of any special
3.24assessments, may be rounded to the nearest even whole dollar. For purposes of this section
3.25whole odd-numbered dollars may be adjusted to the next higher even-numbered dollar.
3.26The amount of market value excluded under section 273.11, subdivision 16, if any, must
3.27also be listed on the tax statement.
3.28    (b) The property tax statements for manufactured homes and sectional structures
3.29taxed as personal property shall contain the same information that is required on the
3.30tax statements for real property.
3.31    (c) Real and personal property tax statements must contain the following information
3.32in the order given in this paragraph. The information must contain the current year tax
3.33information in the right column with the corresponding information for the previous year
3.34in a column on the left:
3.35    (1) the property's estimated market value under section 273.11, subdivision 1;
4.1    (2) the property's taxable market value after reductions under section 273.11,
4.2subdivisions 1a and 16 ;
4.3    (3) the property's gross tax, calculated by adding the property's total property tax to
4.4the sum of the aids enumerated in clause (4); any items required by the commissioner of
4.5revenue under section 273.1384, subdivision 1, paragraph (b); and
4.6    (4) a total of the following aids:
4.7    (i) education aids payable under chapters 122A, 123A, 123B, 124D, 125A, 126C,
4.8and 127A;
4.9    (ii) local government aids for cities, towns, and counties under sections 477A.011 to
4.10477A.04; and
4.11    (iii) disparity reduction aid under section 273.1398;
4.12    (5) for homestead residential and agricultural properties, the credits under section
4.13273.1384;
4.14    (6) any credits received under sections 273.119; 273.123; 273.135; 273.1391;
4.15273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of credit received
4.16under section 273.135 must be separately stated and identified as "taconite tax relief"; and
4.17    (7) (4) the net tax payable in the manner required in paragraph (a).
4.18    (d) If the county uses envelopes for mailing property tax statements and if the county
4.19agrees, a taxing district may include a notice with the property tax statement notifying
4.20taxpayers when the taxing district will begin its budget deliberations for the current
4.21year, and encouraging taxpayers to attend the hearings. If the county allows notices to
4.22be included in the envelope containing the property tax statement, and if more than
4.23one taxing district relative to a given property decides to include a notice with the tax
4.24statement, the county treasurer or auditor must coordinate the process and may combine
4.25the information on a single announcement.
4.26    The commissioner of revenue shall certify to the county auditor the actual or
4.27estimated aids enumerated in paragraph (c), clause (4), that local governments will receive
4.28in the following year. The commissioner must certify this amount by January 1 of each
4.29year.
4.30EFFECTIVE DATE.This section is effective for taxes payable in 2008 and
4.31thereafter.

4.32    Sec. 3. Minnesota Statutes 2006, section 290A.03, subdivision 13, is amended to read:
4.33    Subd. 13. Property taxes payable. "Property taxes payable" means the property
4.34tax exclusive of special assessments, penalties, and interest payable on a claimant's
4.35homestead after deductions made under sections 273.135, 273.1384, 273.1391, 273.42,
5.1subdivision 2 , and any other state paid property tax credits in any calendar year, and
5.2after any refund claimed and allowable under section 290A.04, subdivision 2h, that is
5.3first payable in the year that the property tax is payable. Beginning for property taxes
5.4payable in 2008, the amount of the credit under section 273.1384, subdivision 1, must
5.5not be deducted in computing property taxes payable. In the case of a claimant who
5.6makes ground lease payments, "property taxes payable" includes the amount of the
5.7payments directly attributable to the property taxes assessed against the parcel on which
5.8the house is located. No apportionment or reduction of the "property taxes payable" shall
5.9be required for the use of a portion of the claimant's homestead for a business purpose if
5.10the claimant does not deduct any business depreciation expenses for the use of a portion
5.11of the homestead in the determination of federal adjusted gross income. For homesteads
5.12which are manufactured homes as defined in section 273.125, subdivision 8, and for
5.13homesteads which are park trailers taxed as manufactured homes under section 168.012,
5.14subdivision 9 , "property taxes payable" shall also include 19 percent of the gross rent paid
5.15in the preceding year for the site on which the homestead is located. When a homestead
5.16is owned by two or more persons as joint tenants or tenants in common, such tenants
5.17shall determine between them which tenant may claim the property taxes payable on the
5.18homestead. If they are unable to agree, the matter shall be referred to the commissioner of
5.19revenue whose decision shall be final. Property taxes are considered payable in the year
5.20prescribed by law for payment of the taxes.
5.21    In the case of a claim relating to "property taxes payable," the claimant must have
5.22owned and occupied the homestead on January 2 of the year in which the tax is payable
5.23and (i) the property must have been classified as homestead property pursuant to section
5.24273.124 , on or before December 15 of the assessment year to which the "property taxes
5.25payable" relate; or (ii) the claimant must provide documentation from the local assessor
5.26that application for homestead classification has been made on or before December 15
5.27of the year in which the "property taxes payable" were payable and that the assessor has
5.28approved the application.
5.29EFFECTIVE DATE.This section is effective beginning for refund claims based on
5.30property taxes payable in 2008.

5.31    Sec. 4. Minnesota Statutes 2006, section 290A.04, subdivision 2a, is amended to read:
5.32    Subd. 2a. Renters. (a) A claimant whose rent constituting property taxes exceeds
5.33the percentage of the household income stated below must pay an amount equal to the
5.34percent of income shown for the appropriate household income level along with the
5.35percent to be paid by the claimant of the remaining amount of rent constituting property
6.1taxes. The state refund equals the amount of rent constituting property taxes that remain,
6.2up to the maximum state refund amount shown below.

6.3 6.4	Household Income	Percent of Income	Percent Paid by Claimant	Maximum State Refund
6.5	$0 to 3,589	1.0 percent	5 percent	$1,190
6.6	$0 to 4,579			$1,500
6.7	3,590 to 4,779	1.0 percent	10 percent	$1,190
6.8	4,580 to 6,099			$1,500
6.9	4,780 to 5,969	1.1 percent	10 percent	$1,190
6.10	6,100 to 7,619			$1,500
6.11	5,970 to 8,369	1.2 percent	10 percent	$1,190
6.12	7,620 to 10,669			$1,500
6.13	8,370 to 10,759	1.3 percent	15 percent	$1,190
6.14	10,670 to 13,729			$1,500
6.15	10,760 to 11,949	1.4 percent	15 percent	$1,190
6.16	13,730 to 15,239			$1,500
6.17	11,950 to 13,139	1.4 percent	20 percent	$1,190
6.18	15,240 to 16,769			$1,500
6.19	13,140 to 15,539	1.5 percent	20 percent	$1,190
6.20	16,770 to 19,829			$1,500
6.21	15,540 to 16,729	1.6 percent	20 percent	$1,190
6.22	19,830 to 21,349			$1,500
6.23	16,730 to 17,919	1.7 percent	25 percent	$1,190
6.24	21,350 to 22,859			$1,500
6.25	17,920 to 20,319	1.8 percent	25 percent	$1,190
6.26	22,860 to 25,929			$1,500
6.27	20,320 to 21,509	1.9 percent	30 percent	$1,190
6.28	25,930 to 27,439			$1,500
6.29	21,510 to 22,699	2.0 percent	30 percent	$1,190
6.30	27,440 to 28,959			$1,500
6.31	22,700 to 23,899	2.2 percent	30 percent	$1,190
6.32	28,960 to 30,499			$1,500
6.33	23,900 to 25,089	2.4 percent	30 percent	$1,190
6.34	30,500 to 32,009			$1,500
6.35	25,090 to 26,289	2.6 percent	35 percent	$1,190
6.36	32,010 to 33,539			$1,500
6.37	26,290 to 27,489	2.7 percent	35 percent	$1,190
6.38	33,540 to 35,079			$1,500
6.39	27,490 to 28,679	2.8 percent	35 percent	$1,190
6.40	35,080 to 36,589			$1,500
6.41	28,680 to 29,869	2.9 percent	40 percent	$1,190
6.42	36,590 to 38,109			$1,500
6.43	29,870 to 31,079	3.0 percent	40 percent	$1,190
7.1	38,110 to 39,649			$1,500
7.2	31,080 to 32,269	3.1 percent	40 percent	$1,190
7.3	39,650 to 41,169			$1,500
7.4	32,270 to 33,459	3.2 percent	40 percent	$1,190
7.5	41,170 to 42,689			$1,500
7.6	33,460 to 34,649	3.3 percent	45 percent	$1,080
7.7	42,690 to 49,729			$1,370
7.8	34,650 to 35,849	3.4 percent	45 percent	$ 960
7.9	49,730 to 51,459			$1,220
7.10	35,850 to 37,049	3.5 percent	45 percent	$ 830
7.11	51,460 to 53,189			$1,050
7.12	37,050 to 38,239	3.5 percent	50 percent	$ 720
7.13	53,190 to 54,899			$910
7.14	38,240 to 39,439	3.5 percent	50 percent	$ 600
7.15	54,900 to 56,609			$760
7.16	38,440 to 40,629	3.5 percent	50 percent	$ 360
7.17	56,610 to 58,319			$450
7.18	40,630 to 41,819	3.5 percent	50 percent	$ 120
7.19	58,320 to 60,000			$150

7.20    (b) The payment made to a claimant is the amount of the state refund calculated
7.21under this subdivision. No payment is allowed if the claimant's household income is
7.22$41,820 $60,000 or more.
7.23EFFECTIVE DATE.This section is effective beginning for claims filed for rent
7.24paid after December 31, 2006.

7.25    Sec. 5. Minnesota Statutes 2006, section 290A.04, subdivision 2h, is amended to read:
7.26    Subd. 2h. Additional refund. (a) If the gross property taxes payable on a
7.27homestead increase more than 12 percent over the property taxes payable in the prior year
7.28on the same property that is owned and occupied by the same owner on January 2 of both
7.29years, and the amount of that increase is $100 or more, a claimant who is a homeowner
7.30shall be allowed an additional refund equal to 60 percent of the amount of the increase
7.31over the greater of 12 percent of the prior year's property taxes payable or $100. This
7.32subdivision shall not apply to any increase in the gross property taxes payable attributable
7.33to improvements made to the homestead after the assessment date for the prior year's
7.34taxes. This subdivision shall not apply to any increase in the gross property taxes payable
7.35attributable to the termination of valuation exclusions under section 273.11, subdivision
7.3616 , or to the reduction in and elimination of the homestead market value credit under
7.37section 273.1384, subdivision 1, paragraph (b).
8.1    The maximum refund allowed under this subdivision is $1,000.
8.2    (b) For purposes of this subdivision "gross property taxes payable" means property
8.3taxes payable determined without regard to the refund allowed under this subdivision.
8.4    (c) In addition to the other proofs required by this chapter, each claimant under
8.5this subdivision shall file with the property tax refund return a copy of the property tax
8.6statement for taxes payable in the preceding year or other documents required by the
8.7commissioner.
8.8    (d) Upon request, the appropriate county official shall make available the names and
8.9addresses of the property taxpayers who may be eligible for the additional property tax
8.10refund under this section. The information shall be provided on a magnetic computer
8.11disk. The county may recover its costs by charging the person requesting the information
8.12the reasonable cost for preparing the data. The information may not be used for any
8.13purpose other than for notifying the homeowner of potential eligibility and assisting the
8.14homeowner, without charge, in preparing a refund claim.
8.15EFFECTIVE DATE.This section is effective for refund claims based on property
8.16taxes payable in 2008.

8.17    Sec. 6. Minnesota Statutes 2006, section 290A.04, is amended by adding a subdivision
8.18to read:
8.19    Subd. 2k. Homestead credit state refund. (a) A claimant who is a homeowner
8.20is entitled to a state refund of the amount of the property taxes payable in excess of two
8.21percent of the claimant's household income, based on the percentage and maximum for the
8.22appropriate household income level shown below. The refund amount determined from the
8.23table must be reduced further by the amount of the homestead market value credit under
8.24section 273.1384, subdivision 1, paragraph (b), but not to an amount that is less than zero.

8.25	Household Income	Refund Percentage	Maximum State Refund
8.26	0 to $5,399	90 percent	$2,500
8.27	5,400 to 18,899	85 percent	2,500
8.28	18,900 to 26,999	80 percent	2,500
8.29	27,000 to 32,399	75 percent	2,500
8.30	32,400 to 37,799	70 percent	2,500
8.31	37,800 to 45,899	65 percent	2,500
8.32	45,900 to 64,699	60 percent	2,500
8.33	64,700 to 80,899	55 percent	2,300
8.34	80,900 to 94,399	50 percent	2,100
8.35	94,400 to 99,299	45 percent	1,900
8.36	99,300 to 104,099	40 percent	1,700
8.37	104,100 to 115,599	30 percent	1,500
9.1	115,600 to 127,199	30 percent	1,250
9.2	127,200 to 134,099	25 percent	1,000
9.3	134,100 to 138,799	25 percent	750
9.4	138,800 to 144,399	25 percent	500
9.5	144,400 to 150,000	25 percent	250

9.6    (b) No payment is allowed under paragraph (a) if the claimant's household income
9.7is more than $150,000.
9.8EFFECTIVE DATE.This section is effective beginning for claims based on
9.9property taxes payable in 2008.

9.10    Sec. 7. Minnesota Statutes 2006, section 290A.04, subdivision 4, is amended to read:
9.11    Subd. 4. Inflation adjustment. Beginning for property tax refunds payable in
9.12calendar year 2002 2009, the commissioner shall annually adjust the dollar amounts of
9.13the income thresholds and the maximum refunds under subdivisions 2 and 2a 2k for
9.14inflation. The commissioner shall make the inflation adjustments in accordance with
9.15section 1(f) of the Internal Revenue Code, except that for purposes of this subdivision the
9.16percentage increase shall be determined from the year ending on June 30, 2000 2007, to
9.17the year ending on June 30 of the year preceding that in which the refund is payable. The
9.18commissioner shall use the appropriate percentage increase to annually adjust the income
9.19thresholds and maximum refunds under subdivisions 2 and 2a 2k for inflation without
9.20regard to whether or not the income tax brackets are adjusted for inflation in that year.
9.21The commissioner shall round the thresholds and the maximum amounts, as adjusted to
9.22the nearest $10 amount. If the amount ends in $5, the commissioner shall round it up
9.23to the next $10 amount.
9.24    The commissioner shall annually announce the adjusted refund schedule at the same
9.25time provided under section 290.06. The determination of the commissioner under this
9.26subdivision is not a rule under the Administrative Procedure Act.
9.27EFFECTIVE DATE.This section is effective beginning for claims based on
9.28property taxes payable in 2009.

9.29    Sec. 8. REPEALER.
9.30Minnesota Statutes 2006, section 290A.04, subdivision 2, is repealed.
9.31EFFECTIVE DATE.This section is effective for claims based on property taxes
9.32payable in 2008 and later.

10.1ARTICLE 2

10.2SCHOOL PROPERTY TAX RELIEF

10.3    Section 1. Minnesota Statutes 2006, section 123B.53, subdivision 4, is amended to read:
10.4    Subd. 4. Debt service equalization revenue. (a) The debt service equalization
10.5revenue of a district equals the sum of the first tier debt service equalization revenue and
10.6the second tier debt service equalization revenue.
10.7    (b) The first tier debt service equalization revenue of a district equals the greater of
10.8zero or the eligible debt service revenue minus the amount raised by a levy of 15 percent
10.9times the adjusted debt service net tax capacity of the district minus the second tier debt
10.10service equalization revenue of the district.
10.11    (c) The second tier debt service equalization revenue of a district equals the greater
10.12of zero or the eligible debt service revenue, excluding alternative facilities levies under
10.13section 123B.59, subdivision 5, minus the amount raised by a levy of 25 percent times the
10.14adjusted net tax capacity of the district.
10.15EFFECTIVE DATE.This section is effective for revenue for fiscal year 2009.

10.16    Sec. 2. Minnesota Statutes 2006, section 123B.53, subdivision 5, is amended to read:
10.17    Subd. 5. Equalized debt service levy. (a) The equalized debt service levy of a
10.18district equals the sum of the first tier equalized debt service levy and the second tier
10.19equalized debt service levy.
10.20    (b) A district's first tier equalized debt service levy equals the district's first tier debt
10.21service equalization revenue times the lesser of one or the ratio of:
10.22    (1) the quotient derived by dividing the adjusted debt service net tax capacity of the
10.23district for the year before the year the levy is certified by the adjusted pupil units in the
10.24district for the school year ending in the year prior to the year the levy is certified; to
10.25    (2) $3,200 100 percent of the statewide adjusted net tax capacity equalizing factor.
10.26    (c) A district's second tier equalized debt service levy equals the district's second tier
10.27debt service equalization revenue times the lesser of one or the ratio of:
10.28    (1) the quotient derived by dividing the adjusted net tax capacity of the district for
10.29the year before the year the levy is certified by the adjusted pupil units in the district for
10.30the school year ending in the year prior to the year the levy is certified; to
10.31    (2) $8,000.
10.32EFFECTIVE DATE.This section is effective for revenue for fiscal year 2009.

11.1    Sec. 3. [123B.555] SCHOOL BOND AGRICULTURAL CREDIT.
11.2    Subdivision 1. Eligibility. All class 2 property under section 273.13, subdivision 23,
11.3except for (1) property consisting of the house, garage, and immediately surrounding one
11.4acre of land of an agricultural homestead, and (2) landing areas or public access areas of
11.5privately owned public use airports, is eligible to receive the credit under this section.
11.6    Subd. 2. Credit amount. For each qualifying property, the school bond agricultural
11.7credit is equal to 20 percent of the property's eligible net tax capacity multiplied by the
11.8school debt tax rate determined under section 275.08, subdivision 1b.
11.9    Subd. 3. Credit reimbursements. The county auditor shall determine the tax
11.10reductions allowed under this section within the county for each taxes payable year and
11.11shall certify that amount to the commissioner of revenue as a part of the abstracts of tax
11.12lists submitted under section 275.29. Any prior year adjustments shall also be certified on
11.13the abstracts of tax lists. The commissioner shall review the certifications for accuracy,
11.14and may make such changes as are deemed necessary, or return the certification to the
11.15county auditor for correction. The credit under this section must be used to reduce the
11.16school district net tax capacity-based property tax as provided in section 273.1393 .
11.17    Subd. 4. Payment. The commissioner of revenue shall certify the total of the tax
11.18reductions granted under this section for each taxes payable year within each school
11.19district to the commissioner of education, who shall pay the reimbursement amounts to
11.20each school district as provided in section 273.1392 .
11.21    Subd. 5. Appropriation. An amount sufficient to make the payments required
11.22by this section is annually appropriated from the general fund to the commissioner of
11.23education.
11.24EFFECTIVE DATE.This section is effective for taxes payable in 2008 and
11.25thereafter.

11.26    Sec. 4. Minnesota Statutes 2006, section 126C.01, is amended by adding a subdivision
11.27to read:
11.28    Subd. 2a. Statewide adjusted net tax capacity equalizing factor. The statewide
11.29adjusted net tax capacity equalizing factor equals the quotient derived by dividing the total
11.30adjusted debt service net tax capacity of all school districts in the state for the year before
11.31the year the levy is certified by the total number of adjusted cost pupil units in the state
11.32for the fiscal year preceding the year the levy is certified.
11.33EFFECTIVE DATE.This section is effective for taxes payable in 2008.

12.1    Sec. 5. Minnesota Statutes 2006, section 126C.01, is amended by adding a subdivision
12.2to read:
12.3    Subd. 3a. Referendum market value equalizing factor. The referendum market
12.4value equalizing factor equals the quotient derived by dividing the total referendum market
12.5value of all school districts in the state for the year before the year the levy is certified by
12.6the total number of resident marginal cost pupil units in the state for the current school year.
12.7EFFECTIVE DATE.This section is effective for taxes payable in 2008.

12.8    Sec. 6. Minnesota Statutes 2006, section 126C.10, subdivision 13a, is amended to read:
12.9    Subd. 13a. Operating capital levy. To obtain operating capital revenue for fiscal
12.10year 2007 and later, a district may levy an amount not more than the product of its
12.11operating capital revenue for the fiscal year times the lesser of one or the ratio of its
12.12adjusted net tax capacity per adjusted marginal cost pupil unit to the operating capital
12.13equalizing factor. The operating capital equalizing factor equals $22,222 for fiscal year
12.142006, and $10,700 for fiscal year 2007 and 2008, and $25,000 for fiscal year 2009 and later.
12.15EFFECTIVE DATE.This section is effective for taxes payable in 2008.

12.16    Sec. 7. Minnesota Statutes 2006, section 126C.17, subdivision 6, is amended to read:
12.17    Subd. 6. Referendum equalization levy. (a) For fiscal year 2003 and later,
12.18A district's referendum equalization levy equals the sum of the first tier referendum
12.19equalization levy and the second tier referendum equalization levy.
12.20    (b) A district's first tier referendum equalization levy equals the district's first tier
12.21referendum equalization revenue times the lesser of one or the ratio of the district's
12.22referendum market value per resident marginal cost pupil unit to $476,000 120 percent of
12.23the referendum market value equalizing factor.
12.24    (c) A district's second tier referendum equalization levy equals the district's second
12.25tier referendum equalization revenue times the lesser of one or the ratio of the district's
12.26referendum market value per resident marginal cost pupil unit to $270,000 60 percent of
12.27the referendum market value equalizing factor.
12.28EFFECTIVE DATE.This section is effective for taxes payable in 2008.

12.29    Sec. 8. Minnesota Statutes 2006, section 127A.48, is amended by adding a subdivision
12.30to read:
12.31    Subd. 17. Adjusted debt service net tax capacity. To calculate each district's
12.32adjusted debt service net tax capacity, the commissioner of revenue must recompute each
13.1district's adjusted net tax capacity using an alternative sales ratio comparing the sales price
13.2to the estimated market value of the property.
13.3EFFECTIVE DATE.This section is effective the day following final enactment for
13.4computing taxes payable in 2008.

13.5    Sec. 9. Minnesota Statutes 2006, section 273.11, subdivision 1a, is amended to read:
13.6    Subd. 1a. Limited market value. In the case of all property classified as
13.7agricultural homestead or nonhomestead, residential homestead or nonhomestead, timber,
13.8or noncommercial seasonal residential recreational, the assessor shall compare the value
13.9with the taxable portion of the value determined in the preceding assessment.
13.10    For assessment years 2004, 2005, and 2006, the amount of the increase shall not
13.11exceed the greater of (1) 15 percent of the value in the preceding assessment, or (2) 25
13.12percent of the difference between the current assessment and the preceding assessment.
13.13    For assessment year 2007, the amount of the increase shall not exceed the greater of
13.14(1) 15 percent of the value in the preceding assessment, or (2) 33 percent of the difference
13.15between the current assessment and the preceding assessment.
13.16    For assessment year 2008, the amount of the increase shall not exceed the greater of
13.17(1) 15 percent of the value in the preceding assessment, or (2) 50 percent of the difference
13.18between the current assessment and the preceding assessment.
13.19    This limitation shall not apply to increases in value due to improvements. For
13.20purposes of this subdivision, the term "assessment" means the value prior to any exclusion
13.21under subdivision 16.
13.22    The provisions of this subdivision shall be in effect through assessment year 2008
13.23as provided in this subdivision.
13.24    For purposes of the assessment/sales ratio study conducted under section 127A.48,
13.25and the computation of state aids paid under chapters 122A, 123A, 123B, excluding
13.26section 123B.53, 124D, 125A, 126C, 127A, and 477A, market values and net tax
13.27capacities determined under this subdivision and subdivision 16, shall be used.
13.28EFFECTIVE DATE.This section is effective the day following final enactment for
13.29computing taxes payable in 2008.

