HF 751

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to finance; authorizing the establishment of 
  1.3             job opportunity building zones; providing for certain 
  1.4             tax incentives in job opportunity building zones; 
  1.5             providing job opportunity building zone aid; changing 
  1.6             local government aids; providing for levy limits; 
  1.7             making sales tax accelerated June liability provisions 
  1.8             permanent; providing for deposit of certain sales and 
  1.9             cigarette tax proceeds; providing for cash flow and 
  1.10            budget reserve accounts; abolishing a contingent 
  1.11            transfer from the budget reserve account; abolishing 
  1.12            or providing for the expiration of certain funds and 
  1.13            accounts; authorizing delay of certain payments to 
  1.14            cities and counties; repealing a refund on used motor 
  1.15            oil and filters; appropriating money; amending 
  1.16            Minnesota Statutes 2002, sections 16A.152, 
  1.17            subdivisions 1, 1b, 2, 7; 62J.694, subdivision 4; 
  1.18            144.395, subdivision 3; 272.02, by adding a 
  1.19            subdivision; 272.029, by adding a subdivision; 
  1.20            273.1398, subdivisions 4a, 4c, 6, 8; 275.025, 
  1.21            subdivision 1; 275.065, by adding a subdivision; 
  1.22            275.07, subdivision 1; 275.70, subdivisions 3, 5; 
  1.23            275.71, subdivisions 2, 4, 5, 6; 275.73, subdivision 
  1.24            2; 275.74, subdivisions 2, 3; 289A.20, subdivision 4; 
  1.25            290.01, subdivisions 19b, 29; 290.06, subdivision 2c, 
  1.26            by adding a subdivision; 290.067, subdivision 1; 
  1.27            290.0671, subdivision 1; 290.091, subdivision 2; 
  1.28            290.0921, subdivision 3; 290.0922, subdivision 3; 
  1.29            297A.68, by adding a subdivision; 297A.94; 297B.03; 
  1.30            297F.10, subdivision 1; 477A.013, subdivision 9; 
  1.31            477A.03, subdivision 2; Laws 2001, First Special 
  1.32            Session chapter 5, article 12, section 95, as amended; 
  1.33            Laws 2002, chapter 377, article 12, section 17; 
  1.34            proposing coding for new law in Minnesota Statutes, 
  1.35            chapters 469; 477A; repealing Minnesota Statutes 2002, 
  1.36            sections 273.138; 273.1398, subdivision 2; 273.166; 
  1.37            275.71, subdivision 5; 325E.112, subdivision 2a; 
  1.38            477A.011, subdivisions 36, 37; 477A.0121, subdivisions 
  1.39            1, 2, 3, 4, 5, 6; 477A.0122, subdivisions 1, 2, 3, 4, 
  1.40            5, 6; 477A.0123; 477A.03, subdivisions 3, 4; 477A.06; 
  1.41            477A.065; 477A.07. 
  1.42  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.43                             ARTICLE 1 
  2.1                    JOB OPPORTUNITY BUILDING ZONES 
  2.2      Section 1.  Minnesota Statutes 2002, section 272.02, is 
  2.3   amended by adding a subdivision to read: 
  2.4      Subd. 56.  [JOB OPPORTUNITY BUILDING ZONE PROPERTY.] (a) 
  2.5   Improvements to real property, and personal property, classified 
  2.6   under section 273.13, subdivision 24, and located within a job 
  2.7   opportunity building zone are exempt from ad valorem taxes 
  2.8   levied under chapter 275. 
  2.9      (b) Improvements to real property, and tangible personal 
  2.10  property, of an agricultural production facility located within 
  2.11  an agricultural processing facility zone is exempt from ad 
  2.12  valorem taxes levied under chapter 275. 
  2.13     (c) For property to qualify for exemption under paragraph 
  2.14  (a), the occupant must be a qualified business as defined in 
  2.15  section 469.310. 
  2.16     (d) The exemption applies beginning for the first 
  2.17  assessment year after designation of the job opportunity 
  2.18  building zone by the commissioner of trade and economic 
  2.19  development.  The exemption applies to each assessment year that 
  2.20  begins during the duration of the job opportunity building 
  2.21  zone.  This exemption does not apply to: 
  2.22     (1) the levy under section 475.61 or similar levy 
  2.23  provisions under any other law to pay general obligation bonds, 
  2.24  if the bonds were issued before the date of designation of the 
  2.25  job opportunity building zone; or 
  2.26     (2) a levy under section 126C.17, if the levy was approved 
  2.27  by the voters before the designation of the job opportunity 
  2.28  building zone. 
  2.29     [EFFECTIVE DATE.] This section is effective beginning for 
  2.30  property taxes assessed in 2004, payable in 2005. 
  2.31     Sec. 2.  Minnesota Statutes 2002, section 272.029, is 
  2.32  amended by adding a subdivision to read: 
  2.33     Subd. 7.  [EXEMPTION.] The tax imposed under this section 
  2.34  does not apply to electricity produced by wind energy conversion 
  2.35  systems located in a job opportunity building zone, designated 
  2.36  under section 469.314, for the period of the zone designation.  
  3.1   The exemption applies beginning for the first calendar year 
  3.2   after designation of the zone and applies to each calendar year 
  3.3   that begins during the designation of the zone. 
  3.4      [EFFECTIVE DATE.] This section is effective the day 
  3.5   following final enactment. 
  3.6      Sec. 3.  Minnesota Statutes 2002, section 290.01, 
  3.7   subdivision 19b, is amended to read: 
  3.8      Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
  3.9   individuals, estates, and trusts, there shall be subtracted from 
  3.10  federal taxable income: 
  3.11     (1) interest income on obligations of any authority, 
  3.12  commission, or instrumentality of the United States to the 
  3.13  extent includable in taxable income for federal income tax 
  3.14  purposes but exempt from state income tax under the laws of the 
  3.15  United States; 
  3.16     (2) if included in federal taxable income, the amount of 
  3.17  any overpayment of income tax to Minnesota or to any other 
  3.18  state, for any previous taxable year, whether the amount is 
  3.19  received as a refund or as a credit to another taxable year's 
  3.20  income tax liability; 
  3.21     (3) the amount paid to others, less the amount used to 
  3.22  claim the credit allowed under section 290.0674, not to exceed 
  3.23  $1,625 for each qualifying child in grades kindergarten to 6 and 
  3.24  $2,500 for each qualifying child in grades 7 to 12, for tuition, 
  3.25  textbooks, and transportation of each qualifying child in 
  3.26  attending an elementary or secondary school situated in 
  3.27  Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 
  3.28  wherein a resident of this state may legally fulfill the state's 
  3.29  compulsory attendance laws, which is not operated for profit, 
  3.30  and which adheres to the provisions of the Civil Rights Act of 
  3.31  1964 and chapter 363.  For the purposes of this clause, 
  3.32  "tuition" includes fees or tuition as defined in section 
  3.33  290.0674, subdivision 1, clause (1).  As used in this clause, 
  3.34  "textbooks" includes books and other instructional materials and 
  3.35  equipment purchased or leased for use in elementary and 
  3.36  secondary schools in teaching only those subjects legally and 
  4.1   commonly taught in public elementary and secondary schools in 
  4.2   this state.  Equipment expenses qualifying for deduction 
  4.3   includes expenses as defined and limited in section 290.0674, 
  4.4   subdivision 1, clause (3).  "Textbooks" does not include 
  4.5   instructional books and materials used in the teaching of 
  4.6   religious tenets, doctrines, or worship, the purpose of which is 
  4.7   to instill such tenets, doctrines, or worship, nor does it 
  4.8   include books or materials for, or transportation to, 
  4.9   extracurricular activities including sporting events, musical or 
  4.10  dramatic events, speech activities, driver's education, or 
  4.11  similar programs.  For purposes of the subtraction provided by 
  4.12  this clause, "qualifying child" has the meaning given in section 
  4.13  32(c)(3) of the Internal Revenue Code; 
  4.14     (4) income as provided under section 290.0802; 
  4.15     (5) to the extent included in federal adjusted gross 
  4.16  income, income realized on disposition of property exempt from 
  4.17  tax under section 290.491; 
  4.18     (6) to the extent not deducted in determining federal 
  4.19  taxable income or used to claim the long-term care insurance 
  4.20  credit under section 290.0672, the amount paid for health 
  4.21  insurance of self-employed individuals as determined under 
  4.22  section 162(l) of the Internal Revenue Code, except that the 
  4.23  percent limit does not apply.  If the individual deducted 
  4.24  insurance payments under section 213 of the Internal Revenue 
  4.25  Code of 1986, the subtraction under this clause must be reduced 
  4.26  by the lesser of: 
  4.27     (i) the total itemized deductions allowed under section 
  4.28  63(d) of the Internal Revenue Code, less state, local, and 
  4.29  foreign income taxes deductible under section 164 of the 
  4.30  Internal Revenue Code and the standard deduction under section 
  4.31  63(c) of the Internal Revenue Code; or 
  4.32     (ii) the lesser of (A) the amount of insurance qualifying 
  4.33  as "medical care" under section 213(d) of the Internal Revenue 
  4.34  Code to the extent not deducted under section 162(1) of the 
  4.35  Internal Revenue Code or excluded from income or (B) the total 
  4.36  amount deductible for medical care under section 213(a); 
  5.1      (7) the exemption amount allowed under Laws 1995, chapter 
  5.2   255, article 3, section 2, subdivision 3; 
  5.3      (8) to the extent included in federal taxable income, 
  5.4   postservice benefits for youth community service under section 
  5.5   124D.42 for volunteer service under United States Code, title 
  5.6   42, sections 12601 to 12604; 
  5.7      (9) to the extent not deducted in determining federal 
  5.8   taxable income by an individual who does not itemize deductions 
  5.9   for federal income tax purposes for the taxable year, an amount 
  5.10  equal to 50 percent of the excess of charitable contributions 
  5.11  allowable as a deduction for the taxable year under section 
  5.12  170(a) of the Internal Revenue Code over $500; 
  5.13     (10) for taxable years beginning before January 1, 2008, 
  5.14  the amount of the federal small ethanol producer credit allowed 
  5.15  under section 40(a)(3) of the Internal Revenue Code which is 
  5.16  included in gross income under section 87 of the Internal 
  5.17  Revenue Code; 
  5.18     (11) for individuals who are allowed a federal foreign tax 
  5.19  credit for taxes that do not qualify for a credit under section 
  5.20  290.06, subdivision 22, an amount equal to the carryover of 
  5.21  subnational foreign taxes for the taxable year, but not to 
  5.22  exceed the total subnational foreign taxes reported in claiming 
  5.23  the foreign tax credit.  For purposes of this clause, "federal 
  5.24  foreign tax credit" means the credit allowed under section 27 of 
  5.25  the Internal Revenue Code, and "carryover of subnational foreign 
  5.26  taxes" equals the carryover allowed under section 904(c) of the 
  5.27  Internal Revenue Code minus national level foreign taxes to the 
  5.28  extent they exceed the federal foreign tax credit; and 
  5.29     (12) in each of the five tax years immediately following 
  5.30  the tax year in which an addition is required under subdivision 
  5.31  19a, clause (7), an amount equal to one-fifth of the delayed 
  5.32  depreciation.  For purposes of this clause, "delayed 
  5.33  depreciation" means the amount of the addition made by the 
  5.34  taxpayer under subdivision 19a, clause (7), minus the positive 
  5.35  value of any net operating loss under section 172 of the 
  5.36  Internal Revenue Code generated for the tax year of the 
  6.1   addition.  The resulting delayed depreciation cannot be less 
  6.2   than zero; and 
  6.3      (13) job opportunity building zone income as provided under 
  6.4   section 469.316. 
  6.5      [EFFECTIVE DATE.] This section is effective for taxable 
  6.6   years beginning after December 31, 2003. 
  6.7      Sec. 4.  Minnesota Statutes 2002, section 290.01, 
  6.8   subdivision 29, is amended to read: 
  6.9      Subd. 29.  [TAXABLE INCOME.] The term "taxable income" 
  6.10  means:  
  6.11     (1) for individuals, estates, and trusts, the same as 
  6.12  taxable net income; 
  6.13     (2) for corporations, the taxable net income less 
  6.14     (i) the net operating loss deduction under section 290.095; 
  6.15  and 
  6.16     (ii) the dividends received deduction under section 290.21, 
  6.17  subdivision 4; and 
  6.18     (iii) the exemption for operating in a job opportunity 
  6.19  building zone under section 469.317. 
  6.20     [EFFECTIVE DATE.] This section is effective for taxable 
  6.21  years beginning after December 31, 2003. 
  6.22     Sec. 5.  Minnesota Statutes 2002, section 290.06, 
  6.23  subdivision 2c, is amended to read: 
  6.24     Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
  6.25  AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
  6.26  married individuals filing joint returns and surviving spouses 
  6.27  as defined in section 2(a) of the Internal Revenue Code must be 
  6.28  computed by applying to their taxable net income the following 
  6.29  schedule of rates: 
  6.30     (1) On the first $25,680, 5.35 percent; 
  6.31     (2) On all over $25,680, but not over $102,030, 7.05 
  6.32  percent; 
  6.33     (3) On all over $102,030, 7.85 percent. 
  6.34     Married individuals filing separate returns, estates, and 
  6.35  trusts must compute their income tax by applying the above rates 
  6.36  to their taxable income, except that the income brackets will be 
  7.1   one-half of the above amounts.  
  7.2      (b) The income taxes imposed by this chapter upon unmarried 
  7.3   individuals must be computed by applying to taxable net income 
  7.4   the following schedule of rates: 
  7.5      (1) On the first $17,570, 5.35 percent; 
  7.6      (2) On all over $17,570, but not over $57,710, 7.05 
  7.7   percent; 
  7.8      (3) On all over $57,710, 7.85 percent. 
  7.9      (c) The income taxes imposed by this chapter upon unmarried 
  7.10  individuals qualifying as a head of household as defined in 
  7.11  section 2(b) of the Internal Revenue Code must be computed by 
  7.12  applying to taxable net income the following schedule of rates: 
  7.13     (1) On the first $21,630, 5.35 percent; 
  7.14     (2) On all over $21,630, but not over $86,910, 7.05 
  7.15  percent; 
  7.16     (3) On all over $86,910, 7.85 percent. 
  7.17     (d) In lieu of a tax computed according to the rates set 
  7.18  forth in this subdivision, the tax of any individual taxpayer 
  7.19  whose taxable net income for the taxable year is less than an 
  7.20  amount determined by the commissioner must be computed in 
  7.21  accordance with tables prepared and issued by the commissioner 
  7.22  of revenue based on income brackets of not more than $100.  The 
  7.23  amount of tax for each bracket shall be computed at the rates 
  7.24  set forth in this subdivision, provided that the commissioner 
  7.25  may disregard a fractional part of a dollar unless it amounts to 
  7.26  50 cents or more, in which case it may be increased to $1. 
  7.27     (e) An individual who is not a Minnesota resident for the 
  7.28  entire year must compute the individual's Minnesota income tax 
  7.29  as provided in this subdivision.  After the application of the 
  7.30  nonrefundable credits provided in this chapter, the tax 
  7.31  liability must then be multiplied by a fraction in which:  
  7.32     (1) the numerator is the individual's Minnesota source 
  7.33  federal adjusted gross income as defined in section 62 of the 
  7.34  Internal Revenue Code and increased by the additions required 
  7.35  under section 290.01, subdivision 19a, clauses (1) and (6), and 
  7.36  reduced by the subtraction under section 290.01, subdivision 
  8.1   19b, clause (13), and the Minnesota assignable portion of the 
  8.2   subtraction for United States government interest under section 
  8.3   290.01, subdivision 19b, clause (1), after applying the 
  8.4   allocation and assignability provisions of section 290.081, 
  8.5   clause (a), or 290.17; and 
  8.6      (2) the denominator is the individual's federal adjusted 
  8.7   gross income as defined in section 62 of the Internal Revenue 
  8.8   Code of 1986, increased by the amounts specified in section 
  8.9   290.01, subdivision 19a, clauses (1) and (6), and reduced by the 
  8.10  amounts specified in section 290.01, subdivision 19b, clause 
  8.11  clauses (1) and (13). 
  8.12     [EFFECTIVE DATE.] This section is effective for taxable 
  8.13  years beginning after December 31, 2003. 
  8.14     Sec. 6.  Minnesota Statutes 2002, section 290.06, is 
  8.15  amended by adding a subdivision to read: 
  8.16     Subd. 29.  [JOB OPPORTUNITY BUILDING ZONE JOB CREDIT.] A 
  8.17  taxpayer that is a qualified business, as defined in section 
  8.18  469.310, subdivision 11, is allowed a credit as determined under 
  8.19  section 469.318 against the tax imposed by this chapter. 
  8.20     [EFFECTIVE DATE.] This section is effective the day 
  8.21  following final enactment. 
  8.22     Sec. 7.  Minnesota Statutes 2002, section 290.067, 
  8.23  subdivision 1, is amended to read: 
  8.24     Subdivision 1.  [AMOUNT OF CREDIT.] (a) A taxpayer may take 
  8.25  as a credit against the tax due from the taxpayer and a spouse, 
  8.26  if any, under this chapter an amount equal to the dependent care 
  8.27  credit for which the taxpayer is eligible pursuant to the 
  8.28  provisions of section 21 of the Internal Revenue Code subject to 
  8.29  the limitations provided in subdivision 2 except that in 
  8.30  determining whether the child qualified as a dependent, income 
  8.31  received as a Minnesota family investment program grant or 
  8.32  allowance to or on behalf of the child must not be taken into 
  8.33  account in determining whether the child received more than half 
  8.34  of the child's support from the taxpayer, and the provisions of 
  8.35  section 32(b)(1)(D) of the Internal Revenue Code do not apply. 
  8.36     (b) If a child who has not attained the age of six years at 
  9.1   the close of the taxable year is cared for at a licensed family 
  9.2   day care home operated by the child's parent, the taxpayer is 
  9.3   deemed to have paid employment-related expenses.  If the child 
  9.4   is 16 months old or younger at the close of the taxable year, 
  9.5   the amount of expenses deemed to have been paid equals the 
  9.6   maximum limit for one qualified individual under section 21(c) 
  9.7   and (d) of the Internal Revenue Code.  If the child is older 
  9.8   than 16 months of age but has not attained the age of six years 
  9.9   at the close of the taxable year, the amount of expenses deemed 
  9.10  to have been paid equals the amount the licensee would charge 
  9.11  for the care of a child of the same age for the same number of 
  9.12  hours of care.  
  9.13     (c) If a married couple: 
  9.14     (1) has a child who has not attained the age of one year at 
  9.15  the close of the taxable year; 
  9.16     (2) files a joint tax return for the taxable year; and 
  9.17     (3) does not participate in a dependent care assistance 
  9.18  program as defined in section 129 of the Internal Revenue Code, 
  9.19  in lieu of the actual employment related expenses paid for that 
  9.20  child under paragraph (a) or the deemed amount under paragraph 
  9.21  (b), the lesser of (i) the combined earned income of the couple 
  9.22  or (ii) the amount of the maximum limit for one qualified 
  9.23  individual under section 21(c) and (d) of the Internal Revenue 
  9.24  Code will be deemed to be the employment related expense paid 
  9.25  for that child.  The earned income limitation of section 21(d) 
  9.26  of the Internal Revenue Code shall not apply to this deemed 
  9.27  amount.  These deemed amounts apply regardless of whether any 
  9.28  employment-related expenses have been paid.  
