Minnesota Legislature
HF 1
1st Engrossment - 82nd Legislature, 2001 1st Special Session (2001 - 2002) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
Current Version - 1st Engrossment
1.1 A bill for an act 1.2 relating to the financing and operation of government 1.3 in this state; providing for payment of a sales tax 1.4 rebate; providing for education finance; providing 1.5 property tax reform; making changes to income, 1.6 corporate franchise, sales and use, property, motor 1.7 vehicle sales, motor vehicle registration, mortgage 1.8 registry, deed, insurance premiums, MinnesotaCare, 1.9 motor fuels, cigarette and tobacco, liquor, lawful 1.10 gambling, minerals, estate, and special taxes; 1.11 changing and allowing tax credits, subtractions, and 1.12 exemptions; conforming with changes in federal income 1.13 tax provisions; providing for allocation of income; 1.14 changing property tax valuation, assessment, levy, 1.15 classification, credit, aid, homestead, exemption, 1.16 review, appeal, and distribution provisions; imposing 1.17 a state property tax levy on certain property and 1.18 providing for use of the proceeds; providing a 1.19 property tax homestead credit; imposing levy limits; 1.20 changing certain property tax notice and hearing 1.21 provisions and authorizing waivers; abolishing certain 1.22 tax levies for metropolitan transit, establishing a 1.23 transit fund, and dedicating certain tax proceeds to 1.24 the fund; providing for local government aids; 1.25 changing certain provisions relating to biomass 1.26 facilities; providing for utility pass-through of 1.27 certain property tax reductions; allowing utility rate 1.28 adjustments for lowering emissions; providing for 1.29 uniform sales and use tax administration; providing 1.30 for taxation and incentive payments on forest lands; 1.31 providing for state takeover of certain costs of 1.32 district court administration and out-of-home 1.33 placements; reducing taconite production tax rates and 1.34 providing for state aid; providing for the 1.35 distribution of certain taconite production tax 1.36 payments; providing for electronic filing and payment 1.37 of taxes; changing procedures for disposition of 1.38 seized contraband; changing tax increment financing 1.39 provisions; providing for biomedical innovation 1.40 initiative grants; changing budget reserve provisions; 1.41 providing for payments in lieu of taxes; changing 1.42 provisions relating to property tax refunds; 1.43 authorizing special taxing districts; changing and 1.44 clarifying tax administration, collection, 1.45 enforcement, interest, and penalty provisions; 1.46 transferring administration and enforcement of the 2.1 Unfair Cigarette Sales Act from the commissioner of 2.2 revenue to the commissioner of commerce; changing 2.3 revenue recapture provisions; authorizing abatements 2.4 and waivers of fees and certain taxes in disaster 2.5 areas; changing and imposing fees; changing debt 2.6 collection provisions for student loans; providing 2.7 certain powers to certain political subdivisions; 2.8 providing certain duties and powers to the 2.9 commissioner of revenue; authorizing publication of 2.10 names of certain delinquent taxpayers; authorizing 2.11 border city allocations; changing provisions relating 2.12 to tax-forfeited lands and providing for tax-forfeited 2.13 lands transfers; defining a lottery and other terms; 2.14 classifying data; requiring studies and reports; 2.15 imposing penalties; appropriating money; amending 2.16 Minnesota Statutes 2000, sections 16A.152, 2.17 subdivisions 1a, 2; 16D.08, subdivision 2; 45.011, 2.18 subdivision 1; 69.021, subdivision 5; 84.922, by 2.19 adding a subdivision; 88.49, subdivisions 5, 9a; 2.20 88.491, subdivision 2; 97A.065, subdivision 2, as 2.21 amended; 103D.905, subdivision 3; 115B.24, subdivision 2.22 2; 116J.424; 123A.45, subdivisions 2, 6; 123B.42, 2.23 subdivision 3; 123B.53, subdivisions 2, 4, 5; 123B.54; 2.24 123B.75, subdivision 5; 123B.92, subdivision 9; 2.25 126C.01, subdivision 3; 126C.10, subdivisions 1, 2; 2.26 126C.13, subdivision 4; 126C.17, subdivisions 1, 2, 5, 2.27 6, 7, 8, by adding subdivisions; 126C.21, subdivision 2.28 4; 126C.48, subdivision 8; 126C.63, subdivision 8; 2.29 126C.69, subdivisions 2, 3, 9, 12, 15; 144.3831, 2.30 subdivision 2; 168.013, subdivision 1a; 168.017, 2.31 subdivision 3; 174.24, subdivision 3b; 179A.101, 2.32 subdivision 1; 179A.102, subdivision 6; 179A.103, 2.33 subdivision 1; 216B.2424, subdivision 5; 239.101, 2.34 subdivision 3; 256L.02, subdivision 3; 270.06; 270.07, 2.35 subdivision 3, by adding a subdivision; 270.271, 2.36 subdivisions 1, 3; 270.60, by adding a subdivision; 2.37 270.70, subdivision 13; 270.73, subdivision 1; 2.38 270.771; 270.78; 270A.03, subdivisions 5, 7; 270A.11; 2.39 270B.02, subdivisions 2, 3; 270B.03, subdivision 6; 2.40 271.01, subdivision 5; 271.21, subdivision 2; 272.02, 2.41 subdivisions 10, 22, by adding subdivisions; 273.061, 2.42 subdivisions 1, 2; 273.072, subdivision 1; 273.11, 2.43 subdivisions 1a, 14, by adding subdivisions; 273.1104, 2.44 subdivision 2; 273.111, subdivision 4; 273.121; 2.45 273.124, subdivisions 1, 8, 11, 13, 14; 273.13, 2.46 subdivisions 22, 23, 24, 25, 31; 273.134; 273.135, 2.47 subdivisions 1, 2; 273.136, subdivision 2; 273.1391, 2.48 subdivisions 2, 3; 273.1392; 273.1393; 273.1398, 2.49 subdivision 4a, by adding subdivisions; 273.166, 2.50 subdivisions 2, 3, 5; 273.42, by adding a subdivision; 2.51 274.01, subdivision 1; 274.13, subdivision 1; 275.02; 2.52 275.065, subdivisions 3, 5a, 6; 275.066; 275.07, 2.53 subdivision 1; 275.16; 275.28, subdivision 1; 275.61; 2.54 275.62, subdivision 1; 275.70, subdivision 5, by 2.55 adding subdivisions; 276.04, subdivision 2; 276.11, 2.56 subdivision 1; 276A.01, subdivisions 2, 3; 276A.06, 2.57 subdivision 3; 281.17; 282.01, subdivisions 1, 1b, 1c, 2.58 1d, 1e; 282.04, subdivision 2; 282.241; 287.035; 2.59 287.04; 287.08; 287.12; 287.13, by adding a 2.60 subdivision; 287.20, subdivisions 2, 9; 287.21, 2.61 subdivision 1; 287.28; 289A.02, subdivision 7, by 2.62 adding a subdivision; 289A.12, subdivision 3; 289A.18, 2.63 subdivision 4, as amended; 289A.20, subdivisions 1, 2, 2.64 4; 289A.26, subdivision 2a; 289A.31, subdivision 7; 2.65 289A.50, subdivisions 2, 2a; 289A.55, subdivision 9; 2.66 289A.60, subdivisions 1, 2, 7, 21, as amended, by 2.67 adding a subdivision; 290.01, subdivisions 6b, 7, 19, 2.68 19b, 19c, 19d, 22, 29, 31, by adding a subdivision; 2.69 290.014, subdivision 5; 290.05, subdivision 1; 290.06, 2.70 subdivisions 2c, 22, 23; 290.067, subdivisions 2, 2b; 2.71 290.0671, subdivisions 1, 1a, 7; 290.0674, subdivision 3.1 1; 290.0675, subdivisions 1, 3; 290.091, subdivision 3.2 2; 290.0921, subdivisions 1, 2, 3, 6; 290.0922, 3.3 subdivision 2; 290.093; 290.095, subdivision 2; 3.4 290.17, subdivisions 1, 4; 290.191, subdivision 2; 3.5 290.21, subdivision 4; 290.92, subdivision 23; 3.6 290.9725; 290A.03, subdivisions 6, 12, 13, 15; 3.7 290A.04, subdivisions 2, 2a, 2h, 4; 290A.15; 291.005, 3.8 subdivision 1; 295.50, subdivisions 3, 4, 15; 295.52, 3.9 subdivisions 4, 7; 295.55, subdivision 4; 295.57, 3.10 subdivision 1; 296A.07, subdivision 4; 296A.08, 3.11 subdivision 3; 296A.15, subdivisions 1, 7; 296A.16, 3.12 subdivision 2; 296A.21, subdivisions 1, 4; 296A.24, 3.13 subdivisions 1, 2; 297A.01, subdivision 5; 297A.07, 3.14 subdivision 3; 297A.25, subdivisions 3, 11, 28; 3.15 297A.61, subdivisions 2, 3, 4, 6, 7, 9, 10, 12, 14, 3.16 17, 19, 22, 23, by adding subdivisions; 297A.64, 3.17 subdivisions 3, 4; 297A.66, subdivisions 1, 3; 3.18 297A.67, subdivisions 2, 8, 23, 24, 25, by adding 3.19 subdivisions; 297A.68, subdivisions 2, 3, 5, 11, 13, 3.20 14, 18, 19, 25, by adding a subdivision; 297A.69, 3.21 subdivision 2; 297A.70, subdivisions 1, 2, 3, 4, 7, 8, 3.22 10, 13, 14; 297A.71, subdivision 6, by adding 3.23 subdivisions; 297A.72, subdivision 1; 297A.75; 3.24 297A.77, subdivision 1; 297A.80; 297A.82, subdivision 3.25 3, by adding a subdivision; 297A.86, subdivision 1; 3.26 297A.89, subdivision 1; 297A.90, subdivision 1; 3.27 297A.91; 297A.92, subdivision 2; 297A.94, as amended; 3.28 297A.99, subdivisions 7, 9, 11; 297B.03; 297B.09, 3.29 subdivision 1; 297E.02, subdivision 4; 297E.16, 3.30 subdivisions 1, 2; 297F.04, subdivision 1; 297F.09, 3.31 subdivision 7; 297F.13, subdivision 4; 297F.16, 3.32 subdivision 4; 297F.20, subdivision 3; 297F.21, 3.33 subdivisions 1, 2, 3; 297G.09, subdivision 6; 297G.15, 3.34 subdivision 4; 297G.16, subdivisions 5, 7; 297G.20, 3.35 subdivisions 3, 4; 297H.04, by adding a subdivision; 3.36 297H.06, by adding a subdivision; 297I.05, subdivision 3.37 5; 297I.20; 297I.35, subdivision 2; 297I.40, 3.38 subdivisions 1, 2, 7; 297I.85, subdivision 7; 298.01, 3.39 subdivisions 3b, 4c; 298.018, subdivisions 1, 2; 3.40 298.17; 298.22, subdivision 2, by adding a 3.41 subdivision; 298.2211, subdivision 2; 298.2213, 3.42 subdivision 3; 298.2214, subdivision 1; 298.223, 3.43 subdivision 1; 298.225, subdivision 1; 298.227; 3.44 298.24, subdivision 1; 298.28, subdivisions 3, 4, 6, 3.45 7, 9a, 10; 298.282, subdivision 1; 282.292, 3.46 subdivision 2; 298.293; 298.296, subdivision 2; 3.47 298.2961; 298.298; 298.75, subdivisions 1, 2; 299D.03, 3.48 subdivision 5; 325D.33, subdivision 8, by adding a 3.49 subdivision; 325D.405; 325D.415; 345.41; 349.19, 3.50 subdivision 2a; 357.021, subdivision 1a; 383A.80, 3.51 subdivision 1; 383B.80, subdivision 1; 461.12, by 3.52 adding a subdivision; 469.040, subdivision 5; 469.169, 3.53 by adding a subdivision; 469.1732, subdivision 1; 3.54 469.174, subdivisions 3, 10, 10a, 12; 469.175, 3.55 subdivisions 1, 6b, by adding a subdivision; 469.176, 3.56 subdivisions 1b, 1e, 3, 4g, by adding subdivisions; 3.57 469.1763, subdivision 6; 469.177, subdivisions 1, 11, 3.58 by adding a subdivision; 469.1771, subdivision 1; 3.59 469.178, by adding a subdivision; 469.1812, 3.60 subdivision 2; 469.1813, subdivision 6; 469.1814, by 3.61 adding a subdivision; 469.202, subdivision 2; 469.303; 3.62 471.58; 473.388, subdivisions 4, 7; 473.446, 3.63 subdivision 1; 473.843, subdivision 3; 473F.08, 3.64 subdivision 3; 475.53, subdivision 4; 475.58, 3.65 subdivision 1, as amended; 477A.011, subdivisions 35, 3.66 36; 477A.013, subdivisions 1, 9; 477A.03, subdivision 3.67 2; 477A.12; 477A.14; 480.181, subdivision 1; 487.33, 3.68 subdivision 5; 488A.03, by adding a subdivision; 3.69 488A.20, by adding a subdivision; 574.34, subdivision 3.70 1; 609.75, subdivision 1; Laws 1986, chapter 396, 3.71 section 5; Laws 1992, chapter 499, article 7, section 4.1 31, as amended; Laws 1997, chapter 231, article 1, 4.2 section 19, subdivision 3, as amended; Laws 1997, 4.3 chapter 231, article 1, section 22; Laws 1998, chapter 4.4 389, article 16, section 35, subdivision 1; Laws 1999, 4.5 chapter 243, article 4, section 19; Laws 2000, chapter 4.6 479, article 2, section 1; Laws 2000, chapter 490, 4.7 article 8, section 17; Laws 2000, chapter 490, article 4.8 11, section 26; proposing coding for new law in 4.9 Minnesota Statutes, chapters 12; 16A; 103B; 116J; 4.10 126C; 174; 216B; 270; 272; 273; 275; 290; 295; 296A; 4.11 297A; 297F; 297H; 383A; 469; 471; 477A; 480; 484; 4.12 proposing coding for new law as Minnesota Statutes, 4.13 chapters 144F; 290C; repealing Minnesota Statutes 4.14 2000, sections 16A.1521; 16A.76; 126C.10, subdivisions 4.15 9, 10, 11, 12, 19, 20, 21, 22; 126C.11; 126C.13, 4.16 subdivisions 1, 2, 3; 126C.30; 126C.31; 126C.32; 4.17 126C.33; 126C.34; 126C.35; 126C.36; 270.31; 270.32; 4.18 270.33; 270.34; 270.35; 270.36; 270.37; 270.38; 4.19 270.39; 273.126; 273.13, subdivision 24a; 273.1382; 4.20 273.1399; 275.078; 275.08, subdivision 1e; 289A.60, 4.21 subdivisions 3, 15; 290.06, subdivisions 25, 26; 4.22 290.0673; 290.095, subdivisions 1a, 7; 290.21, 4.23 subdivision 3; 290.23; 290.25; 290.31, subdivisions 2, 4.24 2a, 3, 4, 5, 19; 290.35; 290.9726, subdivision 7; 4.25 290A.04, subdivision 2j; 296A.16, subdivision 6; 4.26 296A.24, subdivision 3; 297A.61, subdivision 16; 4.27 297A.62, subdivision 2; 297A.64, subdivision 1; 4.28 297A.68, subdivision 21; 297A.71, subdivisions 2, 15, 4.29 16; 297B.032; 297E.16, subdivision 3; 297F.21, 4.30 subdivision 4; 297G.20, subdivision 5; 297I.05, 4.31 subdivision 8; 297I.30, subdivision 3; 325D.33, 4.32 subdivision 5; 462A.071; 469.1732, subdivision 2; 4.33 469.1734, subdivision 4; 469.1782, subdivision 1; 4.34 473.3915; 473.446, subdivisions 1a, 1b; Laws 1988, 4.35 chapter 426, section 1; Laws 1988, chapter 702, 4.36 section 16; Laws 1992, chapter 511, article 2, section 4.37 52, as amended; Laws 1996, chapter 471, article 8, 4.38 section 45; Laws 1999, chapter 243, article 6, 4.39 sections 14, 15; Laws 2000, chapter 490, article 6, 4.40 section 17; Minnesota Rules, parts 8120.0200; 4.41 8120.0500; 8120.0700; 8120.0900; 8120.1300; 8120.1600; 4.42 8120.2000; 8120.2100; 8120.2200; 8120.2300; 8120.2500; 4.43 8120.2700; 8120.2800; 8120.3000; 8120.3200; 8120.4300; 4.44 8120.4400; 8120.4500; 8120.4600; 8120.4900; 8120.5000; 4.45 8120.5100; 8120.5300. 4.46 4.47 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 4.48 ARTICLE 1 4.49 REBATE 4.50 Section 1. [STATEMENT OF PURPOSE.] 4.51 (a) The state of Minnesota derives revenues from a variety 4.52 of taxes, fees, and other sources, including the state sales tax. 4.53 (b) It is fair and reasonable to refund the existing state 4.54 budget surplus in the form of a rebate of nonbusiness consumer 4.55 sales taxes paid by individuals in calendar year 1999. 4.56 (c) Information concerning the amount of sales tax paid at 4.57 various income levels is contained in the Minnesota tax 4.58 incidence report, which is written by the commissioner of 5.1 revenue and presented to the legislature according to Minnesota 5.2 Statutes, section 270.0682. 5.3 (d) It is fair and reasonable to use information contained 5.4 in the Minnesota tax incidence report to determine the 5.5 proportionate share of the sales tax rebate due each eligible 5.6 taxpayer since no effective or practical mechanism exists for 5.7 determining the amount of actual sales tax paid by each eligible 5.8 individual. 5.9 Sec. 2. [SALES TAX REBATE.] 5.10 Subdivision 1. [ELIGIBILITY; REBATE BASED ON INCOME.] An 5.11 individual who was a resident of Minnesota for any part of 1999, 5.12 and filed a 1999 Minnesota income tax return on or before 5.13 November 30, 2001, and had a tax liability before refundable 5.14 credits on that return of at least $1 and who was not allowed to 5.15 be claimed as a dependent on a 1999 federal income tax return 5.16 filed by another person is eligible for a sales tax rebate based 5.17 on income under either subdivision 2 or 3. 5.18 Subd. 2. [MARRIED JOINT AND HEAD OF HOUSEHOLD FILERS.] The 5.19 sales tax rebate for taxpayers who qualify under subdivision 1 5.20 and are married filing joint or head of household filers is 5.21 computed according to the following schedule: 5.22 Income Sales Tax Rebate 5.23 less than $2,500 $233 5.24 at least $2,500 but less than $5,000 $289 5.25 at least $5,000 but less than $10,000 $303 5.26 at least $10,000 but less than $15,000 $334 5.27 at least $15,000 but less than $20,000 $379 5.28 at least $20,000 but less than $25,000 $409 5.29 at least $25,000 but less than $30,000 $436 5.30 at least $30,000 but less than $35,000 $474 5.31 at least $35,000 but less than $40,000 $516 5.32 at least $40,000 but less than $45,000 $560 5.33 at least $45,000 but less than $50,000 $595 5.34 at least $50,000 but less than $60,000 $609 5.35 at least $60,000 but less than $70,000 $636 5.36 at least $70,000 but less than $80,000 $692 6.1 at least $80,000 but less than $90,000 $748 6.2 at least $90,000 but less than $100,000 $809 6.3 at least $100,000 but less than $120,000 $877 6.4 at least $120,000 but less than $140,000 $960 6.5 at least $140,000 but less than $160,000 $1,038 6.6 at least $160,000 but less than $180,000 $1,111 6.7 at least $180,000 but less than $200,000 $1,181 6.8 at least $200,000 but less than $400,000 $1,510 6.9 at least $400,000 but less than $600,000 $1,987 6.10 at least $600,000 but less than $800,000 $2,384 6.11 at least $800,000 but less than $1,000,000 $2,733 6.12 $1,000,000 and over $3,250 6.13 Subd. 3. [SINGLE AND MARRIED SEPARATE FILERS.] The sales 6.14 tax rebate for individuals who qualify under subdivision 1 as 6.15 single or married filing separately must be computed according 6.16 to the following schedule: 6.17 Income Sales Tax Rebate 6.18 less than $2,500 $118 6.19 at least $2,500 but less than $5,000 $124 6.20 at least $5,000 but less than $10,000 $165 6.21 at least $10,000 but less than $15,000 $196 6.22 at least $15,000 but less than $20,000 $227 6.23 at least $20,000 but less than $25,000 $253 6.24 at least $25,000 but less than $30,000 $305 6.25 at least $30,000 but less than $40,000 $329 6.26 at least $40,000 but less than $50,000 $363 6.27 at least $50,000 but less than $70,000 $465 6.28 at least $70,000 but less than $100,000 $644 6.29 at least $100,000 but less than $140,000 $776 6.30 at least $140,000 but less than $200,000 $937 6.31 at least $200,000 but less than $400,000 $1,270 6.32 $400,000 and over $1,625 6.33 Subd. 4. [NONRESIDENTS.] Individuals who were not 6.34 residents of Minnesota for any part of 1999 and who paid more 6.35 than $10 in Minnesota sales tax under Minnesota Statutes, 6.36 chapter 297A, on nonbusiness consumer purchases in that year 7.1 qualify for a rebate under this subdivision only. Qualifying 7.2 nonresidents must file a claim for rebate on a form prescribed 7.3 by the commissioner by November 30, 2001. The claim must 7.4 include receipts showing the Minnesota sales tax paid and the 7.5 date of the sale. Taxes paid on purchases allowed in the 7.6 computation of federal taxable income or reimbursed by an 7.7 employer are not eligible for the rebate. The commissioner 7.8 shall determine the qualifying taxes paid and rebate the lesser 7.9 of: 7.10 (1) 40.45 percent of that amount; or 7.11 (2) the maximum amount for which the claimant would have 7.12 been eligible as determined under subdivision 2 if the taxpayer 7.13 filed the 1999 federal income tax return as a married taxpayer 7.14 filing jointly or head of household, or as determined under 7.15 subdivision 3 for other taxpayers. 7.16 Subd. 5. [DEFINITION OF INCOME.] "Income," for purposes of 7.17 this section other than subdivision 4, is taxable income as 7.18 defined in section 63 of the Internal Revenue Code of 1986, as 7.19 amended through December 31, 1998, plus the sum of any additions 7.20 to federal taxable income for the taxpayer under Minnesota 7.21 Statutes, section 290.01, subdivision 19a, and reported on the 7.22 original 1999 income tax return, including subsequent 7.23 adjustments to that return made within the time limits specified 7.24 in subdivision 12. For an individual who was a resident of 7.25 Minnesota for less than the entire year, the sales tax rebate 7.26 equals the sales tax rebate calculated under subdivision 2 or 3 7.27 multiplied by the percentage determined pursuant to Minnesota 7.28 Statutes, section 290.06, subdivision 2c, paragraph (e), as 7.29 calculated on the original 1999 income tax return, including 7.30 subsequent adjustments to that return made within the time 7.31 limits specified in subdivision 12. For purposes of subdivision 7.32 4, "income" is taxable income as defined in section 63 of the 7.33 Internal Revenue Code of 1986, as amended through December 31, 7.34 1998, and reported on the taxpayer's original federal tax return 7.35 for the first taxable year beginning after December 31, 1998. 7.36 Subd. 6. [SOCIAL SECURITY AND PUBLIC PENSION 8.1 RECIPIENTS.] (a) An individual qualifies for a rebate of $118 8.2 under this subdivision if the individual: 8.3 (1) was a resident of Minnesota for all of calendar year 8.4 1999; 8.5 (2) is not eligible for a rebate under subdivision 9; 8.6 (3) attained the age of 18 on or before December 31, 1999; 8.7 and 8.8 (4)(i) received social security benefits as defined in 8.9 section 86(d)(1) of the Internal Revenue Code of 1986, as 8.10 amended through December 31, 2000, in calendar year 1999; or 8.11 (ii) received federal, state or local public pension or 8.12 disability benefits in calendar year 1999. 8.13 (b) An individual or married couple who qualifies for a 8.14 rebate under both this subdivision and subdivision 1 is eligible 8.15 for the rebate under whichever subdivision provides a larger 8.16 amount. 8.17 (c) If the Social Security Administration, Railroad 8.18 Retirement Board, or the administrator of a public pension is 8.19 paying benefits to a recipient by electronic funds transfers in 8.20 calendar year 2001, the commissioner may pay the rebate under 8.21 this subdivision through electronic funds transfer to the same 8.22 financial institution and into the same account into which those 8.23 benefits are transferred in calendar year 2001. 8.24 (d) For purposes of this subdivision, "public pension plan 8.25 administrator" means (1) a state and local public pension 8.26 administrator, (2) the federal Civil Service Retirement System, 8.27 (3) the United States Department of Defense for the military 8.28 retirement and survivors benefit programs, and (4) the Federal 8.29 Employees Retirement System. 8.30 (e) A state and local public pension administrator is an 8.31 entity paying benefits under a pension plan enumerated in 8.32 Minnesota Statutes, section 356.20, subdivision 2. Each state 8.33 and local pension administrator shall provide to the 8.34 commissioner of revenue, in a form the commissioner prescribes, 8.35 a list of individuals to whom it pays benefits that meet the 8.36 requirements of paragraph (a), clauses (1) and (3). 