13.30    Sec. 10. Minnesota Statutes 2006, section 273.1393, is amended to read:
13.31273.1393 COMPUTATION OF NET PROPERTY TAXES.
13.32    Notwithstanding any other provisions to the contrary, "net" property taxes are
13.33determined by subtracting the credits in the order listed from the gross tax:
14.1    (1) disaster credit as provided in section 273.123;
14.2    (2) powerline credit as provided in section 273.42;
14.3    (3) agricultural preserves credit as provided in section 473H.10;
14.4    (4) enterprise zone credit as provided in section 469.171;
14.5    (5) disparity reduction credit;
14.6    (6) conservation tax credit as provided in section 273.119;
14.7    (7) homestead and agricultural credits as provided in section 273.1384;
14.8    (8) school bond agricultural credit as provided in section 123B.555;
14.9    (8) (9) taconite homestead credit as provided in section 273.135; and
14.10    (9) (10) supplemental homestead credit as provided in section 273.1391.
14.11    The combination of all property tax credits must not exceed the gross tax amount.
14.12EFFECTIVE DATE.This section is effective for taxes payable in 2008 and
14.13thereafter.

14.14    Sec. 11. Minnesota Statutes 2006, section 275.065, subdivision 3, is amended to read:
14.15    Subd. 3. Notice of proposed property taxes. (a) The county auditor shall prepare
14.16and the county treasurer shall deliver after November 10 and on or before November 24
14.17each year, by first class mail to each taxpayer at the address listed on the county's current
14.18year's assessment roll, a notice of proposed property taxes.
14.19    (b) The commissioner of revenue shall prescribe the form of the notice.
14.20    (c) The notice must inform taxpayers that it contains the amount of property taxes
14.21each taxing authority proposes to collect for taxes payable the following year. In the case
14.22of a town, or in the case of the state general tax, the final tax amount will be its proposed
14.23tax. In the case of taxing authorities required to hold a public meeting under subdivision 6,
14.24the notice must clearly state that each taxing authority, including regional library districts
14.25established under section 134.201, and including the metropolitan taxing districts as
14.26defined in paragraph (i), but excluding all other special taxing districts and towns, will
14.27hold a public meeting to receive public testimony on the proposed budget and proposed or
14.28final property tax levy, or, in case of a school district, on the current budget and proposed
14.29property tax levy. It must clearly state the time and place of each taxing authority's
14.30meeting, a telephone number for the taxing authority that taxpayers may call if they have
14.31questions related to the notice, and an address where comments will be received by mail.
14.32    (d) The notice must state for each parcel:
14.33    (1) the market value of the property as determined under section 273.11, and used
14.34for computing property taxes payable in the following year and for taxes payable in the
14.35current year as each appears in the records of the county assessor on November 1 of the
15.1current year; and, in the case of residential property, whether the property is classified as
15.2homestead or nonhomestead. The notice must clearly inform taxpayers of the years to
15.3which the market values apply and that the values are final values;
15.4    (2) the items listed below, shown separately by county, city or town, and state
15.5general tax, net of the residential and agricultural homestead credit under section 273.1384
15.6and the school bond agricultural credit under section 123B.555, voter approved school
15.7levy, other local school levy, and the sum of the special taxing districts, and as a total
15.8of all taxing authorities:
15.9    (i) the actual tax for taxes payable in the current year; and
15.10    (ii) the proposed tax amount.
15.11    If the county levy under clause (2) includes an amount for a lake improvement
15.12district as defined under sections 103B.501 to 103B.581, the amount attributable for that
15.13purpose must be separately stated from the remaining county levy amount.
15.14    In the case of a town or the state general tax, the final tax shall also be its proposed
15.15tax unless the town changes its levy at a special town meeting under section 365.52. If a
15.16school district has certified under section 126C.17, subdivision 9, that a referendum will
15.17be held in the school district at the November general election, the county auditor must
15.18note next to the school district's proposed amount that a referendum is pending and that,
15.19if approved by the voters, the tax amount may be higher than shown on the notice. In
15.20the case of the city of Minneapolis, the levy for the Minneapolis Library Board and the
15.21levy for Minneapolis Park and Recreation shall be listed separately from the remaining
15.22amount of the city's levy. In the case of the city of St. Paul, the levy for the St. Paul
15.23Library Agency must be listed separately from the remaining amount of the city's levy.
15.24In the case of Ramsey County, any amount levied under section 134.07 may be listed
15.25separately from the remaining amount of the county's levy. In the case of a parcel where
15.26tax increment or the fiscal disparities areawide tax under chapter 276A or 473F applies,
15.27the proposed tax levy on the captured value or the proposed tax levy on the tax capacity
15.28subject to the areawide tax must each be stated separately and not included in the sum of
15.29the special taxing districts; and
15.30    (3) the increase or decrease between the total taxes payable in the current year and
15.31the total proposed taxes, expressed as a percentage.
15.32    For purposes of this section, the amount of the tax on homesteads qualifying under
15.33the senior citizens' property tax deferral program under chapter 290B is the total amount
15.34of property tax before subtraction of the deferred property tax amount.
15.35    (e) The notice must clearly state that the proposed or final taxes do not include
15.36the following:
16.1    (1) special assessments;
16.2    (2) levies approved by the voters after the date the proposed taxes are certified,
16.3including bond referenda and school district levy referenda;
16.4    (3) a levy limit increase approved by the voters by the first Tuesday after the first
16.5Monday in November of the levy year as provided under section 275.73;
16.6    (4) amounts necessary to pay cleanup or other costs due to a natural disaster
16.7occurring after the date the proposed taxes are certified;
16.8    (5) amounts necessary to pay tort judgments against the taxing authority that become
16.9final after the date the proposed taxes are certified; and
16.10    (6) the contamination tax imposed on properties which received market value
16.11reductions for contamination.
16.12    (f) Except as provided in subdivision 7, failure of the county auditor to prepare or
16.13the county treasurer to deliver the notice as required in this section does not invalidate the
16.14proposed or final tax levy or the taxes payable pursuant to the tax levy.
16.15    (g) If the notice the taxpayer receives under this section lists the property as
16.16nonhomestead, and satisfactory documentation is provided to the county assessor by the
16.17applicable deadline, and the property qualifies for the homestead classification in that
16.18assessment year, the assessor shall reclassify the property to homestead for taxes payable
16.19in the following year.
16.20    (h) In the case of class 4 residential property used as a residence for lease or rental
16.21periods of 30 days or more, the taxpayer must either:
16.22    (1) mail or deliver a copy of the notice of proposed property taxes to each tenant,
16.23renter, or lessee; or
16.24    (2) post a copy of the notice in a conspicuous place on the premises of the property.
16.25    The notice must be mailed or posted by the taxpayer by November 27 or within
16.26three days of receipt of the notice, whichever is later. A taxpayer may notify the county
16.27treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to
16.28which the notice must be mailed in order to fulfill the requirements of this paragraph.
16.29    (i) For purposes of this subdivision, subdivisions 5a and 6, "metropolitan special
16.30taxing districts" means the following taxing districts in the seven-county metropolitan area
16.31that levy a property tax for any of the specified purposes listed below:
16.32    (1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325,
16.33473.446 , 473.521, 473.547, or 473.834;
16.34    (2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672;
16.35and
16.36    (3) Metropolitan Mosquito Control Commission under section 473.711.
17.1    For purposes of this section, any levies made by the regional rail authorities in the
17.2county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
17.3398A shall be included with the appropriate county's levy and shall be discussed at that
17.4county's public hearing.
17.5    (j) The governing body of a county, city, or school district may, with the consent
17.6of the county board, include supplemental information with the statement of proposed
17.7property taxes about the impact of state aid increases or decreases on property tax
17.8increases or decreases and on the level of services provided in the affected jurisdiction.
17.9This supplemental information may include information for the following year, the current
17.10year, and for as many consecutive preceding years as deemed appropriate by the governing
17.11body of the county, city, or school district. It may include only information regarding:
17.12    (1) the impact of inflation as measured by the implicit price deflator for state and
17.13local government purchases;
17.14    (2) population growth and decline;
17.15    (3) state or federal government action; and
17.16    (4) other financial factors that affect the level of property taxation and local services
17.17that the governing body of the county, city, or school district may deem appropriate to
17.18include.
17.19    The information may be presented using tables, written narrative, and graphic
17.20representations and may contain instruction toward further sources of information or
17.21opportunity for comment.
17.22EFFECTIVE DATE.This section is effective for taxes payable in 2008 and
17.23thereafter.

17.24    Sec. 12. Minnesota Statutes 2006, section 275.07, subdivision 2, is amended to read:
17.25    Subd. 2. School district in more than one county levies; special requirements. (a)
17.26In school districts lying in more than one county, the clerk shall certify the tax levied to the
17.27auditor of the county in which the administrative offices of the school district are located.
17.28    (b) The clerk shall identify the portion of the school district levy that is levied for the
17.29purposes specified in section 123B.53, subdivision 5, as the school debt levy at the time
17.30that the levy is certified under this section.
17.31EFFECTIVE DATE.This section is effective for taxes payable in 2008 and
17.32thereafter.

17.33    Sec. 13. Minnesota Statutes 2006, section 275.08, subdivision 1b, is amended to read:
18.1    Subd. 1b. Computation of tax rates. (a) The amounts certified to be levied against
18.2net tax capacity under section 275.07 by an individual local government unit shall be
18.3divided by the total net tax capacity of all taxable properties within the local government
18.4unit's taxing jurisdiction. The resulting ratio, the local government's local tax rate,
18.5multiplied by each property's net tax capacity shall be each property's net tax capacity tax
18.6for that local government unit before reduction by any credits.
18.7    (b) The auditor shall also determine the school debt tax rate for each school district
18.8equal to the school debt levy certified under section 275.07 divided by the total net tax
18.9capacity of all taxable property within the district.
18.10    (c) Any amount certified to the county auditor to be levied against market value shall
18.11be divided by the total referendum market value of all taxable properties within the taxing
18.12district. The resulting ratio, the taxing district's new referendum tax rate, multiplied by
18.13each property's referendum market value shall be each property's new referendum tax
18.14before reduction by any credits. For the purposes of this subdivision, "referendum market
18.15value" means the market value as defined in section 126C.01, subdivision 3.
18.16EFFECTIVE DATE.This section is effective for taxes payable in 2008 and
18.17thereafter.

18.18    Sec. 14. Minnesota Statutes 2006, section 276.04, subdivision 2, is amended to read:
18.19    Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the
18.20printing of the tax statements. The commissioner of revenue shall prescribe the form
18.21of the property tax statement and its contents. The statement must contain a tabulated
18.22statement of the dollar amount due to each taxing authority and the amount of the state
18.23tax from the parcel of real property for which a particular tax statement is prepared. The
18.24dollar amounts attributable to the county, the state tax, the voter approved school tax, the
18.25other local school tax, the township or municipality, and the total of the metropolitan
18.26special taxing districts as defined in section 275.065, subdivision 3, paragraph (i), must
18.27be separately stated. The amounts due all other special taxing districts, if any, may be
18.28aggregated except that any levies made by the regional rail authorities in the county of
18.29Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A
18.30shall be listed on a separate line directly under the appropriate county's levy. If the county
18.31levy under this paragraph includes an amount for a lake improvement district as defined
18.32under sections 103B.501 to 103B.581, the amount attributable for that purpose must be
18.33separately stated from the remaining county levy amount. In the case of Ramsey County,
18.34if the county levy under this paragraph includes an amount for public library service
18.35under section 134.07, the amount attributable for that purpose may be separated from the
19.1remaining county levy amount. The amount of the tax on homesteads qualifying under the
19.2senior citizens' property tax deferral program under chapter 290B is the total amount of
19.3property tax before subtraction of the deferred property tax amount. The amount of the
19.4tax on contamination value imposed under sections 270.91 to 270.98, if any, must also
19.5be separately stated. The dollar amounts, including the dollar amount of any special
19.6assessments, may be rounded to the nearest even whole dollar. For purposes of this section
19.7whole odd-numbered dollars may be adjusted to the next higher even-numbered dollar.
19.8The amount of market value excluded under section 273.11, subdivision 16, if any, must
19.9also be listed on the tax statement.
19.10    (b) The property tax statements for manufactured homes and sectional structures
19.11taxed as personal property shall contain the same information that is required on the
19.12tax statements for real property.
19.13    (c) Real and personal property tax statements must contain the following information
19.14in the order given in this paragraph. The information must contain the current year tax
19.15information in the right column with the corresponding information for the previous year
19.16in a column on the left:
19.17    (1) the property's estimated market value under section 273.11, subdivision 1;
19.18    (2) the property's taxable market value after reductions under section 273.11,
19.19subdivisions 1a and 16 ;
19.20    (3) the property's gross tax, calculated by adding the property's total property tax to
19.21the sum of the aids enumerated in clause (4);
19.22    (4) a total of the following aids:
19.23    (i) education aids payable under chapters 122A, 123A, 123B, 124D, 125A, 126C,
19.24and 127A;
19.25    (ii) local government aids for cities, towns, and counties under sections 477A.011 to
19.26477A.04 ; and
19.27    (iii) disparity reduction aid under section 273.1398;
19.28    (5) for homestead residential and agricultural properties, the credits under section
19.29sections 273.1384 and 123B.555;
19.30    (6) any credits received under sections 273.119; 273.123; 273.135; 273.1391;
19.31273.1398, subdivision 4 ; 469.171; and 473H.10, except that the amount of credit received
19.32under section 273.135 must be separately stated and identified as "taconite tax relief"; and
19.33    (7) the net tax payable in the manner required in paragraph (a).
19.34    (d) If the county uses envelopes for mailing property tax statements and if the county
19.35agrees, a taxing district may include a notice with the property tax statement notifying
19.36taxpayers when the taxing district will begin its budget deliberations for the current
20.1year, and encouraging taxpayers to attend the hearings. If the county allows notices to
20.2be included in the envelope containing the property tax statement, and if more than
20.3one taxing district relative to a given property decides to include a notice with the tax
20.4statement, the county treasurer or auditor must coordinate the process and may combine
20.5the information on a single announcement.
20.6    The commissioner of revenue shall certify to the county auditor the actual or
20.7estimated aids enumerated in paragraph (c), clause (4), that local governments will receive
20.8in the following year. The commissioner must certify this amount by January 1 of each
20.9year.
20.10EFFECTIVE DATE.This section is effective for taxes payable in 2008 and
20.11thereafter.

20.12ARTICLE 3

20.13AIDS TO LOCAL GOVERNMENTS

20.14    Section 1. Minnesota Statutes 2006, section 477A.011, subdivision 34, is amended to
20.15read:
20.16    Subd. 34. City revenue need. (a) For a city with a population equal to or greater
20.17than 2,500, "city revenue need" is the sum of (1) 5.0734098 times the pre-1940 housing
20.18percentage; plus (2) 19.141678 times the population decline percentage; plus (3)
20.192504.06334 times the road accidents factor; plus (4) 355.0547; minus (5) the metropolitan
20.20area factor; minus (6) 49.10638 times the household size.
20.21    (b) For a city with a population less than 2,500, "city revenue need" is the sum of (1)
20.222.387 times the pre-1940 housing percentage 300; plus (2) 2.67591 times the commercial
20.23industrial percentage; plus (3) 3.16042 times the population decline percentage; plus
20.24(4) 1.206 times the transformed population; minus (5) 62.772. 0.31 multiplied by the
20.25difference between the city's population and 100. The city revenue need for a city with a
20.26population less than 2,500 may not exceed 500.
20.27    (c) For a city with a population of 2,500 or more and a population in one of the most
20.28recently available five years that was less than 2,500, "city revenue need" is the sum of (1)
20.29its city revenue need calculated under paragraph (a) multiplied by its transition factor;
20.30plus (2) its city revenue need calculated under the formula in paragraph (b) multiplied
20.31by the difference between one and its transition factor. For purposes of this paragraph, a
20.32city's "transition factor" is equal to 0.2 multiplied by the number of years that the city's
20.33population estimate has been 2,500 or more. This provision only applies for aids payable
21.1in calendar years 2006 to 2008 to cities with a 2002 population of less than 2,500. It
21.2applies to any city for aids payable in 2009 and thereafter.
21.3    (d) The city revenue need cannot be less than zero.
21.4    (e) For calendar year 2005 2008 and subsequent years, the city revenue need for
21.5a city, as determined in paragraphs (a) to (d), is multiplied by the ratio of the annual
21.6implicit price deflator for government consumption expenditures and gross investment for
21.7state and local governments as prepared by the United States Department of Commerce,
21.8for the most recently available year to the 2003 2000 implicit price deflator for state
21.9and local government purchases.
21.10EFFECTIVE DATE.This section is effective for aids payable in 2008.

21.11    Sec. 2. Minnesota Statutes 2006, section 477A.011, subdivision 36, is amended to read:
21.12    Subd. 36. City aid base. (a) Except as otherwise provided in this subdivision,
21.13"city aid base" is zero.
21.14    (b) The city aid base for any city with a population less than 500 is increased by
21.15$40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount
21.16of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also
21.17increased by $40,000 for aids payable in calendar year 1995 only, provided that:
21.18    (i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent;
21.19    (ii) the city portion of the tax capacity rate exceeds 100 percent; and
21.20    (iii) its city aid base is less than $60 per capita.
21.21    (c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and
21.22the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
21.23paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that:
21.24    (i) the city has a population in 1994 of 2,500 or more;
21.25    (ii) the city is located in a county, outside of the metropolitan area, which contains a
21.26city of the first class;
21.27    (iii) the city's net tax capacity used in calculating its 1996 aid under section
21.28477A.013 is less than $400 per capita; and
21.29    (iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of
21.30property located in the city is classified as railroad property.
21.31    (d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and
21.32the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
21.33paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that:
21.34    (i) the city was incorporated as a statutory city after December 1, 1993;
21.35    (ii) its city aid base does not exceed $5,600; and
22.1    (iii) the city had a population in 1996 of 5,000 or more.
22.2    (e) The city aid base for a city is increased by $450,000 in 1999 to 2008 and the
22.3maximum amount of total aid it may receive under section 477A.013, subdivision 9,
22.4paragraph (c), is also increased by $450,000 in calendar year 1999 only, provided that:
22.5    (i) the city had a population in 1996 of at least 50,000;
22.6    (ii) its population had increased by at least 40 percent in the ten-year period ending
22.7in 1996; and
22.8    (iii) its city's net tax capacity for aids payable in 1998 is less than $700 per capita.
22.9    (f) The city aid base for a city is increased by $150,000 for aids payable in 2000 and
22.10thereafter, and the maximum amount of total aid it may receive under section 477A.013,
22.11subdivision 9 , paragraph (c), is also increased by $150,000 in calendar year 2000 only,
22.12provided that:
22.13    (1) the city has a population that is greater than 1,000 and less than 2,500;
22.14    (2) its commercial and industrial percentage for aids payable in 1999 is greater
22.15than 45 percent; and
22.16    (3) the total market value of all commercial and industrial property in the city
22.17for assessment year 1999 is at least 15 percent less than the total market value of all
22.18commercial and industrial property in the city for assessment year 1998.
22.19    (g) The city aid base for a city is increased by $200,000 in 2000 and thereafter, and
22.20the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
22.21paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that:
22.22    (1) the city had a population in 1997 of 2,500 or more;
22.23    (2) the net tax capacity of the city used in calculating its 1999 aid under section
22.24477A.013 is less than $650 per capita;
22.25    (3) the pre-1940 housing percentage of the city used in calculating 1999 aid under
22.26section 477A.013 is greater than 12 percent;
22.27    (4) the 1999 local government aid of the city under section 477A.013 is less than
22.2820 percent of the amount that the formula aid of the city would have been if the need
22.29increase percentage was 100 percent; and
22.30    (5) the city aid base of the city used in calculating aid under section 477A.013
22.31is less than $7 per capita.
22.32    (h) The city aid base for a city is increased by $102,000 in 2000 and thereafter, and
22.33the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
22.34paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that:
22.35    (1) the city has a population in 1997 of 2,000 or more;
23.1    (2) the net tax capacity of the city used in calculating its 1999 aid under section
23.2477A.013 is less than $455 per capita;
23.3    (3) the net levy of the city used in calculating 1999 aid under section 477A.013 is
23.4greater than $195 per capita; and
23.5    (4) the 1999 local government aid of the city under section 477A.013 is less than
23.638 percent of the amount that the formula aid of the city would have been if the need
23.7increase percentage was 100 percent.
23.8    (i) The city aid base for a city is increased by $32,000 in 2001 and thereafter, and
23.9the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
23.10paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that:
23.11    (1) the city has a population in 1998 that is greater than 200 but less than 500;
23.12    (2) the city's revenue need used in calculating aids payable in 2000 was greater
23.13than $200 per capita;
23.14    (3) the city net tax capacity for the city used in calculating aids available in 2000
23.15was equal to or less than $200 per capita;
23.16    (4) the city aid base of the city used in calculating aid under section 477A.013
23.17is less than $65 per capita; and
23.18    (5) the city's formula aid for aids payable in 2000 was greater than zero.
23.19    (j) The city aid base for a city is increased by $7,200 in 2001 and thereafter, and
23.20the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
23.21paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that:
23.22    (1) the city had a population in 1998 that is greater than 200 but less than 500;
23.23    (2) the city's commercial industrial percentage used in calculating aids payable in
23.242000 was less than ten percent;
23.25    (3) more than 25 percent of the city's population was 60 years old or older according
23.26to the 1990 census;
23.27    (4) the city aid base of the city used in calculating aid under section 477A.013
23.28is less than $15 per capita; and
23.29    (5) the city's formula aid for aids payable in 2000 was greater than zero.
23.30    (k) The city aid base for a city is increased by $45,000 in 2001 and thereafter and
23.31by an additional $50,000 in calendar years 2002 to 2011, and the maximum amount of
23.32total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also
23.33increased by $45,000 in calendar year 2001 only, and by $50,000 in calendar year 2002
23.34only, provided that:
23.35    (1) the net tax capacity of the city used in calculating its 2000 aid under section
23.36477A.013 is less than $810 per capita;
24.1    (2) the population of the city declined more than two percent between 1988 and 1998;
24.2    (3) the net levy of the city used in calculating 2000 aid under section 477A.013 is
24.3greater than $240 per capita; and
24.4    (4) the city received less than $36 per capita in aid under section 477A.013,
24.5subdivision 9 , for aids payable in 2000.
24.6    (l) The city aid base for a city with a population of 10,000 or more which is located
24.7outside of the seven-county metropolitan area is increased in 2002 and thereafter, and the
24.8maximum amount of total aid it may receive under section 477A.013, subdivision 9,
24.9paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to
24.10the lesser of:
24.11    (1)(i) the total population of the city, as determined by the United States Bureau of
24.12the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or
24.13    (2) $2,500,000.
24.14    (m) The city aid base is increased by $50,000 in 2002 and thereafter, and the
24.15maximum amount of total aid it may receive under section 477A.013, subdivision 9,
24.16paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that:
24.17    (1) the city is located in the seven-county metropolitan area;
24.18    (2) its population in 2000 is between 10,000 and 20,000; and
24.19    (3) its commercial industrial percentage, as calculated for city aid payable in 2001,
24.20was greater than 25 percent.
24.21    (n) The city aid base for a city is increased by $150,000 in calendar years 2002 to
24.222011 and by an additional $75,000 in calendar years 2008 to 2013 and the maximum
24.23amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is
24.24also increased by $150,000 in calendar year 2002 only and by $75,000 in calendar year
24.252008 only, provided that:
24.26    (1) the city had a population of at least 3,000 but no more than 4,000 in 1999;
24.27    (2) its home county is located within the seven-county metropolitan area;
24.28    (3) its pre-1940 housing percentage is less than 15 percent; and
24.29    (4) its city net tax capacity per capita for taxes payable in 2000 is less than $900
24.30per capita.
24.31    (o) The city aid base for a city is increased by $200,000 beginning in calendar
24.32year 2003 and the maximum amount of total aid it may receive under section 477A.013,
24.33subdivision 9 , paragraph (c), is also increased by $200,000 in calendar year 2003 only,
24.34provided that the city qualified for an increase in homestead and agricultural credit aid
24.35under Laws 1995, chapter 264, article 8, section 18.
25.1    (p) The city aid base for a city is increased by $200,000 in 2004 only and the
25.2maximum amount of total aid it may receive under section 477A.013, subdivision 9, is
25.3also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear
25.4dry cask storage facility.
25.5    (q) The city aid base for a city is increased by $10,000 in 2004 and thereafter and the
25.6maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
25.7by $10,000 in calendar year 2004 only, if the city was included in a federal major disaster
25.8designation issued on April 1, 1998, and its pre-1940 housing stock was decreased by
25.9more than 40 percent between 1990 and 2000.
25.10    (r) The city aid base for a city is increased by $25,000 $30,000 in 2006 2008 only
25.11and the maximum total aid it may receive under section 477A.013, subdivision 9, is also
25.12increased by $25,000 $30,000 in calendar year 2006 2008 only if the city had a population
25.13in 2003 of at least 1,000 and has a state park for which the city provides rescue services
25.14and which comprised at least 14 percent of the total geographic area included within the
25.15city boundaries in 2000.
25.16    (s) The city aid base for a city with a population less than 5,000 is increased in
25.172006 and thereafter and the minimum and maximum amount of total aid it may receive
25.18under this section is also increased in calendar year 2006 only by an amount equal to
25.19$6 multiplied by its population.
25.20    (t) The city aid base for a city is increased by $80,000 in 2007 only and the minimum
25.21and maximum amount of total aid it may receive under section 477A.013, subdivision 9,
25.22is also increased by $80,000 in calendar year 2007 only, if:
25.23    (1) as of May 1, 2006, at least 25 percent of the tax capacity of the city is proposed
25.24to be placed in trust status as tax-exempt Indian land;
25.25    (2) the placement of the land is being challenged administratively or in court; and
25.26    (3) due to the challenge, the land proposed to be placed in trust is still on the tax
25.27rolls as of May 1, 2006.
25.28    (u) The city aid base for a city is increased by $100,000 in 2007 and thereafter and
25.29the minimum and maximum total amount of aid it may receive under this section is also
25.30increased in calendar year 2007 only, provided that:
25.31    (1) the city has a 2004 estimated population greater than 200 but less than 2,000;
25.32    (2) its city net tax capacity for aids payable in 2006 was less than $300 per capita;
25.33    (3) the ratio of its pay 2005 tax levy compared to its city net tax capacity for aids
25.34payable in 2006 was greater than 110 percent; and
25.35    (4) it is located in a county where at least 15,000 acres of land are classified as
25.36tax-exempt Indian reservations according to the 2004 abstract of tax-exempt property.
26.1    (v) The city aid base for a city is increased by $140,000 in 2008 and thereafter, and
26.2the maximum total aid it may receive under section 477A.013, subdivision 9, is also
26.3increased by $140,000 in calendar year 2008 only if the city had a population in 2005 of
26.4less than 3,000 and the city's boundaries as of 2007 were formed by the consolidation
26.5of two cities and one township in 2002.
26.6    (w) The city aid base for a city is increased by $100,000 in 2008 and thereafter, and
26.7the maximum total aid it may receive under section 477A.013, subdivision 9, is also
26.8increased by $100,000 in calendar year 2008 only if the city had a city net tax capacity for
26.9aids payable in 2007 of less than $150 per capita and the city experienced flooding on
26.10March 14, 2007, that resulted in evacuation of at least 40 homes.
26.11EFFECTIVE DATE.This section is effective for sales and purchases made after
26.12June 30, 2007.