  9.29     (d) If the taxpayer is not required and does not file a 
  9.30  federal individual income tax return for the tax year, no credit 
  9.31  is allowed for any amount paid to any person unless: 
  9.32     (1) the name, address, and taxpayer identification number 
  9.33  of the person are included on the return claiming the credit; or 
  9.34     (2) if the person is an organization described in section 
  9.35  501(c)(3) of the Internal Revenue Code and exempt from tax under 
  9.36  section 501(a) of the Internal Revenue Code, the name and 
 10.1   address of the person are included on the return claiming the 
 10.2   credit.  
 10.3   In the case of a failure to provide the information required 
 10.4   under the preceding sentence, the preceding sentence does not 
 10.5   apply if it is shown that the taxpayer exercised due diligence 
 10.6   in attempting to provide the information required. 
 10.7      In the case of a nonresident, part-year resident, or a 
 10.8   person who has earned income not subject to tax under this 
 10.9   chapter including earned income excluded pursuant to section 
 10.10  290.01, subdivision 19b, clause (13), the credit determined 
 10.11  under section 21 of the Internal Revenue Code must be allocated 
 10.12  based on the ratio by which the earned income of the claimant 
 10.13  and the claimant's spouse from Minnesota sources bears to the 
 10.14  total earned income of the claimant and the claimant's spouse. 
 10.15     [EFFECTIVE DATE.] This section is effective for taxable 
 10.16  years beginning after December 31, 2003. 
 10.17     Sec. 8.  Minnesota Statutes 2002, section 290.0671, 
 10.18  subdivision 1, is amended to read: 
 10.19     Subdivision 1.  [CREDIT ALLOWED.] (a) An individual is 
 10.20  allowed a credit against the tax imposed by this chapter equal 
 10.21  to a percentage of earned income.  To receive a credit, a 
 10.22  taxpayer must be eligible for a credit under section 32 of the 
 10.23  Internal Revenue Code.  
 10.24     (b) For individuals with no qualifying children, the credit 
 10.25  equals 1.9125 percent of the first $4,620 of earned income.  The 
 10.26  credit is reduced by 1.9125 percent of earned income or modified 
 10.27  adjusted gross income, whichever is greater, in excess of 
 10.28  $5,770, but in no case is the credit less than zero. 
 10.29     (c) For individuals with one qualifying child, the credit 
 10.30  equals 8.5 percent of the first $6,920 of earned income and 8.5 
 10.31  percent of earned income over $12,080 but less than $13,450.  
 10.32  The credit is reduced by 5.73 percent of earned income or 
 10.33  modified adjusted gross income, whichever is greater, in excess 
 10.34  of $15,080, but in no case is the credit less than zero. 
 10.35     (d) For individuals with two or more qualifying children, 
 10.36  the credit equals ten percent of the first $9,720 of earned 
 11.1   income and 20 percent of earned income over $14,860 but less 
 11.2   than $16,800.  The credit is reduced by 10.3 percent of earned 
 11.3   income or modified adjusted gross income, whichever is greater, 
 11.4   in excess of $17,890, but in no case is the credit less than 
 11.5   zero. 
 11.6      (e) For a nonresident or part-year resident, the credit 
 11.7   must be allocated based on the percentage calculated under 
 11.8   section 290.06, subdivision 2c, paragraph (e). 
 11.9      (f) For a person who was a resident for the entire tax year 
 11.10  and has earned income not subject to tax under this 
 11.11  chapter including income excluded under section 290.01, 
 11.12  subdivision 19b, clause (13), the credit must be allocated based 
 11.13  on the ratio of federal adjusted gross income reduced by the 
 11.14  earned income not subject to tax under this chapter over federal 
 11.15  adjusted gross income. 
 11.16     (g) For tax years beginning after December 31, 2001, and 
 11.17  before December 31, 2004, the $5,770 in paragraph (b) is 
 11.18  increased to $6,770, the $15,080 in paragraph (c) is increased 
 11.19  to $16,080, and the $17,890 in paragraph (d) is increased to 
 11.20  $18,890 for married taxpayers filing joint returns. 
 11.21     (h) For tax years beginning after December 31, 2004, and 
 11.22  before December 31, 2007, the $5,770 in paragraph (b) is 
 11.23  increased to $7,770, the $15,080 in paragraph (c) is increased 
 11.24  to $17,080, and the $17,890 in paragraph (d) is increased to 
 11.25  $19,890 for married taxpayers filing joint returns. 
 11.26     (i) For tax years beginning after December 31, 2007, and 
 11.27  before December 31, 2010, the $5,770 in paragraph (b) is 
 11.28  increased to $8,770, the $15,080 in paragraph (c) is increased 
 11.29  to $18,080 and the $17,890 in paragraph (d) is increased to 
 11.30  $20,890 for married taxpayers filing joint returns. 
 11.31     (j) The commissioner shall construct tables showing the 
 11.32  amount of the credit at various income levels and make them 
 11.33  available to taxpayers.  The tables shall follow the schedule 
 11.34  contained in this subdivision, except that the commissioner may 
 11.35  graduate the transition between income brackets. 
 11.36     [EFFECTIVE DATE.] This section is effective for taxable 
 12.1   years beginning after December 31, 2003. 
 12.2      Sec. 9.  Minnesota Statutes 2002, section 290.091, 
 12.3   subdivision 2, is amended to read: 
 12.4      Subd. 2.  [DEFINITIONS.] For purposes of the tax imposed by 
 12.5   this section, the following terms have the meanings given: 
 12.6      (a) "Alternative minimum taxable income" means the sum of 
 12.7   the following for the taxable year: 
 12.8      (1) the taxpayer's federal alternative minimum taxable 
 12.9   income as defined in section 55(b)(2) of the Internal Revenue 
 12.10  Code; 
 12.11     (2) the taxpayer's itemized deductions allowed in computing 
 12.12  federal alternative minimum taxable income, but excluding: 
 12.13     (i) the charitable contribution deduction under section 170 
 12.14  of the Internal Revenue Code to the extent that the deduction 
 12.15  exceeds 1.3 percent of adjusted gross income, as defined in 
 12.16  section 62 of the Internal Revenue Code; 
 12.17     (ii) the medical expense deduction; 
 12.18     (iii) the casualty, theft, and disaster loss deduction; and 
 12.19     (iv) the impairment-related work expenses of a disabled 
 12.20  person; 
 12.21     (3) for depletion allowances computed under section 613A(c) 
 12.22  of the Internal Revenue Code, with respect to each property (as 
 12.23  defined in section 614 of the Internal Revenue Code), to the 
 12.24  extent not included in federal alternative minimum taxable 
 12.25  income, the excess of the deduction for depletion allowable 
 12.26  under section 611 of the Internal Revenue Code for the taxable 
 12.27  year over the adjusted basis of the property at the end of the 
 12.28  taxable year (determined without regard to the depletion 
 12.29  deduction for the taxable year); 
 12.30     (4) to the extent not included in federal alternative 
 12.31  minimum taxable income, the amount of the tax preference for 
 12.32  intangible drilling cost under section 57(a)(2) of the Internal 
 12.33  Revenue Code determined without regard to subparagraph (E); 
 12.34     (5) to the extent not included in federal alternative 
 12.35  minimum taxable income, the amount of interest income as 
 12.36  provided by section 290.01, subdivision 19a, clause (1); and 
 13.1      (6) the amount of addition required by section 290.01, 
 13.2   subdivision 19a, clause (7); 
 13.3      less the sum of the amounts determined under the following: 
 13.4      (1) interest income as defined in section 290.01, 
 13.5   subdivision 19b, clause (1); 
 13.6      (2) an overpayment of state income tax as provided by 
 13.7   section 290.01, subdivision 19b, clause (2), to the extent 
 13.8   included in federal alternative minimum taxable income; 
 13.9      (3) the amount of investment interest paid or accrued 
 13.10  within the taxable year on indebtedness to the extent that the 
 13.11  amount does not exceed net investment income, as defined in 
 13.12  section 163(d)(4) of the Internal Revenue Code.  Interest does 
 13.13  not include amounts deducted in computing federal adjusted gross 
 13.14  income; and 
 13.15     (4) amounts subtracted from federal taxable income as 
 13.16  provided by section 290.01, subdivision 19b, clause clauses (12) 
 13.17  and (13). 
 13.18     In the case of an estate or trust, alternative minimum 
 13.19  taxable income must be computed as provided in section 59(c) of 
 13.20  the Internal Revenue Code. 
 13.21     (b) "Investment interest" means investment interest as 
 13.22  defined in section 163(d)(3) of the Internal Revenue Code. 
 13.23     (c) "Tentative minimum tax" equals 6.4 percent of 
 13.24  alternative minimum taxable income after subtracting the 
 13.25  exemption amount determined under subdivision 3. 
 13.26     (d) "Regular tax" means the tax that would be imposed under 
 13.27  this chapter (without regard to this section and section 
 13.28  290.032), reduced by the sum of the nonrefundable credits 
 13.29  allowed under this chapter.  
 13.30     (e) "Net minimum tax" means the minimum tax imposed by this 
 13.31  section. 
 13.32     [EFFECTIVE DATE.] This section is effective for taxable 
 13.33  years beginning after December 31, 2003. 
 13.34     Sec. 10.  Minnesota Statutes 2002, section 290.0921, 
 13.35  subdivision 3, is amended to read: 
 13.36     Subd. 3.  [ALTERNATIVE MINIMUM TAXABLE INCOME.] 
 14.1   "Alternative minimum taxable income" is Minnesota net income as 
 14.2   defined in section 290.01, subdivision 19, and includes the 
 14.3   adjustments and tax preference items in sections 56, 57, 58, and 
 14.4   59(d), (e), (f), and (h) of the Internal Revenue Code.  If a 
 14.5   corporation files a separate company Minnesota tax return, the 
 14.6   minimum tax must be computed on a separate company basis.  If a 
 14.7   corporation is part of a tax group filing a unitary return, the 
 14.8   minimum tax must be computed on a unitary basis.  The following 
 14.9   adjustments must be made. 
 14.10     (1) For purposes of the depreciation adjustments under 
 14.11  section 56(a)(1) and 56(g)(4)(A) of the Internal Revenue Code, 
 14.12  the basis for depreciable property placed in service in a 
 14.13  taxable year beginning before January 1, 1990, is the adjusted 
 14.14  basis for federal income tax purposes, including any 
 14.15  modification made in a taxable year under section 290.01, 
 14.16  subdivision 19e, or Minnesota Statutes 1986, section 290.09, 
 14.17  subdivision 7, paragraph (c). 
 14.18     For taxable years beginning after December 31, 2000, the 
 14.19  amount of any remaining modification made under section 290.01, 
 14.20  subdivision 19e, or Minnesota Statutes 1986, section 290.09, 
 14.21  subdivision 7, paragraph (c), not previously deducted is a 
 14.22  depreciation allowance in the first taxable year after December 
 14.23  31, 2000. 
 14.24     (2) The portion of the depreciation deduction allowed for 
 14.25  federal income tax purposes under section 168(k) of the Internal 
 14.26  Revenue Code that is required as an addition under section 
 14.27  290.01, subdivision 19c, clause (16), is disallowed in 
 14.28  determining alternative minimum taxable income. 
 14.29     (3) The subtraction for depreciation allowed under section 
 14.30  290.01, subdivision 19d, clause (19), is allowed as a 
 14.31  depreciation deduction in determining alternative minimum 
 14.32  taxable income. 
 14.33     (4) The alternative tax net operating loss deduction under 
 14.34  sections 56(a)(4) and 56(d) of the Internal Revenue Code does 
 14.35  not apply. 
 14.36     (5) The special rule for certain dividends under section 
 15.1   56(g)(4)(C)(ii) of the Internal Revenue Code does not apply. 
 15.2      (6) The special rule for dividends from section 936 
 15.3   companies under section 56(g)(4)(C)(iii) does not apply. 
 15.4      (7) The tax preference for depletion under section 57(a)(1) 
 15.5   of the Internal Revenue Code does not apply. 
 15.6      (8) The tax preference for intangible drilling costs under 
 15.7   section 57(a)(2) of the Internal Revenue Code must be calculated 
 15.8   without regard to subparagraph (E) and the subtraction under 
 15.9   section 290.01, subdivision 19d, clause (4). 
 15.10     (9) The tax preference for tax exempt interest under 
 15.11  section 57(a)(5) of the Internal Revenue Code does not apply.  
 15.12     (10) The tax preference for charitable contributions of 
 15.13  appreciated property under section 57(a)(6) of the Internal 
 15.14  Revenue Code does not apply. 
 15.15     (11) For purposes of calculating the tax preference for 
 15.16  accelerated depreciation or amortization on certain property 
 15.17  placed in service before January 1, 1987, under section 57(a)(7) 
 15.18  of the Internal Revenue Code, the deduction allowable for the 
 15.19  taxable year is the deduction allowed under section 290.01, 
 15.20  subdivision 19e. 
 15.21     For taxable years beginning after December 31, 2000, the 
 15.22  amount of any remaining modification made under section 290.01, 
 15.23  subdivision 19e, not previously deducted is a depreciation or 
 15.24  amortization allowance in the first taxable year after December 
 15.25  31, 2004. 
 15.26     (12) For purposes of calculating the adjustment for 
 15.27  adjusted current earnings in section 56(g) of the Internal 
 15.28  Revenue Code, the term "alternative minimum taxable income" as 
 15.29  it is used in section 56(g) of the Internal Revenue Code, means 
 15.30  alternative minimum taxable income as defined in this 
 15.31  subdivision, determined without regard to the adjustment for 
 15.32  adjusted current earnings in section 56(g) of the Internal 
 15.33  Revenue Code. 
 15.34     (13) For purposes of determining the amount of adjusted 
 15.35  current earnings under section 56(g)(3) of the Internal Revenue 
 15.36  Code, no adjustment shall be made under section 56(g)(4) of the 
 16.1   Internal Revenue Code with respect to (i) the amount of foreign 
 16.2   dividend gross-up subtracted as provided in section 290.01, 
 16.3   subdivision 19d, clause (1), (ii) the amount of refunds of 
 16.4   income, excise, or franchise taxes subtracted as provided in 
 16.5   section 290.01, subdivision 19d, clause (10), or (iii) the 
 16.6   amount of royalties, fees or other like income subtracted as 
 16.7   provided in section 290.01, subdivision 19d, clause (11). 
 16.8      (14) Alternative minimum taxable income excludes the income 
 16.9   from operating in a job opportunity building zone as provided 
 16.10  under section 469.317. 
 16.11     Items of tax preference must not be reduced below zero as a 
 16.12  result of the modifications in this subdivision. 
 16.13     [EFFECTIVE DATE.] This section is effective for taxable 
 16.14  years beginning after December 31, 2003. 
 16.15     Sec. 11.  Minnesota Statutes 2002, section 290.0922, 
 16.16  subdivision 3, is amended to read: 
 16.17     Subd. 3.  [DEFINITIONS.] (a) "Minnesota sales or receipts" 
 16.18  means the total sales apportioned to Minnesota pursuant to 
 16.19  section 290.191, subdivision 5, the total receipts attributed to 
 16.20  Minnesota pursuant to section 290.191, subdivisions 6 to 8, 
 16.21  and/or the total sales or receipts apportioned or attributed to 
 16.22  Minnesota pursuant to any other apportionment formula applicable 
 16.23  to the taxpayer. 
 16.24     (b) "Minnesota property" means total Minnesota tangible 
 16.25  property as provided in section 290.191, subdivisions 9 to 11, 
 16.26  and any other tangible property located in Minnesota, but does 
 16.27  not include property located in a job opportunity building zone 
 16.28  designated under section 469.314.  Intangible property shall not 
 16.29  be included in Minnesota property for purposes of this section.  
 16.30  Taxpayers who do not utilize tangible property to apportion 
 16.31  income shall nevertheless include Minnesota property for 
 16.32  purposes of this section.  On a return for a short taxable year, 
 16.33  the amount of Minnesota property owned, as determined under 
 16.34  section 290.191, shall be included in Minnesota property based 
 16.35  on a fraction in which the numerator is the number of days in 
 16.36  the short taxable year and the denominator is 365.  
 17.1      (c) "Minnesota payrolls"  means total Minnesota payrolls as 
 17.2   provided in section 290.191, subdivision 12, but does not 
 17.3   include job opportunity building zone payrolls under section 
 17.4   468.310, subdivision 8.  Taxpayers who do not utilize payrolls 
 17.5   to apportion income shall nevertheless include Minnesota 
 17.6   payrolls for purposes of this section. 
 17.7      [EFFECTIVE DATE.] This section is effective for taxable 
 17.8   years beginning after December 31, 2003. 
 17.9      Sec. 12.  Minnesota Statutes 2002, section 297A.68, is 
 17.10  amended by adding a subdivision to read: 
 17.11     Subd. 37.  [JOB OPPORTUNITY BUILDING ZONES.] (a) Purchases 
 17.12  of tangible personal property or taxable services by a qualified 
 17.13  business, as defined in section 469.310, are exempt if the 
 17.14  property or services are primarily used or consumed in a job 
 17.15  opportunity building zone designated under section 469.314. 
 17.16     (b) Purchase and use of construction materials and supplies 
 17.17  for construction of improvements to real property in a job 
 17.18  opportunity building zone are exempt if the improvements after 
 17.19  completion of construction are to be used in the conduct of a 
 17.20  qualified business, as defined in section 469.310.  This 
 17.21  exemption applies regardless of whether the purchases are made 
 17.22  by the business or a contractor. 
 17.23     (c) The exemptions under this subdivision apply to a local 
 17.24  sales and use tax regardless of whether the local sales and use 
 17.25  tax is imposed on the sales taxable as defined under this 
 17.26  chapter. 
 17.27     (d) This subdivision applies to sales made during the 
 17.28  duration of the designation of the zone. 
 17.29     [EFFECTIVE DATE.] This section is effective for sales made 
 17.30  on or after the day following final enactment. 
 17.31     Sec. 13.  Minnesota Statutes 2002, section 297B.03, is 
 17.32  amended to read: 
 17.33     297B.03 [EXEMPTIONS.] 