9.1 Subd. 7. [DEPENDENTS.] An individual who: 9.2 (1) was allowed to be claimed as a dependent on a 1999 9.3 federal income tax return filed by another person; 9.4 (2) would have otherwise been eligible for a rebate under 9.5 subdivision 1; and 9.6 (3) reported earned income as defined in section 9.7 32(c)(2)(A)(i) of the Internal Revenue Code, 9.8 is eligible for a rebate under this subdivision only. The 9.9 rebate under this subdivision equals 35 percent of the amount 9.10 allowed under the schedule in subdivision 3 based on the 9.11 individual's income. For an individual who was a resident of 9.12 Minnesota for less than the entire year, the sales tax rebate 9.13 equals the rebate calculated under this subdivision multiplied 9.14 by the percentage determined pursuant to Minnesota Statutes, 9.15 section 290.06, subdivision 2c, paragraph (e), as calculated on 9.16 the original 1999 income tax return. 9.17 Subd. 8. [CREDIT RECIPIENTS.] An individual who 9.18 (1) was a resident of Minnesota for any part of 1999; 9.19 (2) was not eligible for a rebate under subdivision 1, 6, 9.20 or 9; 9.21 (3) was not allowed to be claimed as a dependent on a 1999 9.22 federal income tax return by another person; and 9.23 (4)(i) claimed and was eligible for a refund under 9.24 Minnesota Statutes, chapter 290A, for property taxes paid in 9.25 2000 or rent constituting property taxes paid in 1999 on or 9.26 before November 30, 2001; or 9.27 (ii) filed 1999 Minnesota and federal income tax returns 9.28 before November 30, 2001, in order to 9.29 (A) claim a credit under Minnesota Statutes, section 9.30 290.067, 290.0671, or 290.0674; 9.31 (B) claim a refund of withheld taxes; or 9.32 (C) claim a refund of estimated taxes, 9.33 is eligible for a rebate under this subdivision only. For 9.34 married couples filing joint returns and heads of households, 9.35 the rebate equals the minimum amount in subdivision 2. For 9.36 single filers and married individuals filing separate returns, 10.1 the rebate equals the minimum amount in subdivision 3. For 10.2 individuals who qualify for a rebate under clause (4)(i), the 10.3 rebate equals the minimum amount in subdivision 3 unless the 10.4 property tax refund return is a joint return and neither of the 10.5 joint filers qualifies for a rebate under any of the other 10.6 rebate criteria in which case the rebate equals the minimum 10.7 amount in subdivision 2. For an individual who was a resident 10.8 of Minnesota for less than the entire year, the sales tax rebate 10.9 equals the rebate calculated under this subdivision multiplied 10.10 by the percentage determined under Minnesota Statutes, section 10.11 290.06, subdivision 2c, paragraph (e), as calculated on the 10.12 original 1999 income tax return. Notwithstanding the provisions 10.13 of Minnesota Statutes, section 289A.60, subdivision 12, an 10.14 individual who files a property tax refund claim for property 10.15 taxes paid in 2000 or rent constituting property taxes paid in 10.16 1999 after August 15, 2001, and before November 30, 2001, is 10.17 eligible for a refund under Minnesota Statutes, chapter 290A, 10.18 and a rebate under this subdivision. 10.19 Subd. 9. [CLAIMS BASED ON FEDERAL LIABILITIES.] An 10.20 individual who: 10.21 (1) was a resident of Minnesota for any part of 1999; 10.22 (2) filed 1999 Minnesota and federal income tax returns on 10.23 or before November 30, 2001; 10.24 (3) had federal taxable income on the federal return of at 10.25 least $5; and 10.26 (4) does not qualify for a rebate under subdivision 1 or 7, 10.27 is eligible for a rebate under this subdivision only. 10.28 An individual who was allowed to be claimed as a dependent on a 10.29 1999 federal income tax return filed by another person is 10.30 eligible for a rebate under this subdivision only if the 10.31 individual had in 1999 earned income as defined in section 10.32 32(c)(2)(A)(i) of the Internal Revenue Code; the rebate of a 10.33 dependent eligible for a rebate under this subdivision equals 35 10.34 percent of the amount allowed under the schedule in subdivision 10.35 3 based on the individual's income. For all other individuals 10.36 who qualify under this subdivision, the rebate equals the amount 11.1 allowed based on the individual's income under the schedule in 11.2 subdivision 2 for married couples filing joint returns and heads 11.3 of household and the amount allowed based on the individual's 11.4 income under the schedule in subdivision 3 for single filers and 11.5 married individuals filing separately; provided, however, that 11.6 any rebate payable under this subdivision to an individual who 11.7 was a part-year resident of Minnesota in 1999 must be prorated 11.8 according to the formula applicable to part-year residents in 11.9 subdivision 5. 11.10 Subd. 10. [FISCAL YEAR TAXPAYERS.] For a fiscal year 11.11 taxpayer, the dates in subdivisions 1 through 4 are extended one 11.12 month for each month in calendar year 1999 that occurred prior 11.13 to the start of the individual's 1999 fiscal tax year. 11.14 Subd. 11. [PAYMENT DATES; INTEREST.] The commissioner of 11.15 revenue may begin paying sales tax rebates by July 1, 2001. 11.16 Sales tax rebates not paid by January 1, 2002, bear interest at 11.17 the rate specified in Minnesota Statutes, section 270.75. 11.18 Subd. 12. [NO ADJUSTMENTS AFTER PROCESSING.] A sales tax 11.19 rebate may not be adjusted based on changes to a 1999 income tax 11.20 return that are made by order of assessment after the date the 11.21 rebate is processed, or made by the taxpayer that are filed with 11.22 the commissioner of revenue after that date. 11.23 Subd. 13. [JOINT REBATE RULES.] Individuals who filed a 11.24 joint income tax return for 1999 must receive a joint sales tax 11.25 rebate. After the sales tax rebate has been issued, but before 11.26 the check has been cashed, either joint claimant may request a 11.27 separate check for one-half of the joint sales tax rebate. 11.28 Notwithstanding anything in this section to the contrary, if 11.29 prior to payment, the commissioner has been notified that 11.30 persons who filed a joint 1999 income tax return are living at 11.31 separate addresses, as indicated on their 2000 income tax return 11.32 or otherwise, the commissioner may issue separate checks to each 11.33 person. The amount payable to each person is one-half of the 11.34 total joint rebate. 11.35 Subd. 14. [DECEASED INDIVIDUALS.] If a rebate is received 11.36 by the estate of a deceased individual after the probate estate 12.1 has been closed, and if the original rebate check is returned to 12.2 the commissioner with a copy of the decree of descent or final 12.3 account of the estate, social security numbers, and addresses of 12.4 the beneficiaries, the commissioner may issue separate checks in 12.5 proportion to their share in the residuary estate in the names 12.6 of the residuary beneficiaries of the estate. 12.7 Subd. 15. [APPLICATION OF OTHER LAW.] (a) The sales tax 12.8 rebate is a "Minnesota tax law" for purposes of Minnesota 12.9 Statutes, section 270B.01, subdivision 8. 12.10 (b) The sales tax rebate is "an overpayment of any tax 12.11 collected by the commissioner" for purposes of Minnesota 12.12 Statutes, section 270.07, subdivision 5. For purposes of this 12.13 subdivision, a joint sales tax rebate is payable to each spouse 12.14 equally. 12.15 (c) The sales tax rebate is a refund subject to revenue 12.16 recapture under Minnesota Statutes, chapter 270A. The 12.17 commissioner of revenue shall remit the entire refund to the 12.18 claimant agency, which shall, upon the request of the spouse who 12.19 does not owe the debt, refund one-half of the joint sales tax 12.20 rebate to the spouse who does not owe the debt. 12.21 Subd. 16. [LAPSE OF ENTITLEMENT.] If the commissioner of 12.22 revenue cannot locate an individual entitled to a sales tax 12.23 rebate by July 1, 2003, or if an individual to whom a sales tax 12.24 rebate was issued has not cashed the check by July 1, 2003, the 12.25 right to the sales tax rebate lapses and the check must be 12.26 deposited in the general fund. 12.27 Subd. 17. [CLAIMS FOR UNPAID REBATES.] Individuals 12.28 entitled to a sales tax rebate pursuant to subdivision 1, 6, 7, 12.29 8, or 9 but who did not receive one, and individuals who receive 12.30 a sales tax rebate that was not correctly computed, must file a 12.31 claim with the commissioner before July 1, 2002, in a form 12.32 prescribed by the commissioner. These claims must be treated as 12.33 if they are a claim for refund under Minnesota Statutes, section 12.34 289A.50, subdivisions 4 and 7. 12.35 Subd. 18. [APPROPRIATION.] The rebate is a reduction of 12.36 fiscal year 2001 sales tax revenues. The amount necessary to 13.1 make the sales tax rebates and interest provided in this section 13.2 is appropriated from the general fund to the commissioner of 13.3 revenue in fiscal year 2001 and is available until June 30, 2003. 13.4 Subd. 19. [ILLEGALLY CASHED CHECKS.] If a sales tax rebate 13.5 check is cashed by someone other than the payee or payees of the 13.6 check, and the commissioner of revenue determines that the check 13.7 has been forged or improperly endorsed or the commissioner 13.8 determines that a rebate was overstated or erroneously issued, 13.9 the commissioner may issue an order of assessment for the amount 13.10 of the check or the amount the check is overstated against the 13.11 person or persons cashing it. The assessment must be made 13.12 within two years after the check is cashed, but if cashing the 13.13 check constitutes theft under Minnesota Statutes, section 13.14 609.52, or forgery under Minnesota Statutes, section 609.631, 13.15 the assessment can be made at any time. The assessment may be 13.16 appealed administratively and judicially. The commissioner may 13.17 take action to collect the assessment in the same manner as 13.18 provided by Minnesota Statutes, chapter 289A, for any other 13.19 order of the commissioner assessing tax. 13.20 Subd. 20. [AUTHORITY TO CONTRACT WITH VENDOR.] 13.21 Notwithstanding Minnesota Statutes, sections 9.031, 16A.40, 13.22 16B.49, 16B.50, and any other law to the contrary, the 13.23 commissioner of revenue may take whatever actions the 13.24 commissioner deems necessary to pay the rebates required by this 13.25 section, and may, in consultation with the commissioner of 13.26 finance and the state treasurer, contract with a private vendor 13.27 or vendors to process, print, and mail the rebate checks or 13.28 warrants required under this section and receive and disburse 13.29 state funds to pay those checks or warrants. 13.30 Subd. 21. [ELECTRONIC PAYMENT.] The commissioner may pay 13.31 rebates required by this section by electronic funds transfer to 13.32 individuals who requested that their 2000 individual income tax 13.33 refund be paid through electronic funds transfer. The 13.34 commissioner may make the electronic funds transfer payments to 13.35 the same financial institution and into the same account as the 13.36 2000 individual income tax refund. 14.1 Subd. 22. [ADJUSTMENTS.] A sales tax rebate of 14.2 $852,080,000 is authorized for fiscal year 2001. Before 14.3 payment, the commissioner of revenue shall adjust the rebate as 14.4 follows: 14.5 (1) the rebates calculated in subdivisions 2, 3, 4, 6, 7, 14.6 8, and 9 must be proportionately reduced to account for 1999 14.7 income tax returns that are filed on or after January 1, 2001, 14.8 but before June 1, 2001, so that the estimated amount of sales 14.9 tax rebates payable under subdivisions 2, 3, 4, 6, 7, 8, and 9 14.10 on the date the rebate is processed does not exceed the total 14.11 amount available for the rebate; and 14.12 (2) the commissioner of finance shall certify by July 15, 14.13 2001, the preliminary fiscal 2001 general fund net nondedicated 14.14 revenues. If certified net nondedicated revenues are less than 14.15 the amount forecast in February 2001, the commissioner of 14.16 revenue shall proportionally decrease all rebates under this 14.17 section to rebate the entire amount of the certified net 14.18 nondedicated revenues. The adjustments under this subdivision 14.19 are not a rule subject to Minnesota Statutes, chapter 14. 14.20 [EFFECTIVE DATE.] This section is effective the day 14.21 following final enactment. 14.22 Sec. 3. [APPROPRIATIONS.] 14.23 (a) $1,750,000 is appropriated in fiscal year 2001 from the 14.24 general fund to the commissioner of revenue to administer the 14.25 sales tax rebates in section 2. Any unencumbered balance 14.26 remaining on June 30, 2001, does not cancel but is available for 14.27 expenditure by the commissioner of revenue until June 30, 2002. 14.28 Notwithstanding Minnesota Statutes, section 16A.285, the 14.29 commissioner of revenue may not use this appropriation for any 14.30 purpose other than administering the sales tax rebates. This is 14.31 a one-time appropriation and may not be added to the agency's 14.32 budget base. 14.33 (b) $401,000 is appropriated in fiscal year 2001 from the 14.34 general fund to the state treasurer to pay the cost of clearing 14.35 sales tax rebate checks through commercial banks. Any 14.36 unencumbered balance remaining on June 30, 2001, does not cancel 15.1 but is available for expenditure by the state treasurer until 15.2 June 30, 2002. Notwithstanding Minnesota Statutes, section 15.3 16A.285, the state treasurer may not use this appropriation for 15.4 any purpose other than paying the cost of clearing rebate checks. 15.5 [EFFECTIVE DATE.] This section is effective the day 15.6 following final enactment. 15.7 ARTICLE 2 15.8 EDUCATION FINANCE 15.9 Section 1. Minnesota Statutes 2000, section 123B.42, 15.10 subdivision 3, is amended to read: 15.11 Subd. 3. [COST; LIMITATION.] (a) The cost per pupil of the 15.12 textbooks, individualized instructional or cooperative learning 15.13 materials, and standardized tests provided for in this section 15.14 for each school year must not exceed the statewide average 15.15 expenditure per pupil, adjusted pursuant to clause (b), by the 15.16 Minnesota public elementary and secondary schools for textbooks, 15.17 individualized instructional materials and standardized tests as 15.18 computed and established by the department byMarchFebruary 1 15.19 of the preceding school year from the most recent public school 15.20 year data then available. 15.21 (b) The cost computed in clause (a) shall be increased by 15.22 an inflation adjustment equal to the percent of increase in the 15.23 formula allowance, pursuant to section 126C.10, subdivision 2, 15.24 from the second preceding school year to the current school year. 15.25 Notwithstanding the amount of the formula allowance for fiscal 15.26 years 2003 and 2004 in section 126C.10, subdivision 2, the 15.27 commissioner shall use the amount of the formula allowance for 15.28 the current year minus $415 in determining the inflation 15.29 adjustment for those fiscal years. 15.30 (c) The commissioner shall allot to the districts or 15.31 intermediary service areas the total cost for each school year 15.32 of providing or loaning the textbooks, individualized 15.33 instructional or cooperative learning materials, and 15.34 standardized tests for the pupils in each nonpublic school. The 15.35 allotment shall not exceed the product of the statewide average 15.36 expenditure per pupil, according to clause (a), adjusted 16.1 pursuant to clause (b), multiplied by the number of nonpublic 16.2 school pupils who make requests pursuant to this section and who 16.3 are enrolled as of September 15 of the current school year. 16.4 [EFFECTIVE DATE.] This section is effective for fiscal year 16.5 2003 and thereafter. 16.6 Sec. 2. Minnesota Statutes 2000, section 123B.53, 16.7 subdivision 2, is amended to read: 16.8 Subd. 2. [ELIGIBILITY.] (a) The following portions of a 16.9 district's debt service levy qualify for debt service 16.10 equalization: 16.11 (1) debt service for repayment of principal and interest on 16.12 bonds issued before July 2, 1992; 16.13 (2) debt service for bonds refinanced after July 1, 1992, 16.14 if the bond schedule has been approved by the commissioner and, 16.15 if necessary, adjusted to reflect a 20-year maturity schedule; 16.16 and 16.17 (3) debt service for bonds issued after July 1, 1992, for 16.18 construction projects that have received a positive review and 16.19 comment according to section 123B.71, if the commissioner has 16.20 determined that the district has met the criteria under section 16.21 126C.69, subdivision 3,except section 126C.69, subdivision 3,16.22paragraph (a), clause (2),and if the bond schedule has been 16.23 approved by the commissioner and, if necessary, adjusted to 16.24 reflect a 20-year maturity schedule. 16.25 (b) The criterion described in section 126C.69, subdivision 16.26 3, paragraph (a), clause (9), does not apply to bonds authorized 16.27 by elections held before July 1, 1992. 16.28 (c) For the purpose of this subdivision the department 16.29 shall determine the eligibility for sparsity at the location of 16.30 the new facility, or the site of the new facility closest to the 16.31 nearest operating school if there is more than one new facility. 16.32 (d) Notwithstanding paragraphs (a) to (c), debt service for 16.33 repayment of principal and interest on bonds issued after July 16.34 1, 1997, does not qualify for debt service equalization aid 16.35 unless the primary purpose of the facility is to serve students 16.36 in kindergarten through grade 12. 17.1 [EFFECTIVE DATE.] This section is effective for fiscal year 17.2 2003 and thereafter. 17.3 Sec. 3. Minnesota Statutes 2000, section 123B.53, 17.4 subdivision 4, is amended to read: 17.5 Subd. 4. [DEBT SERVICE EQUALIZATION REVENUE.] (a) The debt 17.6 service equalization revenue of a district equals the sum of the 17.7 first tier debt service equalization revenue and the second tier 17.8 debt service equalization revenue. 17.9 (b) The first tier debt service equalization revenue of a 17.10 district equals the greater of zero or the eligible debt service 17.11 revenue minus the amount raised by a levy of1215 percent times 17.12 the adjusted net tax capacity of the district minus the second 17.13 tier debt service equalization revenue of the district. 17.14 (c) The second tier debt service equalization revenue of a 17.15 district equals the greater of zero or the eligible debt service 17.16 revenue minus the amount raised by a levy of 25 percent times 17.17 the adjusted net tax capacity of the district. 17.18 [EFFECTIVE DATE.] This section is effective for fiscal year 17.19 2003 and thereafter. 17.20 Sec. 4. Minnesota Statutes 2000, section 123B.53, 17.21 subdivision 5, is amended to read: 17.22 Subd. 5. [EQUALIZED DEBT SERVICE LEVY.]To obtain debt17.23service equalization revenue, a district must levy an amount not17.24to exceed the district's debt service equalization revenue(a) 17.25 The equalized debt service levy of a district equals the sum of 17.26 the first tier equalized debt service levy and the second tier 17.27 equalized debt service levy. 17.28 (b) A district's first tier equalized debt service levy 17.29 equals the district's first tier debt service equalization 17.30 revenue times the lesser of one or the ratio of: 17.31 (1) the quotient derived by dividing the adjusted net tax 17.32 capacity of the district for the year before the year the levy 17.33 is certified by the adjusted pupil units in the district for the 17.34 school year ending in the year prior to the year the levy is 17.35 certified; to 17.36 (2)$4,000$3,200. 18.1 (c) A district's second tier equalized debt service levy 18.2 equals the district's second tier debt service equalization 18.3 revenue times the lesser of one or the ratio of: 18.4 (1) the quotient derived by dividing the adjusted net tax 18.5 capacity of the district for the year before the year the levy 18.6 is certified by the adjusted pupil units in the district for the 18.7 school year ending in the year prior to the year the levy is 18.8 certified; to 18.9 (2) $8,000. 18.10 [EFFECTIVE DATE.] This section is effective for taxes 18.11 payable in 2002 and revenue in fiscal year 2003, and thereafter. 18.12 Sec. 5. Minnesota Statutes 2000, section 123B.54, is 18.13 amended to read: 18.14 123B.54 [DEBT SERVICE APPROPRIATION.] 18.15 (a)$33,141,000 in fiscal year 2000, $29,400,000 in fiscal18.16year 2001, $26,934,000 in fiscal year 2002, and $24,540,000 in18.17fiscal year 2003 and each year thereafter is$31,787,000 in 18.18 fiscal year 2004 and $26,453,000 in fiscal years 2005 and later 18.19 are appropriated from the general fund to the commissioner of 18.20 children, families, and learning for payment of debt service 18.21 equalization aid under section 123B.53. 18.22 (b) The appropriations in paragraph (a) must be reduced by 18.23 the amount of any money specifically appropriated for the same 18.24 purpose in any year from any state fund. 18.25 [EFFECTIVE DATE.] This section is effective for fiscal year 18.26 2003 and thereafter. 18.27 Sec. 6. Minnesota Statutes 2000, section 123B.75, 18.28 subdivision 5, is amended to read: 18.29 Subd. 5. [LEVY RECOGNITION.] (a) "School district tax 18.30 settlement revenue" means the current, delinquent, and 18.31 manufactured home property tax receipts collected by the county 18.32 and distributed to the school district. 