26.13    Sec. 3. Minnesota Statutes 2006, section 477A.0124, subdivision 5, is amended to read:
26.14    Subd. 5. County transition aid. (a) For 2005, a county is eligible for transition
26.15aid equal to the amount, if any, by which:
26.16    (1) the difference between:
26.17    (i) the aid the county received under subdivision 1 in 2004, divided by the total aid
26.18paid to all counties under subdivision 1, multiplied by $205,000,000; and
26.19    (ii) the amount of aid the county is certified to receive in 2005 under subdivisions
26.203 and 4;
26.21exceeds:
26.22    (2) three percent of the county's adjusted net tax capacity.
26.23A county's aid under this paragraph may not be less than zero.
26.24    (b) In 2006, a county is eligible to receive two-thirds of the transition aid it received
26.25in 2005.
26.26    (c) In 2007 and thereafter, a county is eligible to receive one-third of the transition
26.27aid it received in 2005.
26.28    (d) No county shall receive aid under this subdivision after 2007.
26.29EFFECTIVE DATE.This section is effective for aids payable in 2008 and
26.30thereafter.

26.31    Sec. 4. Minnesota Statutes 2006, section 477A.013, subdivision 8, is amended to read:
26.32    Subd. 8. City formula aid. In calendar year 2004 and subsequent years, the
26.33formula aid for a city is equal to the need increase percentage multiplied by the difference
27.1between (1) the city's revenue need multiplied by its population, and (2) the sum of the
27.2city's net tax capacity multiplied by the tax effort rate; the taconite aids under sections
27.3298.28 and 298.282 to any city except a city directly impacted by a taconite mine or plant,
27.4multiplied by the following percentages:
27.5    (i) zero percent for aids payable in 2004;
27.6    (ii) 25 percent for aids payable in 2005;
27.7    (iii) 50 percent for aids payable in 2006;
27.8    (iv) 75 percent for aids payable in 2007; and
27.9    (v) 100 percent for aids payable in 2008 and thereafter.
27.10    For purposes of this subdivision, "a city directly impacted by a taconite mine or
27.11plant" means: (1) Babbit, (2) Eveleth, (3) Hibbing, (4) Keewatin, (5) Mountain Iron, (6)
27.12Silver Bay, or (7) Virginia.
27.13No city may have a formula aid amount less than zero. The need increase percentage
27.14must be the same for all cities.
27.15    The applicable need increase percentage must be calculated by the Department of
27.16Revenue so that the total of the aid under subdivision 9 equals the total amount available
27.17for aid under section 477A.03 after the subtraction under section 477A.014, subdivisions
27.184 and 5 .
27.19EFFECTIVE DATE.This section is effective beginning with aids payable in 2008.

27.20    Sec. 5. Minnesota Statutes 2006, section 477A.013, subdivision 9, is amended to read:
27.21    Subd. 9. City aid distribution. (a) In calendar year 2002 and thereafter 2008, each
27.22city shall receive an aid distribution equal to the sum of (1) the city formula aid under
27.23subdivision 8, and (2) its city aid base, and (3) one-half of the difference between its total
27.24aid in the previous year under this section and its city aid base in the previous year. For aids
27.25payable in 2009 and thereafter, each city shall receive an aid distribution equal to the sum
27.26of (1) the city formula aid under subdivision 8, (2) its city aid base, and (3) its formula aid
27.27under subdivision 8 in the previous year, prior to any adjustments under this subdivision.
27.28    (b) For aids payable in 2008, the total aid for any city shall not exceed the sum of (1)
27.2925 percent of its net levy for the year prior to the aid distribution plus (2) its total aid in the
27.30previous year. For aids payable in 2005 2009 and thereafter, the total aid for any city shall
27.31not exceed the sum of (1) ten percent of the city's net levy for the year prior to the aid
27.32distribution plus (2) its total aid in the previous year. For aids payable in 2005 2008 and
27.33thereafter, the total aid for any city with a population of 2,500 or more may not decrease
27.34from be less than its total aid under this section in the previous year by an amount greater
28.1than minus the lesser of (1) $15 multiplied by its population, or (2) ten percent of its net
28.2levy in the year prior to the aid distribution.
28.3    (c) For aids payable in 2004 only, the total aid for a city with a population less than
28.42,500 may not be less than the amount it was certified to receive in 2003 minus the greater
28.5of (1) the reduction to this aid payment in 2003 under Laws 2003, First Special Session
28.6chapter 21, article 5, or (2) five percent of its 2003 aid amount. For aids payable in 2008
28.7only, the total aid for a city with a population less than 2,500 must not be less than the
28.8amount it would otherwise be certified to receive in 2008 if this act was not enacted. For
28.9aids payable in 2005 2008 and thereafter, the total aid for a city with a population less
28.10than 2,500 must not be less than the amount it was certified to receive in the previous year
28.11minus the lesser of (1) $15 multiplied by its population, or (2) five percent of its 2003
28.12certified aid amount.
28.13    (d) If a city's net tax capacity used in calculating aid under this section has decreased
28.14in any year by more than 25 percent from its net tax capacity in the previous year due to
28.15property becoming tax-exempt Indian land, the city's maximum allowed aid increase
28.16under paragraph (b) shall be increased by an amount equal to (1) the city's tax rate in the
28.17year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease
28.18resulting from the property becoming tax exempt.
28.19EFFECTIVE DATE.This section is effective for aids payable in 2008 and
28.20thereafter.

28.21    Sec. 6. Minnesota Statutes 2006, section 477A.013, is amended by adding a
28.22subdivision to read:
28.23    Subd. 11. Towns. In 2008 and subsequent years, each town that levied a property
28.24tax in the previous year shall receive a distribution equal to $3 multiplied by its population.
28.25EFFECTIVE DATE.This section is effective for aids payable in calendar year
28.262008 and thereafter.

28.27    Sec. 7. Minnesota Statutes 2006, section 477A.03, is amended to read:
28.28477A.03 APPROPRIATION.
28.29    Subd. 2. Annual appropriation. A sum sufficient to discharge the duties imposed
28.30by sections 477A.011 to 477A.014 is annually appropriated from the general fund to the
28.31commissioner of revenue.
28.32    Subd. 2a. Cities. For aids payable in 2004, the total aids paid under section
28.33477A.013, subdivision 9, are limited to $429,000,000. For aids payable in 2005, the
29.1total aids paid under section 477A.013, subdivision 9, are limited to $437,052,000. For
29.2aids payable in 2006 and thereafter 2008, the total aids paid under section 477A.013,
29.3subdivision 9 , is limited to $485,052,000 $545,052,000. For aids payable in 2009 and
29.4thereafter, the total aids paid under section 477A.013, subdivision 9, are the amounts
29.5certified to be paid in the previous year, adjusted for inflation as provided under
29.6subdivision 5.
29.7    Subd. 2b. Counties. (a) For aids payable in calendar year 2005 and thereafter
29.82008, the total aids paid to counties under section 477A.0124, subdivision 3, are limited
29.9to $100,500,000 $108,000,000. For aids payable in 2008 and thereafter, the total aids
29.10paid under section 477A.0124, subdivision 3, are the amounts certified to be paid in the
29.11previous year, adjusted for inflation as provided under subdivision 5. Each calendar year,
29.12$500,000 shall be retained by the commissioner of revenue to make reimbursements
29.13to the commissioner of finance for payments made under section 611.27. For calendar
29.14year 2004, the amount shall be in addition to the payments authorized under section
29.15477A.0124, subdivision 1. For calendar year 2005 and subsequent years, The amount shall
29.16be deducted from the appropriation under this paragraph. The reimbursements shall be to
29.17defray the additional costs associated with court-ordered counsel under section 611.27.
29.18Any retained amounts not used for reimbursement in a year shall be included in the next
29.19distribution of county need aid that is certified to the county auditors for the purpose of
29.20property tax reduction for the next taxes payable year.
29.21    (b) For aids payable in 2005, the total aids under section 477A.0124, subdivision
29.224 , are limited to $105,000,000. For aids payable in 2006 and thereafter 2008, the total
29.23aid under section 477A.0124, subdivision 4, is limited to $105,132,923 $112,169,054.
29.24For aids payable in 2008 and thereafter, the total aids paid under section 477A.0124,
29.25subdivision 4, are the amounts certified to be paid in the previous year, adjusted for
29.26inflation as provided under subdivision 5. The commissioner of finance shall bill the
29.27commissioner of revenue for the cost of preparation of local impact notes as required by
29.28section 3.987, not to exceed $207,000 in fiscal year 2004 and thereafter. The commissioner
29.29of education shall bill the commissioner of revenue for the cost of preparation of local
29.30impact notes for school districts as required by section 3.987, not to exceed $7,000 in fiscal
29.31year 2004 and thereafter. The commissioner of revenue shall deduct the amounts billed
29.32under this paragraph from the appropriation under this paragraph. The amounts deducted
29.33are appropriated to the commissioner of finance and the commissioner of education for the
29.34preparation of local impact notes.
29.35    Subd. 5. Inflation adjustment. (a) In 2009 and thereafter, the amount paid under
29.36subdivision 2a shall each be increased by an amount as provided in paragraphs (b) and (c).
30.1    (b) Unless the requirements of paragraph (c) are met, the increase shall be one
30.2percent above the amount certified to be paid under those subdivisions in the previous year.
30.3    (c) If the legislature adopts a new formula proposed by the study in section 11
30.4that all city organizations representing at least 40 cities in the state support, the increase
30.5shall be equal to:
30.6    (1) the amount certified to be paid under that subdivision in the previous year,
30.7multiplied by
30.8    (2) one plus the percentage increase in the implicit price deflator for state and
30.9local government purchases of goods and services prepared by the Bureau of Economic
30.10Analysis of the United States Department of Commerce for the 12-month period ending
30.11March 31 of the previous year.
30.12    The increase under this provision in any year may not be less than 2.5 percent or
30.13greater than 5.0 percent.
30.14    (d) In 2009 to 2010, the amounts paid under subdivision 2b, paragraphs (a) and (b)
30.15shall be increased by the greater of (1) one percent over the amount paid in the previous
30.16year, or (2) the inflation amount applied to the city appropriation under this subdivision. In
30.172011 and thereafter, the increase shall be equal to:
30.18    (1) the amount certified to be paid under that subdivision in the previous year,
30.19multiplied by
30.20    (2) one plus the percentage increase in the implicit price deflator for state and
30.21local government purchases of goods and services prepared by the Bureau of Economic
30.22Analysis of the United States Department of Commerce for the 12-month period ending
30.23March 31 of the previous year.
30.24    The increase under this provision in any year may not be less than 2.5 percent or
30.25greater than 5.0 percent.
30.26EFFECTIVE DATE.This section is effective for aids payable in calendar year
30.272008 and thereafter.

30.28    Sec. 8. UTILITY PROPERTY; TAX BASE ADJUSTMENTS FOR
30.29CALCULATION OF SCHOOL DISTRICT AIDS AND LEVIES.
30.30    For purposes of calculating school levies and aids for fiscal years 2009, 2010, and
30.312011 only, the commissioner of revenue shall compute the adjusted net tax capacity and
30.32referendum market value as if the tax base changes resulting from the amendments to
30.33Minnesota Rules, chapter 8100, including the phase-in provisions of Minnesota Rules,
30.34part 8100.0800, were effective one year earlier.
31.1EFFECTIVE DATE.This section is effective for revenue for fiscal years 2009,
31.22010, and 2011.

31.3    Sec. 9. UTILITY PROPERTY; TAX BASE ADJUSTMENTS FOR
31.4CALCULATION OF COUNTY AND CITY AIDS.
31.5    For purposes of calculating aid for cities under section 477A.013, and for counties
31.6under section 477A.0124, for payment in 2008, 2009, and 2010 only, the commissioner
31.7of revenue shall calculate the adjusted net tax capacity of cities and counties, as defined
31.8in sections 477A.011 and 477A.0124, as if the tax base changes resulting from the
31.9amendments to Minnesota Rules, chapter 8100, including the phase-in provisions of
31.10Minnesota Rules, part 8100.0800, were effective one year earlier.
31.11EFFECTIVE DATE.This section is effective for aids payable in 2008, 2009,
31.12and 2010.

31.13    Sec. 10. MAHNOMEN COUNTY; COUNTY PROPERTY TAX
31.14REIMBURSEMENT, CITY AND SCHOOL DISTRICT TAX BASE
31.15ADJUSTMENTS.
31.16    Subdivision 1. Aid appropriation. $250,000 is appropriated in fiscal year 2009
31.17from the general fund to the commissioner of revenue to make a payment in calendar year
31.182008 to the county of Mahnomen to compensate for the loss of property tax revenue due
31.19to the pending placement of property, located in the city of Mahnomen, into trust status by
31.20the United States Department of the Interior, Bureau of Indian Affairs.
31.21    Subd. 2. School district and city tax base adjustments. (a) The commissioner of
31.22revenue must reduce the referendum market value and adjusted net tax capacity used to
31.23calculate school levies beginning with taxes payable in 2008 and subsequent years for
31.24Independent School District No. 432, Mahnomen, by the amounts attributable to the
31.25property that is pending placement into trust status by the United States Department of
31.26the Interior, Bureau of Indian Affairs. This adjustment shall be made each year until one
31.27year after the removal of the property from the tax rolls.
31.28    (b) The commissioner of revenue must reduce the city net tax capacity used to
31.29calculate city aid under sections 477A.011 to 477A.03, beginning with aids payable in
31.302008 for the city of Mahnomen, by the amounts attributable to property that is pending
31.31placement into trust status by the United States Department of the Interior, Bureau of
31.32Indian Affairs. This adjustment shall be made each year until one year after the removal of
31.33the property from the tax rolls.
32.1EFFECTIVE DATE.This section is effective for aids and levies payable in 2008
32.2and thereafter.

32.3    Sec. 11. STUDY OF CITY LOCAL GOVERNMENT AID PROGRAM.
32.4    The commissioner of revenue shall work with representatives of all major city
32.5organizations, representing at least 40 cities on this issue, to study the current local
32.6government aid formula for cities, along with alternatives proposed by the various
32.7interest groups, and provide a written report with recommendations to the legislature, in
32.8compliance with Minnesota Statutes, sections 3.195 and 3.197, by February 1, 2008.
32.9The study must list the alternatives considered and any recommended changes for
32.10which consensus has been reached. If there is no consensus on proposed changes, the
32.11commissioner shall report this. The commissioner shall allocate minimal staff time to the
32.12study, but must provide staff to organize and chair any meetings of the study group and
32.13provide modeling assistance for the final proposed changes.
32.14EFFECTIVE DATE.This section is effective the day following final enactment.

32.15ARTICLE 4

32.16PROPERTY TAXES

32.17    Section 1. Minnesota Statutes 2006, section 97A.061, subdivision 2, is amended to
32.18read:
32.19    Subd. 2. Allocation. (a) Except as provided in subdivision 3, the county treasurer
32.20shall allocate the payment among the county, towns, and school districts on the same basis
32.21as if the payments were taxes on the land received in the year. Payment of a town's or a
32.22school district's allocation must be made by the county treasurer to the town or school
32.23district within 30 days of receipt of the payment to the county. The county's share of the
32.24payment shall be deposited in the county general revenue fund.
32.25    (b) The county treasurer of a county with a population over 39,000 but less than
32.2642,000 in the 1950 federal census shall allocate the payment only among the towns and
32.27school districts on the same basis as if the payments were taxes on the lands received
32.28in the current year.
32.29    (c) If a town received a payment in calendar year 2006 or thereafter under this
32.30subdivision, and subsequently incorporated as a city, the city will continue to receive any
32.31future year's allocations that would have been made to the town had it not incorporated,
32.32provided the city does not pass ordinances prohibiting hunting.
33.1EFFECTIVE DATE.This section is effective for aid payments made in 2007
33.2and thereafter.

33.3    Sec. 2. Minnesota Statutes 2006, section 127A.48, subdivision 3, is amended to read:
33.4    Subd. 3. Agricultural lands. For purposes of determining the adjusted net tax
33.5capacity of agricultural lands for the calculation of adjusted net tax capacities, the market
33.6value of agricultural lands must be the price for which the property would sell in an
33.7arm's-length transaction. When agricultural land is sold, the property is enrolled under
33.8section 273.111, and the purchaser changes its use in a manner that would result in
33.9a change of classification of the property, the assessment/sales ratio study under this
33.10subdivision must take into account that changed classification as soon as practicable. A
33.11change in status from homestead to nonhomestead or from nonhomestead to homestead is
33.12not a change in classification under this subdivision.
33.13EFFECTIVE DATE.This section is effective for the first study prepared following
33.14the day following final enactment.

33.15    Sec. 3. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
33.16to read:
33.17    Subd. 85. Modular homes used as models by dealers. (a) A modular home
33.18is exempt if it:
33.19    (1) is owned by a modular home dealer and is located on land owned or leased
33.20by that dealer;
33.21    (2) is a single-family model home;
33.22    (3) is not available for sale and is used exclusively as a model;
33.23    (4) is not permanently connected to any utilities except electricity; and
33.24    (5) is situated on a temporary foundation.
33.25    (b) The exemption under this subdivision is allowable for up to five assessment
33.26years after the date it becomes located on the property, provided that the modular home
33.27continues to meet all of the criteria under this subdivision each year. The owner of a
33.28modular model home must notify the county assessor within 60 days that it has been
33.29constructed or located on the property and must again notify the assessor if the modular
33.30home ceases to meet any of the criteria. If more than one modular home is constructed or
33.31situated on a property, the owner must notify the assessor within 60 days for each of the
33.32models placed on the property.
33.33    (c) For purposes of this subdivision, a "modular home" means a building or
33.34structural unit that has been in whole or substantial part manufactured or constructed at an
34.1off-site location to be wholly or partially assembled on-site as a single family dwelling.
34.2Construction of the modular home must comply with applicable standards adopted in
34.3Minnesota Rules authorized under Minnesota Statutes, chapter 16B. A modular home does
34.4not include a structure subject to the requirements of the National Manufactured Home
34.5Construction and Safety Standards Act of 1974 or prefabricated buildings, as defined in
34.6Minnesota Statutes, section 327.31, subdivision 6.
34.7EFFECTIVE DATE.This section is effective for assessment year 2007 and
34.8thereafter, for taxes payable in 2008 and thereafter. The five-year assessment time period
34.9begins with the 2007 assessment for a modular model home currently situated provided
34.10it meets all of the criteria and the county assessor is notified within 90 days of the day
34.11following final enactment.

34.12    Sec. 4. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
34.13to read:
34.14    Subd. 86. Electric generation facility; personal property. (a) Notwithstanding
34.15subdivision 9, clause (a), attached machinery and other personal property which is part of
34.16a simple-cycle combustion-turbine electric generation facility that exceeds 150 megawatts
34.17of installed capacity and that meets the requirements of this subdivision is exempt. At
34.18the time of construction, the facility must:
34.19    (1) utilize natural gas as a primary fuel;
34.20    (2) be owned by an electric generation and transmission cooperative;
34.21    (3) be located within one mile of an existing 16-inch natural gas pipeline and a
34.2269-kilovolt and a 230-kilovolt high-voltage electric transmission line;
34.23    (4) be designed to provide peaking, emergency backup, or contingency services;
34.24    (5) have received a certificate of need under section 216B.243 demonstrating
34.25demand for its capacity; and
34.26    (6) have received by resolution the approval from the governing bodies of the county
34.27and the city in which the proposed facility is to be located for the exemption of personal
34.28property under this subdivision.
34.29    (b) Construction of the facility must be commenced after January 1, 2008, and
34.30before January 1, 2012. Property eligible for this exemption does not include electric
34.31transmission lines and interconnections or gas pipelines and interconnections appurtenant
34.32to the property or the facility.
34.33EFFECTIVE DATE.This section is effective the day following final enactment.

35.1    Sec. 5. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
35.2to read:
35.3    Subd. 87. Apprenticeship training facilities. Property used exclusively for a
35.4state-approved apprenticeship program through the Department of Labor and Industry and
35.5owned by a 501(c)(3) nonprofit corporation is exempt, provided the program participants
35.6receive no compensation.
35.7EFFECTIVE DATE.This section is effective for assessment year 2007 and
35.8thereafter, for taxes payable in 2008 and thereafter.

35.9    Sec. 6. Minnesota Statutes 2006, section 272.115, subdivision 1, is amended to read:
35.10    Subdivision 1. Requirement. Except as otherwise provided in subdivision 5,
35.11whenever any real estate is sold for a consideration in excess of $1,000, whether by
35.12warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor,
35.13grantee or the legal agent of either shall file a certificate of value with the county auditor
35.14in the county in which the property is located when the deed or other document is
35.15presented for recording. Contract for deeds are subject to recording under section 507.235,
35.16subdivision 1 . Value shall, in the case of any deed not a gift, be the amount of the full
35.17actual consideration thereof, paid or to be paid, including the amount of any lien or liens
35.18assumed. The items and value of personal property transferred with the real property
35.19must be listed and deducted from the sale price. The certificate of value shall include the
35.20classification to which the property belongs for the purpose of determining the fair market
35.21value of the property, and shall include any proposed change in use of the property known
35.22to the person filing the certificate that could change the classification of the property. The
35.23certificate shall include financing terms and conditions of the sale which are necessary
35.24to determine the actual, present value of the sale price for purposes of the sales ratio
35.25study. The commissioner of revenue shall promulgate administrative rules specifying the
35.26financing terms and conditions which must be included on the certificate. Pursuant to the
35.27authority of the commissioner of revenue in section 270C.306, the certificate of value
35.28must include the Social Security number or the federal employer identification number
35.29of the grantors and grantees. The identification numbers of the grantors and grantees are
35.30private data on individuals or nonpublic data as defined in section 13.02, subdivisions 9
35.31and 12 , but, notwithstanding that section, the private or nonpublic data may be disclosed to
35.32the commissioner of revenue for purposes of tax administration. The information required
35.33to be shown on the certificate of value is limited to the information required as of the date
35.34of the acknowledgment on the deed or other document to be recorded.