 17.34     There is specifically exempted from the provisions of this 
 17.35  chapter and from computation of the amount of tax imposed by it 
 17.36  the following:  
 18.1      (1) purchase or use, including use under a lease purchase 
 18.2   agreement or installment sales contract made pursuant to section 
 18.3   465.71, of any motor vehicle by the United States and its 
 18.4   agencies and instrumentalities and by any person described in 
 18.5   and subject to the conditions provided in section 297A.67, 
 18.6   subdivision 11; 
 18.7      (2) purchase or use of any motor vehicle by any person who 
 18.8   was a resident of another state or country at the time of the 
 18.9   purchase and who subsequently becomes a resident of Minnesota, 
 18.10  provided the purchase occurred more than 60 days prior to the 
 18.11  date such person began residing in the state of Minnesota and 
 18.12  the motor vehicle was registered in the person's name in the 
 18.13  other state or country; 
 18.14     (3) purchase or use of any motor vehicle by any person 
 18.15  making a valid election to be taxed under the provisions of 
 18.16  section 297A.90; 
 18.17     (4) purchase or use of any motor vehicle previously 
 18.18  registered in the state of Minnesota when such transfer 
 18.19  constitutes a transfer within the meaning of section 118, 331, 
 18.20  332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 
 18.21  1563(a) of the Internal Revenue Code of 1986, as amended through 
 18.22  December 31, 1999; 
 18.23     (5) purchase or use of any vehicle owned by a resident of 
 18.24  another state and leased to a Minnesota based private or for 
 18.25  hire carrier for regular use in the transportation of persons or 
 18.26  property in interstate commerce provided the vehicle is titled 
 18.27  in the state of the owner or secured party, and that state does 
 18.28  not impose a sales tax or sales tax on motor vehicles used in 
 18.29  interstate commerce; 
 18.30     (6) purchase or use of a motor vehicle by a private 
 18.31  nonprofit or public educational institution for use as an 
 18.32  instructional aid in automotive training programs operated by 
 18.33  the institution.  "Automotive training programs" includes motor 
 18.34  vehicle body and mechanical repair courses but does not include 
 18.35  driver education programs; 
 18.36     (7) purchase of a motor vehicle for use as an ambulance by 
 19.1   an ambulance service licensed under section 144E.10; 
 19.2      (8) purchase of a motor vehicle by or for a public library, 
 19.3   as defined in section 134.001, subdivision 2, as a bookmobile or 
 19.4   library delivery vehicle; 
 19.5      (9) purchase of a ready-mixed concrete truck; 
 19.6      (10) purchase or use of a motor vehicle by a town for use 
 19.7   exclusively for road maintenance, including snowplows and dump 
 19.8   trucks, but not including automobiles, vans, or pickup trucks; 
 19.9      (11) purchase or use of a motor vehicle by a corporation, 
 19.10  society, association, foundation, or institution organized and 
 19.11  operated exclusively for charitable, religious, or educational 
 19.12  purposes, except a public school, university, or library, but 
 19.13  only if the vehicle is: 
 19.14     (i) a truck, as defined in section 168.011, a bus, as 
 19.15  defined in section 168.011, or a passenger automobile, as 
 19.16  defined in section 168.011, if the automobile is designed and 
 19.17  used for carrying more than nine persons including the driver; 
 19.18  and 
 19.19     (ii) intended to be used primarily to transport tangible 
 19.20  personal property or individuals, other than employees, to whom 
 19.21  the organization provides service in performing its charitable, 
 19.22  religious, or educational purpose; 
 19.23     (12) purchase of a motor vehicle for use by a transit 
 19.24  provider exclusively to provide transit service is exempt if the 
 19.25  transit provider is either (i) receiving financial assistance or 
 19.26  reimbursement under section 174.24 or 473.384, or (ii) operating 
 19.27  under section 174.29, 473.388, or 473.405; 
 19.28     (13) purchase or use of a motor vehicle by a qualified 
 19.29  business, as defined in section 469.310, located in a job 
 19.30  opportunity building zone, if the motor vehicle is principally 
 19.31  garaged in the job opportunity building zone and is primarily 
 19.32  used as part of or in direct support of the person's operations 
 19.33  carried on in the job opportunity building zone.  The exemption 
 19.34  under this clause also applies to any local sales and use tax. 
 19.35     [EFFECTIVE DATE.] This section is effective for sales made 
 19.36  after December 31, 2003. 
 20.1      Sec. 14.  [469.310] [DEFINITIONS.] 
 20.2      Subdivision 1.  [SCOPE.] For purposes of sections 469.310 
 20.3   to 469.320, the following terms have the meanings given. 
 20.4      Subd. 2.  [AGRICULTURAL PROCESSING FACILITY.] "Agricultural 
 20.5   processing facility" means one or more facilities or operations 
 20.6   that transform, package, sort, or grade livestock or livestock 
 20.7   products, agricultural commodities, or plants or plant products 
 20.8   into goods that are used for intermediate or final consumption 
 20.9   including goods for nonfood use, and surrounding property. 
 20.10     Subd. 3.  [APPLICANT.] "Applicant" means a local government 
 20.11  unit or units applying for designation of an area as a job 
 20.12  opportunity building zone or a joint powers board, established 
 20.13  under section 471.59, acting on behalf of two or more local 
 20.14  government units. 
 20.15     Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
 20.16  commissioner of trade and economic development. 
 20.17     Subd. 5.  [DEVELOPMENT PLAN.] "Development plan" means a 
 20.18  plan meeting the requirements of section 469.311. 
 20.19     Subd. 6.  [JOB OPPORTUNITY BUILDING ZONE OR ZONE.] "Job 
 20.20  opportunity building zone" or "zone" means a zone designated by 
 20.21  the commissioner under section 469.314, and includes an 
 20.22  agricultural processing facility zone. 
 20.23     Subd. 7.  [JOB OPPORTUNITY BUILDING ZONE PERCENTAGE OR ZONE 
 20.24  PERCENTAGE.] "Job opportunity building zone percentage" or "zone 
 20.25  percentage" means the following fraction reduced to a percentage:
 20.26     (1) the numerator of the fraction is: 
 20.27     (i) the ratio of the taxpayer's property factor under 
 20.28  section 290.191 located in the zone for the taxable year over 
 20.29  the property factor numerator determined under section 290.191, 
 20.30  plus 
 20.31     (ii) the ratio of the taxpayer's job opportunity building 
 20.32  zone payroll factor under subdivision 8 over the payroll factor 
 20.33  numerator determined under section 290.191; and 
 20.34     (2) the denominator of the fraction is two. 
 20.35     When calculating the zone percentage for a business that is 
 20.36  part of a unitary business as defined under section 290.17, 
 21.1   subdivision 4, the denominator of the payroll and property 
 21.2   factors is the Minnesota payroll and property of the unitary 
 21.3   business as reported on the combined report under section 
 21.4   290.17, subdivision 4, paragraph (j). 
 21.5      Subd. 8.  [JOB OPPORTUNITY BUILDING ZONE PAYROLL 
 21.6   FACTOR.] "Job opportunity building zone payroll factor" or "job 
 21.7   opportunity building zone payroll" is that portion of the 
 21.8   payroll factor under section 290.191 that represents: 
 21.9      (1) wages or salaries paid to an individual for services 
 21.10  performed in a job opportunity building zone; or 
 21.11     (2) wages or salaries paid to individuals working from 
 21.12  offices within a job opportunity building zone if their 
 21.13  employment requires them to work outside the zone and the work 
 21.14  is incidental to the work performed by the individual within the 
 21.15  zone. 
 21.16     Subd. 9.  [LOCAL GOVERNMENT UNIT.] "Local government unit" 
 21.17  means a statutory or home rule charter city, county, town, or 
 21.18  school district. 
 21.19     Subd. 10.  [PERSON.] "Person" includes an individual, 
 21.20  corporation, partnership, limited liability company, 
 21.21  association, or any other entity. 
 21.22     Subd. 11.  [QUALIFIED BUSINESS.] (a) "Qualified business" 
 21.23  means a person carrying on a trade or business at a place of 
 21.24  business located within a job opportunity building zone. 
 21.25     (b) A person that relocates a trade or business from 
 21.26  outside a job opportunity building zone into a zone is not a 
 21.27  qualified business unless the business: 
 21.28     (1)(i) increases full-time employment in the first full 
 21.29  year of operation within the job opportunity building zone by at 
 21.30  least 20 percent measured relative to the operations that were 
 21.31  relocated; or 
 21.32     (ii) makes a capital investment in the property located 
 21.33  within a zone equivalent to ten percent of the gross revenues of 
 21.34  operation that were relocated in the immediately preceding 
 21.35  taxable year; and 
 21.36     (2) enters a binding written agreement with the 
 22.1   commissioner that: 
 22.2      (i) pledges the business will meet the requirements of 
 22.3   clause (1); 
 22.4      (ii) provides for repayment of all tax benefits enumerated 
 22.5   under section 469.315 to the business under the procedures in 
 22.6   section 469.319, if the requirements of clause (1) are not met; 
 22.7   and 
 22.8      (iii) contains any other terms the commissioner determines 
 22.9   appropriate. 
 22.10     Subd. 12.  [RELOCATES.] (a) "Relocates" means that the 
 22.11  trade or business: 
 22.12     (1) ceases one or more operations or functions at another 
 22.13  location in Minnesota and begins performing substantially the 
 22.14  same operations or functions at a location in a job opportunity 
 22.15  building zone; or 
 22.16     (2) reduces employment at another location in Minnesota 
 22.17  during a period starting one year before and ending one year 
 22.18  after it begins operations in a job opportunity building zone 
 22.19  and its employees in the job opportunity building zone are 
 22.20  engaged in the same line of business as the employees at the 
 22.21  location where it reduced employment. 
 22.22     (b) "Relocate" does not include an expansion by a business 
 22.23  that establishes a new facility that does not replace or 
 22.24  supplant an existing operation or employment in whole or in part.
 22.25     [EFFECTIVE DATE.] This section is effective the day 
 22.26  following final enactment. 
 22.27     Sec. 15.  [469.311] [DEVELOPMENT PLAN.] 
 22.28     (a) An applicant for designation of a job opportunity 
 22.29  building zone must adopt a written development plan for the zone 
 22.30  before submitting the application to the commissioner. 
 22.31     (b) The development plan must contain, at least, the 
 22.32  following: 
 22.33     (1) a map of the proposed zone that indicates the 
 22.34  geographic boundaries of the zone, the total area, and present 
 22.35  use and conditions generally of the land and structures within 
 22.36  those boundaries; 
 23.1      (2) evidence of community support and commitment from local 
 23.2   government, school districts, and other education institutions, 
 23.3   business groups, and the public; 
 23.4      (3) a description of the methods proposed to increase 
 23.5   economic opportunity and expansion, facilitate infrastructure 
 23.6   improvement, reduce the local regulatory burden, and identify 
 23.7   job-training opportunities; 
 23.8      (4) current social, economic, and demographic 
 23.9   characteristics of the proposed zone and anticipated 
 23.10  improvements in education, health, human services, and 
 23.11  employment if the zone is created; 
 23.12     (5) a description of anticipated activity in the zone and 
 23.13  each subzone, including, but not limited to, industrial use, 
 23.14  industrial site reuse, commercial or retail use, and residential 
 23.15  use; and 
 23.16     (6) any other information required by the commissioner. 
 23.17     [EFFECTIVE DATE.] This section is effective the day 
 23.18  following final enactment. 
 23.19     Sec. 16.  [469.312] [JOB OPPORTUNITY BUILDING ZONES; 
 23.20  LIMITATIONS.] 
 23.21     Subdivision 1.  [MAXIMUM SIZE.] A job opportunity building 
 23.22  zone may not exceed 5,000 acres.  For a zone designated as an 
 23.23  agricultural processing facility zone, the zone also may not 
 23.24  exceed the size of a site necessary for the agricultural 
 23.25  processing facility, including ancillary operations and space 
 23.26  for expansion in the reasonably foreseeable future. 
 23.27     Subd. 2.  [SUBZONES.] The area of a job opportunity 
 23.28  building zone may consist of one or more noncontiguous areas or 
 23.29  subzones. 
 23.30     Subd. 3.  [OUTSIDE METROPOLITAN AREA.] The area of a job 
 23.31  opportunity building zone must be located outside of the 
 23.32  metropolitan area, as defined in section 473.121, subdivision 2. 
 23.33     Subd. 4.  [BORDER CITY DEVELOPMENT ZONES.] (a) The area of 
 23.34  a job opportunity building zone may not include the area of a 
 23.35  border city development zone designated under section 469.1731.  
 23.36  The city may remove property from a border city development zone 
 24.1   contingent upon the area being designated as a job opportunity 
 24.2   building zone.  Before removing a parcel of property from a 
 24.3   border city development zone, the city must obtain written 
 24.4   consent to the removal from each recipient that is located on 
 24.5   the parcel and receives incentives under the border city 
 24.6   development zone.  Consent of any other property owner or 
 24.7   taxpayer in the border city development zone is not required. 
 24.8      (b) A city may not provide tax incentives under section 
 24.9   469.1734 to individuals or businesses for operations or activity 
 24.10  in a job opportunity building zone. 
 24.11     Subd. 5.  [DURATION LIMIT.] The maximum duration of a zone 
 24.12  is 12 years.  The applicant may request a shorter duration.  The 
 24.13  commissioner may specify a shorter duration regardless of the 
 24.14  requested duration. 
 24.15     [EFFECTIVE DATE.] This section is effective the day 
 24.16  following final enactment. 
 24.17     Sec. 17.  [469.313] [APPLICATION FOR DESIGNATION.] 
 24.18     Subdivision 1.  [WHO MAY APPLY.] One or more local 
 24.19  government units, or a joint powers board under section 471.59, 
 24.20  acting on behalf of two or more units, may apply for designation 
 24.21  of an area as a job opportunity building zone.  All or part of 
 24.22  the area proposed for designation as a zone must be located 
 24.23  within the boundaries of each of the governmental units.  A 
 24.24  local government unit may not submit or have submitted on its 
 24.25  behalf more than one application for designation of a job 
 24.26  opportunity building zone. 
 24.27     Subd. 2.  [APPLICATION CONTENT.] The application must 
 24.28  include: 
 24.29     (1) a development plan meeting the requirements of section 
 24.30  469.311; 
 24.31     (2) the proposed duration of the zone, not to exceed 12 
 24.32  years; 
 24.33     (3) a resolution or ordinance adopted by each of the cities 
 24.34  or towns and the counties in which the zone is located, agreeing 
 24.35  to provide all of the local tax exemptions provided under 
 24.36  section 469.315; 
 25.1      (4) if the proposed zone includes area in a border city 
 25.2   development zone, written consent to removal of the property 
 25.3   from the border city development zone to the extent required by 
 25.4   section 469.312, subdivision 4; and 
 25.5      (5) supporting evidence to allow the commissioner to 
 25.6   evaluate the application under the criteria in section 469.314. 
 25.7      [EFFECTIVE DATE.] This section is effective the day 
 25.8   following final enactment. 
 25.9      Sec. 18.  [469.314] [DESIGNATION OF JOB OPPORTUNITY 
 25.10  BUILDING ZONES.] 
 25.11     Subdivision 1.  [COMMISSIONER TO DESIGNATE.] (a) The 
 25.12  commissioner, in consultation with the commissioner of revenue 
 25.13  and the director of the office of strategic and long-range 
 25.14  planning, shall designate not more than ten job opportunity 
 25.15  building zones.  In making the designations, the commissioner 
 25.16  shall consider need and likelihood of success to yield the most 
 25.17  economic development and revitalization of economically 
 25.18  distressed rural areas of Minnesota. 
 25.19     (b) In addition to the designations under paragraph (a), 
 25.20  the commissioner may, in consultation with the commissioners of 
 25.21  agriculture and revenue, designate up to five agricultural 
 25.22  processing facility zones. 
 25.23     (c) The commissioner may, upon designation of a zone, 
 25.24  modify the development plan, including the boundaries of the 
 25.25  zone or subzones, if in the commissioner's opinion a modified 
 25.26  plan would better meet the objectives of the job opportunity 
 25.27  building zone program.  The commissioner shall notify the 
 25.28  applicant of the modification and provide a statement of the 
 25.29  reasons for the modifications. 
 25.30     Subd. 2.  [NEED INDICATORS.] (a) In evaluating applications 
 25.31  to determine the need for designation of a job opportunity 
 25.32  building zone, the commissioner shall consider the following 
 25.33  factors as indicators of need: 
 25.34     (1) the percentage of the population that is below 200 
 25.35  percent of the poverty rate compared with the state as a whole; 
 25.36     (2) the extent to which the area's average weekly wage is 
 26.1   significantly lower than the state average weekly wage; 
 26.2      (3) the amount of property in or near the proposed zone 
 26.3   that is deteriorated or underutilized; 
 26.4      (4) the extent to which the median sale price of housing 
 26.5   units in the area is below the state median; 
 26.6      (5) the extent to which the median household income of the 
 26.7   area is lower than the state median household income; 
 26.8      (6) the extent to which the area experienced a population 
 26.9   loss during the 20-year period ending the year before the 
 26.10  application is made; 
 26.11     (7) the extent to which an area has experienced sudden or 
 26.12  severe job loss as a result of closing of businesses or other 
 26.13  employers; 
 26.14     (8) the extent to which property in the area would remain 
 26.15  underdeveloped or nonperforming due to physical characteristics; 
 26.16     (9) the extent to which the area has substantial real 
 26.17  property with adequate infrastructure and energy to support new 
 26.18  or expanded development; and 
 26.19     (10) the extent to which the business startup or expansion 
 26.20  rates are significantly lower than the respective rate for the 
 26.21  state.  
 26.22     (b) In applying the need indicators, the best available 
 26.23  data should be used.  If reported data are not available for the 
 26.24  proposed zone, data for the smallest area that is available and 
 26.25  includes the area of the proposed zone may be used.  The 
 26.26  commissioner may require applicants to provide data to 
 26.27  demonstrate how the area meets one or more of the indicators of 
 26.28  need. 
 26.29     Subd. 3.  [SUCCESS INDICATORS.] In determining the 
 26.30  likelihood of success of a proposed zone, the commissioner shall 
 26.31  consider: 
 26.32     (1) the strength and viability of the proposed development 
 26.33  goals, objectives, and strategies in the development plan; 
 26.34     (2) whether the development plan is creative and innovative 
 26.35  in comparison to other applications; 
 26.36     (3) local public and private commitment to development of 
 27.1   the proposed zone and the potential cooperation of surrounding 
 27.2   communities; 
 27.3      (4) existing resources available to the proposed zone; 
 27.4      (5) how the designation of the zone would relate to other 
 27.5   economic and community development projects and to regional 
 27.6   initiatives or programs; 
 27.7      (6) how the regulatory burden will be eased for businesses 
 27.8   operating in the proposed zone; 
 27.9      (7) proposals to establish and link job creation and job 
 27.10  training; and 
 27.11     (8) the extent to which the development is directed at 
 27.12  encouraging and that designation of the zone is likely to result 
 27.13  in the creation of high-paying jobs. 
 27.14     Subd. 4.  [DESIGNATION SCHEDULE.] (a) The schedule in 
 27.15  paragraphs (b) to (e) applies to the designation of job 
 27.16  opportunity building zones. 
 27.17     (b) The commissioner shall publish the form for 
 27.18  applications and any procedural, form, or content requirements 
 27.19  for applications by no later than ....., 2003.  The commissioner 
 27.20  may publish these requirements on the Internet, in the State 
 27.21  Register, or by any other means the commissioner determines 
 27.22  appropriate to disseminate the information to potential 
 27.23  applicants for designation. 
 27.24     (c) Applications must be submitted by ......., 2003. 
 27.25     (d) The commissioner shall designate the zones by no later 
 27.26  than ......., 2003. 
 27.27     (e) The designation of the zones takes effect January 1, 
 27.28  2004. 
 27.29     [EFFECTIVE DATE.] This section is effective the day 
 27.30  following final enactment. 