18.33 (b) In June ofeach year2001, the school district must 18.34 recognize as revenue, in the fund for which the levy was made, 18.35 the lesser of: 18.36 (1) the sum of May, June, and July school district tax 19.1 settlement revenue received in that calendar year plus general 19.2 education aid according to section 126C.13, subdivision 4, 19.3 received in July and August of that calendar year; or 19.4 (2) the sum of: 19.5 (i) 31 percent of the referendum levy certified in the 19.6 prior calendar year according to section 126C.17, subdivision 9; 19.7 plus 19.8 (ii) the entire amount of the levy certified in the prior 19.9 calendar year according to sections 124D.86, subdivision 4, for 19.10 school districts receiving revenue under 124D.86, subdivision 3, 19.11 clauses (1), (2), and (3); 126C.41, subdivisions 1, 2, and 3, 19.12 paragraphs (4), (5), and (6); 126C.43, subdivision 2; and 19.13 126C.48, subdivision 6. 19.14 (c) For fiscal year 2002 and later years, in June of each 19.15 year, the school district must recognize as revenue, in the fund 19.16 for which the levy was made, the lesser of: 19.17 (1) the sum of May, June, and July school district tax 19.18 settlement revenue received in that calendar year, plus general 19.19 education aid according to section 126C.13, subdivision 4, 19.20 received in July and August of that calendar year; or 19.21 (2) the sum of: 19.22 (i) 31 percent of the referendum levy certified according 19.23 to section 126C.17, in calendar year 2000; plus 19.24 (ii) the entire amount of the levy certified in the prior 19.25 calendar year according to section 124D.86, subdivision 4, for 19.26 school districts receiving revenue under sections 124D.86, 19.27 subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions 19.28 1, 2, and 3, paragraphs (4), (5), and (6); 126C.43, subdivision 19.29 2; and 126C.48, subdivision 6. 19.30 [EFFECTIVE DATE.] This section is effective June 30, 2001. 19.31 Sec. 7. Minnesota Statutes 2000, section 123B.92, 19.32 subdivision 9, is amended to read: 19.33 Subd. 9. [NONPUBLIC PUPIL TRANSPORTATION AID.] (a) A 19.34 district's nonpublic pupil transportation aid for the 1996-1997 19.35 and later school years for transportation services for nonpublic 19.36 school pupils according to sections 123B.88, 123B.84 to 123B.86, 20.1 and this section, equals the sum of the amounts computed in 20.2 paragraphs (b) and (c). This aid does not limit the obligation 20.3 to transport pupils under sections 123B.84 to 123B.87. 20.4 (b) For regular and excess transportation according to 20.5 subdivision 1, paragraph (b), clauses (1) and (2), an amount 20.6 equal to the product of: 20.7 (1) the district's actual expenditure per pupil transported 20.8 in the regular and excess transportation categories during the 20.9 second preceding school year; times 20.10 (2) the number of nonpublic school pupils residing in the 20.11 district who receive regular or excess transportation service or 20.12 reimbursement for the current school year; times 20.13 (3) the ratio of the formula allowance pursuant to section 20.14 126C.10, subdivision 2, for the current school year to the 20.15 formula allowance pursuant to section 126C.10, subdivision 2, 20.16 for the second preceding school year. 20.17 (c) For nonpublic nonregular transportation according to 20.18 subdivision 1, paragraph (b), clause (5), an amount equal to the 20.19 product of: 20.20 (1) the district's actual expenditure for nonpublic 20.21 nonregular transportation during the second preceding school 20.22 year; times 20.23 (2) the ratio of the formula allowance pursuant to section 20.24 126C.10, subdivision 2, for the current school year to the 20.25 formula allowance pursuant to section 126C.10, subdivision 2, 20.26 for the second preceding school year. 20.27 (d) Notwithstanding the amount of the formula allowance for 20.28 fiscal years 2000, 2001, and 2002 in section 126C.10, 20.29 subdivision 2, the commissioner shall use the amount of the 20.30 formula allowance for the current year plus $87 in determining 20.31 the nonpublic pupil transportation revenue in paragraphs (b) and 20.32 (c) for fiscal year 2000, and the amount of the formula 20.33 allowance less $110 in determining the nonpublic pupil 20.34 transportation revenue in paragraphs (b) and (c) for fiscal 20.35 years 2001 and 2002. 20.36 (e) Notwithstanding the amount of the formula allowance for 21.1 fiscal years 2003 and 2004 in section 126C.10, subdivision 2, 21.2 the commissioner shall use the amount of the formula allowance 21.3 for the current year minus $415 in determining the nonpublic 21.4 pupil transportation revenue in paragraphs (b) and (c) for those 21.5 fiscal years. 21.6 [EFFECTIVE DATE.] This section is effective for fiscal year 21.7 2003 and thereafter. 21.8 Sec. 8. Minnesota Statutes 2000, section 126C.01, 21.9 subdivision 3, is amended to read: 21.10 Subd. 3. [REFERENDUM MARKET VALUE.] "Referendum market 21.11 value" means the market value of all taxable property,except21.12thatexcluding property classified as class 2, noncommercial 21.13 4c(1), or 4c(4) under section 273.13. The portion of class 2a 21.14 property consisting of the house, garage, and surrounding one 21.15 acre of land of an agricultural homestead is included in 21.16 referendum market value. Any class of property, or any portion 21.17 of a class of property,withthat is included in the definition 21.18 of referendum market value and that has a class rate of less 21.19 than one percent under section 273.13 shall have a referendum 21.20 market value equal to its net tax capacity multiplied by 100. 21.21 [EFFECTIVE DATE.] This section is effective for taxes 21.22 payable in 2002 and thereafter. 21.23 Sec. 9. Minnesota Statutes 2000, section 126C.10, 21.24 subdivision 1, is amended to read: 21.25 Subdivision 1. [GENERAL EDUCATION REVENUE.] (a) For fiscal 21.26 year2000 and thereafter2002, the general education revenue for 21.27 each district equals the sum of the district's basic revenue, 21.28 basic skills revenue, training and experience revenue, secondary 21.29 sparsity revenue, elementary sparsity revenue, transportation 21.30 sparsity revenue, total operating capital revenue, equity 21.31 revenue,referendum offset adjustment,transition revenue, and 21.32 supplemental revenue. 21.33 (b) For fiscal year 2003 and later, the general education 21.34 revenue for each district equals the sum of the district's basic 21.35 revenue, basic skills revenue, training and experience revenue, 21.36 secondary sparsity revenue, elementary sparsity revenue, 22.1 transportation sparsity revenue, total operating capital 22.2 revenue, and equity revenue. 22.3 [EFFECTIVE DATE.] This section is effective for fiscal year 22.4 2002 and thereafter. 22.5 Sec. 10. Minnesota Statutes 2000, section 126C.10, 22.6 subdivision 2, is amended to read: 22.7 Subd. 2. [BASIC REVENUE.] The basic revenue for each 22.8 district equals the formula allowance times the adjusted 22.9 marginal cost pupil units for the school year.The formula22.10allowance for fiscal year 1998 is $3,581. The formula allowance22.11for fiscal year 1999 is $3,530. The formula allowance for22.12fiscal year 2000 is $3,740.The formula allowance for fiscal 22.13yearyears 2001 andsubsequent fiscal years2002 is $3,964. 22.14 The formula allowance for fiscal year 2003 and subsequent fiscal 22.15 years is $4,379. 22.16 [EFFECTIVE DATE.] This section is effective for fiscal year 22.17 2003 and thereafter. 22.18 Sec. 11. Minnesota Statutes 2000, section 126C.13, 22.19 subdivision 4, is amended to read: 22.20 Subd. 4. [GENERAL EDUCATION AID.] A district's general 22.21 education aid is the sum of the following amounts: 22.22 (1)the product of (i) the difference between thegeneral 22.23 education revenue, excluding transition revenue and supplemental22.24revenue, and the general education levy, times (ii) the ratio of22.25the actual amount levied to the permitted levy; 22.26 (2)transition aid according to section 126C.10,22.27subdivision 22;22.28(3) supplemental aid according to section 127A.49;22.29(4)shared time aid according to section 126C.01, 22.30 subdivision 7; and 22.31(5)(3) referendum aid according to section 126C.17. 22.32 [EFFECTIVE DATE.] This section is effective for fiscal year 22.33 2003 and thereafter. 22.34 Sec. 12. Minnesota Statutes 2000, section 126C.17, 22.35 subdivision 1, is amended to read: 22.36 Subdivision 1. [REFERENDUM ALLOWANCE.] (a) For fiscal year 23.1 2002, a district's referendum revenue allowance equals 23.2 thereferendum revenue authority for that year divided by its23.3resident marginal cost pupil units for that school year.sum of 23.4 the allowance under section 126C.16, subdivision 2, plus any 23.5 additional allowance per resident marginal cost pupil unit 23.6 authorized under subdivision 9 for fiscal year 2002. 23.7 (b) For fiscal year 2003 and later, a district's initial 23.8 referendum revenue allowance equals the sum of the allowance 23.9 under section 126C.16, subdivision 2, plus any additional 23.10 allowance per resident marginal cost pupil unit authorized under 23.11 subdivision 9 before May 1, 2001, for fiscal year 2002 and 23.12 later, plus the referendum conversion allowance approved under 23.13 subdivision 13, minus $415. For districts with more than one 23.14 referendum authority, the reduction must be computed separately 23.15 for each authority. The reduction must be applied first to the 23.16 referendum conversion allowance and next to the authority with 23.17 the earliest expiration date. A district's initial referendum 23.18 revenue allowance may not be less than zero. 23.19 (c) For fiscal year 2003 and later, a district's referendum 23.20 revenue allowance equals the initial referendum allowance plus 23.21 any additional allowance per resident marginal cost pupil unit 23.22 authorized under subdivision 9 after April 30, 2001, for fiscal 23.23 year 2003 and later. 23.24 [EFFECTIVE DATE.] This section is effective for fiscal year 23.25 2002 and thereafter. 23.26 Sec. 13. Minnesota Statutes 2000, section 126C.17, 23.27 subdivision 2, is amended to read: 23.28 Subd. 2. [REFERENDUM ALLOWANCE LIMIT.] (a) Notwithstanding 23.29 subdivision 1, for fiscal year 2002, a district's referendum 23.30 allowance must not exceed the greater of: 23.31 (1) the district's referendum allowance for fiscal year 23.32 1994; 23.33 (2) 25 percent of the formula allowance; or 23.34 (3) for a newly reorganized district created after July 1, 23.35 1994, the sum of the referendum revenue authority for the 23.36 reorganizing districts for the fiscal year preceding the 24.1 reorganization, divided by the sum of the resident marginal cost 24.2 pupil units of the reorganizing districts for the fiscal year 24.3 preceding the reorganization. 24.4 (b) Notwithstanding subdivision 1, for fiscal year 2003 and 24.5 later fiscal years, a district's referendum allowance must not 24.6 exceed the greater of: 24.7 (1) the sum of a district's referendum allowance for fiscal 24.8 year 1994 times 1.162 plus its referendum conversion allowance 24.9 for fiscal year 2003, minus $415; 24.10 (2) 18.2 percent of the formula allowance; 24.11 (3) for a newly reorganized district created on July 1, 24.12 2002, the referendum revenue authority for each reorganizing 24.13 district in the year preceding reorganization divided by its 24.14 resident marginal cost pupil units for the year preceding 24.15 reorganization, minus $415; or 24.16 (4) for a newly reorganized district created after July 1, 24.17 2002, the referendum revenue authority for each reorganizing 24.18 district in the year preceding reorganization divided by its 24.19 resident marginal cost pupil units for the year preceding 24.20 reorganization. 24.21 [EFFECTIVE DATE.] This section is effective for fiscal year 24.22 2003 and thereafter. 24.23 Sec. 14. Minnesota Statutes 2000, section 126C.17, 24.24 subdivision 5, is amended to read: 24.25 Subd. 5. [REFERENDUM EQUALIZATION REVENUE.] (a) For fiscal 24.26 year 2003 and later, a district's referendum equalization 24.27 revenue equals the sum of the first tier referendum equalization 24.28 revenue and the second tier referendum equalization revenue. 24.29 (b) A district's first tier referendum equalization revenue 24.30 equals the district's first tier referendum equalization 24.31 allowance times the district's resident marginal cost pupil 24.32 units for that year. 24.33(b) The(c) A district's first tier referendum equalization 24.34 allowance equals$350 for fiscal year 2000 and $415 for fiscal24.35year 2001 and later.24.36(c) Referendum equalization revenue must not exceed a25.1district's total referendum revenue for that yearthe lesser of 25.2 the district's referendum allowance under subdivision 1 or $126. 25.3 (d) A district's second tier referendum equalization 25.4 revenue equals the district's second tier referendum 25.5 equalization allowance times the district's resident marginal 25.6 cost pupil units for that year. 25.7 (e) A district's second tier referendum equalization 25.8 allowance equals the lesser of the district's referendum 25.9 allowance under subdivision 1 or 18.2 percent of the formula 25.10 allowance, minus the district's first tier referendum 25.11 equalization allowance. 25.12 (f) Notwithstanding paragraph (e), the second tier 25.13 referendum allowance for a district qualifying for secondary 25.14 sparsity revenue under section 126C.10, subdivision 7, or 25.15 elementary sparsity revenue under section 126C.10, subdivision 25.16 8, equals the district's referendum allowance under subdivision 25.17 1 minus the district's first tier referendum equalization 25.18 allowance. 25.19 [EFFECTIVE DATE.] This section is effective for taxes 25.20 payable in 2002 and revenue in fiscal year 2003, and thereafter. 25.21 Sec. 15. Minnesota Statutes 2000, section 126C.17, 25.22 subdivision 6, is amended to read: 25.23 Subd. 6. [REFERENDUM EQUALIZATION LEVY.] (a) For fiscal 25.24 year 2003 and later, a district's referendum equalization levy 25.25for a referendum levied against the referendum market value of25.26all taxable property as defined in section 126C.01, subdivision25.273,equals the sum of the first tier referendum equalization levy 25.28 and the second tier referendum equalization levy. 25.29 (b) A district's first tier referendum equalization levy 25.30 equals the district's first tier referendum equalization revenue 25.31 times the lesser of one or the ratio of the district's 25.32 referendum market value per resident marginal cost pupil unit to 25.33 $476,000. 25.34(b) A district's referendum equalization levy for a25.35referendum levied against the net tax capacity of all taxable25.36property equals the district's referendum equalization revenue26.1times the lesser of one or the ratio of the district's adjusted26.2net tax capacity per resident marginal cost pupil unit to $8,404.26.3 (c) A district's second tier referendum equalization levy 26.4 equals the district's second tier referendum equalization 26.5 revenue times the lesser of one or the ratio of the district's 26.6 referendum market value per resident marginal cost pupil unit to 26.7 $270,000. 26.8 [EFFECTIVE DATE.] This section is effective for taxes 26.9 payable in 2002 and revenue in fiscal year 2003, and thereafter. 26.10 Sec. 16. Minnesota Statutes 2000, section 126C.17, 26.11 subdivision 7, is amended to read: 26.12 Subd. 7. [REFERENDUM EQUALIZATION AID.] (a) A district's 26.13 referendum equalization aid equals the difference between its 26.14 referendum equalization revenue and levy. 26.15 (b) If a district's actual levy for first or second tier 26.16 referendum equalization revenue is less than its maximum levy 26.17 limit for that tier, aid shall be proportionately reduced. 26.18 [EFFECTIVE DATE.] This section is effective for taxes 26.19 payable in 2002 and revenue in fiscal year 2003, and thereafter. 26.20 Sec. 17. Minnesota Statutes 2000, section 126C.17, is 26.21 amended by adding a subdivision to read: 26.22 Subd. 7a. [REFERENDUM TAX BASE REPLACEMENT AID.] For each 26.23 school district that had a referendum allowance for fiscal year 26.24 2002 exceeding $415, for each separately authorized referendum 26.25 levy, the commissioner of revenue, in consultation with the 26.26 commissioner of children, families, and learning, shall certify 26.27 the amount of the referendum levy in taxes payable year 2001 26.28 attributable to the portion of the referendum allowance 26.29 exceeding $415 levied against property classified as class 2 26.30 4c(1), or 4c(4), under section 273.13, excluding the portion of 26.31 the tax paid by the portion of class 2a property consisting of 26.32 the house, garage, and surrounding one acre of land. The 26.33 resulting amount must be used to reduce the district's 26.34 referendum levy amount otherwise determined, and must be paid to 26.35 the district each year that the referendum authority remains in 26.36 effect. The aid payable under this subdivision must be 27.1 subtracted from the district's referendum equalization aid under 27.2 subdivision 7. The referendum equalization aid after the 27.3 subtraction must not be less than zero. 27.4 For the purposes of this subdivision, the referendum levy 27.5 with the latest year of expiration is assumed to be at the 27.6 highest level of equalization, and the referendum levy with the 27.7 earliest year of expiration is assumed to be at the lowest level 27.8 of equalization. 27.9 [EFFECTIVE DATE.] This section is effective for taxes 27.10 payable in 2002 and thereafter. 27.11 Sec. 18. Minnesota Statutes 2000, section 126C.17, 27.12 subdivision 8, is amended to read: 27.13 Subd. 8. [UNEQUALIZED REFERENDUM LEVY.] Each year, a 27.14 district may levy an amount equal to the difference between its 27.15 total referendum revenue according to subdivision54 and its 27.16equalized referendum aid and levy according to subdivisions 627.17and 7referendum equalization revenue according to subdivision 5. 27.18 [EFFECTIVE DATE.] This section is effective for taxes 27.19 payable in 2002 and revenue in fiscal year 2003, and thereafter. 27.20 Sec. 19. Minnesota Statutes 2000, section 126C.17, is 27.21 amended by adding a subdivision to read: 27.22 Subd. 13. [REFERENDUM CONVERSION ALLOWANCE.] A school 27.23 district that received supplemental or transition revenue in 27.24 fiscal year 2002 may convert its supplemental revenue conversion 27.25 allowance and transition revenue conversion allowance to 27.26 additional referendum allowance under subdivision 1 for fiscal 27.27 year 2003 and thereafter. A majority of the school board must 27.28 approve the conversion at a public meeting before November 1, 27.29 2001. For a district with other referendum authority, the 27.30 referendum conversion allowance approved by the board continues 27.31 until the portion of the district's other referendum authority 27.32 with the earliest expiration date after June 30, 2006, expires. 27.33 For a district with no other referendum authority, the 27.34 referendum conversion allowance approved by the board continues 27.35 until June 30, 2012. 27.36 Sec. 20. Minnesota Statutes 2000, section 126C.63, 28.1 subdivision 8, is amended to read: 28.2 Subd. 8. [MAXIMUM EFFORT DEBT SERVICE LEVY.] "Maximum 28.3 effort debt service levy" means the lesser of: 28.4 (1) a levy in whichever of the following amounts is 28.5 applicable: 28.6 (a) in any district receiving a debt service loan for a 28.7 debt service levy payable in 2002 and thereafter, or granted a 28.8 capital loan after January 1, 2001, a levy in total dollar 28.9 amount computed at a rate of 36 percent of adjusted net tax 28.10 capacity for taxes payable in 2002 and thereafter; 28.11 (b) in any district receiving a debt service loan for a 28.12 debt service levy payable in 1991 and thereafter, or granted a 28.13 capital loan after January 1, 1990, a levy in a total dollar 28.14 amount computed at a rate of 24 percent of adjusted net tax 28.15 capacity for taxes payable in 1991 and thereafter; 28.16(b)(c) in any district granted a debt service loan after 28.17 July 31, 1981, or granted a capital loan which is approved after 28.18 July 31, 1981, a levy in a total dollar amount computed as a tax 28.19 rate of 21.92 percent on the adjusted net tax capacity for taxes 28.20 payable in 1991 and thereafter; or 28.21 (2) a levy in any district for which a capital loan was 28.22 approved prior to August 1, 1981, a levy in a total dollar 28.23 amount equal to the sum of the amount of the required debt 28.24 service levy and an amount which when levied annually will in 28.25 the opinion of the commissioner be sufficient to retire the 28.26 remaining interest and principal on any outstanding loans from 28.27 the state within 30 years of the original date when the capital 28.28 loan was granted. 28.29 The board in any district affected by the provisions of 28.30 clause (2) may elect instead to determine the amount of its levy 28.31 according to the provisions of clause (1). If a district's 28.32 capital loan is not paid within 30 years because it elects to 28.33 determine the amount of its levy according to the provisions of 28.34 clause (2), the liability of the district for the amount of the 28.35 difference between the amount it levied under clause (2) and the 28.36 amount it would have levied under clause (1), and for interest 29.1 on the amount of that difference, must not be satisfied and 29.2 discharged pursuant to Minnesota Statutes 1988, or an earlier 29.3 edition of Minnesota Statutes if applicable, section 124.43, 29.4 subdivision 4. 29.5 [EFFECTIVE DATE.] This section is effective for taxes 29.6 payable in 2002 and thereafter. 