36.1    Sec. 7. Minnesota Statutes 2006, section 273.11, subdivision 1a, is amended to read:
36.2    Subd. 1a. Limited market value. In the case of all property classified as
36.3agricultural homestead or nonhomestead, residential homestead or nonhomestead, timber,
36.4or noncommercial seasonal residential recreational, the assessor shall compare the value
36.5with the taxable portion of the value determined in the preceding assessment.
36.6    For assessment years 2004, 2005, and 2006 through 2008, the amount of the increase
36.7shall not exceed the greater of (1) 15 percent of the value in the preceding assessment,
36.8or (2) 25 percent of the difference between the current assessment and the preceding
36.9assessment.
36.10    For assessment year 2007 2009, the amount of the increase shall not exceed the
36.11greater of (1) 15 percent of the value in the preceding assessment, or (2) 33 percent of the
36.12difference between the current assessment and the preceding assessment.
36.13    For assessment year 2008 2010, the amount of the increase shall not exceed the
36.14greater of (1) 15 percent of the value in the preceding assessment, or (2) 50 percent of the
36.15difference between the current assessment and the preceding assessment.
36.16    This limitation shall not apply to increases in value due to improvements. For
36.17purposes of this subdivision, the term "assessment" means the value prior to any exclusion
36.18under subdivision 16.
36.19    The provisions of this subdivision shall be in effect through assessment year 2008
36.20as provided in this subdivision.
36.21    For purposes of the assessment/sales ratio study conducted under section 127A.48,
36.22and the computation of state aids paid under chapters 122A, 123A, 123B, 124D, 125A,
36.23126C, 127A, and 477A, market values and net tax capacities determined under this
36.24subdivision and subdivision 16, shall be used.
36.25EFFECTIVE DATE.This section is effective for assessment year 2007 and
36.26thereafter, for taxes payable in 2008 and thereafter.

36.27    Sec. 8. Minnesota Statutes 2006, section 273.11, is amended by adding a subdivision to
36.28read:
36.29    Subd. 16a. Valuation exclusion for certain improvements. (a) Improvements to
36.30homestead property made after January 2, 2008, shall be excluded from the value of the
36.31property for assessment purposes provided that (1) the house is at least 50 years old at the
36.32time of the improvement and (2) the assessor's estimated market value of the property on
36.33January 2 of the current year does not exceed $400,000.
37.1    (b) The age of a residence is the number of years since the original year of its
37.2construction. In the case of an owner-occupied duplex or triplex, the improvement is
37.3eligible regardless of which portion of the property was improved.
37.4    (c) If the property lies in a jurisdiction that is subject to a building permit process, a
37.5building permit must have been issued prior to commencement of the improvement.
37.6The improvements for a single project or in any one year must add at least $15,000
37.7market value to the property to be eligible for exclusion under this subdivision. Only
37.8improvements to the structure which is the residence of the qualifying homesteader, or
37.9construction of or improvements to no more than one two-car garage per residence,
37.10qualify for the provisions of this subdivision. Whenever a building permit is issued for
37.11property currently classified as homestead, the issuing jurisdiction shall notify the property
37.12owner of the possibility of valuation exclusion under this subdivision. The assessor shall
37.13require an application, including documentation of the age of the house from the owner,
37.14if unknown by the assessor. The application may be filed subsequent to the date of the
37.15building permit provided that the application must be filed within two years of the date the
37.16building permit was issued for the improvement. If the property lies in a jurisdiction that
37.17is not subject to a building permit process, the application must be filed within two years
37.18of the date the improvement was made. The assessor may require proof from the taxpayer
37.19of the date the improvement was made. Applications must be received prior to July 1 of
37.20any year in order to be effective for taxes payable in the following year.
37.21    (d) In the case of a residence that is relocated, the relocation must be from a location
37.22within the state and the only improvements eligible for exclusion under this subdivision
37.23are (1) those for which building permits were issued to the homeowner after the residence
37.24was relocated to its present site, and (2) those undertaken during or after the year the
37.25residence is initially occupied by the homeowner, excluding any market value increase
37.26relating to basic improvements that are necessary to install the residence on its foundation
37.27and connect it to utilities at its present site.
37.28    (e) No exclusion for an improvement may be granted by a local board of review or
37.29county board of equalization, and no abatement of the taxes for qualifying improvements
37.30may be granted by the county board unless (1) a building permit was issued prior to the
37.31commencement of the improvement if the jurisdiction requires a building permit, and
37.32(2) an application was completed.
37.33    (f) The assessor shall note the qualifying value of each improvement on the
37.34property's record, and the sum of those amounts must be subtracted from the value of the
37.35property in each year for ten years after the improvement has been made. After ten years,
37.36the amount of the qualifying value shall be added back as follows:
38.1    (1) 50 percent in the two subsequent assessment years if the qualifying value is equal
38.2to or less than $20,000 market value; or
38.3    (2) 33-1/3 percent in the three subsequent assessment years if the qualifying value is
38.4greater than $20,000 market value.
38.5    (g) If an application is filed after the first assessment date at which an improvement
38.6could have been subject to the valuation exclusion under this subdivision, the ten-year
38.7period during which the value is subject to exclusion is reduced by the number of years
38.8that have elapsed since the property would have qualified initially. The valuation
38.9exclusion terminates whenever (1) the property is sold, or (2) the property is reclassified to
38.10a class that does not qualify for treatment under this subdivision. Improvements made by
38.11an occupant who is the purchaser of the property under a conditional purchase contract
38.12do not qualify under this subdivision unless the seller of the property is a governmental
38.13entity. The qualifying value of the property must be computed based upon the increase
38.14from that structure's market value as of January 2 preceding the acquisition of the property
38.15by the governmental entity.
38.16    (h) The total qualifying value for a homestead may not exceed $75,000. The term
38.17"qualifying value" means the increase in estimated market value resulting from the
38.18improvement. The maximum qualifying value under this subdivision may result from no
38.19more than two separate improvements to the homestead.
38.20    (i) If 50 percent or more of the square footage of a structure is voluntarily razed
38.21or removed, the valuation increase attributable to any subsequent improvements to the
38.22remaining structure does not qualify for the exclusion under this subdivision. If a structure
38.23is unintentionally or accidentally destroyed by a natural disaster, the property is eligible
38.24for an exclusion under this subdivision provided that the structure was not completely
38.25destroyed. The qualifying value on property destroyed by a natural disaster must be
38.26computed based upon the increase from that structure's market value as determined on
38.27January 2 of the year in which the disaster occurred. A property receiving benefits under
38.28the homestead disaster provisions under section 273.123 is not disqualified from receiving
38.29an exclusion under this subdivision. If any combination of improvements made to a
38.30structure after January 2, 2008, increase the size of the structure by 100 percent or more,
38.31the valuation increase attributable to the portion of the improvement that causes the
38.32structure's size to exceed 100 percent does not qualify for exclusion under this subdivision.
38.33EFFECTIVE DATE.This section is effective for improvements made after January
38.342, 2008.

39.1    Sec. 9. Minnesota Statutes 2006, section 273.111, is amended by adding a subdivision
39.2to read:
39.3    Subd. 16. Applications; denied by county. For applications filed for the 2007 and
39.42008 assessment years, all applications for deferment of taxes and assessment under this
39.5section that have been denied by the county shall be forwarded to the commissioner of
39.6revenue by the county assessor within 30 days of denial. The assessor shall also provide
39.7the commissioner with a list of any property owners that requested an application and
39.8were denied, including names and addresses, and the reason for the denial. For the
39.9purpose of monitoring compliance with this section, the commissioner shall compile a
39.10report identifying all denied applications and requests for applications that were denied,
39.11the reason for the denial, and any commissioner action or recommendation. A report must
39.12be submitted to the chairs of the house and senate tax committees on or before February
39.131, 2008, and February 1, 2009, in compliance with Minnesota Statutes, sections 3.195
39.14and 3.197.
39.15EFFECTIVE DATE.This section is effective the day following final enactment.

39.16    Sec. 10. Minnesota Statutes 2006, section 273.124, subdivision 1, is amended to read:
39.17    Subdivision 1. General rule. (a) Residential real estate that is occupied and used
39.18for the purposes of a homestead by its owner, who must be a Minnesota resident, is
39.19a residential homestead.
39.20    Agricultural land, as defined in section 273.13, subdivision 23, that is occupied and
39.21used as a homestead by its owner, who must be a Minnesota resident, is an agricultural
39.22homestead.
39.23    Dates for establishment of a homestead and homestead treatment provided to
39.24particular types of property are as provided in this section.
39.25    Property held by a trustee under a trust is eligible for homestead classification if the
39.26requirements under this chapter are satisfied.
39.27    The assessor shall require proof, as provided in subdivision 13, of the facts upon
39.28which classification as a homestead may be determined. Notwithstanding any other law,
39.29the assessor may at any time require a homestead application to be filed in order to verify
39.30that any property classified as a homestead continues to be eligible for homestead status.
39.31Notwithstanding any other law to the contrary, the Department of Revenue may, upon
39.32request from an assessor, verify whether an individual who is requesting or receiving
39.33homestead classification has filed a Minnesota income tax return as a resident for the most
39.34recent taxable year for which the information is available.
40.1    When there is a name change or a transfer of homestead property, the assessor may
40.2reclassify the property in the next assessment unless a homestead application is filed to
40.3verify that the property continues to qualify for homestead classification.
40.4    (b) For purposes of this section, homestead property shall include property which
40.5is used for purposes of the homestead but is separated from the homestead by a road,
40.6street, lot, waterway, or other similar intervening property. The term "used for purposes
40.7of the homestead" shall include but not be limited to uses for gardens, garages, or other
40.8outbuildings commonly associated with a homestead, but shall not include vacant land
40.9held primarily for future development. In order to receive homestead treatment for
40.10the noncontiguous property, the owner must use the property for the purposes of the
40.11homestead, and must apply to the assessor, both by the deadlines given in subdivision
40.129. After initial qualification for the homestead treatment, additional applications for
40.13subsequent years are not required.
40.14    (c) Residential real estate that is occupied and used for purposes of a homestead by a
40.15relative of the owner is a homestead but only to the extent of the homestead treatment
40.16that would be provided if the related owner occupied the property. For purposes of this
40.17paragraph and paragraph (g), "relative" means a parent, stepparent, child, stepchild,
40.18grandparent, grandchild, brother, sister, uncle, aunt, nephew, or niece. This relationship
40.19may be by blood or marriage. Property that has been classified as seasonal residential
40.20recreational property at any time during which it has been owned by the current owner or
40.21spouse of the current owner will not be reclassified as a homestead unless it is occupied as
40.22a homestead by the owner; this prohibition also applies to property that, in the absence of
40.23this paragraph, would have been classified as seasonal residential recreational property at
40.24the time when the residence was constructed. Neither the related occupant nor the owner of
40.25the property may claim a property tax refund under chapter 290A for a homestead occupied
40.26by a relative. In the case of a residence located on agricultural land, only the house,
40.27garage, and immediately surrounding one acre of land shall be classified as a homestead
40.28under this paragraph, except as provided in paragraph (d). In the case of nonagricultural
40.29property, this paragraph only applies to applications approved before July 1, 2007.
40.30    (d) Agricultural property that is occupied and used for purposes of a homestead by
40.31a relative of the owner, is a homestead, only to the extent of the homestead treatment
40.32that would be provided if the related owner occupied the property, and only if all of the
40.33following criteria are met:
40.34    (1) the relative who is occupying the agricultural property is a son, daughter,
40.35grandson, granddaughter, father, or mother of the owner of the agricultural property or a
41.1son, daughter, grandson, or granddaughter of the spouse of the owner of the agricultural
41.2property;
41.3    (2) the owner of the agricultural property must be a Minnesota resident;
41.4    (3) the owner of the agricultural property must not receive homestead treatment on
41.5any other agricultural property in Minnesota; and
41.6    (4) the owner of the agricultural property is limited to only one agricultural
41.7homestead per family under this paragraph.
41.8    Neither the related occupant nor the owner of the property may claim a property
41.9tax refund under chapter 290A for a homestead occupied by a relative qualifying under
41.10this paragraph. For purposes of this paragraph, "agricultural property" means the house,
41.11garage, other farm buildings and structures, and agricultural land.
41.12    Application must be made to the assessor by the owner of the agricultural property to
41.13receive homestead benefits under this paragraph. The assessor may require the necessary
41.14proof that the requirements under this paragraph have been met.
41.15    (e) In the case of property owned by a property owner who is married, the assessor
41.16must not deny homestead treatment in whole or in part if only one of the spouses occupies
41.17the property and the other spouse is absent due to: (1) marriage dissolution proceedings,
41.18(2) legal separation, (3) employment or self-employment in another location, or (4) other
41.19personal circumstances causing the spouses to live separately, not including an intent to
41.20obtain two homestead classifications for property tax purposes. To qualify under clause
41.21(3), the spouse's place of employment or self-employment must be at least 50 miles distant
41.22from the other spouse's place of employment, and the homesteads must be at least 50 miles
41.23distant from each other. Homestead treatment, in whole or in part, shall not be denied to
41.24the owner's spouse who previously occupied the residence with the owner if the absence
41.25of the owner is due to one of the exceptions provided in this paragraph.
41.26    (f) The assessor must not deny homestead treatment in whole or in part if:
41.27    (1) in the case of a property owner who is not married, the owner is absent due to
41.28residence in a nursing home, boarding care facility, or an elderly assisted living facility
41.29property as defined in section 273.13, subdivision 25a, and the property is not otherwise
41.30occupied; or
41.31    (2) in the case of a property owner who is married, the owner or the owner's spouse
41.32or both are absent due to residence in a nursing home, boarding care facility, or an elderly
41.33assisted living facility property as defined in section 273.13, subdivision 25a, and the
41.34property is not occupied or is occupied only by the owner's spouse.
41.35    (g) If an individual is purchasing property with the intent of claiming it as a
41.36homestead and is required by the terms of the financing agreement to have a relative
42.1shown on the deed as a co-owner, the assessor shall allow a full homestead classification.
42.2This provision only applies to first-time purchasers, whether married or single, or to a
42.3person who had previously been married and is purchasing as a single individual for the
42.4first time. The application for homestead benefits must be on a form prescribed by the
42.5commissioner and must contain the data necessary for the assessor to determine if full
42.6homestead benefits are warranted.
42.7    (h) If residential or agricultural real estate is occupied and used for purposes of a
42.8homestead by a child of a deceased owner and the property is subject to jurisdiction of
42.9probate court, the child shall receive relative homestead classification under paragraph (c)
42.10or (d) to the same extent they would be entitled to it if the owner was still living, until
42.11the probate is completed. For purposes of this paragraph, "child" includes a relationship
42.12by blood or by marriage.
42.13    (i) If a single-family home, duplex, or triplex classified as either residential
42.14homestead or agricultural homestead is also used to provide licensed child care, the
42.15portion of the property used for licensed child care must be classified as a part of the
42.16homestead property.
42.17EFFECTIVE DATE.This section is effective the day following final enactment.

42.18    Sec. 11. Minnesota Statutes 2006, section 273.124, subdivision 14, is amended to read:
42.19    Subd. 14. Agricultural homesteads; special provisions. (a) Real estate of less than
42.20ten acres that is the homestead of its owner must be classified as class 2a under section
42.21273.13, subdivision 23 , paragraph (a), if:
42.22    (1) the parcel on which the house is located is contiguous on at least two sides to (i)
42.23agricultural land, (ii) land owned or administered by the United States Fish and Wildlife
42.24Service, or (iii) land administered by the Department of Natural Resources on which in
42.25lieu taxes are paid under sections 477A.11 to 477A.14;
42.26    (2) its owner also owns a noncontiguous parcel of agricultural land that is at least
42.2720 acres;
42.28    (3) the noncontiguous land is located not farther than four townships or cities, or a
42.29combination of townships or cities from the homestead; and
42.30    (4) the agricultural use value of the noncontiguous land and farm buildings is equal
42.31to at least 50 percent of the market value of the house, garage, and one acre of land.
42.32    Homesteads initially classified as class 2a under the provisions of this paragraph shall
42.33remain classified as class 2a, irrespective of subsequent changes in the use of adjoining
42.34properties, as long as the homestead remains under the same ownership, the owner owns a
42.35noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use
43.1value qualifies under clause (4). Homestead classification under this paragraph is limited
43.2to property that qualified under this paragraph for the 1998 assessment.
43.3    (b)(i) Agricultural property consisting of at least 40 acres, incorporating government
43.4lots and correctional 40's, shall be classified as the owner's homestead, to the same extent
43.5as other agricultural homestead property, if all of the following criteria are met:
43.6    (1) the owner, the owner's spouse, the son or daughter of the owner or owner's
43.7spouse, or the grandson or granddaughter of the owner or the owner's spouse, is actively
43.8farming the agricultural property, either on the person's own behalf as an individual or
43.9on behalf of a partnership operating a family farm, family farm corporation, joint family
43.10farm venture, or limited liability company of which the person is a partner, shareholder, or
43.11member;
43.12    (2) both the owner of the agricultural property and the person who is actively
43.13farming the agricultural property under clause (1), are Minnesota residents;
43.14    (3) neither the owner nor the spouse of the owner claims another agricultural
43.15homestead in Minnesota; and
43.16    (4) neither the owner nor and the person actively farming the property lives farther
43.17than four townships or cities, or a combination of four townships or cities, from the
43.18agricultural property must live either in the county where the agricultural property is
43.19located or in a county contiguous to the county where the agricultural property is located,
43.20except that if the owner or the owner's spouse is required to live in employer-provided
43.21housing, the owner or owner's spouse, whichever is actively farming the agricultural
43.22property, may live more than four townships or cities, or combination of four townships
43.23or cities further from the agricultural property than in the county or county contiguous
43.24to the property.
43.25    The relationship under this paragraph may be either by blood or marriage.
43.26    (ii) Real property held by a trustee under a trust is eligible for agricultural homestead
43.27classification under this paragraph if the qualifications in clause (i) are met, except that
43.28"owner" means the grantor of the trust.
43.29    (iii) Property containing the residence of an owner who owns qualified property
43.30under clause (i) shall be classified as part of the owner's agricultural homestead, if that
43.31property is also used for noncommercial storage or drying of agricultural crops.
43.32    (c) Noncontiguous land shall be included as part of a homestead under section
43.33273.13, subdivision 23 , paragraph (a), only if the homestead is classified as class 2a
43.34and the detached land is located in the same township or city, or not farther than four
43.35townships or cities or combination thereof from county or in a county contiguous to the
43.36homestead. Any taxpayer of these noncontiguous lands must notify the county assessor
44.1that the noncontiguous land is part of the taxpayer's homestead, and, if the homestead is
44.2located in another county, the taxpayer must also notify the assessor of the other county.
44.3    (d) Agricultural land used for purposes of a homestead and actively farmed by a
44.4person holding a vested remainder interest in it must be classified as a homestead under
44.5section 273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a,
44.6any other dwellings on the land used for purposes of a homestead by persons holding
44.7vested remainder interests who are actively engaged in farming the property, and up to
44.8one acre of the land surrounding each homestead and reasonably necessary for the use of
44.9the dwelling as a home, must also be assessed class 2a.
44.10    (e) Agricultural land and buildings that were class 2a homestead property under
44.11section 273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain
44.12classified as agricultural homesteads for subsequent assessments if:
44.13    (1) the property owner abandoned the homestead dwelling located on the agricultural
44.14homestead as a result of the April 1997 floods;
44.15    (2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman,
44.16or Wilkin;
44.17    (3) the agricultural land and buildings remain under the same ownership for the
44.18current assessment year as existed for the 1997 assessment year and continue to be used
44.19for agricultural purposes;
44.20    (4) the dwelling occupied by the owner is located in Minnesota and is within 30
44.21miles of one of the parcels of agricultural land that is owned by the taxpayer; and
44.22    (5) the owner notifies the county assessor that the relocation was due to the 1997
44.23floods, and the owner furnishes the assessor any information deemed necessary by the
44.24assessor in verifying the change in dwelling. Further notifications to the assessor are not
44.25required if the property continues to meet all the requirements in this paragraph and any
44.26dwellings on the agricultural land remain uninhabited.
44.27    (f) Agricultural land and buildings that were class 2a homestead property under
44.28section 273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain
44.29classified agricultural homesteads for subsequent assessments if:
44.30    (1) the property owner abandoned the homestead dwelling located on the agricultural
44.31homestead as a result of damage caused by a March 29, 1998, tornado;
44.32    (2) the property is located in the county of Blue Earth, Brown, Cottonwood,
44.33LeSueur, Nicollet, Nobles, or Rice;
44.34    (3) the agricultural land and buildings remain under the same ownership for the
44.35current assessment year as existed for the 1998 assessment year;
45.1    (4) the dwelling occupied by the owner is located in this state and is within 50 miles
45.2of one of the parcels of agricultural land that is owned by the taxpayer; and
45.3    (5) the owner notifies the county assessor that the relocation was due to a March 29,
45.41998, tornado, and the owner furnishes the assessor any information deemed necessary by
45.5the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the
45.6owner must notify the assessor by December 1, 1998. Further notifications to the assessor
45.7are not required if the property continues to meet all the requirements in this paragraph
45.8and any dwellings on the agricultural land remain uninhabited.
45.9    (g) Agricultural property consisting of at least 40 acres, incorporating government
45.10lots and correctional 40's, of a family farm corporation, joint family farm venture, family
45.11farm limited liability company, or partnership operating a family farm as described under
45.12subdivision 8 shall be classified homestead, to the same extent as other agricultural
45.13homestead property, if all of the following criteria are met:
45.14    (1) a shareholder, member, or partner of that entity is actively farming the
45.15agricultural property;
45.16    (2) that shareholder, member, or partner who is actively farming the agricultural
45.17property is a Minnesota resident;
45.18    (3) neither that shareholder, member, or partner, nor the spouse of that shareholder,
45.19member, or partner claims another agricultural homestead in Minnesota; and
45.20    (4) that shareholder, member, or partner does not live farther than four townships
45.21or cities, or a combination of four townships or cities, from the agricultural property
45.22lives in the county where the agricultural property is located or in a county contiguous to
45.23the county where the property is located.
45.24    Homestead treatment applies under this paragraph for property leased to a family
45.25farm corporation, joint farm venture, limited liability company, or partnership operating a
45.26family farm if legal title to the property is in the name of an individual who is a member,
45.27shareholder, or partner in the entity.
45.28    (h) To be eligible for the special agricultural homestead under this subdivision, an
45.29initial full application must be submitted to the county assessor where the property is
45.30located. Owners and the persons who are actively farming the property shall be required
45.31to complete only a one-page abbreviated version of the application in each subsequent
45.32year provided that none of the following items have changed since the initial application:
45.33    (1) the day-to-day operation, administration, and financial risks remain the same;
45.34    (2) the owners and the persons actively farming the property continue to live within
45.35the four townships or city criteria the county or a contiguous county and are Minnesota
45.36residents;
46.1    (3) the same operator of the agricultural property is listed with the Farm Service
46.2Agency;
46.3    (4) a Schedule F or equivalent income tax form was filed for the most recent year;
46.4    (5) the property's acreage is unchanged; and
46.5    (6) none of the property's acres have been enrolled in a federal or state farm program
46.6since the initial application.
46.7    The owners and any persons who are actively farming the property must include
46.8the appropriate Social Security numbers, and sign and date the application. If any of the
46.9specified information has changed since the full application was filed, the owner must
46.10notify the assessor, and must complete a new application to determine if the property
46.11continues to qualify for the special agricultural homestead. The commissioner of revenue
46.12shall prepare a standard reapplication form for use by the assessors.
46.13EFFECTIVE DATE.The portion of this section relating to the 40 acres requirement
46.14is effective for assessment year 2007, taxes payable in 2008 and thereafter. The remaining
46.15portion relating to contiguous counties is effective for assessment year 2008 and thereafter,
46.16taxes payable in 2009 and thereafter.