 27.31     Sec. 19.  [469.315] [TAX INCENTIVES AVAILABLE IN ZONES.] 
 27.32     Qualified businesses that operate in a job opportunity 
 27.33  building zone, individuals who invest in a qualified business 
 27.34  that operates in a job opportunity building zone, and property 
 27.35  located in a job opportunity building zone qualify for: 
 27.36     (1) exemption from individual income taxes as provided 
 28.1   under section 469.316; 
 28.2      (2) exemption from corporate franchise taxes as provided 
 28.3   under section 469.317; 
 28.4      (3) exemption from the state sales and use tax and any 
 28.5   local sales and use taxes on qualifying purchases as provided in 
 28.6   section 297A.68, subdivision 37; 
 28.7      (4) exemption from the state sales tax on motor vehicles 
 28.8   and any local sales tax on motor vehicles as provided under 
 28.9   section 297B.03; 
 28.10     (5) exemption from the property tax as provided in section 
 28.11  272.02, subdivision 56; 
 28.12     (6) exemption from the wind energy production tax under 
 28.13  section 272.029, subdivision 7; and 
 28.14     (7) the jobs credit allowed under section 469.318. 
 28.15     [EFFECTIVE DATE.] This section is effective the day 
 28.16  following final enactment. 
 28.17     Sec. 20.  [469.316] [INDIVIDUAL INCOME TAX EXEMPTION.] 
 28.18     Subdivision 1.  [APPLICATION.] An individual operating a 
 28.19  trade or business in a job opportunity building zone, and an 
 28.20  individual making a qualifying investment in a qualified 
 28.21  business operating in a job opportunity building zone qualifies 
 28.22  for the exemptions from taxes imposed under chapter 290, as 
 28.23  provided in this section.  The exemptions provided under this 
 28.24  section apply only to the extent that the income otherwise would 
 28.25  be taxable under chapter 290.  Subtractions under this section 
 28.26  from federal taxable income, alternative minimum taxable income, 
 28.27  or any other base subject to tax are limited to the amount that 
 28.28  otherwise would be included in the tax base absent the exemption 
 28.29  under this section. 
 28.30     Subd. 2.  [RENTS.] An individual is exempt from the taxes 
 28.31  imposed under chapter 290 on net rents derived from real or 
 28.32  tangible personal property located in a zone for a taxable year 
 28.33  in which the zone was designated a job opportunity building 
 28.34  zone.  If tangible personal property was used both within and 
 28.35  outside of the zone, the exemption amount for the net rental 
 28.36  income must be multiplied by a fraction, the numerator of which 
 29.1   is the number of days the property was used in the zone and the 
 29.2   denominator of which is the total days. 
 29.3      Subd. 3.  [BUSINESS INCOME.] An individual is exempt from 
 29.4   the taxes imposed under chapter 290 on net income from the 
 29.5   operation of a qualified business in a job opportunity building 
 29.6   zone.  If the trade or business is carried on within and without 
 29.7   the zone and the individual is not a resident of Minnesota, the 
 29.8   exemption must be apportioned based on the zone percentage for 
 29.9   the taxable year.  If the trade or business is carried on within 
 29.10  and without the zone and the individual is a resident of 
 29.11  Minnesota, the exemption must be apportioned based on the zone 
 29.12  percentage for the taxable year, except the ratios under section 
 29.13  469.310, subdivision 7, clause (1), items (i) and (ii), must use 
 29.14  the denominators of the property and payroll factors determined 
 29.15  under section 290.191.  No subtraction is allowed under this 
 29.16  section in excess of 20 percent of the sum of the job 
 29.17  opportunity building zone payroll and the adjusted basis of the 
 29.18  property at the time that the property is first used in the job 
 29.19  opportunity building zone by the business. 
 29.20     Subd. 4.  [CAPITAL GAINS.] (a) An individual is exempt from 
 29.21  the taxes imposed under chapter 290 on: 
 29.22     (1) net gain derived on a sale or exchange of real property 
 29.23  located in the zone.  If the property was held by the individual 
 29.24  during a period when the zone was not designated, the gain must 
 29.25  be prorated based on the percentage of time, measured in 
 29.26  calendar days, that the real property was held by the individual 
 29.27  during the period the zone designation was in effect to the 
 29.28  total period of time the real property was held by the 
 29.29  individual; 
 29.30     (2) net gain derived on a sale or exchange of tangible 
 29.31  personal property used by a qualified business in the zone.  If 
 29.32  the property was held by the individual during a period when the 
 29.33  zone was not designated, the gain must be prorated based on the 
 29.34  percentage of time, measured in calendar days, that the property 
 29.35  was held by the individual during the period the zone 
 29.36  designation was in effect to the total period of time the 
 30.1   property was held by the individual.  If the tangible personal 
 30.2   property was used outside of the zone during the period of the 
 30.3   zone's designation, the exemption must be multiplied by a 
 30.4   fraction, the numerator of which is the number of days the 
 30.5   property was used in the zone during the time of the designation 
 30.6   and the denominator of which is the total days the property was 
 30.7   held during the time of the designation; and 
 30.8      (3) net gain derived on a sale of an ownership interest in 
 30.9   a qualified business operating in the job opportunity building 
 30.10  zone, meeting the requirements of paragraph (b).  The exemption 
 30.11  on the gain must be multiplied by the zone percentage of the 
 30.12  business for the taxable year prior to the sale. 
 30.13     (b) A qualified business meets the requirements of 
 30.14  paragraph (a), clause (3), if it is a corporation, an S 
 30.15  corporation, or a partnership, and for the taxable year its job 
 30.16  opportunity building zone percentage exceeds 25 percent.  For 
 30.17  purposes of paragraph (a), clause (3), the zone percentage must 
 30.18  be calculated by modifying the ratios under section 469.310, 
 30.19  subdivision 7, clause (1), items (i) and (ii), to use the 
 30.20  denominators of the property and payroll factors determined 
 30.21  under section 290.191.  Upon the request of an individual 
 30.22  holding an ownership interest in the entity, the entity must 
 30.23  certify to the owner, in writing, the job opportunity building 
 30.24  zone percentage needed to determine the exemption. 
 30.25     [EFFECTIVE DATE.] This section is effective for taxable 
 30.26  years beginning after December 31, 2003. 
 30.27     Sec. 21.  [469.317] [CORPORATE FRANCHISE TAX EXEMPTION.] 
 30.28     (a) A qualified business is exempt from taxation under 
 30.29  section 290.02, the alternative minimum tax under section 
 30.30  290.0921, and the minimum fee under section 290.0922, on the 
 30.31  portion of its income attributable to operations within the 
 30.32  zone.  This exemption is determined as follows: 
 30.33     (1) for purposes of the tax imposed under section 290.02, 
 30.34  by multiplying its taxable net income by its zone percentage and 
 30.35  subtracting the result in determining taxable income; 
 30.36     (2) for purposes of the alternative minimum tax under 
 31.1   section 290.0921, by multiplying its alternative minimum taxable 
 31.2   income by its zone percentage and reducing alternative minimum 
 31.3   taxable income by this amount; and 
 31.4      (3) for purposes of the minimum fee under section 290.0922, 
 31.5   by excluding property and payroll in the zone from the 
 31.6   computations of the fee. 
 31.7      (b) No subtraction is allowed under this section in excess 
 31.8   of 20 percent of the sum of the corporation's job opportunity 
 31.9   building zone payroll and the adjusted basis of the property at 
 31.10  the time that the property is first used in the job opportunity 
 31.11  building zone by the corporation. 
 31.12     [EFFECTIVE DATE.] This section is effective for taxable 
 31.13  years beginning after December 31, 2003. 
 31.14     Sec. 22.  [469.318] [JOBS CREDIT.] 
 31.15     Subdivision 1.  [CREDIT ALLOWED.] A qualified business is 
 31.16  allowed a credit against the taxes imposed under chapter 290.  
 31.17  The credit equals seven percent of the: 
 31.18     (1) lesser of: 
 31.19     (i) zone payroll for the taxable year, less the zone 
 31.20  payroll for the base year; or 
 31.21     (ii) total Minnesota payroll for the taxable year, less 
 31.22  total Minnesota payroll for the base year; minus 
 31.23     (2) $30,000 multiplied by (the number of full-time 
 31.24  equivalent employee positions that the qualified business 
 31.25  employs in the job opportunity building zone for the taxable 
 31.26  year, minus the number of full-time equivalent employees the 
 31.27  business employed in zone in the base year, but not less than 
 31.28  zero). 
 31.29     Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
 31.30  the following terms have the meanings given. 
 31.31     (b) "Base year" means the taxable year beginning during the 
 31.32  calendar year in which the commissioner designated the zone. 
 31.33     (c) "Full-time equivalent employee position" means the 
 31.34  equivalent of annualized expected hours of work equal to 2,080 
 31.35  hours. 
 31.36     (d) "Minnesota payroll" means the wages or salaries 
 32.1   attributed to Minnesota under section 290.191, subdivision 12, 
 32.2   for the qualified business or the unitary business of which the 
 32.3   qualified business is a part, whichever is greater. 
 32.4      (e) "Zone payroll" means wages or salaries used to 
 32.5   determine the zone payroll factor for the qualified business. 
 32.6      Subd. 3.  [INFLATION ADJUSTMENT.] For taxable years 
 32.7   beginning after December 31, 2004, the dollar amount in 
 32.8   subdivision 1, clause (2), is annually adjusted for inflation.  
 32.9   The commissioner of revenue shall adjust the amount by the 
 32.10  percentage determined under section 290.06, subdivision 2d, for 
 32.11  the taxable year. 
 32.12     Subd. 4.  [REFUNDABLE.] If the amount of the credit exceeds 
 32.13  the liability for tax under chapter 290, the commissioner of 
 32.14  revenue shall refund the excess to the qualified business. 
 32.15     Subd. 5.  [APPROPRIATION.] An amount sufficient to pay the 
 32.16  refunds authorized by this section is appropriated to the 
 32.17  commissioner of revenue from the general fund. 
 32.18     [EFFECTIVE DATE.] This section is effective the day 
 32.19  following final enactment. 
 32.20     Sec. 23.  [469.319] [REPAYMENT OF TAX BENEFITS.] 
 32.21     Subdivision 1.  [REPAYMENT OBLIGATION.] A business must 
 32.22  repay the amount of the tax reduction received during the two 
 32.23  years immediately before it ceased to operate in the zone, if 
 32.24  the business: 
 32.25     (1) received tax reductions authorized by section 469.315; 
 32.26     (2) relocated into a job opportunity building zone after 
 32.27  designation of the zone; and 
 32.28     (3) ceased to operate its facility located within the job 
 32.29  opportunity building zone or otherwise ceases to be or is not a 
 32.30  qualified business. 
 32.31     Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
 32.32  the following terms have the meanings given. 
 32.33     (b) "Business" means any person who received tax benefits 
 32.34  enumerated in section 469.315. 
 32.35     (c) "Commissioner" means the commissioner of revenue. 
 32.36     Subd. 3.  [DISPOSITION OR REPAYMENT.] The repayment must be 
 33.1   paid to the state to the extent it represents a state tax 
 33.2   reduction and to the county to the extent it represents a 
 33.3   property tax reduction.  Any amount repaid to the state must be 
 33.4   deposited in the general fund.  Any amount repaid to the county 
 33.5   for the property tax exemption must be distributed to the local 
 33.6   governments with authority to levy taxes in the zone in the same 
 33.7   manner provided for distribution of payment of delinquent 
 33.8   property taxes.  Any repayment of local sales taxes must be 
 33.9   repaid to the city or county imposing the local sales tax. 
 33.10     Subd. 4.  [REPAYMENT PROCEDURES.] (a) For the repayment of 
 33.11  taxes imposed under chapter 290 or 297A or local taxes collected 
 33.12  pursuant to section 297A.99, a business must file an amended 
 33.13  return with the commissioner of revenue and pay any taxes 
 33.14  required to be repaid within 30 days after ceasing to do 
 33.15  business in the zone.  The amount required to be repaid is 
 33.16  determined by calculating the tax for the period or periods for 
 33.17  which repayment is required without regard to the exemptions and 
 33.18  credits allowed under section 469.315. 
 33.19     (b) For the repayment of taxes imposed under chapter 297B, 
 33.20  a business must pay any taxes required to be repaid to the motor 
 33.21  vehicle registrar, as agent for the commissioner of revenue, 
 33.22  within 30 days after ceasing to do business in the zone. 
 33.23     (c) For the repayment of property taxes, the county auditor 
 33.24  shall prepare a tax statement for the business, applying the 
 33.25  applicable tax extension rates for each payable year and provide 
 33.26  a copy to the business.  The business must pay the taxes to the 
 33.27  county treasurer within 30 days after receipt of the tax 
 33.28  statement. 
 33.29     (d) The provisions of chapters 270 and 289A relating to the 
 33.30  commissioner's authority to audit, assess, and collect the tax 
 33.31  and to hear appeals, are applicable to the repayment required 
 33.32  under paragraphs (a) and (b).  The commissioner may impose civil 
 33.33  penalties as provided in chapter 289A, and the additional tax 
 33.34  and penalties are subject to interest at the rate provided in 
 33.35  section 270.75, from 30 days after ceasing to do business in the 
 33.36  job opportunity building zone until the date the tax is paid. 
 34.1      (e) If a property tax is not repaid under paragraph (c), 
 34.2   the county treasurer shall add the amount required to be repaid 
 34.3   to the property taxes assessed against the property for payment 
 34.4   in the year following the year in which the treasurer discovers 
 34.5   that the business ceased to operate in the job opportunity 
 34.6   building zone. 
 34.7      (f) For determining the tax required to be repaid, a tax 
 34.8   reduction is deemed to have been received on the date that the 
 34.9   tax would have been due if the taxpayer had not been entitled to 
 34.10  the exemption. 
 34.11     (g) The commissioner may assess the repayment of taxes 
 34.12  under paragraph (d) any time within two years after the business 
 34.13  ceases to operate in the job opportunity building zone, or 
 34.14  within any period of limitations for the assessment of tax under 
 34.15  section 289A.38, whichever period is later. 
 34.16     Subd. 5.  [WAIVER AUTHORITY.] The commissioner may waive 
 34.17  all or part of a repayment, if the commissioner, in consultation 
 34.18  with the commissioner of trade and economic development and 
 34.19  appropriate officials from the local government units in which 
 34.20  the qualified business is located, determines that requiring 
 34.21  repayment of the tax is not in the best interest of the state or 
 34.22  the local government units and the business ceased operating as 
 34.23  a result of circumstances beyond its control including, but not 
 34.24  limited to: 
 34.25     (1) a natural disaster; 
 34.26     (2) unforeseen industry trends; or 
 34.27     (3) loss of a major supplier or customer. 
 34.28     [EFFECTIVE DATE.] This section is effective the day 
 34.29  following final enactment. 
 34.30     Sec. 24.  [469.320] [ZONE PERFORMANCE; REMEDIES.] 
 34.31     Subdivision. 1.  [REPORTING REQUIREMENT.] An applicant 
 34.32  receiving designation of a job opportunity building zone under 
 34.33  section 469.314 must annually report to the commissioner on its 
 34.34  progress in meeting the zone performance goals under the 
 34.35  development plan for the zone. 
 34.36     Subd. 2.  [PROCEDURES.] For reports required by subdivision 
 35.1   1, the commissioner may prescribe: 
 35.2      (1) the required time or times by which the reports must be 
 35.3   filed; 
 35.4      (2) the form of the report; and 
 35.5      (3) the information required to be included in the report. 
 35.6      Subd. 3.  [REMEDIES.] If the commissioner determines, based 
 35.7   on a report filed under subdivision 1 or other available 
 35.8   information, that a zone or subzone is failing to meet its 
 35.9   performance goals, the commissioner may take any actions the 
 35.10  commissioner determines appropriate, including modification of 
 35.11  the boundaries of the zone or a subzone or termination of the 
 35.12  zone or a subzone.  Before taking any action, the commissioner 
 35.13  shall consult with the applicant and the affected local 
 35.14  government units, including notifying them of the proposed 
 35.15  actions to be taken.  The commissioner shall publish any order 
 35.16  modifying a zone in the State Register and on the Internet.  The 
 35.17  applicant may appeal the commissioner's order under the 
 35.18  contested case procedures of chapter 14. 
 35.19     Subd. 4.  [EXISTING BUSINESSES.] An action to remove area 
 35.20  from a zone or to terminate a zone under this section does not 
 35.21  apply to: 
 35.22     (1) the property tax on improvements constructed before the 
 35.23  first January 2 following publication of the commissioner's 
 35.24  order; 
 35.25     (2) sales tax on purchases made before the first day of the 
 35.26  next calendar month beginning at least 30 days after publication 
 35.27  of the commissioner's order; and 
 35.28     (3) individual income tax or corporate franchise tax 
 35.29  attributable to a facility that was in operation before the 
 35.30  publication of the commissioner's order. 
 35.31     Sec. 25.  [477A.08] [JOB OPPORTUNITY BUILDING ZONE AID.] 
 35.32     Subdivision 1.  [ELIGIBILITY.] (a) For each assessment year 
 35.33  that the exemption for job opportunity building zone property is 
 35.34  in effect under section 272.02, subdivision 56, the assessor 
 35.35  shall determine the difference between the actual net tax 
 35.36  capacity and the net tax capacity that would be determined for 
 36.1   the job opportunity building zone if the exemption were not in 
 36.2   effect. 
 36.3      (b) Each city and county is eligible for aid equal to 
 36.4   one-half of: 
 36.5      (1) the amount by which the sum of the differences 
 36.6   determined in paragraph (a) for the corresponding assessment 
 36.7   year exceeds three percent of the city's or county's total 
 36.8   taxable net tax capacity for taxes payable in 2003, multiplied 
 36.9   by 
 36.10     (2) the city's or the county's, as applicable, average 
 36.11  local tax rate for taxes payable in 2003. 
 36.12     Subd. 2.  [CERTIFICATION.] The county assessor shall notify 
 36.13  the commissioner of revenue of the amount determined under 
 36.14  subdivision 1, paragraph (b), clause (1), for any city or county 
 36.15  that qualifies for aid under this section by June 30 of the 
 36.16  assessment year, in a form prescribed by the commissioner.  The 
 36.17  commissioner shall notify each city and county of its qualifying 
 36.18  aid amount by August 15 of the assessment year. 
 36.19     Subd. 3.  [APPROPRIATION; PAYMENT.] The commissioner shall 
 36.20  pay each city and county its qualifying aid amount by July 20 of 
 36.21  the following year.  An amount sufficient to pay the aid under 
 36.22  this section is appropriated to the commissioner of revenue from 
 36.23  the general fund. 
 36.24     [EFFECTIVE DATE.] This section is effective beginning for 
 36.25  aid based on property taxes assessed in 2004, payable in 2005. 
 36.26     Sec. 26.  [APPROPRIATIONS.] 
 36.27     (a) $100,000 is appropriated in fiscal year 2004 from the 
 36.28  general fund to the commissioner of trade and economic 
 36.29  development for the cost of designating job opportunity building 
 36.30  zones. 
 36.31     (b) $30,000 is appropriated in fiscal year 2005 from the 
 36.32  general fund to the commissioner of trade and economic 
 36.33  development for the cost of designating job opportunity building 
 36.34  zones. 