29.7 Sec. 21. Minnesota Statutes 2000, section 126C.69, 29.8 subdivision 2, is amended to read: 29.9 Subd. 2. [CAPITAL LOANS ELIGIBILITY.] Beginning July 1, 29.10 1999, a district is not eligible for a capital loan unless the 29.11 district's estimated net debt tax rate as computed by the 29.12 commissioner after debt service equalization aid would be more 29.13 than2436 percent of adjusted net tax capacity. The estimate 29.14 must assume a 20-year maturity schedule for new debt. 29.15 [EFFECTIVE DATE.] This section is effective for taxes 29.16 payable in 2002 and thereafter. 29.17 Sec. 22. Minnesota Statutes 2000, section 126C.69, 29.18 subdivision 3, is amended to read: 29.19 Subd. 3. [DISTRICT REQUEST FOR REVIEW AND COMMENT.] A 29.20 district or a joint powers district that intends to apply for a 29.21 capital loan must submit a proposal to the commissioner for 29.22 review and comment according to section 123B.71 by July 1 of an 29.23 odd-numbered year. The commissioner shall prepare a review and 29.24 comment on the proposed facility, regardless of the amount of 29.25 the capital expenditure required to construct the facility. In 29.26 addition to the information provided under section 123B.71, 29.27 subdivision 9, the commissioner shall require that predesign 29.28 packages comparable to those required under section 16B.335 be 29.29 prepared by the applicant school district. The predesign 29.30 packages must be sufficient to define the scope, cost, and 29.31 schedule of the project and must demonstrate that the project 29.32 has been analyzed according to appropriate space needs standards 29.33 and also consider the following criteria in determining whether 29.34 to make a positive review and comment. 29.35 (a) To grant a positive review and comment the commissioner 29.36 shall determine that all of the following conditions are met: 30.1 (1) the facilities are needed for pupils for whom no 30.2 adequate facilities exist or will exist; 30.3 (2)the district will serve, on average, at least 80 pupils30.4per grade or is eligible for elementary or secondary sparsity30.5revenuethere is evidence to indicate that the facilities will 30.6 have a useful public purpose for at least the term of the bonds; 30.7 (3) no form of cooperation with another district would 30.8 provide the necessary facilities; 30.9 (4) the facilities are comparable in size and quality to 30.10 facilities recently constructed in other districts that have 30.11 similar enrollments; 30.12 (5) the facilities are comparable in size and quality to 30.13 facilities recently constructed in other districts that are 30.14 financed without a capital loan; 30.15 (6) the district is projected tomaintain or increase its30.16average daily membership over the next five years or is eligible30.17for elementary or secondary sparsity revenuehave adequate funds 30.18 in its general operating budget to support a quality education 30.19 for its students for at least the next five years; 30.20 (7) the current facility poses a threat to the life, 30.21 health, and safety of pupils, and cannot reasonably be brought 30.22 into compliance with fire, health, or life safety codes; 30.23 (8) the district has made a good faith effort, as evidenced 30.24 by its maintenance expenditures, to adequately maintain the 30.25 existing facility during the previous ten years and to comply 30.26 with fire, health, and life safety codes and state and federal 30.27 requirements for handicapped accessibility; 30.28 (9) the district has made a good faith effort to encourage 30.29 integration of social service programs within the new facility; 30.30and30.31 (10) evaluations by boards of adjacent districts have been 30.32 received; and 30.33 (11) the proposal includes a comprehensive technology plan 30.34 that assures information access for the students, parents, and 30.35 community. 30.36 (b) The commissioner may grant a negative review and 31.1 comment if: 31.2 (1) the state demographer has examined the population of 31.3 the communities to be served by the facility and determined that 31.4 the communities have not grown during the previous five years; 31.5 (2) the state demographer determines that the economic and 31.6 population bases of the communities to be served by the facility 31.7 are not likely to grow or to remain at a level sufficient, 31.8 during the next ten years, to ensure use of the entire facility; 31.9 (3) the need for facilities could be met within the 31.10 district or adjacent districts at a comparable cost by leasing, 31.11 repairing, remodeling, or sharing existing facilities or by 31.12 using temporary facilities; 31.13 (4) the district plans do not include cooperation and 31.14 collaboration with health and human services agencies and other 31.15 political subdivisions; or 31.16 (5) if the application is for new construction, an existing 31.17 facility that would meet the district's needs could be purchased 31.18 at a comparable cost from any other source within the area. 31.19 [EFFECTIVE DATE.] This section is effective July 1, 2001. 31.20 Sec. 23. Minnesota Statutes 2000, section 126C.69, 31.21 subdivision 9, is amended to read: 31.22 Subd. 9. [LOAN AMOUNT LIMITS.] (a) A loan must not be 31.23 recommended for approval for a district exceeding an amount 31.24 computed as follows: 31.25 (1) the amount requested by the district under subdivision 31.26 6; 31.27 (2) plus the aggregate principal amount of general 31.28 obligation bonds of the district outstanding on June 30 of the 31.29 year following the year the application was received, not 31.30 exceeding the limitation on net debt of the district in section 31.31 475.53, subdivision 4, or363540 percent of its adjusted net 31.32 tax capacity as most recently determined, whichever is less; 31.33 (3) less the maximum net debt permissible for the district 31.34 on December 1 of the year the application is received, under the 31.35 limitation in section 475.53, subdivision 4, or363540 percent 31.36 of its adjusted net tax capacity as most recently determined, 32.1 whichever is less; 32.2 (4) less any amount by which the amount voted exceeds the 32.3 total cost of the facilities for which the loan is granted. 32.4 (b) The loan may be approved in an amount computed as 32.5 provided in paragraph (a), clauses (1) to (3), subject to later 32.6 reduction according to paragraph (a), clause (4). 32.7 [EFFECTIVE DATE.] This section is effective for loan 32.8 applications submitted after July 1, 2001. 32.9 Sec. 24. Minnesota Statutes 2000, section 126C.69, 32.10 subdivision 12, is amended to read: 32.11 Subd. 12. [CONTRACT.] (a) Each capital loan must be 32.12 evidenced by a contract between the district and the state 32.13 acting through the commissioner. The contract must obligate the 32.14 state to reimburse the district, from the maximum effort school 32.15 loan fund, for eligible capital expenses for construction of the 32.16 facility for which the loan is granted, an amount computed as 32.17 provided in subdivision 9. The commissioner must receive from 32.18 the district a certified resolution of the board estimating the 32.19 costs of construction and reciting that contracts for 32.20 construction of the facilities for which the loan is granted 32.21 have been awardedand, that bonds of the district have been 32.22 issued and sold in the amount necessary to pay all estimated 32.23 costs of construction in excess of the amount of the loan, and 32.24 that all work, when completed, meets or exceeds standards 32.25 established in the state building code. The contract must 32.26 obligate the district to repay the loan out of the excesses of 32.27 its maximum effort debt service levy over its required debt 32.28 service levy, including interest at a rate equal to the weighted 32.29 average annual rate payable on Minnesota state school loan bonds 32.30 issued or reissued for the projectand disbursed to the32.31districts on a reimbursement basis, but in no event less than32.323-1/2 percent per year on the principal amount from time to time32.33unpaid. 32.34 (b) The district must each year, as long as it is indebted 32.35 to the state, levy for debt service (i) the amount of its 32.36 maximum effort debt service levy or (ii) the amount of its 33.1 required debt service levy, whichever is greater, except as the 33.2 required debt service levy may be reduced by a loan under 33.3 section 126C.68. The district shall remit payments to the 33.4 commissioner according to section 126C.71. 33.5 (c) The commissioner shall supervise the collection of 33.6 outstanding accounts due the fund and may, by notice to the 33.7 proper county auditor, require the maximum levy to be made as 33.8 required in this subdivision. Interest on capital loans must be 33.9 paid on December 15 of the year after the year the loan is 33.10 granted and annually in later years. By September 30, the 33.11 commissioner shall notify the county auditor of each county 33.12 containing taxable property situated within the district of the 33.13 amount of the maximum effort debt service levy of the district 33.14 for that year. The county auditor or auditors shall extend upon 33.15 the tax rolls an ad valorem tax upon all taxable property within 33.16 the district in the aggregate amount so certified. 33.17 [EFFECTIVE DATE.] This section is effective for loan 33.18 applications submitted after July 1, 2001. 33.19 Sec. 25. Minnesota Statutes 2000, section 126C.69, 33.20 subdivision 15, is amended to read: 33.21 Subd. 15. [BOND SALE LIMITATIONS.] (a) A district having 33.22 an outstanding state loan must not issue and sell any bonds on 33.23 the public market, except to refund state loans, unless it 33.24 agrees to make the maximum effort debt service levy in each 33.25 later year at the higher rate provided in section 126C.63, 33.26 subdivision 8, and unless it schedules the maturities of the 33.27 bonds according to section 475.54, subdivision 2. A district 33.28 that refunds bonds at a lower interest rate may continue to make 33.29 the maximum effort debt service levy in each later year at the 33.30 current rate provided in section 126C.63, subdivision 8, if the 33.31 district can demonstrate to the commissioner's satisfaction that 33.32 the district's repayments of the state loan will not be reduced 33.33 below the previous year's level. The district must report each 33.34 sale to the commissioner. 33.35 (b) For a capital loan issued prior to July 1, 2001, after 33.36athe district's capital loan has been outstanding for 30 years, 34.1 the district must not issue bonds on the public market except to 34.2 refund the loan. 34.3 (c) For a capital loan issued on or after July 1, 2001, 34.4 after the district's capital loan has been outstanding for 20 34.5 years, the district must not issue bonds on the public market 34.6 except to refund the loan. 34.7 [EFFECTIVE DATE.] This section is effective July 1, 2001. 34.8 Sec. 26. Minnesota Statutes 2000, section 475.53, 34.9 subdivision 4, is amended to read: 34.10 Subd. 4. [SCHOOL DISTRICTS.] Except as otherwise provided 34.11 by law, no school district shall be subject to a net debt in 34.12 excess often15 percent of the actual market value of all 34.13 taxable property situated within its corporate limits, as 34.14 computed in accordance with this subdivision. The county 34.15 auditor of each county containing taxable real or personal 34.16 property situated within any school district shall certify to 34.17 the district upon request the market value of all such 34.18 property. Whenever the commissioner of revenue, in accordance 34.19 with section 127A.48, subdivisions 1 to 6, has determined that 34.20 the net tax capacity of any district furnished by county 34.21 auditors is not based upon the market value of taxable property 34.22 in the district, the commissioner of revenue shall certify to 34.23 the district upon request the ratio most recently ascertained to 34.24 exist between such value and the actual market value of property 34.25 within the district. The actual market value of property within 34.26 a district, on which its debt limit under this subdivision is 34.27 based, is (a) the value certified by the county auditors, or (b) 34.28 this value divided by the ratio certified by the commissioner of 34.29 revenue, whichever results in a higher value. 34.30 [EFFECTIVE DATE.] This section is effective July 1, 2001. 34.31 Sec. 27. [SUPPLEMENTAL REVENUE CONVERSION ALLOWANCE.] 34.32 A district's supplemental revenue conversion allowance is 34.33 equal to the district's total fiscal year 2002 supplemental 34.34 revenue divided by its fiscal year 2002 resident marginal cost 34.35 pupil units. 34.36 [EFFECTIVE DATE.] This section is effective for revenue for 35.1 fiscal year 2003. 35.2 Sec. 28. [TRANSITION REVENUE CONVERSION ALLOWANCE.] 35.3 A district's transition revenue conversion allowance is 35.4 equal to the district's total fiscal year 2002 transition 35.5 revenue divided by its fiscal year 2002 resident marginal cost 35.6 pupil units. 35.7 [EFFECTIVE DATE.] This section is effective for revenue for 35.8 fiscal year 2003. 35.9 Sec. 29. [APPROPRIATIONS.] 35.10 Subdivision 1. [DEPARTMENT OF CHILDREN, FAMILIES, AND 35.11 LEARNING.] The sums indicated in this section are appropriated 35.12 from the general fund to the department of children, families, 35.13 and learning for the fiscal years designated. 35.14 Subd. 2. [REFERENDUM TAX BASE REPLACEMENT AID.] For 35.15 referendum tax base replacement aid according to Minnesota 35.16 Statutes, section 126C.17, subdivision 7a: 35.17 $7,851,000 ..... 2003 35.18 The 2003 appropriation includes $0 for 2002 and $7,851,000 35.19 for 2003. 35.20 Subd. 3. [DEBT SERVICE AID.] For debt service aid 35.21 according to Minnesota Statutes, section 123B.53, subdivision 6: 35.22 $25,989,000 ..... 2002 35.23 $35,163,000 ..... 2003 35.24 The 2002 appropriation includes $2,890,000 for 2001 and 35.25 $23,099,000 for 2002. 35.26 The 2003 appropriation includes $2,567,000 for 2002 and 35.27 $32,956,000 for 2003. 35.28 [EFFECTIVE DATE.] This section is effective July 1, 2001. 35.29 Sec. 30. [REPEALER.] 35.30 (a) Minnesota Statutes 2000, sections 126C.10, subdivisions 35.31 9, 10, 11, 12, 19, 20, 21, and 22; and 126C.11, are repealed 35.32 effective for revenue for fiscal year 2003. 35.33 (b) Minnesota Statutes 2000, section 126C.13, subdivisions 35.34 1, 2, and 3, are repealed effective for taxes payable in 2002. 35.35 ARTICLE 3 35.36 PROPERTY TAXES 36.1 Section 1. [16A.1523] [LOCAL GOVERNMENT AID REFORM 36.2 ACCOUNT.] 36.3 Subdivision 1. [ACCOUNT ESTABLISHED.] A local government 36.4 aid reform account is established in the general fund. Amounts 36.5 in this account are available for and may only be spent in 36.6 conjunction with reforming local government aids under chapter 36.7 477A. The reforms may include, but are not limited to: 36.8 (1) changes to the local government aid distribution 36.9 formula; and 36.10 (2) supplemental aids to address local government aid 36.11 disparity problems. 36.12 The balance in the account does not cancel and remains in 36.13 the account until appropriated for local government aid reform. 36.14 Subd. 2. [APPROPRIATION.] Beginning in fiscal year 2003, 36.15 and in each fiscal year thereafter, $14,000,000 is appropriated 36.16 from the general fund to the local government aid reform account 36.17 established in subdivision 1. In fiscal year 2004, and each 36.18 year thereafter, until the balance of the account is 36.19 appropriated by the legislature to local government aid reform, 36.20 an amount equal to the balance at the end of the fiscal year 36.21 times 2.5 percent is also appropriated from the general fund to 36.22 the account. 36.23 [EFFECTIVE DATE.] This section is effective the day 36.24 following final enactment. 36.25 Sec. 2. [16A.88] [TRANSIT FUNDS.] 36.26 Subdivision 1. [GREATER MINNESOTA TRANSIT FUND.] The 36.27 greater Minnesota transit fund is established within the state 36.28 treasury. Money in the fund is annually appropriated to the 36.29 commissioner of transportation for assistance to transit systems 36.30 outside the metropolitan area under section 174.24. 36.31 Subd. 2. [METROPOLITAN AREA TRANSIT FUND.] The 36.32 metropolitan area transit fund is established within the state 36.33 treasury. All money in the fund is annually appropriated to the 36.34 metropolitan council for the funding of transit systems within 36.35 the metropolitan area under sections 473.384, 473.387, 473.388, 36.36 and 473.405 to 473.449. 37.1 Subd. 3. [METROPOLITAN AREA TRANSIT APPROPRIATION 37.2 ACCOUNT.] The metropolitan area transit appropriation account is 37.3 established within the general fund. Money in the account is to 37.4 be used for the funding of transit systems in the metropolitan 37.5 area, subject to legislative appropriation. 37.6 [EFFECTIVE DATE.] This section is effective July 1, 2002. 37.7 Sec. 3. [103B.253] [COUNTY LEVY AUTHORITY.] 37.8 Notwithstanding any other law to the contrary, a county 37.9 levying a tax under section 103B.241, 103B.245, or 103B.251 37.10 shall not include any taxes levied under those authorities in 37.11 the levy certified under section 275.07, subdivision 1, 37.12 paragraph (a). A county levying under section 103B.241, 37.13 103B.245, or 103B.251 shall separately certify that amount and 37.14 the auditor shall extend that levy as a special taxing district 37.15 levy under sections 275.066 and 275.07, subdivision 1, paragraph 37.16 (b). 37.17 [EFFECTIVE DATE.] This section is effective for taxes 37.18 levied in 2001, payable in 2002, and thereafter. 37.19 Sec. 4. Minnesota Statutes 2000, section 103D.905, 37.20 subdivision 3, is amended to read: 37.21 Subd. 3. [ADMINISTRATIVEGENERAL FUND.]An administrative37.22 A general fund, consisting of an ad valorem tax levy, may not 37.23 exceed0.024180.048 percent of taxable market value, or 37.24$125,000$250,000, whichever is less. The money in the fund 37.25 shall be used for general administrative expenses and for the 37.26 construction or implementation and maintenance of projects of 37.27 common benefit to the watershed district. The managers may make 37.28 an annual levy for theadministrativegeneral fund as provided 37.29 in section 103D.911. In addition to the annualadministrative37.30 general levy, the managers may annually levy a tax not to exceed 37.31 0.00798 percent of taxable market value for a period not to 37.32 exceed 15 consecutive years to pay the cost attributable to the 37.33 basic water management features of projects initiated by 37.34 petition of amunicipality ofpolitical subdivision within the 37.35 watershed district or by petition of at least 50 resident owners 37.36 whose property is within the watershed district. 38.1 [EFFECTIVE DATE.] This section is effective for taxes 38.2 levied in 2001, payable in 2002, and thereafter. 38.3 Sec. 5. Minnesota Statutes 2000, section 123A.45, 38.4 subdivision 2, is amended to read: 38.5 Subd. 2. [PETITION.] The petition must contain: 38.6 (a) A correct description of the area proposed for 38.7 detachment and annexation, including supporting data regarding 38.8 location and title to land to establish that the land is 38.9 adjoining a district. 38.10 (b) The reasons for the proposed change with facts showing 38.11 that the granting of the petition will not reduce the size of 38.12 any district to less than four sections, unless the district is 38.13 not operating a school within the district. 38.14 (c) Consent to the petition, if, at the time of the filing 38.15 of the petition, any part of the area proposed for detachment is 38.16 part of a district which maintains and operates a secondary 38.17 school within the district. Before the hearing, the consent of 38.18 the board of the district in which the area proposed for 38.19 detachment lies must be endorsed on the petition. 38.20 (d) An identification of the district to which annexation 38.21 is sought. 38.22 (e) Other information the petitioners may desire to affix. 38.23 (f) An acknowledgment by the petitioner. 38.24 (g) A description of whether bonded indebtedness will be 38.25 allocated according to subdivision 6, paragraph (b) or (c). 38.26 [EFFECTIVE DATE.] This section is effective the day 38.27 following final enactment for detachment and annexation requests 38.28 approved by a county board on or after that date. 38.29 Sec. 6. Minnesota Statutes 2000, section 123A.45, 38.30 subdivision 6, is amended to read: 38.31 Subd. 6. [TAXABLE PROPERTY.] (a) Upon the effective date 38.32 of the order, the detachment and annexation is effected. The 38.33 bonded indebtedness must be assigned to the detached and annexed 38.34 land under either paragraph (b) or (c). 38.35 (b) Unless specified separately under paragraph (c), all 38.36 taxable property in the area so detached and annexed remains 39.1 taxable for payment of any school purpose obligations already 39.2 authorized by or outstanding on the effective date of the order 39.3 against the district from which detached. The order does not 39.4 relieve such property from the obligation of any bonded debt 39.5 already incurred to which it was subject prior to the order. 