46.17    Sec. 12. Minnesota Statutes 2006, section 273.128, subdivision 1, is amended to read:
46.18    Subdivision 1. Requirement Requirements. Low-income rental property In order
46.19to be classified as class 4d low-income rental housing under section 273.13, subdivision
46.2025 , is entitled to valuation under this section if the property must meet the requirements of
46.21subdivision 4, if applicable, and at least 75 20 percent of the units in the rental housing
46.22property must meet any of the following qualifications:
46.23    (1) the units are subject to a housing assistance payments contract under Section 8
46.24of the United States Housing Act of 1937, as amended;
46.25    (2) the units are rent-restricted and income-restricted units of a qualified low-income
46.26housing project receiving tax credits under section 42(g) of the Internal Revenue Code of
46.271986, as amended;
46.28    (3) the units are financed by the Rural Housing Service of the United States
46.29Department of Agriculture and receive payments under the rental assistance program
46.30pursuant to section 521(a) of the Housing Act of 1949, as amended; or
46.31    (4) the units are subject to rent and income restrictions under the terms of financial
46.32assistance provided to the rental housing property by the federal government or the
46.33state of Minnesota, or a local unit of government, as evidenced by a document recorded
46.34against the property.
47.1    The restrictions must require assisted units to be occupied by residents whose
47.2household income at the time of initial occupancy does not exceed 60 percent of the
47.3greater of area or state median income, adjusted for family size, as determined by the
47.4United States Department of Housing and Urban Development. The restriction must also
47.5require the rents for assisted units to not exceed 30 percent of 60 percent of the greater of
47.6area or state median income, adjusted for family size, as determined by the United States
47.7Department of Housing and Urban Development.
47.8EFFECTIVE DATE.This section is effective for property taxes levied in 2007,
47.9payable in 2008, and thereafter.

47.10    Sec. 13. Minnesota Statutes 2006, section 273.128, is amended by adding a subdivision
47.11to read:
47.12    Subd. 4. Participation in crime-free multihousing program. (a) In addition
47.13to the requirements in subdivision 1, if the property qualifies under paragraph (b), the
47.14owners or managers must complete the three phases of the city's or county's crime-free
47.15multihousing program and the qualifying property must be annually certified by the police
47.16or sheriff as participating in the program. If a qualifying property is not certified within
47.17one year after it is first determined to be a qualifying property under paragraph (b), or does
47.18not annually maintain its certification in the program, the city or county shall notify the
47.19property owner that the qualifying property must comply with the requirements of this
47.20subdivision to maintain its classification as class 4d property. If a qualifying property is
47.21not in compliance within one year after receiving the notice from the city or county, the
47.22city or county shall issue a second notice and require the owners to enter into a plan to
47.23achieve compliance within one year. If, upon expiration of the one-year time period,
47.24the qualifying property has not been certified by the police or sheriff as completing the
47.25program, the city or county shall notify the commissioner of the Housing Finance Agency
47.26and the commissioner shall remove the property from the list of class 4d properties
47.27certified to the county or city assessor under subdivision 3. Once removed from the list,
47.28the property is not eligible for class 4d classification until it complies with this subdivision
47.29and its compliance has been certified to the Housing Finance Agency by the city or county.
47.30Certification to the Housing Finance Agency must be made by May 15 to be effective for
47.31taxes payable in the following year.
47.32    (b) A property is a qualifying property for purposes of this subdivision's requirements
47.33if it satisfies each of the following requirements:
47.34    (1) the property is located in a city or county that offers a crime-free multihousing
47.35program through its city police or county sheriff;
48.1    (2) over the preceding two-year period, the number of police or sheriff calls to
48.2the property exceeded the city's or county's average number of calls for multiunit rental
48.3properties for the period by at least 25 percent, adjusted for the number of rental units;
48.4    (3) the police or sheriff department has requested, in writing, the owners or managers
48.5of the property to enroll in the crime-free multihousing program and the owners or
48.6managers refused or failed to enroll within 60 days after the request, or failed to complete
48.7phases one and three within 90 days and all three phases of the program within a one-year
48.8time period; and
48.9    (4) the governing body of the city or county, by resolution, determines the property
48.10is a qualifying property under clauses (1) to (3).
48.11    (c) Low-income qualifying rental housing property classified as class 4d property for
48.12taxes payable in 2007 must meet the requirements of this section by May 15, 2010.
48.13EFFECTIVE DATE.This section is effective for property taxes levied in 2007,
48.14payable in 2008, and thereafter.

48.15    Sec. 14. Minnesota Statutes 2006, section 273.13, subdivision 22, is amended to read:
48.16    Subd. 22. Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b)
48.17and (c), real estate which is residential and used for homestead purposes is class 1a. In the
48.18case of a duplex or triplex in which one of the units is used for homestead purposes, the
48.19entire property is deemed to be used for homestead purposes. The market value of class 1a
48.20property must be determined based upon the value of the house, garage, and land.
48.21    The first $500,000 of market value of class 1a property has a net class rate of
48.22one percent of its market value; and the market value of class 1a property that exceeds
48.23$500,000 has a class rate of 1.25 percent of its market value.
48.24    (b) Class 1b property includes homestead real estate or homestead manufactured
48.25homes used for the purposes of a homestead by
48.26    (1) any person who is blind as defined in section 256D.35, or the blind person and
48.27the blind person's spouse; or
48.28    (2) any person, hereinafter referred to as "veteran," who:
48.29    (i) served in the active military or naval service of the United States; and
48.30    (ii) is entitled to compensation under the laws and regulations of the United States
48.31for permanent and total service-connected disability due to the loss, or loss of use, by
48.32reason of amputation, ankylosis, progressive muscular dystrophies, or paralysis, of both
48.33lower extremities, such as to preclude motion without the aid of braces, crutches, canes, or
48.34a wheelchair; and
49.1    (iii) has acquired a special housing unit with special fixtures or movable facilities
49.2made necessary by the nature of the veteran's disability, or the surviving spouse of the
49.3deceased veteran for as long as the surviving spouse retains the special housing unit
49.4as a homestead; or
49.5    (3) any person who is permanently and totally disabled.
49.6    Property is classified and assessed under clause (3) only if the government agency or
49.7income-providing source certifies, upon the request of the homestead occupant, that the
49.8homestead occupant satisfies the disability requirements of this paragraph.
49.9    Property is classified and assessed pursuant to clause (1) only if the commissioner of
49.10revenue certifies to the assessor that the homestead occupant satisfies the requirements of
49.11this paragraph.
49.12    Permanently and totally disabled for the purpose of this subdivision means a
49.13condition which is permanent in nature and totally incapacitates the person from working
49.14at an occupation which brings the person an income. The first $32,000 $50,000 market
49.15value of class 1b property has a net class rate of .45 percent of its market value. The
49.16remaining market value of class 1b property has a class rate using the rates for class 1a or
49.17class 2a property, whichever is appropriate, of similar market value.
49.18    (c) Class 1c property is commercial use real and personal property that abuts
49.19a lakeshore line public water as defined in section 103G.005, subdivision 15, and is
49.20devoted to temporary and seasonal residential occupancy for recreational purposes but
49.21not devoted to commercial purposes for more than 250 days in the year preceding the
49.22year of assessment, and that includes a portion used as a homestead by the owner, which
49.23includes a dwelling occupied as a homestead by a shareholder of a corporation that owns
49.24the resort, a partner in a partnership that owns the resort, or a member of a limited liability
49.25company that owns the resort even if the title to the homestead is held by the corporation,
49.26partnership, or limited liability company. For purposes of this clause, property is devoted
49.27to a commercial purpose on a specific day if any portion of the property, excluding the
49.28portion used exclusively as a homestead, is used for residential occupancy and a fee is
49.29charged for residential occupancy. Class 1c property must contain three or more rental
49.30units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room,
49.31or individual camping site equipped with water and electrical hookups for recreational
49.32vehicles. Class 1c property must provide recreational activities such as the rental of ice
49.33fishing houses, boats and motors, snowmobiles, downhill or cross-country ski equipment;
49.34provide marina services, launch services, or guide services; or sell bait and fishing tackle.
49.35Any unit in which the right to use the property is transferred to an individual or entity
49.36by deeded interest, or the sale of shares or stock, no longer qualifies for class 1c even
50.1though it may remain available for rent. A camping pad offered for rent by a property
50.2that otherwise qualifies for class 1c is also class 1c, regardless of the term of the rental
50.3agreement, as long as the use of the camping pad does not exceed 250 days. The portion of
50.4the property used as a homestead is class 1a property under paragraph (a). The remainder
50.5of the property is classified as follows: the first $500,000 $600,000 of market value is tier
50.6I, the next $1,700,000 of market value is tier II, and any remaining market value is tier
50.7III. The class rates for class 1c are: tier I, 0.55 0.50 percent; tier II, 1.0 percent; and tier
50.8III, 1.25 percent. If a class 1c resort property has any market value in tier III, the entire
50.9property must meet the requirements of subdivision 25, paragraph (d), clause (1), to
50.10qualify for class 1c treatment under this paragraph. Owners of real and personal property
50.11devoted to temporary and seasonal residential occupancy for recreation purposes in which
50.12all or a portion of the property was devoted to commercial purposes for not more than 250
50.13days in the year preceding the year of assessment desiring classification as class 1c, must
50.14submit a declaration to the assessor designating the cabins or units occupied for 250 days
50.15or less in the year preceding the year of assessment by January 15 of the assessment year.
50.16Those cabins or units and a proportionate share of the land on which they are located must
50.17be designated as class 1c as otherwise provided. The remainder of the cabins or units and
50.18a proportionate share of the land on which they are located must be designated as class
50.193a commercial. The owner of property desiring designation as class 1c property must
50.20provide guest registers or other records demonstrating that the units for which class 1c
50.21designation is sought were not occupied for more than 250 days in the year preceding the
50.22assessment if so requested. The portion of a property operated as a (1) restaurant, (2) bar,
50.23(3) gift shop, (4) conference center or meeting room, and (5) other nonresidential facility
50.24operated on a commercial basis not directly related to temporary and seasonal residential
50.25occupancy for recreation purposes does not qualify for class 1c.
50.26    (d) Class 1d property includes structures that meet all of the following criteria:
50.27    (1) the structure is located on property that is classified as agricultural property under
50.28section 273.13, subdivision 23;
50.29    (2) the structure is occupied exclusively by seasonal farm workers during the time
50.30when they work on that farm, and the occupants are not charged rent for the privilege of
50.31occupying the property, provided that use of the structure for storage of farm equipment
50.32and produce does not disqualify the property from classification under this paragraph;
50.33    (3) the structure meets all applicable health and safety requirements for the
50.34appropriate season; and
50.35    (4) the structure is not salable as residential property because it does not comply
50.36with local ordinances relating to location in relation to streets or roads.
51.1    The market value of class 1d property has the same class rates as class 1a property
51.2under paragraph (a).
51.3EFFECTIVE DATE.The portion of this section increasing the market value of
51.4the first tier of class 1c resorts and striking the language relating to class 1b veterans'
51.5homesteads is effective for assessment year 2007 and thereafter, for taxes payable in 2008
51.6and thereafter. The remaining portion of this section relating to class 1c resorts is effective
51.7for the assessment year 2008, for taxes payable in 2009 and thereafter.

51.8    Sec. 15. Minnesota Statutes 2006, section 273.13, subdivision 23, is amended to read:
51.9    Subd. 23. Class 2. (a) Class 2a property is agricultural land including any
51.10improvements that is homesteaded. The market value of the house and garage and
51.11immediately surrounding one acre of land has the same class rates as class 1a property
51.12under subdivision 22. The value of the remaining land including improvements up to the
51.13first tier valuation limit of agricultural homestead property has a net class rate of 0.55 0.50
51.14percent of market value. The remaining property over the first tier has a class rate of one
51.15percent of market value. For purposes of this subdivision, the "first tier valuation limit of
51.16agricultural homestead property" and "first tier" means the limit certified under section
51.17273.11 , subdivision 23.
51.18    (b) Class 2b property is (1) unplatted real estate, rural in character and used
51.19exclusively for growing trees for timber, lumber, and wood and wood products; (2)
51.20real estate, that is not improved with a structure and is used exclusively for growing
51.21trees for timber, lumber, and wood and wood products, if the owner has participated or
51.22is participating in a cost-sharing program for afforestation, reforestation, or timber stand
51.23improvement on that particular property, administered or coordinated by the commissioner
51.24of natural resources; (3), and that consists of at least ten acres, including land used for
51.25growing trees for timber, lumber, and wood products, but not including land used for
51.26agricultural purposes, provided that the presence of a minor, ancillary nonresidential
51.27structure does not disqualify property from the classification under this clause; (2) real
51.28estate that is nonhomestead agricultural land; or (4) (3) a landing area or public access
51.29area of a privately owned public use airport. Class 2b property has a net class rate of one
51.30percent of market value.
51.31    (c) Agricultural land as used in this section means contiguous acreage of ten acres or
51.32more, used during the preceding year for agricultural purposes. "Agricultural purposes" as
51.33used in this section means the raising or cultivation of agricultural products. "Agricultural
51.34purposes" also includes enrollment in the Reinvest in Minnesota program under sections
51.35103F.501 to 103F.535 or the federal Conservation Reserve Program as contained in Public
52.1Law 99-198 if the property was classified as agricultural (i) under this subdivision for
52.2the assessment year 2002 or (ii) in the year prior to its enrollment. Contiguous acreage
52.3on the same parcel, or contiguous acreage on an immediately adjacent parcel under the
52.4same ownership, may also qualify as agricultural land, but only if it is pasture, timber,
52.5waste, unusable wild land, or land included in state or federal farm programs. Agricultural
52.6classification for property shall be determined excluding the house, garage, and
52.7immediately surrounding one acre of land, and shall not be based upon the market value of
52.8any residential structures on the parcel or contiguous parcels under the same ownership.
52.9    (d) Real estate, excluding the house, garage, and immediately surrounding one acre
52.10of land, of less than ten acres which is exclusively and intensively used for raising or
52.11cultivating agricultural products, shall be considered as agricultural land.
52.12    Land shall be classified as agricultural even if all or a portion of the agricultural use
52.13of that property is the leasing to, or use by another person for agricultural purposes.
52.14    Classification under this subdivision is not determinative for qualifying under
52.15section 273.111.
52.16    The property classification under this section supersedes, for property tax purposes
52.17only, any locally administered agricultural policies or land use restrictions that define
52.18minimum or maximum farm acreage.
52.19    (e) The term "agricultural products" as used in this subdivision includes production
52.20for sale of:
52.21    (1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
52.22animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains,
52.23bees, and apiary products by the owner;
52.24    (2) fish bred for sale and consumption if the fish breeding occurs on land zoned
52.25for agricultural use;
52.26    (3) the commercial boarding of horses if the boarding is done in conjunction with
52.27raising or cultivating agricultural products as defined in clause (1);
52.28    (4) property which is owned and operated by nonprofit organizations used for
52.29equestrian activities, excluding racing;
52.30    (5) game birds and waterfowl bred and raised for use on a shooting preserve licensed
52.31under section 97A.115;
52.32    (6) insects primarily bred to be used as food for animals;
52.33    (7) trees, grown for sale as a crop, and not sold for timber, lumber, wood, or wood
52.34products; and
52.35    (8) maple syrup taken from trees grown by a person licensed by the Minnesota
52.36Department of Agriculture under chapter 28A as a food processor.
53.1    (f) If a parcel used for agricultural purposes is also used for commercial or industrial
53.2purposes, including but not limited to:
53.3    (1) wholesale and retail sales;
53.4    (2) processing of raw agricultural products or other goods;
53.5    (3) warehousing or storage of processed goods; and
53.6    (4) office facilities for the support of the activities enumerated in clauses (1), (2),
53.7and (3),
53.8the assessor shall classify the part of the parcel used for agricultural purposes as class
53.91b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its
53.10use. The grading, sorting, and packaging of raw agricultural products for first sale is
53.11considered an agricultural purpose. A greenhouse or other building where horticultural
53.12or nursery products are grown that is also used for the conduct of retail sales must be
53.13classified as agricultural if it is primarily used for the growing of horticultural or nursery
53.14products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of
53.15those products. Use of a greenhouse or building only for the display of already grown
53.16horticultural or nursery products does not qualify as an agricultural purpose.
53.17    The assessor shall determine and list separately on the records the market value of
53.18the homestead dwelling and the one acre of land on which that dwelling is located. If any
53.19farm buildings or structures are located on this homesteaded acre of land, their market
53.20value shall not be included in this separate determination.
53.21    (g) To qualify for classification under paragraph (b), clause (4) (3), a privately
53.22owned public use airport must be licensed as a public airport under section 360.018. For
53.23purposes of paragraph (b), clause (4) (3), "landing area" means that part of a privately
53.24owned public use airport properly cleared, regularly maintained, and made available to the
53.25public for use by aircraft and includes runways, taxiways, aprons, and sites upon which
53.26are situated landing or navigational aids. A landing area also includes land underlying
53.27both the primary surface and the approach surfaces that comply with all of the following:
53.28    (i) the land is properly cleared and regularly maintained for the primary purposes of
53.29the landing, taking off, and taxiing of aircraft; but that portion of the land that contains
53.30facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;
53.31    (ii) the land is part of the airport property; and
53.32    (iii) the land is not used for commercial or residential purposes.
53.33The land contained in a landing area under paragraph (b), clause (4) (3), must be described
53.34and certified by the commissioner of transportation. The certification is effective until
53.35it is modified, or until the airport or landing area no longer meets the requirements of
53.36paragraph (b), clause (4) (3). For purposes of paragraph (b), clause (4) (3), "public access
54.1area" means property used as an aircraft parking ramp, apron, or storage hangar, or an
54.2arrival and departure building in connection with the airport.
54.3EFFECTIVE DATE.This section is effective for assessment year 2007 and
54.4thereafter, for taxes payable in 2008 and thereafter.

54.5    Sec. 16. Minnesota Statutes 2006, section 273.13, subdivision 24, is amended to read:
54.6    Subd. 24. Class 3. (a) Commercial and industrial property and utility real and
54.7personal property is class 3a.
54.8    (1) Except as otherwise provided, each parcel of commercial, industrial, or utility
54.9real property has a class rate of 1.5 percent of the first tier of market value, and 2.0 percent
54.10of the remaining market value. In the case of contiguous parcels of property owned by the
54.11same person or entity, only the value equal to the first-tier value of the contiguous parcels
54.12qualifies for the reduced class rate, except that contiguous parcels owned by the same
54.13person or entity shall be eligible for the first-tier value class rate on each separate business
54.14operated by the owner of the property, provided the business is housed in a separate
54.15structure. For the purposes of this subdivision, the first tier means the first $150,000 of
54.16market value. Real property owned in fee by a utility for transmission line right-of-way
54.17shall be classified at the class rate for the higher tier.
54.18    For purposes of this subdivision, parcels are considered to be contiguous even if
54.19they are separated from each other by a road, street, waterway, or other similar intervening
54.20type of property. Connections between parcels that consist of power lines or pipelines do
54.21not cause the parcels to be contiguous. Property owners who have contiguous parcels of
54.22property that constitute separate businesses that may qualify for the first-tier class rate shall
54.23notify the assessor by July 1, for treatment beginning in the following taxes payable year.
54.24    (2) All Personal property that is: (i) part of an electric generation, transmission, or
54.25distribution system; or (ii), including tools, implements, and machinery, has a class rate
54.26of 3.0 percent.
54.27    (3) Personal property that is either: (i) part of a pipeline system transporting
54.28or distributing water, gas, crude oil, or petroleum products; and (iii) not described in
54.29clause (3), and all, including tools, implements, and machinery, or (ii) part of an electric
54.30transmission or distribution system, including tools, implements, and machinery, has a
54.31class rate of 2.25 percent.
54.32    (4) Railroad operating property has a class rate as provided under clause (1) for
54.33the first tier of market value and the remaining market value. In the case of multiple
54.34parcels in one county that are owned by one person or entity, only one first tier amount
54.35is eligible for the reduced rate.
55.1    (3) The entire market value of personal property that is: (i) tools, implements, and
55.2machinery of an electric generation, transmission, or distribution system; (ii) tools,
55.3implements, and machinery of a pipeline system transporting or distributing water, gas,
55.4crude oil, or petroleum products; or (iii) the (5) Personal property consisting of mains
55.5and pipes used in the distribution of steam or hot or chilled water for heating or cooling
55.6buildings, has a class rate as provided under clause (1) for the remaining market value
55.7in excess of the first tier.
55.8    (b) Employment property defined in section 469.166, during the period provided
55.9in section 469.170, shall constitute class 3b. The class rates for class 3b property are
55.10determined under paragraph (a).
55.11EFFECTIVE DATE.This section is effective for taxes levied in 2007, payable
55.12in 2008, and thereafter.