 36.35     (c) $53,000 is appropriated in fiscal year 2004 from the 
 36.36  general fund to the commissioner of revenue to administer the 
 37.1   cost of the tax provisions of this article. 
 37.2      (d) $29,000 is appropriated in fiscal year 2005 from the 
 37.3   general fund to the commissioner of revenue to administer the 
 37.4   cost of the tax provisions of this article. 
 37.5      [EFFECTIVE DATE.] This section is effective the day 
 37.6   following final enactment. 
 37.7                              ARTICLE 2 
 37.8               2003/2004 CITY AND COUNTY AID REDUCTIONS 
 37.9      Section 1.  [DEFINITIONS.] 
 37.10     (a) For purposes of this article, the following terms have 
 37.11  the meanings given them in this section. 
 37.12     (b) The 2003 "levy plus aid revenue base" for a city is the 
 37.13  sum of that city's proposed property tax levy for taxes payable 
 37.14  in 2003, as reported to the commissioner of revenue under 
 37.15  Minnesota Statutes, section 275.74, plus the sum of the amounts 
 37.16  the city was certified to receive in 2003 as: 
 37.17     (1) local government aid under Minnesota Statutes, section 
 37.18  477A.013; 
 37.19     (2) existing low-income housing aid under Minnesota 
 37.20  Statutes, section 477A.06; 
 37.21     (3) new construction low-income housing aid under Minnesota 
 37.22  Statutes, section 477A.065; 
 37.23     (4) taconite aids under Minnesota Statutes, sections 298.28 
 37.24  and 298.282, including any aid which was required to be placed 
 37.25  in a special fund for expenditure in the next succeeding year; 
 37.26  and 
 37.27     (5) transit property tax replacement aid under Minnesota 
 37.28  Statutes, section 174.242. 
 37.29     (c) The 2003 and 2004 "levy plus aid revenue base" for a 
 37.30  county is the sum of that county's proposed property tax levy 
 37.31  for taxes payable in 2003, as reported to the commissioner of 
 37.32  revenue under Minnesota Statutes, section 275.74, plus the sum 
 37.33  of the amounts the county was certified to receive in the 
 37.34  designated calendar year as: 
 37.35     (1) homestead and agricultural credit aid under Minnesota 
 37.36  Statutes, sections 273.1398, subdivision 2, and 273.166; 
 38.1      (2) criminal justice aid under Minnesota Statutes, section 
 38.2   477A.0121; 
 38.3      (3) family preservation aid under Minnesota Statutes, 
 38.4   section 477A.0122; 
 38.5      (4) taconite aids under Minnesota Statutes, sections 298.28 
 38.6   and 298.282, including any aid which was required to be placed 
 38.7   in a special fund for expenditure in the next succeeding year; 
 38.8      (5) transit property tax replacement aid under Minnesota 
 38.9   Statutes, section 174.242; and 
 38.10     (6) county program aid under section 477A.0124. 
 38.11     (d) "Total revenues" for a city or county for a particular 
 38.12  year are the total revenues amount for that city or county, as 
 38.13  reported by the state auditor for the same year, or for the most 
 38.14  recent preceding year for which the state auditor has reported, 
 38.15  excluding grants between political subdivisions and amounts 
 38.16  borrowed by the city or county but including net transfers from 
 38.17  an enterprise fund. 
 38.18     [EFFECTIVE DATE.] This section is effective the day 
 38.19  following final enactment. 
 38.20     Sec. 2.  [2003 CITY AID REDUCTIONS.] 
 38.21     The commissioner of revenue shall compute an aid reduction 
 38.22  amount for each city for 2003 equal to 9.3 percent of the city's 
 38.23  levy plus aid revenue base for 2003. 
 38.24     The reduction amount is limited to 3.5 percent of the 
 38.25  city's total revenues for 2003 if a city has a population under 
 38.26  1,000 or if the city has a three-year levy plus aid revenue base 
 38.27  increase average of less than two percent.  For all other 
 38.28  cities, the reduction amount is limited to five percent of the 
 38.29  city's total revenues for 2003. 
 38.30     The reduction is further limited to the sum of the city's 
 38.31  payable 2003 distribution pursuant to Minnesota Statutes, 
 38.32  section 477A.013, and related sections, and the city's payable 
 38.33  2003 reimbursement under Minnesota Statutes, section 273.1384. 
 38.34     The reduction is applied first to the city's distribution 
 38.35  pursuant to Minnesota Statutes, section 477A.013, and then if 
 38.36  necessary to the city's reimbursements pursuant to Minnesota 
 39.1   Statutes, section 273.1384. 
 39.2      To the extent that sufficient information is available on 
 39.3   each successive payment date within the year, the commissioner 
 39.4   of revenue shall pay any remaining 2003 distribution or 
 39.5   reimbursement amount reduced under this section in equal 
 39.6   installments on the payment dates provided in law. 
 39.7      [EFFECTIVE DATE.] This section is effective the day 
 39.8   following final enactment. 
 39.9      Sec. 3.  [2003 COUNTY AID REDUCTIONS.] 
 39.10     The commissioner of revenue shall compute an aid reduction 
 39.11  amount for each county for 2003 equal to 3.2 percent of the 
 39.12  county's levy plus aid revenue base for 2003. 
 39.13     The reduction amount is limited to 1.5 percent of the 
 39.14  county's total revenues for 2003 if a county has a three-year 
 39.15  levy plus aid revenue base increase average of less than two 
 39.16  percent.  For all other counties, the reduction amount is 
 39.17  limited to two percent of the county's total revenues for 2003. 
 39.18     The reduction is further limited to the sum of the county's 
 39.19  payable 2003 distributions pursuant to Minnesota Statutes, 
 39.20  sections 273.138; 273.1384; 273.1398, subdivision 2; 273.166; 
 39.21  477A.0121; and 477A.0122. 
 39.22     The aid reduction is applied first to reduce the county's 
 39.23  2003 distribution pursuant to Minnesota Statutes, section 
 39.24  273.138, then to reduce, in this sequence, the aid payable in 
 39.25  2003 under Minnesota Statutes, sections 273.1398, subdivision 2; 
 39.26  273.166; 477A.0121; and 477A.0122.  Then, if necessary, the 
 39.27  county's reimbursements pursuant to Minnesota Statutes, section 
 39.28  273.1384, are to be reduced. 
 39.29     To the extent that sufficient information is available on 
 39.30  each successive payment date within the year, the commissioner 
 39.31  of revenue shall pay any remaining 2003 distribution or 
 39.32  reimbursement amount reduced under this section in equal 
 39.33  installments on the payment dates provided in law. 
 39.34     [EFFECTIVE DATE.] This section is effective the day 
 39.35  following final enactment. 
 39.36     Sec. 4.  [TOWNSHIP AID REDUCTIONS.] 
 40.1      The commissioner or revenue shall compute an aid reduction 
 40.2   amount for each township for 2003 equal to two percent of the 
 40.3   town's certified levy for taxes payable in 2003. 
 40.4      The reduction is limited to the amount of the town's 
 40.5   payable 2003 reimbursement pursuant to Minnesota Statutes, 
 40.6   section 273.1384.  
 40.7      To the extent that sufficient information is available on 
 40.8   each successive payment date within the year, the commissioner 
 40.9   of revenue shall pay any remaining 2003 reimbursement amount for 
 40.10  the town in equal installments on the payment dates provided in 
 40.11  law. 
 40.12     [EFFECTIVE DATE.] This section is effective the day 
 40.13  following final enactment. 
 40.14     Sec. 5.  [2003 SPECIAL TAXING DISTRICT AID REDUCTIONS.] 
 40.15     The commissioner of revenue shall compute an aid reduction 
 40.16  amount for each special taxing district for 2003 equal to 1.5 
 40.17  percent of the district's certified levy for taxes payable in 
 40.18  2003. 
 40.19     The reduction is limited to the amount of the district's 
 40.20  payable 2003 reimbursement pursuant to Minnesota Statutes, 
 40.21  section 237.1384. 
 40.22     To the extent that sufficient information is available on 
 40.23  each successive payment date within the year, the commissioner 
 40.24  of revenue shall pay any remaining 2003 reimbursement amount for 
 40.25  the district in equal installments on the payment dates provided 
 40.26  in law. 
 40.27     [EFFECTIVE DATE.] This section is effective the day 
 40.28  following final enactment. 
 40.29     Sec. 6.  [2004 CITY AID REDUCTIONS.] 
 40.30     The commissioner of revenue shall compute an aid reduction 
 40.31  amount for 2004 for each city as provided in this section. 
 40.32     The initial aid reduction amount for each city is the 
 40.33  amount by which the city's aid distribution under Minnesota 
 40.34  Statutes, section 477A.013, and related provisions payable in 
 40.35  2003 exceeds the city's 2004 distribution under those provisions.
 40.36     The maximum aid reduction amount for a city is an amount 
 41.1   equal to 9.5 percent of the city's total revenues for 2004, 
 41.2   except that if the city has either a population under 1,000 or a 
 41.3   three-year levy plus aid revenue base increase average of less 
 41.4   than two percent, the maximum aid reduction shall not exceed an 
 41.5   amount equal to eight percent of the city's total revenues for 
 41.6   2004. 
 41.7      If the initial aid reduction amount for a city is less than 
 41.8   the maximum aid reduction amount for that city, the final aid 
 41.9   reduction amount for the city is the sum of the initial aid 
 41.10  reduction amount and the lesser of the amount of the city's 
 41.11  payable 2004 reimbursement under Minnesota Statutes, section 
 41.12  273.1384, or the difference between the maximum and initial aid 
 41.13  reduction amounts for the city. 
 41.14     If the initial aid reduction amount for a city is greater 
 41.15  than the maximum aid reduction amount for the city, the city 
 41.16  receives an additional distribution under this section equal to 
 41.17  the result of subtracting the maximum aid reduction amount from 
 41.18  the initial aid reduction amount.  This distribution shall be 
 41.19  paid in equal installments in 2004 on the dates specified in 
 41.20  Minnesota Statutes, section 477A.015.  The amount necessary for 
 41.21  these additional distributions is appropriated to the 
 41.22  commissioner of revenue from the general fund in fiscal year 
 41.23  2005. 
 41.24     The reduction is applied first to the city's distribution 
 41.25  pursuant to Minnesota Statutes, section 477A.013, and then, if 
 41.26  necessary, to the city's reimbursements pursuant to Minnesota 
 41.27  Statutes, section 273.1384. 
 41.28     To the extent that sufficient information is available on 
 41.29  each payment date in 2004, the commissioner of revenue shall pay 
 41.30  the reimbursements reduced under this section in equal 
 41.31  installments on the payment dates provided in law. 
 41.32     [EFFECTIVE DATE.] This section is effective the day 
 41.33  following final enactment. 
 41.34     Sec. 7.  [2004 COUNTY AID REDUCTIONS.] 
 41.35     The commissioner of revenue shall compute an aid reduction 
 41.36  amount for 2004 for each county as provided in this section. 
 42.1      The commissioner of revenue shall compute an aid reduction 
 42.2   amount for each county for 2004 equal to six percent of the 
 42.3   county's levy plus aid revenue base for 2004. 
 42.4      The reduction amount is limited to 2.5 percent of the 
 42.5   county's total revenues for 2004 if a county has a three-year 
 42.6   levy plus aid revenue base increase average of less than two 
 42.7   percent.  For all other counties, the reduction amount is 
 42.8   limited to three percent of the county's total revenues for 2004.
 42.9      The reduction is further limited to the sum of the county's 
 42.10  payable 2004 distributions under Minnesota Statutes, sections 
 42.11  477A.0124 and 273.1384. 
 42.12     The aid reduction is applied first to the county's 
 42.13  distributions pursuant to Minnesota Statutes, section 477A.0124, 
 42.14  and then, if necessary, to reduce the county's reimbursements 
 42.15  pursuant to Minnesota Statutes, section 273.1384. 
 42.16     To the extent that sufficient information is available on 
 42.17  each payment date in 2004, the commissioner of revenue shall pay 
 42.18  any remaining 2004 distribution or reimbursement amount reduced 
 42.19  under this section in equal installments on the payment dates 
 42.20  provided in law. 
 42.21     [EFFECTIVE DATE.] This section is effective the day 
 42.22  following final enactment. 
 42.23     Sec. 8.  [2004 TOWNSHIP AID REDUCTIONS.] 
 42.24     The commissioner of revenue shall compute an aid reduction 
 42.25  amount for each township for 2004 equal to three percent of the 
 42.26  town's certified levy for taxes payable in 2003.  
 42.27     The reduction is limited to the amount of the town's 
 42.28  payable 2004 reimbursement pursuant to Minnesota Statutes, 
 42.29  section 273.1384. 
 42.30     To the extent that sufficient information is available on 
 42.31  each successive payment date within the year, the commissioner 
 42.32  of revenue shall pay any remaining 2004 reimbursement amount for 
 42.33  the town in equal installments on the payment dates provided in 
 42.34  law. 
 42.35     [EFFECTIVE DATE.] This section is effective the day 
 42.36  following final enactment. 
 43.1      Sec. 9.  [2004 SPECIAL TAXING DISTRICT AID REDUCTIONS.] 
 43.2      The commissioner of revenue shall compute an aid reduction 
 43.3   amount for each special taxing district for 2004 equal to two 
 43.4   percent of the district's certified levy for taxes payable in 
 43.5   2003.  
 43.6      The reduction is limited to the amount of the district's 
 43.7   payable 2004 reimbursement pursuant to Minnesota Statutes, 
 43.8   section 273.1384. 
 43.9      To the extent that sufficient information is available on 
 43.10  each successive payment date within the year, the commissioner 
 43.11  of revenue shall pay any remaining 2004 reimbursement amount for 
 43.12  the district in equal installments on the payment dates provided 
 43.13  in law. 
 43.14     [EFFECTIVE DATE.] This section is effective the day 
 43.15  following final enactment. 
 43.16                             ARTICLE 3 
 43.17                           2004 CITY AID 
 43.18     Section 1.  Minnesota Statutes 2002, section 477A.013, 
 43.19  subdivision 9, is amended to read: 
 43.20     Subd. 9.  [CITY AID DISTRIBUTION.] (a) In calendar year 
 43.21  2002 and thereafter 2004, each city shall receive an aid 
 43.22  distribution equal to the sum of (1) the city formula aid under 
 43.23  subdivision 8, and (2) its city aid base. 
 43.24     (b) The percentage increase change for a first class city 
 43.25  in a calendar year 1995 and thereafter, except for 2002, shall 
 43.26  not exceed the percentage increase change in the sum of the aid 
 43.27  to all cities under this section in the current calendar year 
 43.28  compared to the sum of the aid to all cities in the previous 
 43.29  year.  For aids payable in 2002 only, the amount of the aid paid 
 43.30  to a first class city shall not exceed the sum of its aid amount 
 43.31  for calendar year 2001 under this section and its aid payment in 
 43.32  calendar year 2001 under section 273.1398, subdivision 2, by 
 43.33  more than 2.5 percent. 
 43.34     (c) For aids payable in all years except 2002, The total 
 43.35  aid in a calendar year for any city, except a first class city, 
 43.36  shall not exceed the sum of (1) ten percent of the city's net 
 44.1   levy for the year prior to the aid distribution plus (2) its 
 44.2   total aid in the previous year.  For aids payable in 2002 only, 
 44.3   the total aid for any city, except a first class city, shall not 
 44.4   exceed the sum of (1) 40 percent of the city's net levy for 
 44.5   taxes payable in the year prior to the aid distribution plus (2) 
 44.6   40 percent of its total aid in the previous year under section 
 44.7   273.1398, subdivision 2, plus (3) its total aid in the previous 
 44.8   year under this section. 
 44.9      [EFFECTIVE DATE.] This section is effective for aid payable 
 44.10  in 2004 and thereafter. 
 44.11     Sec. 2.  Minnesota Statutes 2002, section 477A.03, 
 44.12  subdivision 2, is amended to read: 
 44.13     Subd. 2.  [ANNUAL APPROPRIATION.] (a) A sum sufficient to 
 44.14  discharge the duties imposed by sections 477A.011 to 477A.014 is 
 44.15  annually appropriated from the general fund to the commissioner 
 44.16  of revenue.  
 44.17     (b) Aid payments to counties under section 477A.0121 are 
 44.18  limited to $20,265,000 in 1996.  Aid payments to counties under 
 44.19  section 477A.0121 are limited to $27,571,625 in 1997.  For aid 
 44.20  payable in 1998 and thereafter, the total aids paid under 
 44.21  section 477A.0121 are the amounts certified to be paid in the 
 44.22  previous year, adjusted for inflation as provided under 
 44.23  subdivision 3. 
 44.24     (c)(i) For aids payable in 1998 and thereafter, the total 
 44.25  aids paid to counties under section 477A.0122 are the amounts 
 44.26  certified to be paid in the previous year, adjusted for 
 44.27  inflation as provided under subdivision 3. 
 44.28     (ii) Aid payments to counties under section 477A.0122 in 
 44.29  2000 are further increased by an additional $20,000,000 in 2000. 
 44.30     (d) Aid payments to cities in 2002 under section 477A.013, 
 44.31  subdivision 9, are limited to the amounts certified to be paid 
 44.32  in the previous year, adjusted for inflation as provided in 
 44.33  subdivision 3, and increased by $140,000,000.  For aids payable 
 44.34  in 2003, the total aids paid under section 477A.013, subdivision 
 44.35  9, are the amounts certified to be paid in the previous year, 
 44.36  adjusted for inflation as provided under subdivision 3.  For 
 45.1   aids payable in 2004, the total aids paid under section 
 45.2   477A.013, subdivision 9, are the amounts certified to be paid in 
 45.3   the previous year, adjusted for inflation as provided under 
 45.4   subdivision 3, and increased by the amount certified to be paid 
 45.5   in 2003 under section 477A.06.  For aids payable in 2005 and 
 45.6   thereafter, the total aids paid under section 477A.013, 
 45.7   subdivision 9, are the amounts certified to be paid in the 
 45.8   previous year, adjusted for inflation as provided under 
 45.9   subdivision 3.  The additional amount authorized under 
 45.10  subdivision 4 is not included when calculating the appropriation 
 45.11  limits under this paragraph limited to $250,000,000.  For aids 
 45.12  payable in 2005 and thereafter, the total aids paid under 
 45.13  section 477A.013, subdivision 9, are increased to $352,000,000 
 45.14  if a new aid distribution formula is enacted by the legislature 
 45.15  in 2003 containing principles accepted by the governor. 
 45.16     (e) Reimbursements made to counties under section 477A.0123 
 45.17  in calendar year 2005 and thereafter are limited to an amount 
 45.18  equal to the maximum allowed appropriation under this section in 
 45.19  the previous year, multiplied by a percent to be established by 
 45.20  law.  If no percent is established by law, the appropriation is 
 45.21  limited to the total amount appropriated for this purpose in the 
 45.22  previous year. 
 45.23     [EFFECTIVE DATE.] This section is effective for aid payable 
 45.24  in 2004 and thereafter. 