39.6 All taxable property in the area so detached and annexed is 39.7 taxable for payment of any district obligations authorized on or 39.8 subsequent to the effective date of the order by the district to 39.9 which annexation is made. 39.10 (c) Alternatively, if the school board of the district in 39.11 which the area is proposed for detachment and the school board 39.12 of the district in which the area is proposed for annexation 39.13 agree, all taxable property in the area detached and annexed 39.14 shall be taxable by the school district to which the property is 39.15 annexed. Detached and annexed property is relieved from the 39.16 obligation of any bonded debt already incurred by the district 39.17 in which the area is detached and is obligated for any bonded 39.18 debt already incurred by the district to which the area is 39.19 annexed. 39.20 [EFFECTIVE DATE.] This section is effective the day 39.21 following final enactment for detachment and annexation requests 39.22 approved by a county board on or after that date. 39.23 Sec. 7. [126C.455] [SWIMMING POOL LEVY.] 39.24 Each year, a school district with its home office located 39.25 in a county that has (i) a population density of ten or fewer 39.26 persons per square mile according to the 2000 census of 39.27 population; (ii) an international border; and (iii) more than 39.28 one school district within its boundaries, may levy for the net 39.29 operational costs of a swimming pool. The levy may not exceed 39.30 the net actual costs of operation of the swimming pool for the 39.31 previous year. Net actual costs are defined as operating costs 39.32 less any operating revenues and less any payments from other 39.33 local governmental units. 39.34 [EFFECTIVE DATE.] This section is effective for taxes 39.35 payable in 2002 and later. 39.36 Sec. 8. [144F.01] [EMERGENCY MEDICAL SERVICES SPECIAL 40.1 TAXING DISTRICTS.] 40.2 Subdivision 1. [POLITICAL SUBDIVISION DEFINED.] In this 40.3 section, "political subdivision" means a county, a statutory or 40.4 home rule charter city, or a township organized to provide town 40.5 government. 40.6 Subd. 2. [WHO MAY ESTABLISH.] Two or more political 40.7 subdivisions, or parts of them, may establish by resolution of 40.8 their governing bodies a special taxing district for emergency 40.9 medical services. The participating territory of a 40.10 participating political subdivision need not abut any other 40.11 participating territory to be in the special taxing district. 40.12 Subd. 3. [BOARD.] The special taxing district under this 40.13 section is governed by a board made up initially of 40.14 representatives of each participating political subdivision in 40.15 the proportions set out in the establishing resolution, subject 40.16 to change as provided in the district's charter, if any, or in 40.17 the district's bylaws. Each participant's representative serves 40.18 at the pleasure of that participant's governing body. 40.19 Subd. 4. [PROPERTY TAX LEVY AUTHORITY.] The district's 40.20 board may levy a tax on the taxable real and personal property 40.21 in the district. The ad valorem tax levy may not exceed 0.048 40.22 percent of the taxable market value of the district or $250,000, 40.23 whichever is less. The proceeds of the levy must be used as 40.24 provided in subdivision 5. The board shall certify the levy at 40.25 the times as provided under section 275.07. The board shall 40.26 provide the county with whatever information is necessary to 40.27 identify the property that is located within the district. If 40.28 the boundaries include a part of a parcel, the entire parcel 40.29 shall be included in the district. The county auditors must 40.30 spread, collect, and distribute the proceeds of the tax at the 40.31 same time and in the same manner as provided by law for all 40.32 other property taxes. 40.33 Subd. 5. [USE OF LEVY PROCEEDS.] The proceeds of property 40.34 taxes levied under this section must be used to support the 40.35 providing of out-of-hospital emergency medical services 40.36 including, but not limited to, first responder or rescue squads 41.1 recognized by the district, ambulance services licensed under 41.2 chapter 144E and recognized by the district, medical control 41.3 functions set out in chapter 144E, communications equipment and 41.4 systems, and programs of regional emergency medical services 41.5 authorized by regional boards described in section 144E.52. 41.6 Subd. 6. [ADVISORY COMMITTEE.] A special taxing district 41.7 board under this section must have an advisory committee to 41.8 advise the board on issues involving emergency medical services 41.9 and EMS communications. The committee's membership must be 41.10 comprised of representatives of first responders, ambulance 41.11 services, ambulance medical directors, and EMS communication 41.12 experts. The advisory committee members serve at the pleasure 41.13 of the appointing board. 41.14 Subd. 7. [POWERS.] (a) In addition to authority expressly 41.15 granted in this section, a special taxing district under this 41.16 section may exercise any power that may be exercised by any of 41.17 its participating political subdivisions, except that the board 41.18 may not incur debt. The special taxing district may only use 41.19 the power to do what is necessary or reasonable to support the 41.20 services set out in subdivision 5. 41.21 (b) Notwithstanding paragraph (a), the district may only 41.22 levy the taxes authorized in this section. 41.23 Subd. 8. [ADDITIONS AND WITHDRAWALS.] (a) Additional 41.24 eligible political subdivisions may be added to a special taxing 41.25 district under this section as provided by the board of the 41.26 district and agreed to in a resolution of the governing body of 41.27 the political subdivision proposed to be added. 41.28 (b) A political subdivision may withdraw from a special 41.29 taxing district under this section by resolution of its 41.30 governing body. The political subdivision must notify the board 41.31 of the special taxing district of the withdrawal by providing a 41.32 copy of the resolution at least one year in advance of the 41.33 proposed withdrawal. The taxable property of the withdrawing 41.34 member is subject to the property tax levy under subdivision 4 41.35 for the taxes payable year following the notice of the 41.36 withdrawal, unless the board and the withdrawing member agree 42.1 otherwise by action of their governing bodies. 42.2 (c) Notwithstanding subdivision 2, if the district is 42.3 comprised of only two political subdivisions and one of the 42.4 political subdivisions withdraws, the district can continue to 42.5 exist. 42.6 Subd. 9. [DISSOLUTION.] If the special taxing district is 42.7 dissolved, the assets and liabilities may be assigned to a 42.8 successor entity, if any, or otherwise disposed of for public 42.9 purposes as provided by law. 42.10 Subd. 10. [REPORTS.] On or before March 15, 2005, and 42.11 March 15, 2007, the special taxing district shall submit a levy 42.12 and expenditure report to the commissioner of revenue and to the 42.13 chairs of the house and senate committees with jurisdiction over 42.14 taxes. Each report must include the amount of the district's 42.15 levies for taxes payable for each of the two previous years and 42.16 its actual expenditures of those revenues. Expenditures must be 42.17 reported by general service category, as listed in subdivision 42.18 5, and include a separate category for administrative expenses. 42.19 [EFFECTIVE DATE.] This section is effective for taxes 42.20 levied in 2002, payable in 2003, through taxes levied in 2007, 42.21 payable in 2008. 42.22 Sec. 9. Minnesota Statutes 2000, section 174.24, 42.23 subdivision 3b, is amended to read: 42.24 Subd. 3b. [OPERATING ASSISTANCE.] (a) The commissioner 42.25 shall determine the total operating cost of any public transit 42.26 system receiving or applying for assistance in accordance with 42.27 generally accepted accounting principles. To be eligible for 42.28 financial assistance, an applicant or recipient shall provide to 42.29 the commissioner all financial records and other information and 42.30 shall permit any inspection reasonably necessary to determine 42.31 total operating cost and correspondingly the amount of 42.32 assistance which may be paid to the applicant or recipient. 42.33 Where more than one county or municipality contributes 42.34 assistance to the operation of a public transit system, the 42.35 commissioner shall identify one as lead agency for the purpose 42.36 of receivingmoneysmoney under this section. 43.1 (b) Prior to distributing operating assistance to eligible 43.2 recipients for any contract period, the commissioner shall place 43.3 all recipients into one of the following classifications:large43.4urbanized area service,urbanized area service, small urban area 43.5 service, rural area service, and elderly and handicapped 43.6 service. The commissioner shall distribute funds under this 43.7 section so that the percentage of total operating cost paid by 43.8 any recipient from local sources will not exceed the percentage 43.9 for that recipient's classification, except as provided in an 43.10 undue hardship case. The percentagesshallmust be:for large43.11urbanized area service, 50 percent;for urbanized area service 43.12 and small urban area service, 40 percent; for rural area 43.13 service, 35 percent; and for elderly and handicapped service, 35 43.14 percent. The remainder of the total operating cost will be paid 43.15 from state funds less any assistance received by the recipient 43.16 from any federal source. For purposes of this subdivision 43.17 "local sources" means payments under section 174.242 plus all 43.18 local sources of funds and includes all operating revenue, tax 43.19 levies, and contributions from public funds, except that the 43.20 commissioner may exclude from the total assistance contract 43.21 revenues derived from operations the cost of which is excluded 43.22 from the computation of total operating cost. Total operating 43.23 costs for the Duluth transit authority or a successor agency 43.24 shall not include costs related to the Superior, Wisconsin 43.25 service contract and the independent school district No. 709 43.26 service contract. 43.27 (c) If a recipient informs the commissioner in writing 43.28 after the establishment of these percentages but prior to the 43.29 distribution of financial assistance for any year that paying 43.30 its designated percentage of total operating cost from local 43.31 sources will cause undue hardship, the commissioner may reduce 43.32 the percentage to be paid from local sources by the recipient 43.33 and increase the percentage to be paid from local sources by one 43.34 or more other recipients inside or outside the classification, 43.35 provided that no recipient shall have its percentage thus 43.36 reduced or increased for more than two years successively. If 44.1 for any year the funds appropriated to the commissioner to carry 44.2 out the purposes of this section are insufficient to allow the 44.3 commissioner to pay the state share of total operating cost as 44.4 provided in this paragraph, the commissioner shall reduce the 44.5 state share in each classification to the extent necessary. 44.6 [EFFECTIVE DATE.] This section is effective for contracts 44.7 for service for calendar year 2002 and subsequent years. 44.8 Sec. 10. [174.242] [PROPERTY TAX REPLACEMENT AID.] 44.9 Subdivision 1. [REPORT OF PROPERTY TAX REVENUES.] By July 44.10 31, 2001, each system receiving assistance under section 174.24 44.11 must report the amount of its local share operating revenues for 44.12 2001 that are derived from property taxes to the commissioner of 44.13 transportation. The reported amounts must include property tax 44.14 revenues used to fund transit services in excess of the services 44.15 provided under contract with the department of transportation. 44.16 The reports shall separately identify the property tax revenues 44.17 by the taxing jurisdiction from which the revenues were 44.18 received. All general fund revenues provided by a local 44.19 government unit in Minnesota shall be considered property tax 44.20 revenues, except for revenues received from school districts. 44.21 The portion of the St. Cloud metropolitan area transit 44.22 commission's homestead and agricultural credit aid attributable 44.23 to transit operating expenses shall be considered property tax 44.24 revenues. 44.25 Subd. 2. [VERIFICATION BY COMMISSIONER.] The commissioner 44.26 shall examine the reports submitted under subdivision 1, and 44.27 adjust the revenue amounts reported if they are determined to be 44.28 in error. The commissioner may require a system to provide 44.29 whatever information is necessary to assist in determining the 44.30 accuracy of the reported amounts. 44.31 Subd. 3. [REPLACEMENT AID PAYMENTS.] Each system shall 44.32 receive property tax replacement aid payments in calendar years 44.33 2002-2003 equal to (i) the proportion that the system's property 44.34 tax amount determined under subdivision 2 is of the total amount 44.35 determined under subdivision 2 for all systems, times (ii) the 44.36 projected total revenues for the greater Minnesota transit fund 45.1 for the full fiscal year that begins in the calendar year in 45.2 which the aid is payable. A system's property tax replacement 45.3 aid for 2002 under this section may not exceed 106 percent of 45.4 its 2001 property tax amount determined under subdivision 2. A 45.5 system's property tax replacement aid for 2003 under this 45.6 section may not exceed 106 percent of its 2002 property tax 45.7 replacement aid under this section. The commissioner must 45.8 certify the replacement aid amounts for calendar years 2002-2003 45.9 to the commissioner of revenue by system and by taxing 45.10 jurisdiction by August 15 of the preceding year. The 45.11 commissioner of revenue shall deduct the certified amounts from 45.12 each jurisdiction's levy limit. Replacement aid amounts for the 45.13 St. Cloud metropolitan area transit commission and the Duluth 45.14 transit authority shall be deducted from the levy limit for each 45.15 of these jurisdictions as specified in chapter 458A. The annual 45.16 payments to each system shall be made in two equal installments 45.17 on July 20 and November 20. 45.18 Subd. 4. [REPORT TO THE LEGISLATURE.] By January 1, 2003, 45.19 the commissioner of transportation, in consultation with the 45.20 commissioner of revenue, shall make a report to the legislature 45.21 containing recommendations for integrating the grant program 45.22 under section 174.24 with the property tax replacement aid 45.23 program under this section. The recommendations shall attempt 45.24 to restructure the method of financing transit operations in 45.25 greater Minnesota in such a way as to minimize reliance on 45.26 property taxes, while allowing the necessary flexibility to 45.27 accommodate growth in service demands. 45.28 [EFFECTIVE DATE.] This section is effective the day 45.29 following final enactment. 45.30 Sec. 11. [216B.1646] [RATE REDUCTION; PROPERTY TAX 45.31 REDUCTION.] 45.32 (a) The commission shall, by any method the commission 45.33 finds appropriate, reduce the amounts each electric utility 45.34 subject to rate regulation by the commission charges its 45.35 customers to reflect the amount by which each utility's property 45.36 tax on the personal property of its electric generation, 46.1 transmission, or distribution system from taxes payable in 2001 46.2 to taxes payable in 2002 is reduced. The commission must ensure 46.3 that, to the extent feasible, each dollar of property tax 46.4 reduction allocated to Minnesota consumers retroactive to 46.5 January 1, 2002, results in a dollar of savings to the utility's 46.6 customers. 46.7 (b) By April 10, 2002, each utility shall submit a filing 46.8 to the commission containing: 46.9 (1) certified information regarding the utility's property 46.10 tax savings allocated to Minnesota retail customers; and 46.11 (2) a proposed method of passing these savings on to 46.12 Minnesota retail customers. 46.13 The utility shall provide the information in clause (1) to 46.14 the commissioner of revenue at the same time. The commissioner 46.15 shall notify the commission within 30 days as to the accuracy of 46.16 the property tax data submitted by the utility. 46.17 (c) For purposes of this section, "personal property" 46.18 means tools, implements, and machinery of the generating plant. 46.19 It does not apply to transformers, transmission lines, 46.20 distribution lines, or any other tools, implements, and 46.21 machinery that are part of an electric substation, wherever 46.22 located. 46.23 Sec. 12. [216B.1692] [EMISSIONS REDUCTION RIDER.] 46.24 Subdivision 1. [QUALIFYING PROJECTS.] Projects that may be 46.25 approved for the emissions reduction rate rider allowed in this 46.26 section must: 46.27 (1) be installed on existing large electric generating 46.28 power plants, as defined in section 216B.2421, subdivision 2, 46.29 clause (1), that are located in the state and that are currently 46.30 not subject to emission limitations for new power plants under 46.31 the federal Clean Air Act; 46.32 (2) not increase the capacity of the existing electric 46.33 generating power plant more than ten percent or more than 100 46.34 megawatts, whichever is greater; and 46.35 (3) result in the existing plant either: 46.36 (i) complying with applicable new source review standards 47.1 under the federal Clean Air Act; or 47.2 (ii) emitting air contaminants at levels substantially 47.3 lower than allowed for new facilities by the applicable new 47.4 source performance standards under the federal Clean Air Act; or 47.5 (iii) reducing emissions from current levels at a unit to 47.6 the lowest cost effective level when, due to the age or 47.7 condition of the generating unit, the public utility 47.8 demonstrates that it would not be cost effective to reduce 47.9 emissions to the levels in (i) or (ii). 47.10 Subd. 2. [SUBMISSION.] A public utility that intends to 47.11 submit a proposal for an emissions reduction rider under this 47.12 section must submit to the commission, the department, the 47.13 pollution control agency, and interested parties its plans for 47.14 emissions reduction projects at its generating facilities. This 47.15 submission must be made at least 60 days in advance of a 47.16 petition for a rider and shall include: 47.17 (1) the priority order of emission reduction projects the 47.18 utility plans to pursue at its generating facilities; 47.19 (2) the planned schedule for implementation; 47.20 (3) the analysis and considerations relied on by the public 47.21 utility to develop that priority ranking; 47.22 (4) the alternative emission reduction projects considered, 47.23 including but not limited to applications of the best available 47.24 control technology and repowering with natural gas, and reasons 47.25 for not pursuing them; 47.26 (5) the emission reductions expected to be achieved by the 47.27 projects and their relation to applicable standards for new 47.28 facilities under the federal Clean Air Act; and 47.29 (6) the general rationale and conclusions of the public 47.30 utility in determining the priority ranking. 47.31 Subd. 3. [FILING.] A public utility may petition the 47.32 commission for approval of an emissions reduction rider to 47.33 recover the costs of a qualifying emission reduction project 47.34 outside of a general rate case proceeding under section 47.35 216B.16. In its filing, the public utility shall provide: 47.36 (1) a description of the planned emissions reduction 48.1 project; 48.2 (2) the activities involved in the project; 48.3 (3) a schedule for implementation; 48.4 (4) any analysis provided to the pollution control agency 48.5 regarding the project; 48.6 (5) an assessment of alternatives to the project, including 48.7 costs, environmental impact, and operational issues; 48.8 (6) the proposed method of cost recovery; 48.9 (7) any proposed recovery above cost; and 48.10 (8) the projected emissions reductions from the project. 48.11 Nothing in this section precludes a public utility or 48.12 interested party from seeking commission guidelines for 48.13 emissions reduction rider filings; however, commission 48.14 guidelines are not required as a prerequisite to a public 48.15 utility-initiated filing. 48.16 Subd. 4. [ENVIRONMENTAL ASSESSMENT.] The pollution control 48.17 agency shall evaluate the public utility's emission reduction 48.18 project filing and provide the commission with: 48.19 (1) verification that the emission reduction project 48.20 qualifies under subdivision 1; 48.21 (2) a description of the projected environmental benefits 48.22 of the proposed project; and 48.23 (3) its assessment of the appropriateness of the proposed 48.24 project. 48.25 Subd. 5. [APPROVAL.] After receiving the pollution control 48.26 agency's environmental assessment, the commission shall allow 48.27 opportunity for written and oral comment on the proposed 48.28 emissions reduction rate rider proposal. The commission must 48.29 assess the costs of an emission reduction project on a stand 48.30 alone basis and may approve, modify, or reject the proposed 48.31 emissions reduction rider. In making its determination, the 48.32 commission shall consider whether the project, proposed cost 48.33 recovery, and any proposed recovery above cost appropriately 48.34 achieves environmental benefits without unreasonable consumer 48.35 costs. The commission may approve a rider that: 48.36 (1) allows the utility to recover costs of qualifying 49.1 emission reduction projects net of revenues attributable to the 49.2 project; 49.3 (2) allows an appropriate return on investment associated 49.4 with qualifying emission reduction projects at the level 49.5 established in the public utility's last general rate case; 49.6 (3) allocates project costs appropriately between wholesale 49.7 and retail customers; 49.8 (4) provides a mechanism for recovery above cost, if 49.9 necessary to improve the overall economics of the qualifying 49.10 projects to ensure implementation; 49.11 (5) recovers costs from retail customer classes in 49.12 proportion to class energy consumption; and 49.13 (6) terminates recovery once the costs of qualifying 49.14 projects have been fully recovered. 