55.13    Sec. 17. Minnesota Statutes 2006, section 273.13, subdivision 25, is amended to read:
55.14    Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more
55.15units and used or held for use by the owner or by the tenants or lessees of the owner
55.16as a residence for rental periods of 30 days or more, excluding property qualifying for
55.17class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other
55.18than hospitals exempt under section 272.02, and contiguous property used for hospital
55.19purposes, without regard to whether the property has been platted or subdivided. The
55.20market value of class 4a property has a class rate of 1.25 percent.
55.21    (b) Class 4b includes:
55.22    (1) residential real estate containing less than four units that does not qualify as class
55.234bb, other than seasonal residential recreational property;
55.24    (2) manufactured homes not classified under any other provision;
55.25    (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
55.26farm classified under subdivision 23, paragraph (b) containing two or three units; and
55.27    (4) unimproved property that is classified residential as determined under subdivision
55.2833.
55.29    The market value of class 4b property has a class rate of 1.25 percent.
55.30    (c) Class 4bb includes:
55.31    (1) nonhomestead residential real estate containing one unit, other than seasonal
55.32residential recreational property; and
55.33    (2) a single family dwelling, garage, and surrounding one acre of property on a
55.34nonhomestead farm classified under subdivision 23, paragraph (b).
55.35    Class 4bb property has the same class rates as class 1a property under subdivision 22.
56.1    Property that has been classified as seasonal residential recreational property at
56.2any time during which it has been owned by the current owner or spouse of the current
56.3owner does not qualify for class 4bb.
56.4    (d) Class 4c property includes:
56.5    (1) except as provided in subdivision 22, paragraph (c), or subdivision 23, paragraph
56.6(b), clause (1), real and personal property devoted to temporary and seasonal residential
56.7occupancy for recreation purposes, including real and personal property devoted to
56.8temporary and seasonal residential occupancy for recreation purposes and not devoted to
56.9commercial purposes for more than 250 days in the year preceding the year of assessment.
56.10For purposes of this clause, property is devoted to a commercial purpose on a specific
56.11day if any portion of the property is used for residential occupancy, and a fee is charged
56.12for residential occupancy. Class 4c property must contain three or more rental units. A
56.13"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual
56.14camping site equipped with water and electrical hookups for recreational vehicles. Class
56.154c property must provide recreational activities such as renting ice fishing houses, boats
56.16and motors, snowmobiles, downhill or cross-country ski equipment; provide marina
56.17services, launch services, or guide services; or sell bait and fishing tackle. A camping
56.18pad offered for rent by a property that otherwise qualifies for class 4c is also class 4c
56.19regardless of the term of the rental agreement, as long as the use of the camping pad
56.20does not exceed 250 days. In order for a property to be classified as class 4c, seasonal
56.21residential recreational for commercial purposes, at least 40 percent of the annual gross
56.22lodging receipts related to the property must be from business conducted during 90
56.23consecutive days and either (i) at least 60 percent of all paid bookings by lodging guests
56.24during the year must be for periods of at least two consecutive nights; or (ii) at least 20
56.25percent of the annual gross receipts must be from charges for rental of fish houses, boats
56.26and motors, snowmobiles, downhill or cross-country ski equipment, or charges for marina
56.27services, launch services, and guide services, or the sale of bait and fishing tackle. For
56.28purposes of this determination, a paid booking of five or more nights shall be counted as
56.29two bookings. Class 4c also includes commercial use real property used exclusively
56.30for recreational purposes in conjunction with class 4c property devoted to temporary
56.31and seasonal residential occupancy for recreational purposes, up to a total of two acres,
56.32provided the property is not devoted to commercial recreational use for more than 250
56.33days in the year preceding the year of assessment and is located within two miles of the
56.34class 4c property with which it is used. Owners of real and personal property devoted to
56.35temporary and seasonal residential occupancy for recreation purposes and all or a portion
56.36of which was devoted to commercial purposes for not more than 250 days in the year
57.1preceding the year of assessment desiring classification as class 1c or 4c, must submit a
57.2declaration to the assessor designating the cabins or units occupied for 250 days or less in
57.3the year preceding the year of assessment by January 15 of the assessment year. Those
57.4cabins or units and a proportionate share of the land on which they are located will must be
57.5designated class 1c or 4c as otherwise provided. The remainder of the cabins or units and
57.6a proportionate share of the land on which they are located will be designated as class 3a.
57.7The owner of property desiring designation as class 1c or 4c property must provide guest
57.8registers or other records demonstrating that the units for which class 1c or 4c designation
57.9is sought were not occupied for more than 250 days in the year preceding the assessment if
57.10so requested. The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop,
57.11(4) conference center or meeting room, and (4) (5) other nonresidential facility operated
57.12on a commercial basis not directly related to temporary and seasonal residential occupancy
57.13for recreation purposes shall does not qualify for class 1c or 4c;
57.14    (2) qualified property used as a golf course if:
57.15    (i) it is open to the public on a daily fee basis. It may charge membership fees or
57.16dues, but a membership fee may not be required in order to use the property for golfing,
57.17and its green fees for golfing must be comparable to green fees typically charged by
57.18municipal courses; and
57.19    (ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
57.20    A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
57.21with the golf course is classified as class 3a property;
57.22    (3) real property up to a maximum of one acre three acres of land owned and used
57.23by a nonprofit community service oriented organization; provided that and that is not used
57.24for residential purposes on either a temporary or permanent basis, qualifies for class 4c
57.25provided that it meets either of the following:
57.26    (i) the property is not used for a revenue-producing activity for more than six days
57.27in the calendar year preceding the year of assessment and the property is not used for
57.28residential purposes on either a temporary or permanent basis; or
57.29    (ii) the organization makes annual charitable contributions and donations at least
57.30equal to the property's previous year's property taxes and the property is allowed to be
57.31used for public and community meetings or events for no charge, as appropriate to the
57.32size of the facility.
57.33    For purposes of this clause,
57.34(A) "charitable contributions and donations" has the same meaning as lawful
57.35gambling purposes under section 349.12, subdivision 25, excluding those purposes
57.36relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
58.1(B) "property taxes" excludes the state general tax;
58.2(C) a "nonprofit community service oriented organization" means any corporation,
58.3society, association, foundation, or institution organized and operated exclusively for
58.4charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
58.5federal income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal Revenue
58.6Code of 1986, as amended through December 31, 1990. For purposes of this clause,; and
58.7(D) "revenue-producing activities" shall include but not be limited to property or that
58.8portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
58.9liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
58.10alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
58.11insurance business, or office or other space leased or rented to a lessee who conducts a
58.12for-profit enterprise on the premises.
58.13Any portion of the property qualifying under item (i) which is used for revenue-producing
58.14activities for more than six days in the calendar year preceding the year of assessment
58.15shall be assessed as class 3a. The use of the property for social events open exclusively
58.16to members and their guests for periods of less than 24 hours, when an admission is
58.17not charged nor any revenues are received by the organization shall not be considered a
58.18revenue-producing activity;.
58.19    The organization shall maintain records of its charitable contributions and donations
58.20and of public meetings and events held on the property and make them available upon
58.21request any time to the assessor to ensure eligibility. An organization meeting the
58.22requirement under item (ii) must file an application by May 1 with the assessor for
58.23eligibility for the current year's assessment. The commissioner shall prescribe a uniform
58.24application form and instructions;
58.25    (4) postsecondary student housing of not more than one acre of land that is owned by
58.26a nonprofit corporation organized under chapter 317A and is used exclusively by a student
58.27cooperative, sorority, or fraternity for on-campus housing or housing located within two
58.28miles of the border of a college campus;
58.29    (5) manufactured home parks as defined in section 327.14, subdivision 3;
58.30    (6) real property that is actively and exclusively devoted to indoor fitness, health,
58.31social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
58.32and is located within the metropolitan area as defined in section 473.121, subdivision 2;
58.33    (7) a leased or privately owned noncommercial aircraft storage hangar not exempt
58.34under section 272.01, subdivision 2, and the land on which it is located, provided that:
58.35    (i) the land is on an airport owned or operated by a city, town, county, Metropolitan
58.36Airports Commission, or group thereof; and
59.1    (ii) the land lease, or any ordinance or signed agreement restricting the use of the
59.2leased premise, prohibits commercial activity performed at the hangar.
59.3    If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
59.4be filed by the new owner with the assessor of the county where the property is located
59.5within 60 days of the sale;
59.6    (8) a privately owned noncommercial aircraft storage hangar not exempt under
59.7section 272.01, subdivision 2, and the land on which it is located, provided that:
59.8    (i) the land abuts a public airport; and
59.9    (ii) the owner of the aircraft storage hangar provides the assessor with a signed
59.10agreement restricting the use of the premises, prohibiting commercial use or activity
59.11performed at the hangar; and
59.12    (9) residential real estate, a portion of which is used by the owner for homestead
59.13purposes, and that is also a place of lodging, if all of the following criteria are met:
59.14    (i) rooms are provided for rent to transient guests that generally stay for periods
59.15of 14 or fewer days;
59.16    (ii) meals are provided to persons who rent rooms, the cost of which is incorporated
59.17in the basic room rate;
59.18    (iii) meals are not provided to the general public except for special events on fewer
59.19than seven days in the calendar year preceding the year of the assessment; and
59.20    (iv) the owner is the operator of the property.
59.21The market value subject to the 4c classification under this clause is limited to five rental
59.22units. Any rental units on the property in excess of five, must be valued and assessed as
59.23class 3a. The portion of the property used for purposes of a homestead by the owner must
59.24be classified as class 1a property under subdivision 22.
59.25    Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
59.26parcel of seasonal residential recreational property not used for commercial purposes has
59.27the same class rates as class 4bb property, (ii) manufactured home parks assessed under
59.28clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal
59.29residential recreational property has a class rate of one percent for the first $500,000 of
59.30market value, and 1.25 percent for the remaining market value, (iv) the market value of
59.31property described in clause (4) has a class rate of one percent, (v) the market value of
59.32property described in clauses (2) and (6) has a class rate of 1.25 percent, and (vi) that
59.33portion of the market value of property in clause (9) qualifying for class 4c property
59.34has a class rate of 1.25 percent.
59.35    (e) Class 4d property is qualifying low-income rental housing certified to the assessor
59.36by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion
60.1of the units in the building qualify as low-income rental housing units as certified under
60.2section 273.128, subdivision 3, only the proportion of qualifying units to the total number
60.3of units in the building qualify for class 4d. The remaining portion of the building shall be
60.4classified by the assessor based upon its use. Class 4d also includes the same proportion of
60.5land as the qualifying low-income rental housing units are to the total units in the building.
60.6For all properties qualifying as class 4d, the market value determined by the assessor must
60.7be based on the normal approach to value using normal unrestricted rents.
60.8    Class 4d property has a class rate of 0.75 percent.
60.9EFFECTIVE DATE.The portion of this section relating to class 4c resorts in
60.10paragraph (d), clause (1), is effective for assessment year 2008 and thereafter, for taxes
60.11payable in 2009 and thereafter. The portion of this section relating to nonprofit community
60.12service oriented organizations is effective for assessment year 2007 and thereafter, for
60.13taxes payable in 2008 and thereafter, except that the application date in paragraph (d),
60.14clause (3), item (ii), for the 2007 assessment is extended to September 1, 2007.

60.15    Sec. 18. Minnesota Statutes 2006, section 273.13, subdivision 33, is amended to read:
60.16    Subd. 33. Classification of unimproved property. (a) All real property that is not
60.17improved with a structure must be classified according to its current use.
60.18    (b) Except as provided in subdivision 23, paragraph (b), clause (1), real property that
60.19is not improved with a structure and for which there is no identifiable current use must be
60.20classified according to its highest and best use permitted under the local zoning ordinance.
60.21If the ordinance permits more than one use, the land must be classified according to the
60.22highest and best use permitted under the ordinance. If no such ordinance exists, the
60.23assessor shall consider the most likely potential use of the unimproved land based upon
60.24the use made of surrounding land or land in proximity to the unimproved land.
60.25EFFECTIVE DATE.This section is effective for assessment year 2007 and
60.26thereafter, for taxes payable in 2008 and thereafter.

60.27    Sec. 19. Minnesota Statutes 2006, section 273.13, is amended by adding a subdivision
60.28to read:
60.29    Subd. 34. Homestead of disabled veteran. (a) All or a portion of the market value
60.30of property qualifying for homestead classification under subdivision 22 or 23 is excluded
60.31in determining the property's taxable market value if it serves as the homestead of a
60.32military veteran, as defined in section 197.447, who has a service-connected disability of
60.3350 percent or more. To qualify for exclusion under this subdivision, the veteran must have
61.1been honorably discharged from the United States armed forces, as indicated by United
61.2States Government Form DD214 or other official military discharge papers, and must be
61.3certified by the United States Veterans Administration as having a service-connected
61.4disability.
61.5    (b)(1) For a disability rating of at least 50 percent but less than 70 percent, $100,000
61.6of market value is excluded;
61.7    (2) for a disability rating of 70 percent or more, $150,000 of market value is
61.8excluded, except as provided in clause (3); and
61.9    (3) for a total (100 percent) and permanent disability, $300,000 of market value is
61.10excluded.
61.11    (c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b),
61.12clause (3), predeceases the veteran's spouse, and if upon the death of the veteran the
61.13spouse holds the legal or beneficial title to the homestead and permanently resides there,
61.14the exclusion shall carry over to the benefit of the veteran's spouse until such time as the
61.15spouse sells, transfers, or otherwise disposes of the property.
61.16    (d) In the case of an agricultural homestead, only the portion of the property
61.17consisting of the house and garage and immediately surrounding one acre of land qualifies
61.18for the valuation exclusion under this subdivision.
61.19    (e) A property qualifying for a valuation exclusion under this subdivision is not
61.20eligible for the credit under section 273.1384, subdivision 1.
61.21    (f) To qualify for a valuation exclusion under this subdivision a property owner must
61.22apply to the assessor by July 1 of each assessment year, except that an annual reapplication
61.23is not required once a property has been accepted for a valuation exclusion under paragraph
61.24(b), clause (3), and the property continues to qualify until there is a change in ownership.
61.25EFFECTIVE DATE.This section is effective for assessment year 2007 and
61.26thereafter, for taxes payable in 2008 and thereafter.

61.27    Sec. 20. Minnesota Statutes 2006, section 275.065, is amended by adding a subdivision
61.28to read:
61.29    Subd. 3b. Supplemental notice of proposed levy increases. (a) If a city that has
61.30a population of more than 2,500 or a county proposes a levy increase greater than the
61.31threshold increase calculated under paragraph (b), it shall prepare and deliver by first class
61.32mail a supplemental proposed property tax notice to each property taxpayer in the taxing
61.33jurisdiction, as described in this subdivision.
61.34    (b) The threshold increase in the proposed property tax levy is equal to the levy in
61.35the previous year, multiplied by the sum of (1) one percent, (2) the percentage growth,
62.1if any, in the population in the taxing jurisdiction for the most recent available year, (3)
62.2the percentage increase in the total market value in the taxing jurisdiction due to new
62.3construction of commercial and industrial property, and (4) the percentage increase in the
62.4implicit price deflator for government consumption expenditures and gross investment for
62.5state and local governments as prepared by the United States Department of Commerce
62.6for the most recent 12-month period ending March of the levy year.
62.7    (c) The supplemental proposed notice must show the taxing jurisdiction's (1) levy for
62.8the previous year, (2) its threshold levy increase indicating that this increase is calculated
62.9to reflect reasonable growth adjusting for population increases, increased demand from
62.10new business, and inflation, (3) the proposed property tax increase, and (4) the amount the
62.11proposed increase exceeds the threshold increase. The notice must contain a description of
62.12why the jurisdiction needs to raise property taxes above the threshold amount and how the
62.13taxing jurisdiction plans to spend the additional revenue.
62.14EFFECTIVE DATE.This section is effective for taxes levied in calendar year
62.152007 and thereafter.

62.16    Sec. 21. Minnesota Statutes 2006, section 275.065, is amended by adding a subdivision
62.17to read:
62.18    Subd. 6c. Joint public hearing; nonmetropolitan county, cities, and school
62.19districts. (a) Notwithstanding any other provision of law, the county board may hold a
62.20joint hearing with the governing bodies of all taxing authorities located wholly or partially
62.21within the county that are required to hold a public hearing under this section, excluding
62.22special taxing districts. The primary purpose of the joint hearing is for taxpayer efficiency
62.23by allowing taxpayers to come to a single public hearing to discuss the budgets and
62.24proposed property tax levies of most taxing authorities that impact the taxes on their
62.25property.
62.26    (b) This subdivision applies only to counties located outside the metropolitan area
62.27as defined under section 473.121, subdivision 2. If a city or school district is located
62.28partially within the metropolitan area, that taxing jurisdiction may participate in its
62.29nonmetropolitan county's joint hearing, if it so chooses.
62.30    (c) Upon the adoption of a resolution by the county board to hold a joint public
62.31hearing, the county shall notify each city with a population over 500 and each school
62.32district located wholly or partially within the county of its intention to hold the joint
62.33hearing and ask each of the taxing authorities if it would like to participate. Participation
62.34is voluntary, and participation in the joint hearing is in lieu of the requirement for the
62.35governing body to hold a separate public hearing under subdivision 6. If a participating
63.1city or school district is located in more than one county, the hearing under this subdivision
63.2is in lieu of the requirement to hold a separate public hearing if 75 percent or more
63.3of that city or school district's previous year's net tax capacity is in the county where
63.4the hearing is held.
63.5    (d) The initial joint hearing must be held on the first Thursday in December. The
63.6county may hold an additional joint hearing on another date before December 20 if the
63.7majority of the participating taxing authorities want an additional hearing.
63.8    The county board shall obtain a meeting space to hold the joint hearing, preferably
63.9at a public building such as the courthouse, school, or community center. The location
63.10shall be as centrally located within the county as possible. The meeting shall generally be
63.11structured in the following general manner:
63.12    (1) the first 30 to 60 minutes must be devoted to discussion of the county's budget
63.13and levy;
63.14    (2) the next 30 to 60 minutes must be devoted to discussion of the city's budget and
63.15levy, with each city's discussion held in a separate room, preferably in the same building;
63.16    (3) the next 30 to 60 minutes must be devoted to discussion of the school district's
63.17levy, with each school district's discussion held in a separate room, preferably in the
63.18same building; and
63.19    (4) during the last 30 minutes the governing bodies must reassemble in a joint
63.20meeting to entertain any follow-up questions that have arisen from the separate discussions.
63.21    The county shall attempt to keep the total public hearing to within three hours.
63.22    (e) In lieu of the public advertisement requirement in subdivision 5a, the county shall
63.23have a single advertisement listing the county, each city with a population of over 500, and
63.24each school district participating in the joint public hearing listing. Any taxing authority
63.25participating under this subdivision is exempt from the separate public advertisement
63.26requirement under subdivision 5a. The cost of the joint hearing advertisement shall be
63.27apportioned in the same manner provided in subdivision 4. The notice must be published
63.28not less than two business days nor more than six business days before the hearing. The
63.29newspaper selected must be one of general interest and readership in the community, and
63.30not one of limited subject matter. The advertisement must appear in a newspaper that is
63.31published at least once per week. The advertisement must be in the following form:

63.32"NOTICE OF JOINT PUBLIC HEARING

63.33PROPOSED TOTAL PROPERTY TAXES

63.34FOR PARTICIPATING TAXING AUTHORITIES

63.35The property tax amounts below compare that portion of the current budget levied in
63.36property taxes in the county, cities, and school districts for (year) with the property
64.1taxes the county, cities, and school districts propose to collect in (year) for those taxing
64.2authorities participating in the joint public hearing.

64.3 64.4	Taxing Authority	(Year) Property Taxes	Proposed (Year) Property Taxes	Change (Year) - (Year)
64.5	$.......	$.......	$.......	...%
64.6	$.......	$.......	$.......	...%
64.7	$.......	$.......	$.......	...%

64.8ATTEND THE JOINT PUBLIC HEARING

64.9All residents are invited to attend the joint public hearing of the county/cities/school
64.10districts to express your opinions on the proposed amount of (year) property taxes. The
64.11hearing will be held on:

64.12(Month/Day/Year/Time)

64.13(Location/Address)

64.14If the discussion cannot be completed, and another hearing is scheduled, a time and place
64.15for that hearing will be announced at this hearing. You are also invited to send your
64.16written comments to the county auditor. If the comments relate to the city or school
64.17district's levy, please identify that on the envelope so the county auditor can direct the
64.18correspondence to the right jurisdiction."
64.19    The formal adoption of the taxing authority's levy must not be made at the joint
64.20public hearing held under this subdivision. The formal adoption must be made at one of
64.21the regularly scheduled meetings of the taxing authority's governing body. However, the
64.22property tax levy amount that is subsequently adopted cannot exceed the amount shown to
64.23taxpayers at the joint public hearing.
64.24EFFECTIVE DATE.This section is effective for hearings held in 2007 and
64.25thereafter.

64.26    Sec. 22. Minnesota Statutes 2006, section 278.05, subdivision 6, is amended to read:
64.27    Subd. 6. Dismissal of petition; exclusion of certain evidence. (a) In cases where
64.28the petitioner contests the valuation of income-producing property, information, including
64.29income and expense figures in the form of (1) year-end financial statements for the
64.30year prior to the assessment date, (2) year-end financial statements for the year of the
64.31assessment date, and (3) rent rolls on the assessment date including tenant name, lease start
64.32and end dates, option terms, base rent, square footage leased and vacant space, verified net
64.33rentable areas in the form of net rentable square footage of the building or buildings, and
64.34anticipated income and expenses in the form of proposed budgets for the year subsequent
64.35to the year of the assessment date, for income-producing property must be provided to
65.1the county assessor no later than 60 days after the applicable filing deadline contained
65.2in section 278.01, subdivision 1 or 4. Failure to provide the information required in this
65.3paragraph shall result in the dismissal of the petition, unless (1) the failure to provide it was
65.4due to the unavailability of the evidence at the time that the information was due, or (2)
65.5the petitioner was not aware of or informed of the requirement to provide the information.
65.6If the petitioner proves that the requirements under clause (2) are met, the petitioner has
65.7an additional 30 days to provide the information from the time the petitioner became
65.8aware of or was informed of the requirement to provide the information, otherwise the
65.9petition shall be dismissed.
65.10    (b) Provided that the information as contained in paragraph (a) is timely submitted to
65.11the county assessor, the county assessor shall furnish the petitioner at least five days before
65.12the hearing under this chapter with the property's appraisal, if any, which will be presented
65.13to the court at the hearing. The petitioner shall furnish to the county assessor at least five
65.14days before the hearing under this chapter with the property's appraisal, if any, which
65.15will be presented to the court at the hearing. An appraisal of the petitioner's property
65.16done by or for the county shall not be admissible as evidence if the county assessor does
65.17not comply with the provisions in this paragraph. The petition shall be dismissed if the
65.18petitioner does not comply with the provisions in this paragraph.
65.19EFFECTIVE DATE.This section is effective for petitions filed beginning July
65.201, 2007.

65.21    Sec. 23. Minnesota Statutes 2006, section 279.01, is amended by adding a subdivision
65.22to read:
65.23    Subd. 5. Homestead property; monthly payment option. (a) In the case of class
65.241, 1c, or 2a homestead property as defined in section 273.13, a homeowner may apply
65.25to make payments in eight equal monthly installments on the 15th day of each month
65.26from May through December. A homeowner desiring to utilize this option must apply
65.27to the county by April 15 of the year that the taxes are payable, following procedures
65.28established by the county.
65.29    (b) Each county must establish procedures allowing homeowners the option of
65.30paying the current year's property taxes on a monthly basis. The procedures must address
65.31how homeowners apply to participate in the program, how taxpayers can make payments,
65.32including the possibility of automatic bank withdrawals, how and whether the taxpayer is
65.33notified of each payment due date, whether to require annual applications, how to modify
65.34the property tax settlement process, and any other procedures the county board deems
66.1necessary to implement this subdivision. The proposed procedures must be submitted to
66.2the commissioner of revenue by November 1, 2007. The commissioner must review the
66.3procedures and approve them or notify the county of changes that must be made to the
66.4proposed procedures by January 1, 2008.
66.5    (c) The application procedure must be included in the property tax statement mailing.
66.6    (d) Penalties on unpaid taxes on property under the monthly payment program
66.7must be computed by equating the number of days that any of the monthly payments are
66.8overdue to the penalty for the corresponding number of days after May 15 that a payment
66.9is overdue under subdivision 1.
66.10EFFECTIVE DATE.This section is effective for taxes payable in 2008 and
66.11thereafter.

66.12    Sec. 24. Minnesota Statutes 2006, section 279.37, subdivision 1a, is amended to read:
66.13    Subd. 1a. Class 3a property. (a) The delinquent taxes upon a parcel of property
66.14which was classified class 3a, for the previous year's assessment and had a total market
66.15value of $200,000 $500,000 or less for that same assessment shall be eligible to be
66.16composed into a confession of judgment. Property qualifying under this subdivision
66.17shall be subject to the same provisions as provided in this section except as provided
66.18in paragraphs (b) to (d).
66.19    (b) Current year taxes and penalty due at the time the confession of judgment
66.20is entered must be paid.
66.21    (c) The down payment must include all special assessments due in the current tax
66.22year, all delinquent special assessments, and 20 percent of the ad valorem tax, penalties,
66.23and interest accrued against the parcel. The balance remaining is payable in four equal
66.24annual installments.
66.25    (d) The amounts entered in judgment bear interest at the rate provided in section
66.26279.03, subdivision 1a , commencing with the date the judgment is entered. The interest
66.27rate is subject to change each year on the unpaid balance in the manner provided in section
66.28279.03, subdivision 1a .
66.29EFFECTIVE DATE.This section is effective for confessions of judgment entered
66.30into July 1, 2007, and thereafter.

66.31    Sec. 25. Minnesota Statutes 2006, section 289A.08, subdivision 13, is amended to read:
66.32    Subd. 13. Long and short forms; local use tax instructions; property tax refund
66.33information. (a) The commissioner shall provide a long form individual income tax
67.1return and may provide a short form individual income tax return. The returns shall be in
67.2a form that is consistent with the provisions of chapter 290, notwithstanding any other
67.3law to the contrary. The nongame wildlife checkoff provided in section 290.431 and the
67.4dependent care credit provided in section 290.067 must be included on the short form.
67.5    (b) The commissioner must provide information on local use taxes in the individual
67.6income tax instruction booklet. The commissioner must provide this information in the
67.7same section of the booklet that provides information on the state use tax.
67.8    (c) The commissioner must refer to the property tax refunds allowed under chapter
67.9290A on the front cover of the individual income tax instruction booklet, as well as
67.10information within the booklet on income eligibility for the homestead and renter refunds,
67.11and maximum refund amounts allowed in the current year.
67.12EFFECTIVE DATE.This section is effective the day following final enactment.

67.13    Sec. 26. Minnesota Statutes 2006, section 289A.40, subdivision 4, is amended to read:
67.14    Subd. 4. Property tax refund claims. A property tax refund claim under chapter
67.15290A is not allowed if the initial claim is filed more than (1) one year after the original
67.16due date for filing the claim for refunds under section 290A.04, subdivision 2h; or (2) two
67.17years after the original due date for filing the claim for refunds under section 290A.04,
67.18subdivisions 2, 2a, and 2k.
67.19EFFECTIVE DATE.This section is effective for property taxes payable in 2006
67.20and thereafter and rent paid in 2005 and thereafter.