 45.25                             ARTICLE 4 
 45.26                          2004 COUNTY AID 
 45.27     Section 1.  Minnesota Statutes 2002, section 273.1398, 
 45.28  subdivision 4a, is amended to read: 
 45.29     Subd. 4a.  [AID OFFSET FOR COURT COSTS.] (a) In calendar 
 45.30  years 2004, 2005, and 2006, the commissioner of revenue shall 
 45.31  pay the amounts determined in this subdivision to the eligible 
 45.32  counties on the dates specified in subdivision 6.  By July 15 of 
 45.33  the year preceding the year in which the state assumes the cost 
 45.34  of court administration in the judicial district as specified 
 45.35  under section 480.183, 2003, the supreme court shall determine 
 45.36  and certify to the commissioner of revenue for each county the 
 46.1   county's share of the costs to be assumed in the judicial 
 46.2   districts specified under section 480.183, subdivision 1, during 
 46.3   each of the succeeding fiscal year years. 
 46.4      (b) The amount certified in paragraph (a) shall be equal to 
 46.5   the following: 
 46.6      (1) 103 percent of the required court administration 
 46.7   expenditures as defined under section 480.183, subdivision 3, 
 46.8   for calendar year 2003, as determined under subdivision 4b, 
 46.9   paragraph (a); plus 
 46.10     (2) an adjustment for any cumulative percentage increase in 
 46.11  salary expenditures as defined under section 480.183, 
 46.12  subdivision 2, in excess of a maintenance of effort increase of 
 46.13  six percent; less 
 46.14     (3) an amount equal to the county's share of transferred 
 46.15  fines collected by the district courts in the county during the 
 46.16  calendar year preceding certification.  
 46.17     The court and the county may, if both parties agree, 
 46.18  negotiate and certify an amount higher than the amount 
 46.19  calculated under this paragraph. 
 46.20     (c) For purposes of this subdivision, the adjustment in 
 46.21  paragraph (b), clause (2), shall be equal to: 
 46.22     (1) the sum of the court administration expenditures as 
 46.23  defined under section 480.183, subdivision 3, required under 
 46.24  subdivision 4b, paragraph (a), plus the temporary aid payment 
 46.25  under subdivision 4c; multiplied by 
 46.26     (2) the difference between (i) the cumulative percentage 
 46.27  increase in actual and anticipated salary settlements for court 
 46.28  employees from July 1, 2001, until the date of the court 
 46.29  transfer and (ii) the percentage specified in subdivision 4b, 
 46.30  paragraph (a).  
 46.31     (d) Payments to a county under this subdivision 2 or 
 46.32  section 273.166 for the calendar year in which the state assumes 
 46.33  the cost of court administration as defined under section 
 46.34  480.183, subdivision 3, in the judicial district must be 
 46.35  permanently reduced by an amount equal to 75 percent of the net 
 46.36  cost to the state for assumption of district court costs as 
 47.1   certified in paragraph (a). 
 47.2      (e) Payments to a county under this subdivision 2 or 
 47.3   section 273.166 for the calendar year after the calendar year in 
 47.4   which the state assumes the cost of court administration as 
 47.5   defined under section 480.183, subdivision 3, in the judicial 
 47.6   district must be permanently reduced by an amount equal to 25 
 47.7   percent of the net cost to the state for assumption of district 
 47.8   court costs as certified in paragraph (a)., provided that this 
 47.9   amount must be increased or decreased by an amount equal to the 
 47.10  positive or negative difference between the amount of fee and 
 47.11  fine revenue certified under paragraph (b), clause (3), and the 
 47.12  actual amount of fee and fine revenue of the county for the 
 47.13  calendar year when certification takes place. 
 47.14     (f) Payments to a county under subdivision 2 for calendar 
 47.15  year 2001 are permanently increased by an amount equal to 7.5 
 47.16  percent of the county's share of transferred fines collected by 
 47.17  the district courts in the county during calendar year 1998, as 
 47.18  determined under paragraph (a).  If the amount determined in 
 47.19  paragraph (a) exceeds the amount of aid a county is scheduled to 
 47.20  be paid under subdivision 2 in 2000, then the county shall not 
 47.21  receive an aid increase under this paragraph. 
 47.22     (g) Payments to a county under subdivision 2 or section 
 47.23  273.166, for the cost of mandated services, as defined in 
 47.24  section 480.183, subdivision 4, in the judicial district, must 
 47.25  be permanently reduced in 2002 by an amount equal to the cost to 
 47.26  the state for assumption of mandated court services as defined 
 47.27  in section 480.183, subdivision 4.  The supreme court shall 
 47.28  determine the amount for each county and certify it to the 
 47.29  commissioner of revenue by July 15, 2001. 
 47.30     [EFFECTIVE DATE.] This section is effective for aid payable 
 47.31  in 2004, 2005, and 2006. 
 47.32     Sec. 2.  Minnesota Statutes 2002, section 273.1398, 
 47.33  subdivision 4c, is amended to read: 
 47.34     Subd. 4c.  [TEMPORARY AID; COURT ADMINISTRATION COSTS.] For 
 47.35  calendar years 2004 and 2005, each county in a judicial district 
 47.36  that has not been transferred to the state by January 1 of that 
 48.1   year shall receive additional homestead and agricultural 
 48.2   credit temporary court administration cost aid.  This amount is 
 48.3   in addition to the amount calculated under subdivision 2 and 
 48.4   must not be included in the definition of homestead and 
 48.5   agricultural credit base under subdivision 1, paragraph (j).  
 48.6   The amount of additional aid is equal to the difference between 
 48.7   (1) the amount budgeted for court administration costs in 2001 
 48.8   as determined under subdivision 4b, paragraph (b), multiplied by 
 48.9   the maintenance of effort percent for the calendar year as 
 48.10  determined under subdivision 4b, paragraph (a), and (2) the 
 48.11  amount calculated under subdivision 4b, paragraph (a), for 
 48.12  calendar year 2003.  This additional aid must be used only to 
 48.13  fund court administration expenditures as defined in section 
 48.14  480.183, subdivision 3.  This amount must be added to the state 
 48.15  court's base budget in the year when the court in that judicial 
 48.16  district in which the county is located is transferred to the 
 48.17  state. 
 48.18     [EFFECTIVE DATE.] This section is effective for aid payable 
 48.19  in 2004 and 2005. 
 48.20     Sec. 3.  Minnesota Statutes 2002, section 273.1398, 
 48.21  subdivision 6, is amended to read: 
 48.22     Subd. 6.  [PAYMENT.] The commissioner shall certify the 
 48.23  aids provided in subdivisions 2, 2b, 3, and 5 before September 1 
 48.24  of the year preceding the distribution year to the county 
 48.25  auditor of the affected local government.  The aids provided in 
 48.26  subdivisions 2, 2b, 3, 4a, 4c, and 5 must be paid to local 
 48.27  governments other than school districts at the times provided in 
 48.28  section 477A.015 for payment of local government aid to taxing 
 48.29  jurisdictions, except that the first one-half payment of 
 48.30  disparity reduction aid provided in subdivision 3 must be paid 
 48.31  on or before August 31.  The disparity reduction credit provided 
 48.32  in subdivision 4 must be paid to taxing jurisdictions other than 
 48.33  school districts at the time provided in section 473H.10, 
 48.34  subdivision 3.  Aids and credit reimbursements to school 
 48.35  districts must be certified to the commissioner of children, 
 48.36  families, and learning and paid under section 273.1392.  In 
 49.1   2004, the aid provided in subdivision 2 shall constitute a 
 49.2   portion of program aid for counties and shall be paid as 
 49.3   provided in section 477A.0124.  Payment shall not be made to any 
 49.4   taxing jurisdiction that has ceased to levy a property tax.  
 49.5      [EFFECTIVE DATE.] This section is effective for aid payable 
 49.6   in 2004 and thereafter. 
 49.7      Sec. 4.  Minnesota Statutes 2002, section 273.1398, 
 49.8   subdivision 8, is amended to read: 
 49.9      Subd. 8.  [APPROPRIATION.] (a) An amount sufficient to pay 
 49.10  the aids and credits provided under this section for school 
 49.11  districts, intermediate school districts, or any group of school 
 49.12  districts levying as a single taxing entity, is annually 
 49.13  appropriated from the general fund to the commissioner of 
 49.14  children, families, and learning.  An amount sufficient to pay 
 49.15  the aids and credits provided under this section for counties, 
 49.16  cities, towns, and special taxing districts is annually 
 49.17  appropriated from the general fund to the commissioner of 
 49.18  revenue.  A jurisdiction's aid amount may be increased or 
 49.19  decreased based on any prior year adjustments for homestead 
 49.20  credit or other property tax credit or aid programs.  The total 
 49.21  appropriation for the aid provided in subdivision 4a is limited 
 49.22  to $15,700,000 for fiscal year 2005 and $3,300,000 for fiscal 
 49.23  year 2006.  The total appropriation for the aid provided in 
 49.24  subdivision 4c is limited to $2,800,000 for fiscal year 2005 and 
 49.25  $3,200,000 for fiscal year 2006. 
 49.26     (b) The commissioner of finance shall bill the commissioner 
 49.27  of revenue for the cost of preparation of local impact notes as 
 49.28  required by section 3.987 only to the extent to which those 
 49.29  costs exceed those costs incurred in fiscal year 1997 and for 
 49.30  any other new costs attributable to the local impact note 
 49.31  function required by section 3.987, not to exceed $100,000 in 
 49.32  fiscal years 1998 and 1999 and $200,000 in fiscal year 2000 and 
 49.33  thereafter. 
 49.34     The commissioner of revenue shall deduct the amount billed 
 49.35  under this paragraph from aid payments to be made to cities and 
 49.36  counties under subdivision 2 on a pro rata basis.  The amount 
 50.1   deducted under this paragraph is appropriated to the 
 50.2   commissioner of finance for the preparation of local impact 
 50.3   notes. 
 50.4      [EFFECTIVE DATE.] This section is effective for aid payable 
 50.5   in 2004 and thereafter. 
 50.6      Sec. 5.  [477A.0124] [COUNTY PROGRAM AID.] 
 50.7      Subdivision 1.  [CALENDAR YEAR 2004.] In 2004, each county 
 50.8   shall receive program aid in an amount equal to the sum of: 
 50.9      (1) the amount of county attached machinery aid computed 
 50.10  for the county for payment in 2003 under section 273.138 prior 
 50.11  to any reduction under laws enacted in 2003; 
 50.12     (2) the amount of county homestead and agricultural credit 
 50.13  aid computed for the county for payment in 2003 under section 
 50.14  273.1398, subdivision 2, prior to any reduction under laws 
 50.15  enacted in 2003, plus a fiscal disparity adjustment under 
 50.16  section 273.1398, subdivision 1, for aid payable in 2004, minus 
 50.17  the aid to be paid to the county in 2004 under section 273.1398, 
 50.18  subdivisions 4a and 4c; 
 50.19     (3) the amount of county manufactured home homestead and 
 50.20  agricultural credit aid computed for the county for payment in 
 50.21  2003 under section 273.166 prior to any reduction under laws 
 50.22  enacted in 2003; 
 50.23     (4) the amount of county criminal justice aid computed for 
 50.24  the county for payment in 2003 under section 477A.0121 prior to 
 50.25  any reduction under laws enacted in 2003; and 
 50.26     (5) the amount of county family preservation aid computed 
 50.27  for the county for payment in 2003 under section 477A.0122 prior 
 50.28  to any reduction under laws enacted in 2003. 
 50.29     Subd. 2.  [CALENDAR YEAR 2005 AND THEREAFTER.] In 2005 and 
 50.30  thereafter, each county shall receive county program aid in an 
 50.31  amount equal to the county's portion of the total county program 
 50.32  aid certified for payment in the prior year times the amount 
 50.33  appropriated for distribution in the year of the payment. 
 50.34     Subd. 3.  [PAYMENT.] The amount of county program aid 
 50.35  payable to a county in a calendar year shall be paid by the 
 50.36  commissioner of revenue in equal installments on the dates 
 51.1   specified in section 477A.015. 
 51.2      Subd. 4.  [APPROPRIATIONS.] (a) In fiscal year 2006, 
 51.3   $100,000,000 is appropriated to the commissioner of revenue to 
 51.4   make the aid payments provided in this section.  An additional 
 51.5   $105,000,000 is appropriated in fiscal year 2006 for this 
 51.6   purpose if a new aid formula is enacted by the legislature in 
 51.7   2003 containing principles accepted by the governor. 
 51.8      (b) Each calendar year, $500,000 of the total appropriation 
 51.9   for this section shall be retained by the commissioner of 
 51.10  revenue to make reimbursements to the commissioner of finance 
 51.11  for payments made under section 611.27.  The reimbursements 
 51.12  shall be to defray the additional costs associated with 
 51.13  court-ordered counsel under section 611.27.  Any retained 
 51.14  amounts not used for reimbursement in a year shall be included 
 51.15  in the next distribution of county program aid that is certified 
 51.16  to the county auditors for the purpose of property tax reduction 
 51.17  for the next taxes payable year. 
 51.18     [EFFECTIVE DATE.] This section is effective the day 
 51.19  following final enactment. 
 51.20                             ARTICLE 5 
 51.21                            LEVY LIMITS 
 51.22     Section 1.  Minnesota Statutes 2002, section 275.065, is 
 51.23  amended by adding a subdivision to read: 
 51.24     Subd. 9.  [REVERSE REFERENDUM.] The reverse referendum 
 51.25  procedure in this subdivision applies only in the case of a 
 51.26  county, or a city that has a population of more than 2,500, that 
 51.27  has adopted a property tax levy increase over the levy amount 
 51.28  certified under section 275.07, subdivision 1, for the previous 
 51.29  year. 
 51.30     If, within 21 days after the public hearing and adoption of 
 51.31  a levy under subdivision 6, a petition signed by voters equal in 
 51.32  number to five percent of the votes cast in the county or city 
 51.33  in the last general election requesting a referendum on the levy 
 51.34  increase is filed with the county auditor or the city clerk, the 
 51.35  levy increase shall not be effective until it has been submitted 
 51.36  to the voters at a special election to be held on the fourth 
 52.1   Tuesday in January, and a majority of votes cast on the question 
 52.2   of approving the levy increase are in the affirmative.  The 
 52.3   commissioner of revenue shall prepare the form of the question 
 52.4   to be presented at the referendum, which shall reference only 
 52.5   the amount of the property tax levy increase over the previous 
 52.6   year. 
 52.7      The county or city shall notify the county auditor of the 
 52.8   results of the referendum.  If the majority of the votes cast on 
 52.9   the question are in the affirmative, the levy adopted under 
 52.10  subdivision 6 shall be certified to the county auditor under 
 52.11  section 275.07, subdivision 1.  If the majority of the votes 
 52.12  cast on the question are in the negative, an amount equal to the 
 52.13  preceding year's levy shall be certified to the county auditor 
 52.14  for purposes of section 275.07, subdivision 1; provided that if 
 52.15  the current year adopted levy includes any levy for the payment 
 52.16  of bonded indebtedness or judgments, such levies for bonded 
 52.17  indebtedness and judgments shall be extended in full and the 
 52.18  remainder of the levies shall be reduced so that the total, 
 52.19  including levies for bonds and judgments, does not exceed the 
 52.20  preceding year's levy. 
 52.21     [EFFECTIVE DATE.] This section is effective for taxes 
 52.22  levied in 2004 and thereafter, for taxes payable in 2005 and 
 52.23  thereafter. 
 52.24     Sec. 2.  Minnesota Statutes 2002, section 275.07, 
 52.25  subdivision 1, is amended to read: 
 52.26     Subdivision 1.  [CERTIFICATION OF LEVY.] (a) Except as 
 52.27  provided under paragraph (b) or (c), the taxes voted by cities, 
 52.28  counties, school districts, and special districts shall be 
 52.29  certified by the proper authorities to the county auditor on or 
 52.30  before five working days after December 20 in each year.  A town 
 52.31  must certify the levy adopted by the town board to the county 
 52.32  auditor by September 15 each year.  If the town board modifies 
 52.33  the levy at a special town meeting after September 15, the town 
 52.34  board must recertify its levy to the county auditor on or before 
 52.35  five working days after December 20.  The taxes certified shall 
 52.36  not be reduced by the county auditor by the aid received under 
 53.1   section 273.1398, subdivision 2, but shall be reduced by the 
 53.2   county auditor by the aid received under section 273.1398, 
 53.3   subdivision 3.  If a city, town, county, school district, or 
 53.4   special district fails to certify its levy by that date, its 
 53.5   levy shall be the amount levied by it for the preceding year. 
 53.6      (b)(i) The taxes voted by counties under sections 103B.241, 
 53.7   103B.245, and 103B.251 shall be separately certified by the 
 53.8   county to the county auditor on or before five working days 
 53.9   after December 20 in each year.  The taxes certified shall not 
 53.10  be reduced by the county auditor by the aid received under 
 53.11  section 273.1398, subdivisions 2 and 3.  If a county fails to 
 53.12  certify its levy by that date, its levy shall be the amount 
 53.13  levied by it for the preceding year.  
 53.14     (ii) For purposes of the proposed property tax notice under 
 53.15  section 275.065 and the property tax statement under section 
 53.16  276.04, for the first year in which the county implements the 
 53.17  provisions of this paragraph, the county auditor shall reduce 
 53.18  the county's levy for the preceding year to reflect any amount 
 53.19  levied for water management purposes under clause (i) included 
 53.20  in the county's levy. 
 53.21     (c) A county or city to which the reverse referendum 
 53.22  provisions under section 275.065, subdivision 9, apply, shall 
 53.23  certify the taxes to the county auditor by January 5, except 
 53.24  that any county or city for which a petition has been filed 
 53.25  under section 275.065, subdivision 9, must certify the day 
 53.26  immediately following the election under that subdivision. 
 53.27     [EFFECTIVE DATE.] This section is effective for taxes 
 53.28  levied in 2004 and thereafter, for taxes payable in 2005 and 
 53.29  thereafter. 
 53.30     Sec. 3.  Minnesota Statutes 2002, section 275.70, 
 53.31  subdivision 3, is amended to read: 
 53.32     Subd. 3.  [LOCAL GOVERNMENTAL UNIT.] "Local governmental 
 53.33  unit" means a county, or a statutory or home rule charter 
 53.34  city with a population greater than 2,500. 
 53.35     [EFFECTIVE DATE.] This section is effective for taxes 
 53.36  payable in 2004 and thereafter. 