49.15 The commission must not approve an emission reduction 49.16 project and its associated rate rider if: 49.17 (1) the emissions reduction project is needed to comply 49.18 with new state or federal air quality standards; or 49.19 (2) the emissions reduction project is required as a 49.20 corrective action as part of any state or federal enforcement 49.21 action. 49.22 The commission may not include any costs of a proposed 49.23 project in the emission reduction rider that are not directly 49.24 allocable to reduction of emissions. 49.25 Subd. 6. [IMPLEMENTATION.] Within 60 days of a final 49.26 commission order, the public utility shall notify the commission 49.27 and the pollution control agency whether it will proceed with 49.28 the project. Nothing in this section commits a public utility 49.29 to implementing a proposed emission reduction project if the 49.30 proposed project or terms of the emissions reduction rider have 49.31 been either modified or rejected by the commission. A public 49.32 utility implementing a project under this section will not be 49.33 required for a period of eight years after installation to 49.34 undertake additional investments to comply with a new state 49.35 requirement regarding pollutants addressed by the project at the 49.36 project generating facility. This section does not affect 50.1 requirements of federal law. The term of the rider shall extend 50.2 for the period approved by the commission regardless of any 50.3 subsequent state or federal requirement affecting any pollutant 50.4 addressed by the approved emission reduction project and 50.5 regardless of the sunset date in subdivision 8. 50.6 Subd. 7. [EVALUATION.] By January 15, 2005, the 50.7 commission, in consultation with the commissioner of commerce 50.8 and commissioner of the pollution control agency, shall report 50.9 to the legislature: 50.10 (1) the number of participating public utilities and 50.11 qualifying projects proposed and approved under this section; 50.12 (2) the total cost of each project and any associated 50.13 incentives; 50.14 (3) the reduction in air emissions achieved; 50.15 (4) rate impacts of the cost recovery mechanisms; and 50.16 (5) an assessment of the effectiveness of the cost recovery 50.17 mechanism in accomplishing power plant emissions reductions in 50.18 excess of those required by law. 50.19 Subd. 8. [SUNSET.] This section is effective until June 50.20 30, 2006. 50.21 Sec. 13. Minnesota Statutes 2000, section 216B.2424, 50.22 subdivision 5, is amended to read: 50.23 Subd. 5. [MANDATE.] (a) A public utility, as defined in 50.24 section 216B.02, subdivision 4, that operates a nuclear-powered 50.25 electric generating plant within this state must construct and 50.26 operate, purchase, or contract to construct and operate (1) by 50.27 December 31, 1998, 50 megawatts of electric energy installed 50.28 capacity generated by farm-grown closed-loop biomass scheduled 50.29 to be operational by December 31, 2001; and (2) by December 31, 50.30 1998, an additional 75 megawatts of installed capacity so 50.31 generated scheduled to be operational by December 31, 2002. 50.32 (b) Of the 125 megawatts of biomass electricity installed 50.33 capacity required under this subdivision, no more than 50 50.34 megawatts of this capacity may be provided by a facility that 50.35 uses poultry litter as its primary fuel source and any such 50.36 facility: 51.1 (1) need not use biomass that complies with the definition 51.2 in subdivision 1; 51.3 (2) must enter into a contract with the public utility for 51.4 such capacity, that has an average purchase price per megawatt 51.5 hour over the life of the contract that is equal to or less than 51.6 the average purchase price per megawatt hour over the life of 51.7 the contract in contracts approved by the public utilities 51.8 commission before April 1, 2000, to satisfy the mandate of this 51.9 section, and file that contract with the public utilities 51.10 commission prior to September 1, 2000; and 51.11 (3) such capacity must be scheduled to be operational by 51.12 December 31, 2002. 51.13 (c) Of the total 125 megawatts of biomass electric energy 51.14 installed capacity required under this section, no more than 75 51.15 megawatts may be provided by a single project. 51.16 (d) Of the 75 megawatts of biomass electric energy 51.17 installed capacity required under paragraph (a), clause (2), no 51.18 more than 25 megawatts of this capacity may be provided by a St. 51.19 Paul district heating and cooling system cogeneration facility 51.20 utilizing waste wood as a primary fuel source. The St. Paul 51.21 district heating and cooling system cogeneration facility need 51.22 not use biomass that complies with the definition in subdivision 51.23 1. 51.24 (e) The public utility must accept and consider on an equal 51.25 basis with other biomass proposals: 51.26 (1) a proposal to satisfy the requirements of this section 51.27 that includes a project that exceeds the megawatt capacity 51.28 requirements of either paragraph (a), clause (1) or (2), and 51.29 that proposes to sell the excess capacity to the public utility 51.30 or to other purchasers; and 51.31 (2) a proposal for a new facility to satisfy more than ten 51.32 but not more than 20 megawatts of the electrical generation 51.33 requirements by a small business-sponsored independent power 51.34 producer facility to be located within the northern quarter of 51.35 the state, which means the area located north of Constitutional 51.36 Route No. 8 as described in section 161.114, subdivision 2, and 52.1 that utilizes biomass residue wood, sawdust, bark, chipped wood, 52.2 or brush to generate electricity. A facility described in this 52.3 clause is not required to utilize biomass complying with the 52.4 definition in subdivision 1, but must have the capacity required 52.5 by this clause operational by December 31, 2002. 52.6(e)(f) If a public utility files a contract with the 52.7 commission for electric energy installed capacity that uses 52.8 poultry litter as its primary fuel source, the commission must 52.9 do a preliminary review of the contract to determine if it meets 52.10 the purchase price criteria provided in paragraph (b), clause 52.11 (2), of this subdivision. The commission shall perform its 52.12 review and advise the parties of its determination within 30 52.13 days of filing of such a contract by a public utility. A public 52.14 utility may submit by September 1, 2000, a revised contract to 52.15 address the commission's preliminary determination. 52.16(f)(g) The commission shall finally approve, modify, or 52.17 disapprove no later than July 1, 2001, all contracts submitted 52.18 by a public utility as of September 1, 2000, to meet the mandate 52.19 set forth in this subdivision. 52.20(g)(h) If a public utility subject to this section 52.21 exercises an option to increase the generating capacity of a 52.22 project in a contract approved by the commission prior to April 52.23 25, 2000, to satisfy the mandate in this subdivision, the public 52.24 utility must notify the commission by September 1, 2000, that it 52.25 has exercised the option and include in the notice the amount of 52.26 additional megawatts to be generated under the option 52.27 exercised. Any review by the commission of the project after 52.28 exercise of such an option shall be based on the same criteria 52.29 used to review the existing contract. 52.30 (i) A facility specified in this subdivision qualifies for 52.31 exemption from property taxation under section 272.02, 52.32 subdivision 43. 52.33 [EFFECTIVE DATE.] This section is effective the day 52.34 following final enactment. 52.35 Sec. 14. Minnesota Statutes 2000, section 271.01, 52.36 subdivision 5, is amended to read: 53.1 Subd. 5. [JURISDICTION.] The tax court shall have 53.2 statewide jurisdiction. Except for an appeal to the supreme 53.3 court or any other appeal allowed under this subdivision, the 53.4 tax court shall be the sole, exclusive, and final authority for 53.5 the hearing and determination of all questions of law and fact 53.6 arising under the tax laws of the state, as defined in this 53.7 subdivision, in those cases that have been appealed to the tax 53.8 court and in any case that has been transferred by the district 53.9 court to the tax court. The tax court shall have no 53.10 jurisdiction in any case that does not arise under the tax laws 53.11 of the state or in any criminal case or in any case determining 53.12 or granting title to real property or in any case that is under 53.13 the probate jurisdiction of the district court. The small 53.14 claims division of the tax court shall have no jurisdiction in 53.15 any case dealing with property valuation or assessment for 53.16 property tax purposes until the taxpayer has appealed the 53.17 valuation or assessment to the county board of equalization, and 53.18 in those towns and cities which have not transferred their 53.19 duties to the county, the town or city board of equalization, 53.20 except for: (i) those taxpayers whose original assessments are 53.21 determined by the commissioner of revenue;and(ii) those 53.22 taxpayers appealing a denial of a current year application for 53.23 the homestead classification for their property and the denial 53.24 was not reflected on a valuation notice issued in the year; and 53.25 (iii) any case dealing with property valuation, assessment, or 53.26 taxation for property tax purposes and meeting the 53.27 jurisdictional requirements of section 271.21, subdivision 2, 53.28 paragraph (c). The tax court shall have no jurisdiction in any 53.29 case involving an order of the state board of equalization 53.30 unless a taxpayer contests the valuation of property. Laws 53.31 governing taxes, aids, and related matters administered by the 53.32 commissioner of revenue, laws dealing with property valuation, 53.33 assessment or taxation of property for property tax purposes, 53.34 and any other laws that contain provisions authorizing review of 53.35 taxes, aids, and related matters by the tax court shall be 53.36 considered tax laws of this state subject to the jurisdiction of 54.1 the tax court. This subdivision shall not be construed to 54.2 prevent an appeal, as provided by law, to an administrative 54.3 agency, board of equalization, review under section 274.13, 54.4 subdivision 1c, or to the commissioner of revenue. Wherever 54.5 used in this chapter, the term commissioner shall mean the 54.6 commissioner of revenue, unless otherwise specified. 54.7 [EFFECTIVE DATE.] This section is effective for the 2002 54.8 assessment, and thereafter. 54.9 Sec. 15. Minnesota Statutes 2000, section 271.21, 54.10 subdivision 2, is amended to read: 54.11 Subd. 2. [JURISDICTION.] At the election of the taxpayer, 54.12 the small claims division shall have jurisdiction only in the 54.13 following matters: 54.14 (a) cases involving valuation, assessment, or taxation of 54.15 real or personal property, if the taxpayer has satisfied the 54.16 requirements of section 271.01, subdivision 5, and: (i) the 54.17 issue is a denial of a current year application for the 54.18 homestead classification for the taxpayer's property and the 54.19 denial was not reflected on a valuation notice issued in the 54.20 year; or (ii) in the case of nonhomestead property, the 54.21 assessor's estimated market value is less than $100,000;or54.22 (b) any other case concerning the tax laws as defined in 54.23 section 271.01, subdivision 5, in which the amount in 54.24 controversy does not exceed $5,000, including penalty and 54.25 interest; or 54.26 (c) cases involving valuation, assessment, or taxation of 54.27 real or personal property if: 54.28 (i) the issue is a denial of a current year application for 54.29 the homestead classification for the taxpayer's property; 54.30 (ii) only one parcel is included in the petition, the 54.31 entire parcel is classified as homestead 1a or 1b pursuant to 54.32 section 273.13, and the parcel contains no more than one 54.33 dwelling unit; or 54.34 (iii) the assessor's estimated market value of the property 54.35 included in the petition is less than $300,000. 54.36 [EFFECTIVE DATE.] This section is effective for the 2002 55.1 assessment, and thereafter. 55.2 Sec. 16. Minnesota Statutes 2000, section 272.02, 55.3 subdivision 22, is amended to read: 55.4 Subd. 22. [WIND ENERGY CONVERSION SYSTEMS.] (a) Small 55.5 scale wind energy conversion systems installed after January 1, 55.6 1991, and used as an electric power source are exempt. 55.7 "Small scale wind energy conversion systems" are wind 55.8 energy conversion systems, as defined in section 216C.06, 55.9 subdivision 12, including the foundation or support pad, which 55.10 (i) are used as an electric power source; (ii) are located 55.11 within one county and owned by the same owner; and (iii) produce 55.12 two megawatts or less of electricity as measured by nameplate 55.13 ratings. 55.14 (b) Medium scale wind energy conversion systems installed 55.15 after January 1, 1991, are treated as follows: (i) the 55.16 foundation and support pad are taxable; (ii) the associated 55.17 supporting and protective structures are exempt for the first 55.18 five assessment years after they have been constructed, and 55.19 thereafter, 30 percent of the market value of the associated 55.20 supporting and protective structures are taxable; and (iii) the 55.21 turbines, blades, transformers, and its related equipment, are 55.22 exempt. "Medium scale wind energy conversion systems" are wind 55.23 energy conversion systems as defined in section 216C.06, 55.24 subdivision 12, including the foundation or support pad, which: 55.25 (i) are used as an electric power source; (ii) are located 55.26 within one county and owned by the same owner; and (iii) produce 55.27 more than two but equal to or less than 12 megawatts of energy 55.28 as measured by nameplate ratings. 55.29 (c) Large scale wind energy conversion systems installed 55.30 after January 1, 1991, are treated as follows: 25 percent of 55.31 the market value of all property is taxable, including (i) the 55.32 foundation and support pad; (ii) the associated supporting and 55.33 protective structures; and (iii) the turbines, blades, 55.34 transformers, and its related equipment. "Large scale wind 55.35 energy conversion systems" are wind energy conversion systems as 55.36 defined in section 216C.06, subdivision 12, including the 56.1 foundation or support pad, which (i) are used as an electric 56.2 power source; and (ii) produce more than 12 megawatts of energy 56.3 as measured by nameplate ratings. 56.4 (d) The total size of a wind energy conversion system under 56.5 this subdivision shall be determined according to this paragraph. 56.6 Unless the systems are interconnected with different 56.7 distribution systems, the nameplate capacity of one wind energy 56.8 conversion system shall be combined with the nameplate capacity 56.9 of any other wind energy conversion system that is: 56.10 (1) located within five miles of the wind energy conversion 56.11 system; 56.12 (2) constructed within the same calendar year as the wind 56.13 energy conversion system; and 56.14 (3) under common ownership. 56.15 In the case of a dispute, the commissioner of commerce 56.16 shall determine the total size of the system, and shall draw all 56.17 reasonable inferences in favor of combining the systems. 56.18 (e) In making a determination under paragraph (d), the 56.19 commissioner of commerce may determine that two wind energy 56.20 conversion systems are under common ownership when the 56.21 underlying ownership structure contains similar persons or 56.22 entities, even if the ownership shares differ between the two 56.23 systems. Wind energy conversion systems are not under common 56.24 ownership solely because the same person or entity provided 56.25 equity financing for the systems. 56.26 [EFFECTIVE DATE.] This section is effective for wind energy 56.27 conversion systems installed after January 1, 2001. 56.28 Sec. 17. Minnesota Statutes 2000, section 272.02, is 56.29 amended by adding a subdivision to read: 56.30 Subd. 46. [RESIDENTIAL BUILDINGS ON TEMPORARY SITES.] A 56.31 newly constructed building that is situated on real property is 56.32 exempt if it is: 56.33 (1) intended for future residential occupancy; 56.34 (2) on a temporary foundation and intended to be moved; 56.35 (3) not used as a model or for any other business purposes; 56.36 (4) not connected to any utilities; and 57.1 (5) located on land that will not be sold with the building. 57.2 The exemption under this subdivision is allowable for only 57.3 one assessment year after the date of the initial construction 57.4 of the building. 57.5 [EFFECTIVE DATE.] This section is effective for assessment 57.6 year 2001 and thereafter. 57.7 Sec. 18. Minnesota Statutes 2000, section 272.02, is 57.8 amended by adding a subdivision to read: 57.9 Subd. 47. [POULTRY LITTER BIOMASS GENERATION FACILITY; 57.10 PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a), 57.11 attached machinery and other personal property which is part of 57.12 an electrical generating facility that meets the requirements of 57.13 this subdivision is exempt. At the time of construction, the 57.14 facility must: 57.15 (1) be designed to utilize poultry litter as a primary fuel 57.16 source; and 57.17 (2) be constructed for the purpose of generating power at 57.18 the facility that will be sold pursuant to a contract approved 57.19 by the public utilities commission in accordance with the 57.20 biomass mandate imposed under section 216B.2424. 57.21 Construction of the facility must be commenced after 57.22 January 1, 2000, and before December 31, 2002. Property 57.23 eligible for this exemption does not include electric 57.24 transmission lines and interconnections or gas pipelines and 57.25 interconnections appurtenant to the property or the facility. 57.26 [EFFECTIVE DATE.] This section is effective for assessment 57.27 year 2001 and thereafter. 57.28 Sec. 19. Minnesota Statutes 2000, section 272.02, is 57.29 amended by adding a subdivision to read: 57.30 Subd. 48. [WASTE TIRE COGENERATION FACILITY; PERSONAL 57.31 PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 57.32 machinery and other personal property which is part of an 57.33 electric generating facility that meets the requirements of this 57.34 subdivision is exempt. At the time of construction, the 57.35 facility must: 57.36 (1) be designed to utilize waste tires as a primary fuel 58.1 source; and 58.2 (2) be a cogeneration electric generating facility of 15 to 58.3 25 megawatts of installed capacity. 58.4 Construction of the facility must be commenced after 58.5 January 1, 2000, and before January 1, 2004. Property eligible 58.6 for this exemption does not include electric transmission lines 58.7 and interconnections or gas pipelines and interconnections 58.8 appurtenant to the property or the facility. 58.9 [EFFECTIVE DATE.] This section is effective for assessment 58.10 year 2001 and thereafter. 58.11 Sec. 20. Minnesota Statutes 2000, section 272.02, is 58.12 amended by adding a subdivision to read: 58.13 Subd. 49. [AGRICULTURAL HISTORICAL SOCIETY 58.14 PROPERTY.] Property is exempt from taxation if it is owned by a 58.15 nonprofit charitable or educational organization that qualifies 58.16 for exemption under section 501(c)(3) of the Internal Revenue 58.17 Code of 1986, as amended through December 31, 2000, and meets 58.18 the following criteria: 58.19 (1) the property is primarily used for storing and 58.20 exhibiting tools, equipment, and artifacts useful in providing 58.21 an understanding of local or regional agricultural history. 58.22 Primary use is determined each year based on the number of days 58.23 the property is used solely for storage and exhibition purposes; 58.24 (2) the property is limited to a maximum of 20 acres per 58.25 owner per county, but includes the land and any taxable 58.26 structures, fixtures, and equipment on the land; 58.27 (3) the property is not used for a revenue-producing 58.28 activity for more than ten days in each calendar year; and 58.29 (4) the property is not used for residential purposes on 58.30 either a temporary or permanent basis. 58.31 [EFFECTIVE DATE.] This section is effective for assessment 58.32 year 2001 and thereafter. 58.33 Sec. 21. Minnesota Statutes 2000, section 272.02, is 58.34 amended by adding a subdivision to read: 58.35 Subd. 50. [BIOMASS ELECTRICAL GENERATION FACILITY; 58.36 PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a), 59.1 attached machinery and other personal property which is part of 59.2 an electrical generating facility that meets the requirements of 59.3 this subdivision is exempt. At the time of construction, the 59.4 facility must: 59.5 (1) be designed to utilize biomass as established in 59.6 section 216B.2424 as a primary fuel source; and 59.7 (2) be constructed for the purpose of generating power at 59.8 the facility that will be sold pursuant to a contract approved 59.9 by the public utilities commission in accordance with the 59.10 biomass mandate imposed under section 216B.2424. 