67.21    Sec. 27. Minnesota Statutes 2006, section 290B.03, subdivision 1, is amended to read:
67.22    Subdivision 1. Program qualifications. The qualifications for the senior citizens'
67.23property tax deferral program are as follows:
67.24    (1) the property must be owned and occupied as a homestead by a person 65 years of
67.25age or older. In the case of a married couple, both only one of the spouses must be at least
67.2665 years old at the time the first property tax deferral is granted, regardless of whether the
67.27property is titled in the name of one spouse or both spouses, or titled in another way that
67.28permits the property to have homestead status;
67.29    (2) the total household income of the qualifying homeowners homeowner, or in the
67.30case of a married couple, the qualifying homeowner and spouse, as defined in section
67.31290A.03, subdivision 5 , for the calendar year preceding the year of the initial application
67.32may not exceed $60,000 $75,000;
68.1    (3) the homestead must have been owned and occupied as the homestead of at
68.2least one of the qualifying homeowners for at least 15 years prior to the year the initial
68.3application is filed;
68.4    (4) there are no state or federal tax liens or judgment liens on the homesteaded
68.5property;
68.6    (5) there are no mortgages or other liens on the property that secure future advances,
68.7except for those subject to credit limits that result in compliance with clause (6); and
68.8    (6) the total unpaid balances of debts secured by mortgages and other liens on the
68.9property, including unpaid and delinquent special assessments and interest and any
68.10delinquent property taxes, penalties, and interest, but not including property taxes payable
68.11during the year, does not exceed 75 percent of the assessor's estimated market value for
68.12the year.
68.13EFFECTIVE DATE.This section is effective for applications filed on or after
68.14July 1, 2007.

68.15    Sec. 28. Minnesota Statutes 2006, section 290B.03, subdivision 2, is amended to read:
68.16    Subd. 2. Qualifying homestead; defined. Qualifying homestead property is defined
68.17as the dwelling occupied as the homeowner's principal residence and so much of the land
68.18surrounding it as is reasonably necessary for use of the dwelling as a home and any other
68.19property used for purposes of a homestead as defined in section 273.13, subdivisions
68.2022 and 23 , but not to exceed one acre. The homestead may be part of a multidwelling
68.21building and the land on which it is built. Property is not qualifying homestead property if
68.22a person or entity other than the applicant or the applicant's spouse holds an interest in the
68.23property as the vendor under a contract for deed or as a remainderperson.
68.24EFFECTIVE DATE.This section is effective for applications submitted on or
68.25after January 1, 2007.

68.26    Sec. 29. Minnesota Statutes 2006, section 290B.04, subdivision 3, is amended to read:
68.27    Subd. 3. Excess-income certification by taxpayer. A taxpayer whose initial
68.28application has been approved under subdivision 2 shall notify the commissioner of
68.29revenue in writing by July 1 if the taxpayer's household income for the preceding calendar
68.30year exceeded $60,000 $75,000. The certification must state the homeowner's total
68.31household income for the previous calendar year. No property taxes may be deferred
68.32under this chapter in any year following the year in which a program participant filed or
68.33should have filed an excess-income certification under this subdivision showing income in
69.1excess of the maximum allowed, unless the participant has filed a resumption of eligibility
69.2certification as described in subdivision 4.
69.3EFFECTIVE DATE.This section is effective for applications filed on or after
69.4July 1, 2007.

69.5    Sec. 30. Minnesota Statutes 2006, section 290B.04, subdivision 4, is amended to read:
69.6    Subd. 4. Resumption of eligibility certification by taxpayer. A taxpayer who has
69.7previously filed an excess-income certification under subdivision 3 may resume program
69.8participation if the taxpayer's household income for a subsequent year is $60,000 $75,000
69.9or less. If the taxpayer chooses to resume program participation, the taxpayer must notify
69.10the commissioner of revenue in writing by July 1 of the year following a calendar year in
69.11which the taxpayer's household income is $60,000 $75,000 or less. The certification must
69.12state the taxpayer's total household income for the previous calendar year. Once a taxpayer
69.13resumes participation in the program under this subdivision, participation will continue
69.14until the taxpayer files a subsequent excess-income certification under subdivision 3 or
69.15until participation is terminated under section 290B.08, subdivision 1.
69.16EFFECTIVE DATE.This section is effective for applications filed on or after
69.17July 1, 2007.

69.18    Sec. 31. Minnesota Statutes 2006, section 290B.05, subdivision 1, is amended to read:
69.19    Subdivision 1. Determination by commissioner. The commissioner shall
69.20determine each qualifying homeowner's "annual maximum property tax amount"
69.21following approval of the homeowner's initial application and following the receipt of a
69.22resumption of eligibility certification. The "annual maximum property tax amount" equals
69.23three percent of the homeowner's total household income for the year preceding either the
69.24initial application or the resumption of eligibility certification, whichever is applicable.
69.25Following approval of the initial application, the commissioner shall determine the
69.26qualifying homeowner's "maximum allowable deferral." No tax may be deferred relative
69.27to the appropriate assessment year for any homeowner whose total household income
69.28for the previous year exceeds $60,000 $75,000. No tax shall be deferred in any year in
69.29which the homeowner does not meet the program qualifications in section 290B.03. The
69.30maximum allowable total deferral is equal to 75 percent of the assessor's estimated market
69.31value for the year, less the balance of any mortgage loans and other amounts secured by
69.32liens against the property at the time of application, including any unpaid and delinquent
70.1special assessments and interest and any delinquent property taxes, penalties, and interest,
70.2but not including property taxes payable during the year.
70.3EFFECTIVE DATE.This section is effective for applications received on or after
70.4July 1, 2007.

70.5    Sec. 32. Minnesota Statutes 2006, section 290B.07, is amended to read:
70.6290B.07 LIEN; DEFERRED PORTION.
70.7    (a) Payment by the state to the county treasurer of property taxes, penalties, interest,
70.8or special assessments and interest deferred under this chapter is deemed a loan from the
70.9state to the program participant. The commissioner must compute the interest as provided
70.10in section 270C.40, subdivision 5, but not to exceed five percent, and maintain records of
70.11the total deferred amount and interest for each participant. Interest shall accrue beginning
70.12September 1 of the payable year for which the taxes are deferred, provided that no interest
70.13shall be charged on (1) deferred property tax amounts on applications filed on or after
70.14July 1, 2007, or (2) deferred property taxes beginning with taxes payable in 2008 on
70.15applications filed prior to July 1, 2007. Any deferral made under this chapter shall not
70.16be construed as delinquent property taxes.
70.17    The lien created under section 272.31 continues to secure payment by the taxpayer,
70.18or by the taxpayer's successors or assigns, of the amount deferred, including interest, with
70.19respect to all years for which amounts are deferred. The lien for deferred taxes and interest
70.20has the same priority as any other lien under section 272.31, except that liens, including
70.21mortgages, recorded or filed prior to the recording or filing of the notice under section
70.22290B.04, subdivision 2 , have priority over the lien for deferred taxes and interest. A
70.23seller's interest in a contract for deed, in which a qualifying homeowner is the purchaser
70.24or an assignee of the purchaser, has priority over deferred taxes and interest on deferred
70.25taxes, regardless of whether the contract for deed is recorded or filed. The lien for deferred
70.26taxes and interest for future years has the same priority as the lien for deferred taxes and
70.27interest for the first year, which is always higher in priority than any mortgages or other
70.28liens filed, recorded, or created after the notice recorded or filed under section 290B.04,
70.29subdivision 2 . The county treasurer or auditor shall maintain records of the deferred
70.30portion and shall list the amount of deferred taxes for the year and the cumulative deferral
70.31and interest for all previous years as a lien against the property. In any certification of
70.32unpaid taxes for a tax parcel, the county auditor shall clearly distinguish between taxes
70.33payable in the current year, deferred taxes and interest, and delinquent taxes. Payment
70.34of the deferred portion becomes due and owing at the time specified in section 290B.08.
71.1Upon receipt of the payment, the commissioner shall issue a receipt for it to the person
71.2making the payment upon request and shall notify the auditor of the county in which the
71.3parcel is located, within ten days, identifying the parcel to which the payment applies.
71.4Upon receipt by the commissioner of revenue of collected funds in the amount of the
71.5deferral, the state's loan to the program participant is deemed paid in full.
71.6    (b) If property for which taxes have been deferred under this chapter forfeits
71.7under chapter 281 for nonpayment of a nondeferred property tax amount, or because
71.8of nonpayment of amounts previously deferred following a termination under section
71.9290B.08 , the lien for the taxes deferred under this chapter, plus interest and costs, shall be
71.10canceled by the county auditor as provided in section 282.07. However, notwithstanding
71.11any other law to the contrary, any proceeds from a subsequent sale of the property under
71.12chapter 282 or another law, must be used to first reimburse the county's forfeited tax sale
71.13fund for any direct costs of selling the property or any costs directly related to preparing
71.14the property for sale, and then to reimburse the state for the amount of the canceled lien.
71.15Within 90 days of the receipt of any sale proceed to which the state is entitled under these
71.16provisions, the county auditor must pay those funds to the commissioner of revenue by
71.17warrant for deposit in the general fund. No other deposit, use, distribution, or release of
71.18gross sale proceeds or receipts may be made by the county until payments sufficient
71.19to fully reimburse the state for the canceled lien amount have been transmitted to the
71.20commissioner.
71.21EFFECTIVE DATE.This section is effective July 1, 2007.

71.22    Sec. 33. [290D.01] CITATION.
71.23    This program shall be named the "seasonal recreational property tax deferral
71.24program."
71.25EFFECTIVE DATE.This section is effective July 1, 2007.

71.26    Sec. 34. [290D.02] TERMS.
71.27    Subdivision 1. Terms. For purposes of sections 290D.01 to 290D.08, the terms
71.28defined in this section have the meanings given them.
71.29    Subd. 2. Primary property owner. "Primary property owner" means a person who
71.30(1) has been the owner, or one of the owners, of the eligible property for at least 15 years
71.31prior to the year the application is filed under section 290D.04; and (2) applies for the
71.32deferral of property taxes under section 290D.04.
72.1    Subd. 3. Secondary property owner. "Secondary property owner" means any
72.2person, other than the primary property owner, who has been an owner of the eligible
72.3property for at least 15 years prior to the year the initial application is filed for deferral
72.4of property taxes under section 290D.04.
72.5    Subd. 4. Eligible property. "Eligible property" means a parcel of property or
72.6contiguous parcels of property under the same ownership classified as noncommercial
72.7seasonal residential recreational 4c(1) property under section 273.13, subdivision 25.
72.8    Subd. 5. Base property tax amount. "Base property tax amount" means the total
72.9property taxes levied by all taxing jurisdictions, including special assessments, on the
72.10eligible property in the year prior to the year that the initial application is approved under
72.11section 290D.04 and payable in the year of the application.
72.12    Subd. 6. Special assessments. "Special assessments" means any assessment, fee, or
72.13other charge that may be made by law, and that appears on the property tax statement for
72.14the property for collection under the laws applicable to the enforcement of real estate taxes.
72.15    Subd. 7. Commissioner. "Commissioner" means the commissioner of revenue.
72.16EFFECTIVE DATE.This section is effective for applications filed July 1, 2008,
72.17and thereafter.

72.18    Sec. 35. [290D.03] QUALIFICATIONS FOR DEFERRAL.
72.19    In order for an eligible property to qualify for treatment under this program:
72.20    (1) the eligible property must have been owned solely by the primary property owner,
72.21or jointly with others, for at least 15 years prior to the year the initial application is filed;
72.22    (2) there must be no state or federal tax liens or judgment liens on the eligible
72.23property;
72.24    (3) there must be no mortgages or other liens on the eligible property that secure
72.25future advances, except for those subject to credit limits that result in compliance with
72.26clause (4); and
72.27    (4) the total unpaid balances of debts secured by mortgages and other liens on the
72.28eligible property, including unpaid and delinquent special assessments and interest and
72.29any delinquent property taxes, penalties, and interest, but not including property taxes
72.30payable during the year, must not exceed 60 percent of the assessor's estimated market
72.31value for the current assessment year.
72.32EFFECTIVE DATE.This section is effective for applications filed July 1, 2008,
72.33and thereafter.

73.1    Sec. 36. [290D.04] APPLICATION FOR DEFERRAL.
73.2    Subdivision 1. Initial application. (a) A primary owner of a property meeting
73.3the qualifications under section 290D.03 may apply to the commissioner for deferral
73.4of taxes on the eligible property. Applications are due on or before July 1 for deferral
73.5of any taxes payable in the following year. The application, which must be prescribed
73.6by the commissioner, shall include the following items and any other information the
73.7commissioner deems necessary:
73.8    (1) the name, address, and Social Security number of the primary property owner
73.9and secondary property owners, if any;
73.10    (2) a copy of the property tax statement for the current taxes payable year for the
73.11eligible property;
73.12    (3) the initial year of ownership of the primary property owner and any second
73.13property owners of the eligible property;
73.14    (4) information on any mortgage loans or other amounts secured by mortgages or
73.15other liens against the eligible property, for which purpose the commissioner may require
73.16the applicant to provide a copy of the mortgage note, the mortgage, or a statement of the
73.17balance owing on the mortgage loan provided by the mortgage holder. The commissioner
73.18may require the appropriate documents in connection with obtaining and confirming
73.19information on unpaid amounts secured by other liens; and
73.20    (5) the signatures of the primary property owner and all other owners, if any, stating
73.21that each owner agrees to enroll the eligible property in the program to defer property
73.22taxes under this chapter.
73.23    The application must state that program participation is voluntary. The application
73.24must also state that program participation includes authorization for the annual deferred
73.25amount. The deferred property tax calculated by the county and the cumulative deferred
73.26property tax amount is public data.
73.27    (b) As part of the initial application process, if the property is abstract property, the
73.28commissioner may require the applicant to obtain at the applicant's cost a report prepared
73.29by a licensed abstracter showing the last deed and any unsatisfied mortgages, liens,
73.30judgments, and state and federal tax lien notices which were recorded on or after the date
73.31of that last deed with respect to the eligible property or to the applicant.
73.32    The certificate or report need not include references to any documents filed or
73.33recorded more than 40 years prior to the date of the certification or report. The certification
73.34or report must be as of a date not more than 30 days prior to submission of the application
73.35under this section.
74.1    The commissioner may also require the county recorder or county registrar of the
74.2county where the eligible property is located to provide copies of recorded documents
74.3related to the applicant of the eligible property, for which the recorder or registrar shall
74.4not charge a fee. The commissioner may use any information available to determine or
74.5verify eligibility under this section.
74.6    Subd. 2. Approval; recording. The commissioner shall approve all initial
74.7applications that qualify under this chapter and shall notify the primary property owner on
74.8or before December 1. The commissioner may investigate the facts or require confirmation
74.9in regard to an application. The commissioner shall record or file a notice of qualification
74.10for deferral, including the names of the primary and any secondary property owners and a
74.11legal description of the eligible property, in the office of the county recorder, or registrar of
74.12titles, whichever is applicable, in the county where the eligible property is located. The
74.13notice must state that it serves as a notice of lien and that it includes deferrals under this
74.14section for future years. The primary property owner shall pay the recording or filing fees
74.15for the notice, which, notwithstanding section 357.18, shall be paid by that owner at the
74.16time of satisfaction of the lien.
74.17    Subd. 3. Penalty for failure; investigations. (a) The commissioner shall assess
74.18a penalty equal to 20 percent of the property taxes improperly deferred in the case of a
74.19false application. The commissioner shall assess a penalty equal to 50 percent of the
74.20property taxes improperly deferred if the taxpayer knowingly filed a false application. The
74.21commissioner shall assess penalties under this section through the issuance of an order
74.22under the provisions of chapter 270C. Persons affected by a commissioner's order issued
74.23under this section may appeal as provided in chapter 270C.
74.24    (b) The commissioner may conduct investigations related to initial applications
74.25required under this chapter within the period ending 3-1/2 years from the due date of
74.26the application.
74.27    Subd. 4. Annual certification to commissioner. Annually on or before July 1,
74.28the primary property owner must certify to the commissioner that the person continues
74.29to qualify as a primary property owner. If the primary owner has died or has transferred
74.30the property in the preceding year, a certification may be filed by the primary owner's
74.31spouse, or by one of the secondary owners, provided that the person is currently an
74.32owner of the property. In this case, the primary owner's spouse or the secondary owner
74.33shall be considered the primary owner from that point forward. If neither the primary
74.34owner, the primary owner's spouse, or a secondary owner is eligible to file the required
74.35annual certification for the property, the property's participation in the program shall be
74.36terminated, and the procedures in section 290D.07 apply.
75.1    Subd. 5. Annual notice to primary property owner. Annually, on or before
75.2September 1, the commissioner shall notify each primary property owner, in writing, of
75.3the total cumulative deferred taxes and accrued interest on the qualifying property as of
75.4that date.
75.5EFFECTIVE DATE.This section is effective for applications filed July 1, 2008,
75.6and thereafter.

75.7    Sec. 37. [290D.05] DEFERRED PROPERTY TAX AMOUNT.
75.8    Subdivision 1. Calculation of deferred property tax amount. Each year after
75.9the county auditor has determined the final property tax rates under section 275.08, the
75.10"deferred property tax amount" must be calculated on each eligible property. The deferred
75.11property tax amount is equal to 50 percent of the amount of the difference between (1) the
75.12total amount of property taxes and special assessments levied upon the eligible property
75.13for the current year by all taxing jurisdictions and (2) the eligible property's base property
75.14tax amount. Any tax attributable to new improvements made to the eligible property after
75.15the initial application has been approved under section 290D.04, subdivision 2, must be
75.16excluded in determining the deferred property tax amount. The eligible property's total
75.17current year's tax less the deferred property tax amount for the current year must be listed
75.18on the property tax statement and is the amount due to the county under chapter 276.
75.19Reference that the property is enrolled in the seasonal recreational property tax deferral
75.20program under this chapter and a state lien has been recorded must be clearly printed on
75.21the statement.
75.22    Subd. 2. Certification to commissioner. The county auditor shall annually, on or
75.23before April 15, certify to the commissioner the property tax deferral amounts determined
75.24under this section for each eligible property in the county. The commissioner shall
75.25prescribe the information that is necessary to identify the eligible properties.
75.26    Subd. 3. Limitation on total amount of deferred taxes. The total amount of
75.27deferred taxes and interest on a property, when added to (1) the balance owed on any
75.28mortgages on the property at the time of initial application; (2) other amounts secured by
75.29liens on the property at the time of the initial application; and (3) any unpaid and delinquent
75.30special assessments and interest and any delinquent property taxes, penalties, and interest,
75.31but not including property taxes payable during the year, must not exceed 60 percent of
75.32the assessor's estimated market value of the property for the current assessment year.
75.33EFFECTIVE DATE.This section is effective for applications filed July 1, 2008,
75.34and thereafter.

76.1    Sec. 38. [290D.06] LIEN; DEFERRED PORTION.
76.2    (a) Payment by the state to the county treasurer of property taxes, penalties, interest,
76.3or special assessments and interest, deferred under this chapter is deemed a loan from the
76.4state to the program participant. The commissioner shall compute the interest as provided
76.5in section 270C.40, subdivision 5, but not to exceed two percent over the maximum
76.6interest rate provided in section 290B.07, paragraph (a), and maintain records of the total
76.7deferred amount and interest for each participant. Interest accrues beginning September 1
76.8of the payable year for which the taxes are deferred. Any deferral made under this chapter
76.9must not be construed as delinquent property taxes.
76.10    The lien created under section 272.31 continues to secure payment by the taxpayer,
76.11or by the taxpayer's successors or assigns, of the amount deferred, including interest, with
76.12respect to all years for which amounts are deferred. The lien for deferred taxes and interest
76.13has the same priority as any other lien under section 272.31, except that liens, including
76.14mortgages, recorded or filed prior to the recording or filing of the notice under section
76.15290D.04, subdivision 2, have priority over the lien for deferred taxes and interest. A
76.16seller's interest in a contract for deed, in which a qualifying owner is the purchaser or an
76.17assignee of the purchaser, has priority over deferred taxes and interest on deferred taxes,
76.18regardless of whether the contract for deed is recorded or filed. The lien for deferred taxes
76.19and interest for future years has the same priority as the lien for deferred taxes and interest
76.20for the first year, which is always higher in priority than any mortgages or other liens filed,
76.21recorded, or created after the notice recorded or filed under section 290D.04, subdivision
76.222 . The county treasurer or auditor shall maintain records of the deferred portion and shall
76.23list the amount of deferred taxes for the year and the cumulative deferral and interest for
76.24all previous years as a lien against the eligible property. In any certification of unpaid
76.25taxes for a tax parcel, the county auditor shall clearly distinguish between taxes payable in
76.26the current year, deferred taxes and interest, and delinquent taxes. Payment of the deferred
76.27portion becomes due and owing at the time specified in section 290D.07. Upon receipt of
76.28the payment, the commissioner shall issue a receipt to the person making the payment
76.29upon request and shall notify the auditor of the county in which the parcel is located,
76.30within ten days, identifying the parcel to which the payment applies. Upon receipt by the
76.31commissioner of collected funds in the amount of the deferral, the state's loan to the
76.32program participant is deemed paid in full.
76.33    (b) If eligible property for which taxes have been deferred under this chapter forfeits
76.34under chapter 281 for nonpayment of a nondeferred property tax amount, or because
76.35of nonpayment of amounts previously deferred following a termination under section
76.36290D.07, the lien for the taxes deferred under this chapter, plus interest and costs, shall be
77.1canceled by the county auditor as provided in section 282.07. However, notwithstanding
77.2any other law to the contrary, any proceeds from a subsequent sale of the eligible property
77.3under chapter 282 or another law, must be used to first reimburse the county's forfeited
77.4tax sale fund for any direct costs of selling the eligible property or any costs directly
77.5related to preparing the eligible property for sale, and then to reimburse the state for
77.6the amount of the canceled lien. Within 90 days of the receipt of any sale proceeds to
77.7which the state is entitled under these provisions, the county auditor must pay those funds
77.8to the commissioner by warrant for deposit in the general fund. No other deposit, use,
77.9distribution, or release of gross sale proceeds or receipts may be made by the county until
77.10payments sufficient to fully reimburse the state for the canceled lien amount have been
77.11transmitted to the commissioner.
77.12EFFECTIVE DATE.This section is effective for applications filed July 1, 2008,
77.13and thereafter.

77.14    Sec. 39. [290D.07] TERMINATION OF DEFERRAL; PAYMENT OF
77.15DEFERRED TAXES.
77.16    Subdivision 1. Termination. (a) The deferral of taxes granted under this chapter
77.17terminates when one of the following occurs:
77.18    (1) the eligible property is sold or transferred to someone other than the primary
77.19owner's spouse or a secondary owner;
77.20    (2) the death of the primary owner, or in the case of a married couple, after the
77.21death of both spouses, provided that there is not a secondary owner eligible to become
77.22the primary owner;
77.23    (3) the primary property owner notifies the commissioner, in writing, that all owners,
77.24including any secondary property owners, desire to discontinue the deferral; or
77.25    (4) the eligible property no longer qualifies under section 290D.03.
77.26    (b) An eligible property is not terminated from the program because no deferred
77.27property tax amount is determined for any given year after the eligible property's initial
77.28enrollment into the program.
77.29    (c) An eligible property is not terminated from the program if the eligible property
77.30subsequently becomes the homestead of one or more of the property owners and the
77.31property and the owners qualify for, and are immediately enrolled in, the senior deferral
77.32program under chapter 290B.
77.33    Subd. 2. Payment upon termination. Upon the termination of the deferral under
77.34subdivision 1, the amount of deferred taxes, penalties, interest, and special assessments
77.35and interest, plus the recording or filing fees under this subdivision and section 290D.04,
78.1subdivision 2 , becomes due and payable to the commissioner within 90 days of termination
78.2of the deferral for terminations under subdivision 1, paragraph (a), clauses (1) and (2),
78.3and within one year of termination of the deferral for terminations under subdivision 1,
78.4paragraph (a), clauses (3) and (4). No additional interest is due on the deferral if timely
78.5paid. On receipt of payment, the commissioner shall, within ten days, notify the auditor
78.6of the county in which the parcel is located, identifying the parcel to which the payment
78.7applies and shall remit the recording or filing fees under this subdivision and section
78.8290D.04, subdivision 2, to the auditor. A notice of termination of deferral, containing the
78.9legal description and the recording or filing data for the notice of qualification for deferral
78.10under section 290D.04, subdivision 2, shall be prepared and recorded or filed by the
78.11county auditor in the same office in which the notice of qualification for deferral under
78.12section 290D.04, subdivision 2, was recorded or filed, and the county auditor shall mail a
78.13copy of the notice of termination to the property owner. The property owner shall pay the
78.14recording or filing fees. Upon recording or filing of the notice of termination of deferral,
78.15the notice of qualification for deferral under section 290D.04, subdivision 2, and the lien
78.16created by it are discharged. If the deferral is not timely paid, the penalty, interest, lien,
78.17forfeiture, and other rules for the collection of ad valorem property taxes apply.
78.18EFFECTIVE DATE.This section is effective for applications filed July 1, 2008,
78.19and thereafter.