 54.1      Sec. 4.  Minnesota Statutes 2002, section 275.70, 
 54.2   subdivision 5, is amended to read: 
 54.3      Subd. 5.  [SPECIAL LEVIES.] "Special levies" means those 
 54.4   portions of ad valorem taxes levied by a local governmental unit 
 54.5   for the following purposes or in the following manner: 
 54.6      (1) to pay the costs of the principal and interest 
 54.7   on existing bonded indebtedness or; for this purpose, "existing 
 54.8   bonded indebtedness" means: 
 54.9      (i) the amount of bonded indebtedness for which a special 
 54.10  levy under this clause was claimed for taxes levied in 2002 in 
 54.11  the case of a county or city that was subject to section 275.71 
 54.12  for taxes levied in 2002; 
 54.13     (ii) the amount of bonded indebtedness for which the same 
 54.14  special levy could have been claimed for taxes levied in 2002 if 
 54.15  the local governmental unit was not subject to section 275.71 
 54.16  for taxes levied in 2002; 
 54.17     (iii) the amount of bonded indebtedness if the city or 
 54.18  county has, prior to May 1, 2003, entered into a binding 
 54.19  contract or agreement requiring the expenditure of some or all 
 54.20  of the borrowed funds; and 
 54.21     (iv) the amount of bonded indebtedness the issuance of 
 54.22  which was approved by the voters of the city or county prior to 
 54.23  May 1, 2003; 
 54.24     (2) to reimburse for the amount of liquor store revenues 
 54.25  used to pay the principal and interest due on municipal liquor 
 54.26  store bonds in the year preceding the year for which the levy 
 54.27  limit is calculated; 
 54.28     (2) (3) to pay the costs of principal and interest on 
 54.29  certificates of indebtedness issued for any corporate purpose 
 54.30  except for the following: 
 54.31     (i) tax anticipation or aid anticipation certificates of 
 54.32  indebtedness; 
 54.33     (ii) certificates of indebtedness issued under sections 
 54.34  298.28 and 298.282; 
 54.35     (iii) certificates of indebtedness used to fund current 
 54.36  expenses or to pay the costs of extraordinary expenditures that 
 55.1   result from a public emergency; or 
 55.2      (iv) certificates of indebtedness used to fund an 
 55.3   insufficiency in tax receipts or an insufficiency in other 
 55.4   revenue sources; 
 55.5      (3) (4) to provide for the bonded indebtedness portion of 
 55.6   payments made to another political subdivision of the state of 
 55.7   Minnesota if the amount would have qualified as a special levy 
 55.8   for taxes levied in 2002 or the bonds were issued before May 1, 
 55.9   2003; 
 55.10     (4) (5) to fund payments made to the Minnesota state armory 
 55.11  building commission under section 193.145, subdivision 2, to 
 55.12  retire the principal and interest on armory construction bonds; 
 55.13     (5) (6) property taxes approved by voters which are levied 
 55.14  against the referendum market value as provided under section 
 55.15  275.61; 
 55.16     (6) (7) to fund matching requirements needed to qualify for 
 55.17  federal or state grants or programs to the extent that either 
 55.18  (i) the matching requirement exceeds the matching requirement in 
 55.19  calendar year 2001, or (ii) it is a new matching requirement 
 55.20  that did not exist prior to 2002; 
 55.21     (7) (8) to pay the expenses reasonably and necessarily 
 55.22  incurred in preparing for or repairing the effects of natural 
 55.23  disaster including the occurrence or threat of widespread or 
 55.24  severe damage, injury, or loss of life or property resulting 
 55.25  from natural causes, in accordance with standards formulated by 
 55.26  the emergency services division of the state department of 
 55.27  public safety, as allowed by the commissioner of revenue under 
 55.28  section 275.74, subdivision 2; 
 55.29     (8) (9) pay amounts required to correct an error in the 
 55.30  levy certified to the county auditor by a city or county in a 
 55.31  levy year, but only to the extent that when added to the 
 55.32  preceding year's levy it is not in excess of an applicable 
 55.33  statutory, special law or charter limitation, or the limitation 
 55.34  imposed on the governmental subdivision by sections 275.70 to 
 55.35  275.74 in the preceding levy year; 
 55.36     (9) (10) to pay an abatement under section 469.1815 for 
 56.1   which the granting resolution was adopted prior to May 1, 2003; 
 56.2      (10) (11) to pay any costs attributable to increases in the 
 56.3   employer contribution rates under chapter 353 that are effective 
 56.4   after June 30, 2001; 
 56.5      (11) (12) to pay the operating or maintenance costs of a 
 56.6   county jail as authorized in section 641.01 or 641.262, or of a 
 56.7   correctional facility as defined in section 241.021, subdivision 
 56.8   1, paragraph (5), to the extent that the county can demonstrate 
 56.9   to the commissioner of revenue that the amount has been included 
 56.10  in the county budget as a direct result of a rule, minimum 
 56.11  requirement, minimum standard, or directive of the department of 
 56.12  corrections, or to pay the operating or maintenance costs of a 
 56.13  regional jail as authorized in section 641.262.  For purposes of 
 56.14  this clause, a district court order is not a rule, minimum 
 56.15  requirement, minimum standard, or directive of the department of 
 56.16  corrections.  If the county utilizes this special levy, any 
 56.17  amount levied by the county in the previous levy year for the 
 56.18  purposes specified under this clause and included in the 
 56.19  county's previous year's levy limitation computed under section 
 56.20  275.71, shall be deducted from the levy limit base under section 
 56.21  275.71, subdivision 2, when determining the county's current 
 56.22  year levy limitation.  The county shall provide the necessary 
 56.23  information to the commissioner of revenue for making this 
 56.24  determination.  The amount of this special levy is limited to 
 56.25  110 percent of the amount levied by the county for these 
 56.26  purposes in the prior year; 
 56.27     (12) (13) to pay for operation of a lake improvement 
 56.28  district, as authorized under section 103B.555.  If the county 
 56.29  utilizes this special levy, any amount levied by the county in 
 56.30  the previous levy year for the purposes specified under this 
 56.31  clause and included in the county's previous year's levy 
 56.32  limitation computed under section 275.71 shall be deducted from 
 56.33  the levy limit base under section 275.71, subdivision 2, when 
 56.34  determining the county's current year levy limitation.  The 
 56.35  county shall provide the necessary information to the 
 56.36  commissioner of revenue for making this determination.  The 
 57.1   amount of this special levy is limited to 110 percent of the 
 57.2   amount levied by the county for these purposes in the prior 
 57.3   year; 
 57.4      (13) (14) to repay a state or federal loan used to fund the 
 57.5   direct or indirect required spending by the local government due 
 57.6   to a state or federal transportation project or other state or 
 57.7   federal capital project.  This authority may only be used if the 
 57.8   project is not a local government initiative; 
 57.9      (14) for counties only, to pay the costs reasonably 
 57.10  expected to be incurred in 2002 related to the redistricting of 
 57.11  election districts and establishment of election precincts under 
 57.12  sections 204B.135 and 204B.14, the notice required by section 
 57.13  204B.14, subdivision 4, and the reassignment of voters in the 
 57.14  statewide registration system, not to exceed $1 per capita, 
 57.15  provided that the county shall distribute a portion of the 
 57.16  amount levied under this clause equal to 25 cents times the 
 57.17  population of the city to all cities in the county with a 
 57.18  population of 30,000 or more; 
 57.19     (15) to pay for court administration costs as required 
 57.20  under section 273.1398, subdivision 4b, less the county's share 
 57.21  of transferred fines and fees collected by the district courts 
 57.22  in the county for calendar year 2001 aid amount certified to be 
 57.23  paid to the county in 2004 under section 273.1398, subdivisions 
 57.24  4a and 4c; however, for taxes levied to pay for these costs in 
 57.25  the year in which the court financing is transferred to the 
 57.26  state, the amount under this section clause is limited to 
 57.27  one-third of the aid reduction under section 273.1398, 
 57.28  subdivision 4a; and 
 57.29     (16) to fund a police or firefighters relief association as 
 57.30  required under section 69.77 to the extent that the required 
 57.31  amount exceeds the amount levied for this purpose in 2001. 
 57.32     [EFFECTIVE DATE.] This section is effective for taxes 
 57.33  payable in 2004 and thereafter. 
 57.34     Sec. 5.  Minnesota Statutes 2002, section 275.71, 
 57.35  subdivision 2, is amended to read: 
 57.36     Subd. 2.  [LEVY LIMIT BASE.] (a) The levy limit base for a 
 58.1   local governmental unit for taxes levied in 2001 2003 is equal 
 58.2   to the greater of: 
 58.3      (1) the sum of its adjusted levy limit base for taxes 
 58.4   levied in 1999 plus the amount it levied in 1999 under Minnesota 
 58.5   Statutes 1999 Supplement, section 275.70, subdivision 5, clauses 
 58.6   (8) and (13), multiplied by: 
 58.7      (i) one plus the percentage growth in the implicit price 
 58.8   deflator for the 12-month period ending March 30, 2000; 
 58.9      (ii) one plus a percentage equal to the annual percentage 
 58.10  increase in the estimated number of households, if any, for the 
 58.11  most recent 12-month period that was available on July 1, 2000; 
 58.12  and 
 58.13     (iii) one plus a percentage equal to 50 percent of the 
 58.14  percentage increase in the taxable market value of the 
 58.15  jurisdiction due to new construction of class 3 property, as 
 58.16  defined in section 273.13, subdivision 24, except for 
 58.17  state-assessed utility and railroad operating property, for the 
 58.18  most recent year for which data was available as of July 1, 2000 
 58.19  ; or 
 58.20     (2) an amount equal to: 
 58.21     (i) (1) the sum of the amount it levied in 2000 2002 plus 
 58.22  the amount of aids it was certified to receive in calendar 
 58.23  year 2001 2003 under sections 273.1398, 273.166, 298.282, 
 58.24  477A.011 to 477A.03, prior to any aid reductions under section 
 58.25  273.1399, subdivision 5, 477A.06, and 477A.065, and 477A.07, 
 58.26  prior to any aid reductions enacted into law in 2003; less 
 58.27     (ii) (2) the amount it levied in 2000 2002 that would 
 58.28  qualify have qualified as special levies under Minnesota 
 58.29  Statutes 2002, section 275.70, subdivision 6, for taxes levied 
 58.30  in 2001 2002.  The local governmental unit shall provide the 
 58.31  commissioner of revenue with sufficient information to make this 
 58.32  calculation. 
 58.33     (b) If the governmental unit was not subject to levy limits 
 58.34  for taxes levied in 1999, its levy limit base for taxes levied 
 58.35  in 2001 is equal to the amount calculated under paragraph (a), 
 58.36  clause (2). 
 59.1      (c) The levy limit base for a local governmental unit for 
 59.2   taxes levied in 2002 is equal to its adjusted levy limit base in 
 59.3   the previous year, plus the amount of tree growth tax it 
 59.4   received in calendar year 2001 under sections 270.31 to 270.39, 
 59.5   and plus, in the case of a city, the amount it was certified to 
 59.6   receive in calendar year 2001 under section 273.166, is subject 
 59.7   to any adjustments under section 275.72. 
 59.8      [EFFECTIVE DATE.] This section is effective for taxes 
 59.9   payable in 2004 and thereafter. 
 59.10     Sec. 6.  Minnesota Statutes 2002, section 275.71, 
 59.11  subdivision 4, is amended to read: 
 59.12     Subd. 4.  [ADJUSTED LEVY LIMIT BASE.] (a) For taxes levied 
 59.13  in 2001 and 2002 2003, the adjusted levy limit base is equal to: 
 59.14     (1) the levy limit base computed under subdivisions 2 and 3 
 59.15  or section 275.72,; minus 
 59.16     (2) the total reduction for the local unit determined under 
 59.17  articles 2, 3, and 4 of this act for the distribution or aid 
 59.18  amount payable in 2004 pursuant to sections 477A.013 and 
 59.19  477A.0124; multiplied by: 
 59.20     (1) (3)(i) one plus a percentage equal to the percentage 
 59.21  growth in the implicit price deflator; 
 59.22     (2) (ii) one plus a percentage equal to the percentage 
 59.23  increase in number of households, if any, for the most recent 
 59.24  12-month period for which data is available; and 
 59.25     (3) (iii) one plus a percentage equal to 50 percent of the 
 59.26  percentage increase in the taxable market value of the 
 59.27  jurisdiction due to new construction of class 3 property, as 
 59.28  defined in section 273.13, subdivision 24, except for 
 59.29  state-assessed utility and railroad operating property, for the 
 59.30  most recent year for which data is available. 
 59.31     (b) For counties only, for taxes levied in 2001 and 2002 
 59.32  2003, the adjusted levy limit base is also reduced by any amount 
 59.33  of levy reduction required under section 275.07, subdivision 1, 
 59.34  paragraph (b), clause (ii). 
 59.35     [EFFECTIVE DATE.] This section is effective for taxes 
 59.36  payable in 2004 and thereafter. 
 60.1      Sec. 7.  Minnesota Statutes 2002, section 275.71, 
 60.2   subdivision 5, is amended to read: 
 60.3      Subd. 5.  [PROPERTY TAX LEVY LIMIT.] Notwithstanding any 
 60.4   other provision of a municipal charter which limits ad valorem 
 60.5   taxes to a lesser amount, or which would require a separate 
 60.6   voter approval for any increase, For taxes levied in 2001 and 
 60.7   2002 2003, the property tax levy limit for a local governmental 
 60.8   unit is equal to its adjusted levy limit base determined under 
 60.9   subdivision 4 plus any additional levy authorized under section 
 60.10  275.73, which is levied against net tax capacity, reduced by the 
 60.11  sum of (i) the total amount of aids and reimbursements that the 
 60.12  local governmental unit is certified to receive in 2004 under 
 60.13  sections 477A.011 to 477A.014, except for the increases in city 
 60.14  aid bases in calendar year 2002 under section 477A.011, 
 60.15  subdivision 36, paragraphs (n), (p), and (q), (ii) homestead and 
 60.16  agricultural aids it is certified to receive under section 
 60.17  273.1398, (iii) plus any taconite aids under sections 298.28 and 
 60.18  298.282 including any aid which was required to be placed in a 
 60.19  special fund for expenditure in the next succeeding year, (iv) 
 60.20  low-income housing aid under sections 477A.06 and 477A.065, and 
 60.21  (v) property tax replacement aids under section 174.242. 
 60.22     [EFFECTIVE DATE.] This section is effective for taxes 
 60.23  payable in 2004 and thereafter. 
 60.24     Sec. 8.  Minnesota Statutes 2002, section 275.71, 
 60.25  subdivision 6, is amended to read: 
 60.26     Subd. 6.  [LEVIES IN EXCESS OF LEVY LIMITS.] (a) If the 
 60.27  levy made by a city or county exceeds the levy limit provided in 
 60.28  sections 275.70 to 275.74, except when the excess levy is due to 
 60.29  the rounding of the rate in accordance with section 275.28, the 
 60.30  county auditor shall only extend the amount of taxes permitted 
 60.31  under sections 275.70 to 275.74, as provided for in section 
 60.32  275.16. 
 60.33     (b) For taxes levied in 2002, payable in 2003 only, if an 
 60.34  error was made in calculating the levy limit adjustment related 
 60.35  to a special levy for jails authorized under section 275.70, 
 60.36  subdivision 5, clause (11), in the previous year, the following 
 61.1   adjustments must be made: 
 61.2      (1) the county's levy limit base for taxes levied in 2002 
 61.3   must be based on the corrected adjusted levy limit base for 
 61.4   taxes levied in 2001; and 
 61.5      (2) the county's final levy limit for taxes levied in 2002, 
 61.6   payable in 2003, must also be temporarily reduced by an amount 
 61.7   equal to the amount of county levy spread in the previous year 
 61.8   in excess of the total recalculated levy limit plus authorized 
 61.9   special levies for taxes levied in 2001, payable in 2002. 
 61.10     (c) The commissioner of revenue shall inform counties 
 61.11  affected by paragraph (b) of the levy error and levy adjustments 
 61.12  required under this provision by June 15, 2002.  The county may 
 61.13  provide additional information to the commissioner indicating 
 61.14  why these adjustments may be in error by July 15, 2002.  The 
 61.15  commissioner shall certify the final levy adjustment to the 
 61.16  affected counties by August 1, 2002.  The levy reduction imposed 
 61.17  under paragraph (b), clause (2), may be spread over a period not 
 61.18  to exceed three years, upon agreement between the county and the 
 61.19  commissioner. 
 61.20     [EFFECTIVE DATE.] This section is effective for taxes 
 61.21  payable in 2004 and thereafter. 
 61.22     Sec. 9.  Minnesota Statutes 2002, section 275.73, 
 61.23  subdivision 2, is amended to read:  
 61.24     Subd. 2.  [LEVY EFFECTIVE DATE.] An additional levy 
 61.25  approved under subdivision 1 at a general or special election 
 61.26  held prior to September 1 on or before the first Tuesday in 
 61.27  November in any levy year may be levied in that same levy year 
 61.28  and subsequent levy years.  An additional levy approved under 
 61.29  subdivision 1 at a general or special election held after August 
 61.30  31 the first Tuesday in November in any levy year shall not be 
 61.31  levied in that same levy but may be levied in subsequent levy 
 61.32  years. 
 61.33     [EFFECTIVE DATE.] This section is effective for taxes 
 61.34  payable in 2004 and thereafter. 
 61.35     Sec. 10.  Minnesota Statutes 2002, section 275.74, 
 61.36  subdivision 2, is amended to read: 
 62.1      Subd. 2.  [AUTHORIZATION FOR SPECIAL LEVIES.] A local 
 62.2   governmental unit may request authorization to levy for 
 62.3   unreimbursed costs for natural disasters under section 275.70, 
 62.4   subdivision 5, clause (7) (8).  The local governmental unit 
 62.5   shall submit a request to levy under section 275.70, subdivision 
 62.6   5, clause (7) (8), to the commissioner of revenue by September 
 62.7   30 of the levy year and the request must include information 
 62.8   documenting the estimated unreimbursed costs.  The commissioner 
 62.9   of revenue may grant levy authority, up to the amount requested 
 62.10  based on the documentation submitted.  All decisions of the 
 62.11  commissioner are final. 
 62.12     [EFFECTIVE DATE.] This section is effective for taxes 
 62.13  payable in 2004 and thereafter. 
 62.14     Sec. 11.  Minnesota Statutes 2002, section 275.74, 
 62.15  subdivision 3, is amended to read: 
 62.16     Subd. 3.  [INFORMATION NECESSARY TO CALCULATE THE 2001 LEVY 
 62.17  LIMIT BASE.] A local governmental unit must provide the 
 62.18  commissioner with the information required to calculate the 
 62.19  alternative 2001 levy limit base amount under section 275.71, 
 62.20  subdivision 2, paragraph (a), clause (2), by July 20, 2001 of 
 62.21  the levy year.  If the information is not received by the 
 62.22  commissioner by that date, or is not deemed sufficient to make 
 62.23  the calculation under that clause, the commissioner has the 
 62.24  discretion to set the local governmental unit's 2001 levy limit 
 62.25  for all purposes including those purposes for which special 
 62.26  levies may be made, base equal to the amount of the local unit's 
 62.27  certified levy for the prior year minus the amount calculated 
 62.28  under section 275.71, subdivision 2 4, paragraph (a), 
 62.29  clause (1) (2). 
 62.30     [EFFECTIVE DATE.] This section is effective for taxes 
 62.31  payable in 2004 and thereafter. 
 62.32                             ARTICLE 6 
 62.33             LOCAL GOVERNMENT AIDS AND LEVIES REPEALERS
 62.34     Section 1.  [REPEALER.] 
 62.35     Minnesota Statutes 2002, sections 477A.0121, subdivision 1; 
 62.36  and 477A.0122, subdivision 1, are repealed. 
 63.1      [EFFECTIVE DATE.] This section is effective for aid payable 
 63.2   in 2003 and thereafter. 
 63.3      Sec. 2.  [REPEALER.] 
 63.4      Minnesota Statutes 2002, sections 273.138; 273.1398, 
 63.5   subdivision 2; 273.166; 477A.011, subdivisions 36 and 37; 
 63.6   477A.0121, subdivisions 2, 3, 4, 5, and 6; 477A.0122, 
 63.7   subdivisions 2, 3, 4, 5, and 6; 477A.0123; 477A.03, subdivisions 
 63.8   3 and 4; 477A.06; 477A.065; and 477A.07, are repealed. 