59.11 Construction of the facility must be commenced after 59.12 January 1, 2000, and before December 31, 2002. Property 59.13 eligible for this exemption does not include electric 59.14 transmission lines and interconnections or gas pipelines and 59.15 interconnections appurtenant to the property or facility. 59.16 [EFFECTIVE DATE.] This section is effective for assessment 59.17 year 2001 and thereafter. 59.18 Sec. 22. [272.028] [PAYMENT IN LIEU OF PERSONAL PROPERTY 59.19 TAX; WIND GENERATION FACILITIES.] 59.20 A developer of a new or existing medium or large scale wind 59.21 energy conversion system, as defined under section 272.02, 59.22 subdivision 22, paragraphs (b) and (c), may negotiate with the 59.23 city or town and the county where the wind energy conversion 59.24 system is located to establish a payment in lieu of tax on 59.25 personal property used to generate electric power. The in lieu 59.26 payment is to provide fees or compensation to the host 59.27 jurisdictions to maintain public infrastructure and services. 59.28 The payment in lieu of personal property tax may be based on 59.29 production capacity, historical production, or other factors 59.30 agreed upon by the parties. The payment in lieu of tax 59.31 agreement must be signed by the parties and filed with the 59.32 commissioner of revenue and the county recorder. Upon execution 59.33 and filing of the agreement, the personal property to which the 59.34 in lieu payment applies shall be deemed exempt from tax under 59.35 section 272.02, subdivision 22, paragraphs (b) and (c). This 59.36 exemption shall be effective for the assessment year in which 60.1 the in lieu payment is agreed upon and shall remain exempt for 60.2 the same duration as the in lieu payments are in effect. 60.3 Sec. 23. Minnesota Statutes 2000, section 273.11, 60.4 subdivision 1a, is amended to read: 60.5 Subd. 1a. [LIMITED MARKET VALUE.] In the case of all 60.6 property classified as agricultural homestead or nonhomestead, 60.7 residential homestead or nonhomestead, timber, or noncommercial 60.8 seasonal recreational residential, the assessor shall compare 60.9 the value withthatthe taxable portion of the value determined 60.10 in the preceding assessment.The amount of the increase entered60.11in the current assessment shall not exceed the greater of (1)60.128.5 percent of the value in the preceding assessment, or (2) 1560.13percent of the difference between the current assessment and the60.14preceding assessment.60.15 For assessment year 2002, the amount of the increase shall 60.16 not exceed the greater of (1) 10 percent of the value in the 60.17 preceding assessment, or (2) 15 percent of the difference 60.18 between the current assessment and the preceding assessment. 60.19 For assessment year 2003, the amount of the increase shall 60.20 not exceed the greater of (1) 12 percent of the value in the 60.21 preceding assessment, or (2) 20 percent of the difference 60.22 between the current assessment and the preceding assessment. 60.23 For assessment year 2004, the amount of the increase shall 60.24 not exceed the greater of (1) 15 percent of the value in the 60.25 preceding assessment, or (2) 25 percent of the difference 60.26 between the current assessment and the preceding assessment. 60.27 For assessment year 2005, the amount of the increase shall 60.28 not exceed the greater of (1) 15 percent of the value in the 60.29 preceding assessment, or (2) 33 percent of the difference 60.30 between the current assessment and the preceding assessment. 60.31 For assessment year 2006, the amount of the increase shall 60.32 not exceed the greater of (1) 15 percent of the value in the 60.33 preceding assessment, or (2) 50 percent of the difference 60.34 between the current assessment and the preceding assessment. 60.35 This limitation shall not apply to increases in value due 60.36 to improvements. For purposes of this subdivision, the term 61.1 "assessment" means the value prior to any exclusion under 61.2 subdivision 16. 61.3 The provisions of this subdivision shall be in effectonly61.4 through assessment year20012006 as provided in this 61.5 subdivision. 61.6 For purposes of the assessment/sales ratio study conducted 61.7 under section 127A.48, and the computation of state aids paid 61.8 under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 61.9 477A, market values and net tax capacities determined under this 61.10 subdivision and subdivision 16, shall be used. 61.11 [EFFECTIVE DATE.] This section is effective the day 61.12 following final enactment. The change to this section which 61.13 adds timber property is initially effective for the 2001 61.14 assessment. 61.15 Sec. 24. Minnesota Statutes 2000, section 273.11, 61.16 subdivision 14, is amended to read: 61.17 Subd. 14. [VACANT LAND PLATTEDON OR AFTERBEFORE AUGUST 61.18 1,19912001.] (a) All land plattedon or afterbefore August 1, 61.1919912001, and not improved with a permanent structure, shall be 61.20 assessed as provided in this subdivision. The assessor shall 61.21 determine the market value of each individual lot based upon the 61.22 highest and best use of the property as unplatted land. In 61.23 establishing the market value of the property, the assessor 61.24 shall consider the sale price of the unplatted land or 61.25 comparable sales of unplatted land of similar use and similar 61.26 availability of public utilities. 61.27 (b) The market value determined in paragraph (a) shall be 61.28 increased as follows for each of the three assessment years 61.29 immediately following the final approval of the plat: one-third 61.30 of the difference between the property's unplatted market value 61.31 as determined under paragraph (a) and the market value based 61.32 upon the highest and best use of the land as platted property 61.33 shall be added in each of the three subsequent assessment years. 61.34 (c) Any increase in market value after the first assessment 61.35 year following the plat's final approval shall be added to the 61.36 property's market value in the next assessment year. 62.1 Notwithstanding paragraph (b), if construction begins before the 62.2 expiration of the three years in paragraph (b), that lot shall 62.3 be eligible for revaluation in the next assessment year. The 62.4 market value of a platted lot determined under this subdivision 62.5 shall not exceed the value of that lot based upon the highest 62.6 and best use of the property as platted land. 62.7 [EFFECTIVE DATE.] This section is effective for land 62.8 platted before August 1, 2001. 62.9 Sec. 25. Minnesota Statutes 2000, section 273.11, is 62.10 amended by adding a subdivision to read: 62.11 Subd. 14a. [VACANT LAND PLATTED ON OR AFTER AUGUST 1, 62.12 2001; LOCATED IN METROPOLITAN COUNTIES.] (a) All land platted on 62.13 or after August 1, 2001, located in a metropolitan county, and 62.14 not improved with a permanent structure, shall be assessed as 62.15 provided in this subdivision. The assessor shall determine the 62.16 market value of each individual lot based upon the highest and 62.17 best use of the property as unplatted land. In establishing the 62.18 market value of the property, the assessor shall consider the 62.19 sale price of the unplatted land or comparable sales of 62.20 unplatted land of similar use and similar availability of public 62.21 utilities. 62.22 (b) The market value determined in paragraph (a) shall be 62.23 increased as follows for each of the three assessment years 62.24 immediately following the final approval of the plat: one-third 62.25 of the difference between the property's unplatted market value 62.26 as determined under paragraph (a) and the market value based 62.27 upon the highest and best use of the land as platted property 62.28 shall be added in each of the three subsequent assessment years. 62.29 (c) Any increase in market value after the first assessment 62.30 year following the plat's final approval shall be added to the 62.31 property's market value in the next assessment year. 62.32 Notwithstanding paragraph (b), if construction begins before the 62.33 expiration of the three years in paragraph (b), that lot shall 62.34 be eligible for revaluation in the next assessment year. The 62.35 market value of a platted lot determined under this subdivision 62.36 shall not exceed the value of that lot based upon the highest 63.1 and best use of the property as platted land. 63.2 (d) For purposes of this section, "metropolitan county" 63.3 means the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, 63.4 Scott, and Washington. 63.5 [EFFECTIVE DATE.] This section is effective for land 63.6 platted after July 31, 2001. 63.7 Sec. 26. Minnesota Statutes 2000, section 273.11, is 63.8 amended by adding a subdivision to read: 63.9 Subd. 14b. [VACANT LAND PLATTED ON OR AFTER AUGUST 1, 63.10 2001; LOCATED IN NONMETROPOLITAN COUNTIES.] (a) All land platted 63.11 on or after August 1, 2001, located in a nonmetropolitan county, 63.12 and not improved with a permanent structure, shall be assessed 63.13 as provided in this subdivision. The assessor shall determine 63.14 the market value of each individual lot based upon the highest 63.15 and best use of the property as unplatted land. In establishing 63.16 the market value of the property, the assessor shall consider 63.17 the sale price of the unplatted land or comparable sales of 63.18 unplatted land of similar use and similar availability of public 63.19 utilities. 63.20 (b) The market value determined in paragraph (a) shall be 63.21 increased as follows for each of the seven assessment years 63.22 immediately following the final approval of the plat: 63.23 one-seventh of the difference between the property's unplatted 63.24 market value as determined under paragraph (a) and the market 63.25 value based upon the highest and best use of the land as platted 63.26 property shall be added in each of the seven subsequent 63.27 assessment years. 63.28 (c) Any increase in market value after the first assessment 63.29 year following the plat's final approval shall be added to the 63.30 property's market value in the next assessment year. 63.31 Notwithstanding paragraph (b), if construction begins before the 63.32 expiration of the seven years in paragraph (b), that lot shall 63.33 be eligible for revaluation in the next assessment year. The 63.34 market value of a platted lot determined under this subdivision 63.35 shall not exceed the value of that lot based upon the highest 63.36 and best use of the property as platted land. 64.1 [EFFECTIVE DATE.] This section is effective for land 64.2 platted after July 31, 2001. 64.3 Sec. 27. Minnesota Statutes 2000, section 273.124, 64.4 subdivision 1, is amended to read: 64.5 Subdivision 1. [GENERAL RULE.] (a) Residential real estate 64.6 that is occupied and used for the purposes of a homestead by its 64.7 owner, who must be a Minnesota resident, is a residential 64.8 homestead. 64.9 Agricultural land, as defined in section 273.13, 64.10 subdivision 23, that is occupied and used as a homestead by its 64.11 owner, who must be a Minnesota resident, is an agricultural 64.12 homestead. 64.13 Dates for establishment of a homestead and homestead 64.14 treatment provided to particular types of property are as 64.15 provided in this section. 64.16 Property held by a trustee under a trust is eligible for 64.17 homestead classification if the requirements under this chapter 64.18 are satisfied. 64.19 The assessor shall require proof, as provided in 64.20 subdivision 13, of the facts upon which classification as a 64.21 homestead may be determined. Notwithstanding any other law, the 64.22 assessor may at any time require a homestead application to be 64.23 filed in order to verify that any property classified as a 64.24 homestead continues to be eligible for homestead status. 64.25 Notwithstanding any other law to the contrary, the department of 64.26 revenue may, upon request from an assessor, verify whether an 64.27 individual who is requesting or receiving homestead 64.28 classification has filed a Minnesota income tax return as a 64.29 resident for the most recent taxable year for which the 64.30 information is available. 64.31 When there is a name change or a transfer of homestead 64.32 property, the assessor may reclassify the property in the next 64.33 assessment unless a homestead application is filed to verify 64.34 that the property continues to qualify for homestead 64.35 classification. 64.36 (b) For purposes of this section, homestead property shall 65.1 include property which is used for purposes of the homestead but 65.2 is separated from the homestead by a road, street, lot, 65.3 waterway, or other similar intervening property. The term "used 65.4 for purposes of the homestead" shall include but not be limited 65.5 to uses for gardens, garages, or other outbuildings commonly 65.6 associated with a homestead, but shall not include vacant land 65.7 held primarily for future development. In order to receive 65.8 homestead treatment for the noncontiguous property, the owner 65.9 must use the property for the purposes of the homestead, and 65.10 must apply to the assessor, both by the deadlines given in 65.11 subdivision 9. After initial qualification for the homestead 65.12 treatment, additional applications for subsequent years are not 65.13 required. 65.14 (c) Residential real estate that is occupied and used for 65.15 purposes of a homestead by a relative of the owner is a 65.16 homestead but only to the extent of the homestead treatment that 65.17 would be provided if the related owner occupied the property. 65.18 For purposes of this paragraph and paragraph (g), "relative" 65.19 means a parent, stepparent, child, stepchild, grandparent, 65.20 grandchild, brother, sister, uncle, aunt, nephew, or niece. 65.21 This relationship may be by blood or marriage. Property that 65.22 has been classified as seasonal recreational residential 65.23 property at any time during which it has been owned by the 65.24 current owner or spouse of the current owner will not be 65.25 reclassified as a homestead unless it is occupied as a homestead 65.26 by the owner; this prohibition also applies to property that, in 65.27 the absence of this paragraph, would have been classified as 65.28 seasonal recreational residential property at the time when the 65.29 residence was constructed. Neither the related occupant nor the 65.30 owner of the property may claim a property tax refund under 65.31 chapter 290A for a homestead occupied by a relative. In the 65.32 case of a residence located on agricultural land, only the 65.33 house, garage, and immediately surrounding one acre of land 65.34 shall be classified as a homestead under this paragraph, except 65.35 as provided in paragraph (d). 65.36 (d) Agricultural property that is occupied and used for 66.1 purposes of a homestead by a relative of the owner, is a 66.2 homestead, only to the extent of the homestead treatment that 66.3 would be provided if the related owner occupied the property, 66.4 and only if all of the following criteria are met: 66.5 (1) the relative who is occupying the agricultural property 66.6 is a son, daughter, grandson, granddaughter, father, or mother 66.7 of the owner of the agricultural property or a son, daughter, 66.8 grandson, or granddaughter of the spouse of the owner of the 66.9 agricultural property; 66.10 (2) the owner of the agricultural property must be a 66.11 Minnesota resident; 66.12 (3) the owner of the agricultural property must not receive 66.13 homestead treatment on any other agricultural property in 66.14 Minnesota; and 66.15 (4) the owner of the agricultural property is limited to 66.16 only one agricultural homestead per family under this paragraph. 66.17 Neither the related occupant nor the owner of the property 66.18 may claim a property tax refund under chapter 290A for a 66.19 homestead occupied by a relative qualifying under this 66.20 paragraph. For purposes of this paragraph, "agricultural 66.21 property" means the house, garage, other farm buildings and 66.22 structures, and agricultural land. 66.23 Application must be made to the assessor by the owner of 66.24 the agricultural property to receive homestead benefits under 66.25 this paragraph. The assessor may require the necessary proof 66.26 that the requirements under this paragraph have been met. 66.27 (e) In the case of property owned by a property owner who 66.28 is married, the assessor must not deny homestead treatment in 66.29 whole or in part if only one of the spouses occupies the 66.30 property and the other spouse is absent due to: (1) marriage 66.31 dissolution proceedings, (2) legal separation, (3) employment or 66.32 self-employment in another location, or (4) other personal 66.33 circumstances causing the spouses to live separately, not 66.34 including an intent to obtain two homestead classifications for 66.35 property tax purposes. To qualify under clause (3), the 66.36 spouse's place of employment or self-employment must be at least 67.1 50 miles distant from the other spouse's place of employment, 67.2 and the homesteads must be at least 50 miles distant from each 67.3 other. Homestead treatment, in whole or in part, shall not be 67.4 denied to the owner's spouse who previously occupied the 67.5 residence with the owner if the absence of the owner is due to 67.6 one of the exceptions provided in this paragraph. 67.7 (f) The assessor must not deny homestead treatment in whole 67.8 or in part if: 67.9 (1) in the case of a property owner who is not married, the 67.10 owner is absent due to residence in a nursing homeor, boarding 67.11 care facility, or an elderly assisted living facility property 67.12 as defined in section 273.13, subdivision 25a, and the property 67.13 is not otherwise occupied; or 67.14 (2) in the case of a property owner who is married, the 67.15 owner or the owner's spouse or both are absent due to residence 67.16 in a nursing homeor, boarding care facility, or an elderly 67.17 assisted living facility property as defined in section 273.13, 67.18 subdivision 25a, and the property is not occupied or is occupied 67.19 only by the owner's spouse. 67.20 (g) If an individual is purchasing property with the intent 67.21 of claiming it as a homestead and is required by the terms of 67.22 the financing agreement to have a relative shown on the deed as 67.23 a coowner, the assessor shall allow a full homestead 67.24 classification. This provision only applies to first-time 67.25 purchasers, whether married or single, or to a person who had 67.26 previously been married and is purchasing as a single individual 67.27 for the first time. The application for homestead benefits must 67.28 be on a form prescribed by the commissioner and must contain the 67.29 data necessary for the assessor to determine if full homestead 67.30 benefits are warranted. 67.31 (h) If residential or agricultural real estate is occupied 67.32 and used for purposes of a homestead by a child of a deceased 67.33 owner and the property is subject to jurisdiction of probate 67.34 court, the child shall receive relative homestead classification 67.35 under paragraph (c) or (d) to the same extent they would be 67.36 entitled to it if the owner was still living, until the probate 68.1 is completed. For purposes of this paragraph, "child" includes 68.2 a relationship by blood or by marriage. 68.3 [EFFECTIVE DATE.] This section is effective for taxes 68.4 levied in 2001, payable in 2002, and thereafter. 68.5 Sec. 28. Minnesota Statutes 2000, section 273.124, 68.6 subdivision 8, is amended to read: 68.7 Subd. 8. [HOMESTEAD OWNED BY OR LEASED TO FAMILY FARM 68.8 CORPORATION, JOINT FARM VENTURE, LIMITED LIABILITY COMPANY, OR 68.9 PARTNERSHIP.] (a) Each family farm corporation, each 68.10 joint family farm venture, each limited liability company, and 68.11 each partnership operating a family farm is entitled to class 1b 68.12 under section 273.13, subdivision 22, paragraph (b), or class 2a 68.13 assessment for one homestead occupied by a shareholder, member, 68.14 or partner thereof who is residing on the landexcept as68.15provided in subdivision 14, paragraph (g), and actively engaged 68.16 in farming of the land owned by the family farm corporation, 68.17 joint family farm venture, limited liability company, or 68.18 partnership operating a family farm. Homestead treatment 68.19 applies even if legal title to the property is in the name of 68.20 the family farm corporation, joint family farm venture, limited 68.21 liability company, or partnership operating the family farm, and 68.22 not in the name of the person residing on it. 68.23 "Family farm corporation," "family farm," and "farm68.24 partnership operating a family farm" have the meanings given in 68.25 section 500.24, except that the number of allowable 68.26 shareholders, members, or partners under this subdivision shall 68.27 not exceed 12. "Limited liability company" has the meaning 68.28 contained insectionsections 322B.03, subdivision 28, and 68.29 500.24, subdivision 2, paragraphs (l) and (m). "Joint family 68.30 farm venture" means a cooperative agreement among two or more 68.31 farm enterprises authorized to operate a family farmlandunder 68.32 section 500.24. 68.33 (b) In addition to property specified in paragraph (a), any 68.34 other residences owned by family farm corporations, joint family 68.35 farm ventures, limited liability companies, or 68.36 partnerships operating a family farm described in paragraph (a) 69.1 which are located on agricultural land and occupied as 69.2 homesteads by its shareholders, members, or partners who are 69.3 actively engaged in farming on behalf ofthethat corporation, 69.4 joint farm venture, limited liability company, or partnership 69.5 must also be assessed as class 2a property or as class 1b 69.6 property under section 273.13, subdivision 22, paragraph (b). 