78.20    Sec. 40. [290D.08] STATE REIMBURSEMENT.
78.21    Subdivision 1. Determination; payment. The county auditor shall determine the
78.22total current year's deferred amount of property tax under this chapter in the county, and
78.23submit those amounts as part of the abstracts of tax lists submitted by the county auditors
78.24under section 275.29. The commissioner may make changes in the abstracts of tax lists as
78.25deemed necessary. The commissioner, after such review, shall pay the deferred amount of
78.26property tax to each county treasurer on or before August 31.
78.27    The county treasurer shall distribute as part of the October settlement the funds
78.28received as if they had been collected as part of the property tax.
78.29    Subd. 2. Appropriation. An amount sufficient to pay the total amount of property
78.30tax determined under subdivision 1, plus any amounts paid under section 290D.04,
78.31subdivision 4 , is annually appropriated from the general fund to the commissioner.
78.32EFFECTIVE DATE.This section is effective for applications filed July 1, 2008,
78.33and thereafter.

79.1    Sec. 41. Minnesota Statutes 2006, section 298.75, is amended by adding a subdivision
79.2to read:
79.3    Subd. 11. Tax may be imposed; Otter Tail County. (a) If Otter Tail County
79.4does not impose a tax under this section and approves imposition of the tax under this
79.5subdivision, the town of Scambler in Otter Tail County may impose the aggregate
79.6materials tax under this section.
79.7    (b) For purposes of exercising the powers contained in this section, the "town" is
79.8deemed to be the "county."
79.9    (c) All provisions in this section apply to the town of Scambler, except that in lieu of
79.10the tax proceeds under subdivision 7, all proceeds of the tax must be retained by the town.
79.11    (d) If Otter Tail County imposes an aggregate materials tax under this section, the
79.12tax imposed by the town of Scambler under this subdivision is repealed on the effective
79.13date of the Otter Tail County tax.
79.14EFFECTIVE DATE.This section is effective the day after the governing body
79.15of the town of Scambler and its chief clerical officer comply with section 645.021,
79.16subdivisions 2 and 3.

79.17    Sec. 42. Minnesota Statutes 2006, section 435.193, is amended to read:
79.18435.193 HARDSHIP ASSESSMENT DEFERRAL FOR SENIORS OR,
79.19DISABLED, OR MILITARY PERSONS.
79.20    (a) Notwithstanding the provisions of any law to the contrary, any county, statutory
79.21or home rule charter city, or town, making a special assessment may, at its discretion, defer
79.22the payment of that assessment for any homestead property:
79.23    (1) owned by a person 65 years of age or older or retired by virtue of a permanent
79.24and total disability for whom it would be a hardship to make the payments; or
79.25    (2) owned by a person who is a member of the Minnesota National Guard or other
79.26military reserves who is ordered into active military service, as defined in section 190.05,
79.27subdivision 5b or 5c, as stated in the person's military orders, for whom it would be a
79.28hardship to make the payments.
79.29    (b) Any county, statutory or home rule charter city, or town electing to defer
79.30special assessments shall adopt an ordinance or resolution establishing standards and
79.31guidelines for determining the existence of a hardship and for determining the existence of
79.32a disability, but nothing herein shall be construed to prohibit the determination of hardship
79.33on the basis of exceptional and unusual circumstances not covered by the standards and
80.1guidelines where the determination is made in a nondiscriminatory manner and does not
80.2give the applicant an unreasonable preference or advantage over other applicants.
80.3EFFECTIVE DATE.This section is effective the day following final enactment,
80.4and applies to any special assessment for which payment is due on or after that date.

80.5    Sec. 43. Minnesota Statutes 2006, section 469.1813, subdivision 1a, is amended to
80.6read:
80.7    Subd. 1a. Use of term. (a) As used in this section and sections 469.1814 and
80.8469.1815 , "abatement" includes a deferral of taxes with abatement of interest and penalties
80.9unless the context indicates otherwise. The abatement may include delinquent taxes,
80.10interest, and penalties.
80.11    (b) Computation of duration limits under this section must include each taxes
80.12payable year for which delinquent taxes are abated.
80.13EFFECTIVE DATE.This section is effective for abatements granted after
80.14December 31, 2006.

80.15    Sec. 44. Minnesota Statutes 2006, section 473F.01, subdivision 2, is amended to read:
80.16    Subd. 2. Use of proceeds. Except as provided in section 473F.08, subdivision 3a,
80.17The proceeds from the areawide tax imposed under this chapter must be used by a local
80.18governmental unit in the same manner and for the same purposes as the proceeds from
80.19other ad valorem taxes levied by the local governmental unit.
80.20EFFECTIVE DATE.This section is effective for taxes payable in 2008 and
80.21thereafter.

80.22    Sec. 45. Minnesota Statutes 2006, section 473F.08, subdivision 5, is amended to read:
80.23    Subd. 5. Areawide tax rate. On or before August 25 of each year, the county auditor
80.24shall certify to the administrative auditor that portion of the levy of each governmental
80.25unit determined under subdivisions 3, clause (a), 3a, and 3b. The administrative auditor
80.26shall then determine the areawide tax rate sufficient to yield an amount equal to the sum of
80.27such levies from the areawide net tax capacity. On or before September 1 of each year, the
80.28administrative auditor shall certify the areawide tax rate to each of the county auditors.
80.29EFFECTIVE DATE.This section is effective for taxes payable in 2008 and
80.30thereafter.

81.1    Sec. 46. Minnesota Statutes 2006, section 473F.08, subdivision 7a, is amended to read:
81.2    Subd. 7a. Certification of values; payment. The administrative auditor shall
81.3determine for each county the difference between the total levy on distribution value
81.4pursuant to subdivisions 3, clause (a), 3a, and 3b, within the county and the total tax on
81.5contribution value pursuant to subdivision 6, within the county. On or before May 16 of
81.6each year, the administrative auditor shall certify the differences so determined to each
81.7county auditor. In addition, the administrative auditor shall certify to those county auditors
81.8for whose county the total tax on contribution value exceeds the total levy on distribution
81.9value the settlement the county is to make to the other counties of the excess of the total tax
81.10on contribution value over the total levy on distribution value in the county. On or before
81.11June 15 and November 15 of each year, each county treasurer in a county having a total tax
81.12on contribution value in excess of the total levy on distribution value shall pay one-half of
81.13the excess to the other counties in accordance with the administrative auditors certification.
81.14EFFECTIVE DATE.This section is effective for taxes payable in 2008 and
81.15thereafter.

81.16    Sec. 47. FISCAL DISPARITIES STUDY.
81.17    Subdivision 1. Study required. The commissioner of revenue shall conduct a study
81.18of the metropolitan revenue distribution program contained in Minnesota Statutes, chapter
81.19473F, commonly known as the fiscal disparities program. On or before February 1, 2008,
81.20the commissioner shall make a report to the chairs of the house of representatives and
81.21senate tax committees consisting of the findings of the study and any recommendations
81.22resulting from the study.
81.23    The study must consider to what extent the program is meeting the following goals,
81.24and what changes could be made to the program in the furtherance of meeting those goals:
81.25    (1) reducing the extent to which the property tax encourages development patterns
81.26that do not make cost-effective use of public infrastructure or impose other high public
81.27costs;
81.28    (2) ensuring that the benefits of economic growth of the region are shared throughout
81.29the region, especially for growth that results from state and/or regional decisions;
81.30    (3) improving the ability of each jurisdiction within the region to deliver services at
81.31a level commensurate with its tax effort;
81.32    (4) compensating jurisdictions containing properties that provide regional benefits
81.33for the costs those properties impose on their host jurisdictions in excess of their tax
81.34payments;
82.1    (5) promoting a fair distribution of property tax burdens across jurisdictions of
82.2the region; and
82.3    (6) reducing the economic losses that result from competition among communities
82.4for commercial-industrial tax base.
82.5    Subd. 2. Appropriation. $150,000 is appropriated to the commissioner of revenue
82.6from the general fund in fiscal year 2008 to conduct the study required under subdivision 1.
82.7EFFECTIVE DATE.This section is effective July 1, 2007.

82.8    Sec. 48. IMPROVING PUBLIC AWARENESS AND PARTICIPATION IN
82.9PROPERTY TAX RELIEF PROGRAMS.
82.10    The commissioner of revenue, in consultation with county officials, shall undertake
82.11to improve the public's awareness of and participation in property tax refund programs,
82.12including the regular program for homeowners and renters and the additional property
82.13tax refund program, the senior citizen's property tax deferral program, and the seasonal
82.14recreational property tax deferral program.
82.15    The commissioner shall consider options for improving public awareness, including,
82.16but not limited to:
82.17    (i) direct mailings to homeowners;
82.18    (ii) an insert in the property tax statement;
82.19    (iii) more prominent and direct references to the programs on the property tax
82.20statement;
82.21    (iv) notification on the property tax statement envelopes or folders;
82.22    (v) public service announcements, including print, broadcast, and Internet; and
82.23    (vi) information and handouts at the truth in taxation hearings.
82.24EFFECTIVE DATE.This section is effective the day following final enactment.

82.25    Sec. 49. TRUTH IN TAXATION PROGRAM; COSTS AND PARTICIPATION
82.26STUDY.
82.27    The commissioner of revenue shall prepare a study of the costs of the truth in
82.28taxation program under Minnesota Statutes, section 275.065, and the level of taxpayer
82.29participation in the hearings required under Minnesota Statutes, section 275.065,
82.30subdivision 6. In determining the costs, the commissioner shall ascertain the costs of
82.31the preparation and mailing of the notice under Minnesota Statutes, section 275.065,
82.32subdivision 3, the advertisement under Minnesota Statutes, section 275.065, subdivision
82.335a, and any costs associated with the hearings required under Minnesota Statutes, section
83.1275.065, subdivision 6. The report must also make recommendations for ways to increase
83.2taxpayer participation in the local government budget process, including but not limited to
83.3the truth-in-taxation process. The report must be delivered by January 15, 2008, to the
83.4legislature as provided for in Minnesota Statutes, section 3.195. The report must also be
83.5provided to the chairs of the senate and house of representatives committees and divisions
83.6with jurisdiction over property taxes.
83.7EFFECTIVE DATE.This section is effective the day following final enactment.

83.8    Sec. 50. REPEALER.
83.9Minnesota Statutes 2006, section 473F.08, subdivision 3a, is repealed.
83.10EFFECTIVE DATE.This section is effective for taxes payable in 2008 and
83.11thereafter.

83.12ARTICLE 5

83.13LOCAL SALES TAXES

83.14    Section 1. Minnesota Statutes 2006, section 297A.99, subdivision 1, is amended to
83.15read:
83.16    Subdivision 1. Authorization; scope. (a) A political subdivision of this state may
83.17impose a general sales tax if permitted by special law enacted prior to January 1, 2008, or
83.18if the political subdivision enacted and imposed the tax before the effective date of section
83.19477A.016 and its predecessor provision.
83.20    (b) This section governs the imposition of a general sales tax by the political
83.21subdivision. The provisions of this section preempt the provisions of any special law:
83.22    (1) enacted before June 2, 1997, or
83.23    (2) enacted on or after June 2, 1997, that does not explicitly exempt the special law
83.24provision from this section's rules by reference.
83.25    (c) This section does not apply to or preempt a sales tax on motor vehicles or a
83.26special excise tax on motor vehicles.
83.27    (d) No political subdivision may use its funds to advertise, promote, or hold a
83.28referendum to support imposing a general sales tax unless authorized by a special law
83.29enacted prior to January 1, 2008.
83.30    (e) No political subdivision may seek the authority to impose a general sales tax
83.31after January 1, 2008.
83.32EFFECTIVE DATE.This section is effective the day following final enactment.

84.1    Sec. 2. Laws 1980, chapter 511, section 1, subdivision 2, as amended by Laws 1991,
84.2chapter 291, article 8, section 22, and Laws 1998, chapter 389, article 8, section 25, and
84.3Laws 2003, First Special Session chapter 21, article 8, section 11, is amended to read:
84.4    Subd. 2. Notwithstanding Minnesota Statutes, Section 477A.016, or any other law,
84.5ordinance, or city charter provision to the contrary, the city of Duluth may, by ordinance,
84.6impose an additional sales tax of up to one and one-half two and one-quarter percent on
84.7sales transactions which are described in Minnesota Statutes 2000, Section 297A.01,
84.8Subdivision 3, Clause (c). When the city council determines that the taxes imposed
84.9under this subdivision and under Laws 1998, chapter 389, article 8, section 26 at a rate
84.10of one-half of one percent have produced revenue sufficient to pay (1) the debt service
84.11on bonds in a principal amount of $8,000,000 issued for capital improvements to the
84.12Duluth Entertainment and Convention Center, and (2) debt service on outstanding bonds
84.13originally issued in the principal amount of $4,970,000 to finance capital improvements
84.14to the Great Lakes Aquarium since the imposition of the taxes at the rate of one and
84.15one-half percent, the rate of the tax under this subdivision is reduced to by one-half of
84.16one percent. The imposition of this tax shall not be subject to voter referendum under
84.17either state law or city charter provisions. When the city council determines that the taxes
84.18imposed under this subdivision at a rate of three-quarters of one percent and other sources
84.19of revenue produce revenue sufficient to pay debt service on bonds in the principal amount
84.20of $37,931,000 plus issuance and discount costs, issued for capital improvements at the
84.21Duluth Entertainment and Convention Center, which include a new arena, the rate of tax
84.22under this subdivision must be reduced by three-quarters of one percent.
84.23EFFECTIVE DATE.This section is effective the day after the governing body of
84.24the city of Duluth and its chief clerical officer comply with Minnesota Statutes, section
84.25645.021, subdivisions 2 and 3.

84.26    Sec. 3. Laws 2005, First Special Session chapter 3, article 5, section 39, is amended to
84.27read:
84.28    Sec. 39. CITY OF BEMIDJI.
84.29    Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes,
84.30section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to the
84.31approval of the city voters at the general election held on November 5, 2002, and at the
84.32general election held November 7, 2006, the city of Bemidji may impose by ordinance
84.33a sales and use tax of one-half of one percent for the purposes specified in subdivision
84.342. The provisions of Minnesota Statutes, section 297A.99, govern the imposition,
84.35administration, collection, and enforcement of the tax authorized under this subdivision.
85.1    Subd. 2. Use of revenues. Revenues received from the tax authorized by
85.2subdivision 1 must be used for the cost of collecting and administering the tax and to pay
85.3for the projects listed in this subdivision:
85.4    (1) To pay all or part of the capital or administrative costs of the acquisition,
85.5construction, and improvement of parks and trails within the city, as provided for in the
85.6city of Bemidji's parks, open space, and trail system plan, adopted by the Bemidji City
85.7Council on November 21, 2001. Authorized expenses include, but are not limited to,
85.8acquiring property, paying construction expenses related to the development of these
85.9facilities and improvements, and securing and paying debt service on bonds or other
85.10obligations issued to finance acquisition, construction, improvement, or development of
85.11parks and trails within the city of Bemidji.
85.12    (2) To pay all or part of the city's share of costs of up to $50,000,000 plus any
85.13associated bond costs, for acquisition, design, and construction of a regional event center.
85.14Authorized expenses include, but are not limited to, acquiring property, paying demolition
85.15and construction expenses, improving associated infrastructure, and purchasing furniture,
85.16fixtures, and equipment for the regional event center, and securing and paying debt service
85.17on bonds or other obligations issued to finance the regional event center project.
85.18    Subd. 3. Bonds. (a) Pursuant to the approval of the city voters at the general
85.19election held on November 5, 2002, the city of Bemidji may issue, without an additional
85.20election, general obligation bonds of the city in an amount not to exceed $9,826,000 to
85.21pay capital and administrative expenses for the acquisition, construction, improvement,
85.22and development of parks and trails as specified in subdivision 2. The debt represented by
85.23the bonds must not be included in computing any debt limitations applicable to the city,
85.24and the levy of taxes required by Minnesota Statutes, section 475.61, to pay the principal
85.25of any interest on the bonds must not be subject to any levy limitations or be included in
85.26computing or applying any levy limitation applicable to the city.
85.27    (b) Pursuant to the approval of the city voters at the general election held on
85.28November 7, 2006, the city of Bemidji may issue, without an additional election, general
85.29obligation bonds of the city in an amount not to exceed $50,000,000 to pay capital and
85.30administrative expenses for the acquisition, construction, improvement, and development
85.31of the regional event center specified in subdivision 2. The debt represented by the bonds
85.32must not be included in computing any debt limitations applicable to the city, and the levy
85.33of taxes required by Minnesota Statutes, section 475.61, to pay the principal of any interest
85.34on the bonds must not be subject to any levy limitations or be included in computing or
85.35applying any levy limitation applicable to the city.
86.1    Subd. 4. Termination of tax. The tax imposed under subdivision 1 expires
86.2when the Bemidji City Council determines that the amount described in subdivision 3,
86.3paragraph (a), has been received from the tax to finance the capital and administrative
86.4costs for acquisition, construction, improvement, and development of parks and trails and
86.5to repay or retire at maturity the principal, interest, and premium due on any bonds issued
86.6for the park and trail improvements under subdivision 3, paragraph (a), plus the earlier
86.7of (1) 30 years, or (2) when the city council first determines that the additional revenues
86.8received from the extension of the tax equals or exceeds the amount authorized to be spent
86.9for the regional event center under subdivision 2, clause (2). Any funds remaining after
86.10completion of the park and trail improvements authorized projects and retirement or
86.11redemption of the bonds may be placed in the general fund of the city. The tax imposed
86.12under subdivision 1 may expire at an earlier time if the city so determines by ordinance.
86.13EFFECTIVE DATE.This section is effective the day after compliance by the
86.14governing body of the city of Bemidji and its chief clerical officer with Minnesota
86.15Statutes, section 645.021, subdivisions 2 and 3.

86.16    Sec. 4. CITY OF CROOKSTON; TAXES AUTHORIZED.
86.17    Subdivision 1. Sales and use tax. Notwithstanding Minnesota Statutes, section
86.18477A.016, or any other provision of law, ordinance, or city charter, if approved by the
86.19voters at the next general election or a special election prior to December 31, 2008, the
86.20city of Crookston may impose by ordinance a sales and use tax of up to one-half of one
86.21percent for the purpose specified in subdivision 2. Except as provided in this section, the
86.22provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration,
86.23collection, and enforcement of the tax authorized under this subdivision.
86.24    Subd. 2. Use of revenues. Revenues received from taxes authorized by subdivision
86.251 must be used by the city to pay the cost of collecting the taxes and to pay all or part of the
86.26capital and administrative costs for the reconstruction of public facilities that need to be
86.27relocated in conjunction with the city's flood control project. Authorized expenses include,
86.28but are not limited to, acquiring property and paying construction expenses related to these
86.29facilities and improvements, and paying debt service on bonds or other obligations issued
86.30to finance acquisition, development, and construction of these facilities and improvements.
86.31The total amount of revenues that the city may raise under subdivision 1 to finance these
86.32projects is limited to no more than $10,000,000 plus any associated bond costs.
86.33    Subd. 3. Bonding authority. Pursuant to the approval of the city voters to impose
86.34the tax authorized under subdivision 1, the city may issue, without an additional election,
86.35general obligation bonds of the city in an amount not to exceed $10,000,000 to pay
87.1capital and administrative expenses for the projects described in subdivision 2. The debt
87.2represented by the bonds is not included in computing any debt limitation applicable to the
87.3city, and any levy of taxes under Minnesota Statutes, section 475.61, to pay principal of
87.4and interest on the bonds is not subject to any levy limitation or be included in computing
87.5or applying any levy limitation applicable to the city.
87.6    Subd. 4. Termination of taxes. The taxes imposed under subdivision 1 expire when
87.7the Crookston city council determines that the amount of revenues received from the taxes
87.8to finance the project described in subdivision 2 first equals or exceeds the amount spent
87.9directly on the projects in subdivision 2, plus the additional amount needed to pay the
87.10costs related to issuance of bonds under subdivision 3, including interest on the bonds.
87.11Any funds remaining after completion of the project and retirement or redemption of the
87.12bonds may be placed in the general fund of the city. The taxes imposed under subdivision
87.131 may expire at an earlier time if the city so determines by ordinance.
87.14EFFECTIVE DATE.This section is effective the day after the governing body of
87.15the city of Crookston and its chief clerical officer comply with Minnesota Statutes, section
87.16645.021, subdivisions 2 and 3.

87.17    Sec. 5. CITY OF NORTH MANKATO; TAXES AUTHORIZED.
87.18    Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes,
87.19section 477A.016, or any other provision of law, ordinance, or city charter pursuant to
87.20the approval of the voters on November 7, 2006, and pursuant to Minnesota Statutes,
87.21section 297A.99, the city of North Mankato may impose by ordinance a sales and use tax
87.22of one-half of one percent for the purposes specified in subdivision 2. The provisions of
87.23Minnesota Statutes, section 297A.99, govern the imposition, administration, collection,
87.24and enforcement of the taxes authorized under this subdivision.
87.25    Subd. 2. Use of revenues. Revenues received from the tax authorized by
87.26subdivision 1 must be used to pay all or part of the capital costs of the following projects:
87.27    (1) the local share of the Trunk Highway 14/County State Aid Highway 41
87.28interchange project;
87.29    (2) development of regional parks and hiking and biking trails;
87.30    (3) expansion of the North Mankato Taylor Library;
87.31    (4) riverfront redevelopment; and
87.32    (5) lake improvement projects.
87.33    The total amount of revenues from the tax in subdivision 1 that may be used to fund
87.34these projects is $6,000,000 plus any associated bond costs.
88.1    Subd. 3. Bonds. (a) The city of North Mankato, pursuant to the approval of the
88.2voters at the November 7, 2006, referendum authorizing the imposition of the taxes in
88.3this section, may issue bonds under Minnesota Statutes, chapter 475, to pay capital and
88.4administrative expenses for the projects described in subdivision 2, in an amount that
88.5does not exceed $6,000,000. A separate election to approve the bonds under Minnesota
88.6Statutes, section 475.58, is not required.
88.7    (b) The debt represented by the bonds is not included in computing any debt
88.8limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section
88.9475.61, to pay principal and interest on the bonds is not subject to any levy limitation.
88.10    Subd. 4. Termination of taxes. The tax imposed under subdivision 1 expires
88.11when the city council determines that the amount of revenues received from the taxes
88.12to pay for the projects under subdivision 2 first equals or exceeds $6,000,000 plus the
88.13additional amount needed to pay the costs related to issuance of bonds under subdivision
88.143, including interest on the bonds. Any funds remaining after completion of the projects
88.15and retirement or redemption of the bonds must be placed in a capital facilities and
88.16equipment replacement fund of the city. The tax imposed under subdivision 1 may expire
88.17at an earlier time if the city so determines by ordinance.
88.18EFFECTIVE DATE.This section is effective the day after compliance by the
88.19governing body of the city of North Mankato with Minnesota Statutes, section 645.021,
88.20subdivision 3.