 63.9      [EFFECTIVE DATE.] This section is effective for aid payable 
 63.10  in 2004 and thereafter. 
 63.11     Sec. 3.  [REPEALER.] 
 63.12     Minnesota Statutes 2002, section 275.71, subdivision 5, is 
 63.13  repealed. 
 63.14     [EFFECTIVE DATE.] This section is effective for taxes 
 63.15  payable in 2005 and thereafter. 
 63.16                             ARTICLE 7 
 63.17                         FUNDS AND ACCOUNTS 
 63.18     Section 1.  Minnesota Statutes 2002, section 16A.152, 
 63.19  subdivision 1, is amended to read: 
 63.20     Subdivision 1.  [CASH FLOW ACCOUNT ESTABLISHED.] (a) A cash 
 63.21  flow account is created in the general fund in the state 
 63.22  treasury.  Beginning July 1, 2003, the commissioner of finance 
 63.23  shall restrict part or all of the balance before reserves in the 
 63.24  general fund as may be necessary to fund the cash flow account, 
 63.25  up to $350,000,000. 
 63.26     (b) The Amounts restricted are transferred to in the cash 
 63.27  flow account and shall remain in the account until drawn down 
 63.28  and used to meet cash flow deficiencies resulting from uneven 
 63.29  distribution of revenue collections and required expenditures 
 63.30  during a fiscal year. 
 63.31     Sec. 2.  Minnesota Statutes 2002, section 16A.152, 
 63.32  subdivision 1b, is amended to read: 
 63.33     Subd. 1b.  [BUDGET RESERVE INCREASE.] On June 30 July 1, 
 63.34  2003, the commissioner of finance shall 
 63.35  transfer $3,900,000 $300,000,000 to the budget reserve account 
 63.36  in the general fund.  On June 30 July 1, 2004, the commissioner 
 64.1   of finance shall transfer $12,300,000 $200,000,000 to the budget 
 64.2   reserve account in the general fund.  On June 30, 2005, the 
 64.3   commissioner of finance shall transfer $12,000,000 to the budget 
 64.4   reserve account in the general fund.  The amounts necessary for 
 64.5   this purpose are appropriated from the general fund. 
 64.6      Sec. 3.  Minnesota Statutes 2002, section 16A.152, 
 64.7   subdivision 2, is amended to read: 
 64.8      Subd. 2.  [ADDITIONAL REVENUES; PRIORITY.] If on the basis 
 64.9   of a forecast of general fund revenues and expenditures, the 
 64.10  commissioner of finance determines that there will be a positive 
 64.11  unrestricted budgetary general fund balance at the close of the 
 64.12  biennium, the commissioner of finance must allocate money to the 
 64.13  budget reserve until the total amount in the account equals 
 64.14  $653,000,000 the following accounts and purposes in priority 
 64.15  order: 
 64.16     (1) the cash flow account established in subdivision 1 
 64.17  until that account reaches $350,000,000; and 
 64.18     (2) the budget reserve account established in subdivision 
 64.19  1a until that account reaches five percent of the forecasted 
 64.20  expenditures in the odd-numbered fiscal year of the most 
 64.21  recently enacted biennial budget. 
 64.22     The amounts necessary to meet the requirements of this 
 64.23  section are appropriated from the general fund within two weeks 
 64.24  after the forecast is released. 
 64.25     Sec. 4.  Minnesota Statutes 2002, section 16A.152, 
 64.26  subdivision 7, is amended to read: 
 64.27     Subd. 7.  [DELAY; REDUCTION.] The commissioner may delay 
 64.28  paying up to 15 percent of an appropriation to a statutory or 
 64.29  home rule charter city, county, special taxing district, or a 
 64.30  system of higher education in that entity's fiscal year for up 
 64.31  to 60 days after the start of its next fiscal year.  The delayed 
 64.32  amount is subject to allotment reduction under subdivision 4. 
 64.33     [EFFECTIVE DATE.] This section is effective the day 
 64.34  following final enactment. 
 64.35     Sec. 5.  Minnesota Statutes 2002, section 62J.694, 
 64.36  subdivision 4, is amended to read: 
 65.1      Subd. 4.  [SUNSET.] The medical education endowment fund 
 65.2   expires June 30, 2015 July 1, 2003.  Upon expiration, the 
 65.3   commissioner of finance shall transfer the principal and any 
 65.4   remaining interest to the general fund. 
 65.5      Sec. 6.  Minnesota Statutes 2002, section 144.395, 
 65.6   subdivision 3, is amended to read: 
 65.7      Subd. 3.  [SUNSET.] The tobacco use prevention and local 
 65.8   public health endowment fund expires June 30, 2015 July 1, 2003. 
 65.9   Upon expiration, the commissioner of finance shall transfer the 
 65.10  principal and any remaining interest to the general fund.  
 65.11     Sec. 7.  Minnesota Statutes 2002, section 275.025, 
 65.12  subdivision 1, is amended to read: 
 65.13     Subdivision 1.  [LEVY AMOUNT.] The state general levy is 
 65.14  levied against commercial-industrial property and seasonal 
 65.15  recreational property, as defined in this section.  The state 
 65.16  general levy is $592,000,000 for taxes payable in 2002.  For 
 65.17  taxes payable in subsequent years, the levy is increased each 
 65.18  year by multiplying the amount for the prior year by the sum of 
 65.19  one plus the rate of increase, if any, in the implicit price 
 65.20  deflator for government consumption expenditures and gross 
 65.21  investment for state and local governments prepared by the 
 65.22  Bureau of Economic Analysts of the United States Department of 
 65.23  Commerce for the 12-month period ending March 31 of the year 
 65.24  prior to the year the taxes are payable.  The tax under this 
 65.25  section is not treated as a local tax rate under section 469.177 
 65.26  and is not the levy of a governmental unit under chapters 276A 
 65.27  and 473F.  Beginning in fiscal year 2004, and in each year 
 65.28  thereafter, the commissioner of finance shall deposit in an 
 65.29  education reserve account, which account is hereby established, 
 65.30  the increased amount of the state general levy received for 
 65.31  deposit in the general fund for that year over the amount of the 
 65.32  state general levy received for deposit in the general fund in 
 65.33  fiscal year 2003.  The amounts in the education reserve account 
 65.34  do not lapse or cancel each year, but remain until appropriated 
 65.35  by law for education aid or higher education funding. 
 65.36     [EFFECTIVE DATE.] This section is effective June 30, 2003. 
 66.1      Sec. 8.  Laws 2002, chapter 377, article 12, section 17, is 
 66.2   amended to read: 
 66.3      Sec. 17.  [APPROPRIATION.] 
 66.4      (a) $585,000 in fiscal year 2002 and $7,015,000 in fiscal 
 66.5   year 2003 are appropriated to the commissioner of revenue from 
 66.6   the general fund for tax compliance activities, including 
 66.7   identification and collection of tax liabilities from 
 66.8   individuals and businesses that currently do not pay all taxes 
 66.9   owed, and audit and collection activity in the income tax, sales 
 66.10  tax, lawful gambling, insurance, and corporate areas.  The base 
 66.11  funding for these activities in fiscal years 2004 and 2005 is 
 66.12  increased by $4,750,000 each year. 
 66.13     (b) The commissioner must include these tax compliance 
 66.14  activities in the report required by Laws 2001, First Special 
 66.15  Session chapter 10, article 1, section 16, subdivision 2, 
 66.16  paragraph (c). 
 66.17     (c) Laws 2002, chapter 220, article 10, section 38, does 
 66.18  not apply to the positions necessary to carry out the compliance 
 66.19  activities identified in this section. 
 66.20     (d) If the legislative auditor determines that: 
 66.21     (1) actual revenue collections generated from tax 
 66.22  compliance activities funded by Laws 2001, First Special Session 
 66.23  chapter 10, article 1, section 16, subdivision 2, paragraphs (a) 
 66.24  and (b), will not generate at least $52,000,000 in additional 
 66.25  general fund revenue for the biennium ending June 30, 2003; or 
 66.26     (2) actual revenue collections generated from new tax 
 66.27  compliance activities funded by the appropriation in this 
 66.28  section will not generate at least $7,600,000 in additional 
 66.29  general fund revenue for the biennium ending June 30, 2003; 
 66.30  then the commissioner of finance must cancel from the budget 
 66.31  reserve account to the general fund the difference between the 
 66.32  $52,000,000 or the $7,600,000 and the actual additional general 
 66.33  fund revenue.  The legislative auditor's determination under 
 66.34  this paragraph must be made in the February 1, 2003, report to 
 66.35  the legislature required by Laws 2001, First Special Session 
 66.36  chapter 10, article 1, section 16. 
 67.1      [EFFECTIVE DATE.] This section is effective the day 
 67.2   following final enactment. 
 67.3                              ARTICLE 8 
 67.4                            MISCELLANEOUS 
 67.5      Section 1.  Minnesota Statutes 2002, section 289A.20, 
 67.6   subdivision 4, is amended to read: 
 67.7      Subd. 4.  [SALES AND USE TAX.] (a) The taxes imposed by 
 67.8   chapter 297A are due and payable to the commissioner monthly on 
 67.9   or before the 20th day of the month following the month in which 
 67.10  the taxable event occurred, or following another reporting 
 67.11  period as the commissioner prescribes or as allowed under 
 67.12  section 289A.18, subdivision 4, paragraph (f), except that use 
 67.13  taxes due on an annual use tax return as provided under section 
 67.14  289A.11, subdivision 1, are payable by April 15 following the 
 67.15  close of the calendar year. 
 67.16     (b) For a fiscal year ending before July 1, 2002, A vendor 
 67.17  having a liability of $120,000 or more during a fiscal year 
 67.18  ending June 30 must remit the June liability for the next year 
 67.19  in the following manner: 
 67.20     (1) Two business days before June 30 of the year, the 
 67.21  vendor must remit 75 percent of the estimated June liability to 
 67.22  the commissioner.  
 67.23     (2) On or before August 20 of the year, the vendor must pay 
 67.24  any additional amount of tax not remitted in June. 
 67.25     (c) A vendor having a liability of $120,000 or more during 
 67.26  a fiscal year ending June 30 must remit all liabilities on 
 67.27  returns due for periods beginning in the subsequent calendar 
 67.28  year by electronic means on or before the 20th day of the month 
 67.29  following the month in which the taxable event occurred, or on 
 67.30  or before the 20th day of the month following the month in which 
 67.31  the sale is reported under section 289A.18, subdivision 4, 
 67.32  except for 75 percent of the estimated June liability, which is 
 67.33  due two business days before June 30.  The remaining amount of 
 67.34  the June liability is due on August 20.  
 67.35     [EFFECTIVE DATE.] This section is effective the day 
 67.36  following final enactment. 
 68.1      Sec. 2.  Minnesota Statutes 2002, section 297A.94, is 
 68.2   amended to read: 
 68.3      297A.94 [DEPOSIT OF REVENUES.] 
 68.4      (a) Except as provided in this section, the commissioner 
 68.5   shall deposit the revenues, including interest and penalties, 
 68.6   derived from the taxes imposed by this chapter in the state 
 68.7   treasury and credit them to the general fund.  
 68.8      (b) The commissioner shall deposit taxes in the Minnesota 
 68.9   agricultural and economic account in the special revenue fund if:
 68.10     (1) the taxes are derived from sales and use of property 
 68.11  and services purchased for the construction and operation of an 
 68.12  agricultural resource project; and 
 68.13     (2) the purchase was made on or after the date on which a 
 68.14  conditional commitment was made for a loan guaranty for the 
 68.15  project under section 41A.04, subdivision 3. 
 68.16  The commissioner of finance shall certify to the commissioner 
 68.17  the date on which the project received the conditional 
 68.18  commitment.  The amount deposited in the loan guaranty account 
 68.19  must be reduced by any refunds and by the costs incurred by the 
 68.20  department of revenue to administer and enforce the assessment 
 68.21  and collection of the taxes.  
 68.22     (c) The commissioner shall deposit the revenues, including 
 68.23  interest and penalties, derived from the taxes imposed on sales 
 68.24  and purchases included in section 297A.61, subdivision 3, 
 68.25  paragraph (g), clauses (1) and (4), in the state treasury, and 
 68.26  credit them as follows: 
 68.27     (1) first to the general obligation special tax bond debt 
 68.28  service account in each fiscal year the amount required by 
 68.29  section 16A.661, subdivision 3, paragraph (b); and 
 68.30     (2) after the requirements of clause (1) have been met, the 
 68.31  balance to the general fund. 
 68.32     (d) The commissioner shall deposit the revenues, including 
 68.33  interest and penalties, collected under section 297A.64, 
 68.34  subdivision 5, in the state treasury and credit them to the 
 68.35  general fund.  By July 15 of each year the commissioner shall 
 68.36  transfer to the highway user tax distribution fund an amount 
 69.1   equal to the excess fees collected under section 297A.64, 
 69.2   subdivision 5, for the previous calendar year. 
 69.3      (e) For fiscal year 2001, 97 percent; for fiscal years 2002 
 69.4   and 2003, 87 percent; and for fiscal year 2004 and thereafter, 
 69.5   87.1 74 percent of the revenues, including interest and 
 69.6   penalties, transmitted to the commissioner under section 
 69.7   297A.65, must be deposited by the commissioner in the state 
 69.8   treasury as follows: 
 69.9      (1) 50 percent of the receipts must be deposited in the 
 69.10  heritage enhancement account in the game and fish fund, and may 
 69.11  be spent only on activities that improve, enhance, or protect 
 69.12  fish and wildlife resources, including conservation, 
 69.13  restoration, and enhancement of land, water, and other natural 
 69.14  resources of the state; 
 69.15     (2) 22.5 percent of the receipts must be deposited in the 
 69.16  natural resources fund, and may be spent only for state parks 
 69.17  and trails; 
 69.18     (3) 22.5 percent of the receipts must be deposited in the 
 69.19  natural resources fund, and may be spent only on metropolitan 
 69.20  park and trail grants; 
 69.21     (4) three percent of the receipts must be deposited in the 
 69.22  natural resources fund, and may be spent only on local trail 
 69.23  grants; and 
 69.24     (5) two percent of the receipts must be deposited in the 
 69.25  natural resources fund, and may be spent only for the Minnesota 
 69.26  zoological garden, the Como park zoo and conservatory, and the 
 69.27  Duluth zoo. 
 69.28     (f) The revenue dedicated under paragraph (e) may not be 
 69.29  used as a substitute for traditional sources of funding for the 
 69.30  purposes specified, but the dedicated revenue shall supplement 
 69.31  traditional sources of funding for those purposes.  Land 
 69.32  acquired with money deposited in the game and fish fund under 
 69.33  paragraph (e) must be open to public hunting and fishing during 
 69.34  the open season, except that in aquatic management areas or on 
 69.35  lands where angling easements have been acquired, fishing may be 
 69.36  prohibited during certain times of the year and hunting may be 
 70.1   prohibited.  At least 87 percent of the money deposited in the 
 70.2   game and fish fund for improvement, enhancement, or protection 
 70.3   of fish and wildlife resources under paragraph (e) must be 
 70.4   allocated for field operations. 
 70.5      [EFFECTIVE DATE.] This section is effective the day 
 70.6   following final enactment. 
 70.7      Sec. 3.  Minnesota Statutes 2002, section 297F.10, 
 70.8   subdivision 1, is amended to read: 
 70.9      Subdivision 1.  [TAX AND USE TAX ON CIGARETTES.] Revenue 
 70.10  received from cigarette taxes, as well as related penalties, 
 70.11  interest, license fees, and miscellaneous sources of revenue 
 70.12  shall be deposited by the commissioner in the state treasury and 
 70.13  credited as follows: 
 70.14     (a) first to the general obligation special tax bond debt 
 70.15  service account in each fiscal year the amount required to 
 70.16  increase the balance on hand in the account on each December 1 
 70.17  to an amount equal to the full amount of principal and interest 
 70.18  to come due on all outstanding bonds whose debt service is 
 70.19  payable primarily from the proceeds of the tax to and including 
 70.20  the second following July 1; and 
 70.21     (b) after the requirements of paragraph (a) have been met: 
 70.22     (1) the revenue produced by one mill 3.25 mills of the tax 
 70.23  on cigarettes weighing not more than three pounds a thousand and 
 70.24  two 6.5 mills of the tax on cigarettes weighing more than three 
 70.25  pounds a thousand must be credited to the Minnesota future 
 70.26  resources fund academic health center special revenue fund 
 70.27  hereby created and is annually appropriated to the board of 
 70.28  regents at the University of Minnesota for academic health 
 70.29  center funding at the University of Minnesota; and 
 70.30     (2) the revenue produced by 1.25 mills of the tax on 
 70.31  cigarettes weighing not more than three pounds a thousand and 
 70.32  2.5 mills of the tax on cigarettes weighing more than three 
 70.33  pounds a thousand must be credited to the medical education and 
 70.34  research costs special revenue fund hereby created and is 
 70.35  annually appropriated to the commissioner of health for medical 
 70.36  education and research funding at the department of health; and 
 71.1      (3) the balance of the revenues derived from taxes, 
 71.2   penalties, and interest (under this chapter) and from license 
 71.3   fees and miscellaneous sources of revenue shall be credited to 
 71.4   the general fund. 
 71.5      [EFFECTIVE DATE.] This section is effective for all 
 71.6   revenues received after June 30, 2003. 
 71.7      Sec. 4.  Laws 2001, First Special Session chapter 5, 
 71.8   article 12, section 95, as amended by Laws 2002, chapter 377, 
 71.9   article 3, section 24, is amended to read: 
 71.10     Sec. 95.  [REPEALER.] 
 71.11     (a) Minnesota Statutes 2000, sections 297A.61, subdivision 
 71.12  16; 297A.68, subdivision 21; and 297A.71, subdivision 2, are 
 71.13  repealed effective for sales and purchases occurring after June 
 71.14  30, 2001, except that the repeal of section 297A.61, subdivision 
 71.15  16, paragraph (d), is effective for sales and purchases 
 71.16  occurring after July 31, 2001. 
 71.17     (b) Minnesota Statutes 2000, sections 297A.62, subdivision 
 71.18  2, and 297A.64, subdivision 1, are repealed effective for sales 
 71.19  and purchases made after December 31, 2005. 
 71.20     (c) Minnesota Statutes 2000, section 297A.71, subdivision 
 71.21  15, is repealed effective for sales and purchases made after 
 71.22  June 30, 2002. 
 71.23     (d) Minnesota Statutes 2000, section 289A.60, subdivision 
 71.24  15, is repealed effective for liabilities after January 1, 2004. 
 71.25     (e) Minnesota Statutes 2000, section 297A.71, subdivision 
 71.26  16, is repealed effective for sales and purchases occurring 
 71.27  after December 31, 2002. 
 71.28     Sec. 5.  [REPEALER.] 
 71.29     Minnesota Statutes 2002, section 325E.112, subdivision 2a, 
 71.30  is repealed. 
 71.31     [EFFECTIVE DATE.] This section is effective July 1, 2003.