69.7 (c) Agricultural property that is owned by a member, 69.8 partner, or shareholder of a family farm corporation or 69.9 joint family farm venture,as defined in paragraph (a), or by a69.10member of alimited liability company, or by apartner in a69.11 partnership operating a family farm and leased to the family 69.12 farm corporationby the shareholder, or to a member of a, 69.13 limited liability company, orto thepartnershipby the partner69.14 operating a family farm, or joint farm venture, as defined in 69.15 paragraph (a), is eligible for classification as class 1b or 69.16 class 2a under section 273.13,subdivision 22, paragraph (b), or69.17class 2a under section 273.13, subdivision 23, paragraph (a),if 69.18 the owner is actually residing on the propertyexcept as69.19provided in subdivision 14, paragraph (g), and is actually 69.20 engaged in farming the land on behalf ofthethat corporation, 69.21 joint farm venture, limited liability company, or partnership. 69.22 This paragraph applies without regard to any legal possession 69.23 rights of the family farm corporation, joint family farm 69.24 venture, limited liability company, or partnership operating a 69.25 family farm under the lease. 69.26 [EFFECTIVE DATE.] This section is effective for the 2001 69.27 assessment, taxes payable in 2002, and thereafter. 69.28 Sec. 29. Minnesota Statutes 2000, section 273.124, 69.29 subdivision 11, is amended to read: 69.30 Subd. 11. [LIMITATION ON HOMESTEAD 69.31CLASSIFICATIONREDUCTIONS.]If the assessor has classified a69.32property as both homestead and nonhomestead, the greater of the69.33value attributable to the portion of the property classified as69.34class 1 or class 2a or the value of the first tier of net class69.35rates provided under section 273.13, subdivision 22, or 23,69.36paragraph (a), is entitled to assessment as a homestead under70.1section 273.13, subdivision 22 or 23. The limitation in this70.2subdivision does not apply to buildings containing fewer than70.3four residential units or to a single rented or leased dwelling70.4unit located within or attached to a private garage or similar70.5structure owned by the owner of a homestead and located on the70.6premises of that homestead.70.7 If the assessor has classified a property as both homestead 70.8 and nonhomestead, the reductions in tax provided under sections 70.9 273.135 and 273.1391 apply to the value of both the homestead 70.10 and the nonhomestead portions of the property. 70.11 [EFFECTIVE DATE.] This section is effective for taxes 70.12 payable in 2002 and thereafter. 70.13 Sec. 30. Minnesota Statutes 2000, section 273.124, 70.14 subdivision 13, is amended to read: 70.15 Subd. 13. [HOMESTEAD APPLICATION.] (a) A person who meets 70.16 the homestead requirements under subdivision 1 must file a 70.17 homestead application with the county assessor to initially 70.18 obtain homestead classification. 70.19 (b) On or before January 2, 1993, each county assessor 70.20 shall mail a homestead application to the owner of each parcel 70.21 of property within the county which was classified as homestead 70.22 for the 1992 assessment year. The format and contents of a 70.23 uniform homestead application shall be prescribed by the 70.24 commissioner of revenue. The commissioner shall consult with 70.25 the chairs of the house and senate tax committees on the 70.26 contents of the homestead application form. The application 70.27 must clearly inform the taxpayer that this application must be 70.28 signed by all owners who occupy the property or by the 70.29 qualifying relative and returned to the county assessor in order 70.30 for the property to continue receiving homestead treatment. The 70.31 envelope containing the homestead application shall clearly 70.32 identify its contents and alert the taxpayer of its necessary 70.33 immediate response. 70.34 (c) Every property owner applying for homestead 70.35 classification must furnish to the county assessor the social 70.36 security number of each occupant who is listed as an owner of 71.1 the property on the deed of record, the name and address of each 71.2 owner who does not occupy the property, and the name and social 71.3 security number of each owner's spouse who occupies the 71.4 property. The application must be signed by each owner who 71.5 occupies the property and by each owner's spouse who occupies 71.6 the property, or, in the case of property that qualifies as a 71.7 homestead under subdivision 1, paragraph (c), by the qualifying 71.8 relative. 71.9 If a property owner occupies a homestead, the property 71.10 owner's spouse may not claim another property as a homestead 71.11 unless the property owner and the property owner's spouse file 71.12 with the assessor an affidavit or other proof required by the 71.13 assessor stating that the property qualifies as a homestead 71.14 under subdivision 1, paragraph (e). 71.15 Owners or spouses occupying residences owned by their 71.16 spouses and previously occupied with the other spouse, either of 71.17 whom fail to include the other spouse's name and social security 71.18 number on the homestead application or provide the affidavits or 71.19 other proof requested, will be deemed to have elected to receive 71.20 only partial homestead treatment of their residence. The 71.21 remainder of the residence will be classified as nonhomestead 71.22 residential. When an owner or spouse's name and social security 71.23 number appear on homestead applications for two separate 71.24 residences and only one application is signed, the owner or 71.25 spouse will be deemed to have elected to homestead the residence 71.26 for which the application was signed. 71.27 The social security numbers or affidavits or other proofs 71.28 of the property owners and spouses are private data on 71.29 individuals as defined by section 13.02, subdivision 12, but, 71.30 notwithstanding that section, the private data may be disclosed 71.31 to the commissioner of revenue, or, for purposes of proceeding 71.32 under the Revenue Recapture Act to recover personal property 71.33 taxes owing, to the county treasurer. 71.34 (d) If residential real estate is occupied and used for 71.35 purposes of a homestead by a relative of the owner and qualifies 71.36 for a homestead under subdivision 1, paragraph (c), in order for 72.1 the property to receive homestead status, a homestead 72.2 application must be filed with the assessor. The social 72.3 security number of each relative occupying the property and the 72.4 social security number of each owner who is related to an 72.5 occupant of the property shall be required on the homestead 72.6 application filed under this subdivision. If a different 72.7 relative of the owner subsequently occupies the property, the 72.8 owner of the property must notify the assessor within 30 days of 72.9 the change in occupancy. The social security number of a 72.10 relative occupying the property is private data on individuals 72.11 as defined by section 13.02, subdivision 12, but may be 72.12 disclosed to the commissioner of revenue. 72.13 (e) The homestead application shall also notify the 72.14 property owners that the application filed under this section 72.15 will not be mailed annually and that if the property is granted 72.16 homestead status for the 1993 assessment, or any assessment year 72.17 thereafter, that same property shall remain classified as 72.18 homestead until the property is sold or transferred to another 72.19 person, or the owners, the spouse of the owner, or the relatives 72.20 no longer use the property as their homestead. Upon the sale or 72.21 transfer of the homestead property, a certificate of value must 72.22 be timely filed with the county auditor as provided under 72.23 section 272.115. Failure to notify the assessor within 30 days 72.24 that the property has been sold, transferred, or that the owner, 72.25 the spouse of the owner, or the relative is no longer occupying 72.26 the property as a homestead, shall result in the penalty 72.27 provided under this subdivision and the property will lose its 72.28 current homestead status. 72.29 (f) If the homestead application is not returned within 30 72.30 days, the county will send a second application to the present 72.31 owners of record. The notice of proposed property taxes 72.32 prepared under section 275.065, subdivision 3, shall reflect the 72.33 property's classification. Beginning with assessment year 1993 72.34 for all properties, if a homestead application has not been 72.35 filed with the county by December 15, the assessor shall 72.36 classify the property as nonhomestead for the current assessment 73.1 year for taxes payable in the following year, provided that the 73.2 owner may be entitled to receive the homestead classification by 73.3 proper application under section 375.192. 73.4 (g) At the request of the commissioner, each county must 73.5 give the commissioner a list that includes the name and social 73.6 security number of each property owner and the property owner's 73.7 spouse occupying the property, or relative of a property owner, 73.8 applying for homestead classification under this subdivision. 73.9 The commissioner shall use the information provided on the lists 73.10 as appropriate under the law, including for the detection of 73.11 improper claims by owners, or relatives of owners, under chapter 73.12 290A. 73.13 (h) If the commissioner finds that a property owner may be 73.14 claiming a fraudulent homestead, the commissioner shall notify 73.15 the appropriate counties. Within 90 days of the notification, 73.16 the county assessor shall investigate to determine if the 73.17 homestead classification was properly claimed. If the property 73.18 owner does not qualify, the county assessor shall notify the 73.19 county auditor who will determine the amount of homestead 73.20 benefits that had been improperly allowed. For the purpose of 73.21 this section, "homestead benefits" means the tax reduction 73.22 resulting from the classification as a homestead under section 73.23 273.13, the taconite homestead credit under section 273.135, the 73.24 residential homestead and agricultural homestead credits under 73.25 section 273.1384, and the supplemental homestead credit under 73.26 section 273.1391. 73.27 The county auditor shall send a notice to the person who 73.28 owned the affected property at the time the homestead 73.29 application related to the improper homestead was filed, 73.30 demanding reimbursement of the homestead benefits plus a penalty 73.31 equal to 100 percent of the homestead benefits. The person 73.32 notified may appeal the county's determination by serving copies 73.33 of a petition for review with county officials as provided in 73.34 section 278.01 and filing proof of service as provided in 73.35 section 278.01 with the Minnesota tax court within 60 days of 73.36 the date of the notice from the county. Procedurally, the 74.1 appeal is governed by the provisions in chapter 271 which apply 74.2 to the appeal of a property tax assessment or levy, but without 74.3 requiring any prepayment of the amount in controversy. If the 74.4 amount of homestead benefits and penalty is not paid within 60 74.5 days, and if no appeal has been filed, the county auditor shall 74.6 certify the amount of taxes and penalty to the county 74.7 treasurer. The county treasurer will add interest to the unpaid 74.8 homestead benefits and penalty amounts at the rate provided in 74.9 section 279.03 for real property taxes becoming delinquent in 74.10 the calendar year during which the amount remains unpaid. 74.11 Interest may be assessed for the period beginning 60 days after 74.12 demand for payment was made. 74.13 If the person notified is the current owner of the 74.14 property, the treasurer may add the total amount of homestead 74.15 benefits, penalty, interest, and costs to the ad valorem taxes 74.16 otherwise payable on the property by including the amounts on 74.17 the property tax statements under section 276.04, subdivision 74.18 3. The amounts added under this paragraph to the ad valorem 74.19 taxes shall include interest accrued through December 31 of the 74.20 year preceding the taxes payable year for which the amounts are 74.21 first added. These amounts, when added to the property tax 74.22 statement, become subject to all the laws for the enforcement of 74.23 real or personal property taxes for that year, and for any 74.24 subsequent year. 74.25 If the person notified is not the current owner of the 74.26 property, the treasurer may collect the amounts due under the 74.27 Revenue Recapture Act in chapter 270A, or use any of the powers 74.28 granted in sections 277.20 and 277.21 without exclusion, to 74.29 enforce payment of the homestead benefits, penalty, interest, 74.30 and costs, as if those amounts were delinquent tax obligations 74.31 of the person who owned the property at the time the application 74.32 related to the improperly allowed homestead was filed. The 74.33 treasurer may relieve a prior owner of personal liability for 74.34 the homestead benefits, penalty, interest, and costs, and 74.35 instead extend those amounts on the tax lists against the 74.36 property as provided in this paragraph to the extent that the 75.1 current owner agrees in writing. On all demands, billings, 75.2 property tax statements, and related correspondence, the county 75.3 must list and state separately the amounts of homestead 75.4 benefits, penalty, interest and costs being demanded, billed or 75.5 assessed. 75.6 (i) Any amount of homestead benefits recovered by the 75.7 county from the property owner shall be distributed to the 75.8 county, city or town, and school district where the property is 75.9 located in the same proportion that each taxing district's levy 75.10 was to the total of the three taxing districts' levy for the 75.11 current year. Any amount recovered attributable to taconite 75.12 homestead credit shall be transmitted to the St. Louis county 75.13 auditor to be deposited in the taconite property tax relief 75.14 account. Any amount recovered that is attributable to 75.15 supplemental homestead credit is to be transmitted to the 75.16 commissioner of revenue for deposit in the general fund of the 75.17 state treasury. The total amount of penalty collected must be 75.18 deposited in the county general fund. 75.19 (j) If a property owner has applied for more than one 75.20 homestead and the county assessors cannot determine which 75.21 property should be classified as homestead, the county assessors 75.22 will refer the information to the commissioner. The 75.23 commissioner shall make the determination and notify the 75.24 counties within 60 days. 75.25 (k) In addition to lists of homestead properties, the 75.26 commissioner may ask the counties to furnish lists of all 75.27 properties and the record owners. The social security numbers 75.28 and federal identification numbers that are maintained by a 75.29 county or city assessor for property tax administration 75.30 purposes, and that may appear on the lists retain their 75.31 classification as private or nonpublic data; but may be viewed, 75.32 accessed, and used by the county auditor or treasurer of the 75.33 same county for the limited purpose of assisting the 75.34 commissioner in the preparation of microdata samples under 75.35 section 270.0681. 75.36 [EFFECTIVE DATE.] This section is effective for homestead 76.1 applications submitted on or after the day following final 76.2 enactment. 76.3 Sec. 31. Minnesota Statutes 2000, section 273.124, 76.4 subdivision 14, is amended to read: 76.5 Subd. 14. [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 76.6 (a) Real estate of less than ten acres that is the homestead of 76.7 its owner must be classified as class 2a under section 273.13, 76.8 subdivision 23, paragraph (a), if: 76.9 (1) the parcel on which the house is located is contiguous 76.10 on at least two sides to (i) agricultural land, (ii) land owned 76.11 or administered by the United States Fish and Wildlife Service, 76.12 or (iii) land administered by the department of natural 76.13 resources on which in lieu taxes are paid under sections 477A.11 76.14 to 477A.14; 76.15 (2) its owner also owns a noncontiguous parcel of 76.16 agricultural land that is at least 20 acres; 76.17 (3) the noncontiguous land is located not farther than four 76.18 townships or cities, or a combination of townships or cities 76.19 from the homestead; and 76.20 (4) the agricultural use value of the noncontiguous land 76.21 and farm buildings is equal to at least 50 percent of the market 76.22 value of the house, garage, and one acre of land. 76.23 Homesteads initially classified as class 2a under the 76.24 provisions of this paragraph shall remain classified as class 76.25 2a, irrespective of subsequent changes in the use of adjoining 76.26 properties, as long as the homestead remains under the same 76.27 ownership, the owner owns a noncontiguous parcel of agricultural 76.28 land that is at least 20 acres, and the agricultural use value 76.29 qualifies under clause (4). Homestead classification under this 76.30 paragraph is limited to property that qualified under this 76.31 paragraph for the 1998 assessment. 76.32 (b)(i) Agricultural property consisting of at least 40 76.33 acres shall be classified as the owner's homestead, to the same 76.34 extent as other agricultural homestead property, if all of the 76.35 following criteria are met: 76.36 (1) the owner, the owner's spouse, or theowner'sson or 77.1 daughter of the owner or owner's spouse, is actively farming the 77.2 agricultural property, either on the person's own behalf as an 77.3 individual or on behalf of a partnership operating a family 77.4 farm, family farm corporation, joint family farm venture, or 77.5 limited liability company of which the person is a partner, 77.6 shareholder, or member; 77.7 (2) both the owner of the agricultural propertyis a77.8Minnesota resident,andiftheowner's son or daughterperson 77.9 who is actively farming the agricultural property under clause 77.10 (1),that person must also be aare Minnesota 77.11residentresidents; 77.12 (3) neither the owner nor the spouse of the owner claims 77.13 another agricultural homestead in Minnesota; and 77.14 (4) neither the ownerdoes not livenor the person actively 77.15 farming the property lives farther than four townships or 77.16 cities, or a combination of four townships or cities, from the 77.17 agricultural property,andexcept that if theowner's son or77.18daughter is actively farming the agricultural property under77.19clause (1), that person must also live within theowner or the 77.20 owner's spouse is required to live in employer-provided housing, 77.21 the owner or owner's spouse, whichever is actively farming the 77.22 agricultural property, may live more than four townships or 77.23 cities, or combination of four townships or cities from the 77.24 agricultural property. 77.25 The relationship under this paragraph may be either by 77.26 blood or marriage. 77.27 (ii) Real property held by a trustee under a trust is 77.28 eligible for agricultural homestead classification under this 77.29 paragraph if the qualifications in clause (i) are met, except 77.30 that "owner" means the grantor of the trust. 77.31(ii)(iii) Property containing the residence of an owner 77.32 who owns qualified property under clause (i) shall be classified 77.33 as part of the owner's agricultural homestead, if that property 77.34 is also used for noncommercial storage or drying of agricultural 77.35 crops. 77.36 (c)Except as provided in paragraph (e),Noncontiguous land 78.1 shall be included as part of a homestead under section 273.13, 78.2 subdivision 23, paragraph (a), only if the homestead is 78.3 classified as class 2a and the detached land is located in the 78.4 same township or city, or not farther than four townships or 78.5 cities or combination thereof from the homestead. Any taxpayer 78.6 of these noncontiguous lands must notify the county assessor 78.7 that the noncontiguous land is part of the taxpayer's homestead, 78.8 and, if the homestead is located in another county, the taxpayer 78.9 must also notify the assessor of the other county. 78.10 (d) Agricultural land used for purposes of a homestead and 78.11 actively farmed by a person holding a vested remainder interest 78.12 in it must be classified as a homestead under section 273.13, 78.13 subdivision 23, paragraph (a). If agricultural land is 78.14 classified class 2a, any other dwellings on the land used for 78.15 purposes of a homestead by persons holding vested remainder 78.16 interests who are actively engaged in farming the property, and 78.17 up to one acre of the land surrounding each homestead and 78.18 reasonably necessary for the use of the dwelling as a home, must 78.19 also be assessed class 2a. 78.20 (e) Agricultural land and buildings that were class 2a 78.21 homestead property under section 273.13, subdivision 23, 78.22 paragraph (a), for the 1997 assessment shall remain classified 78.23 as agricultural homesteads for subsequent assessments if: 78.24 (1) the property owner abandoned the homestead dwelling 78.25 located on the agricultural homestead as a result of the April 78.26 1997 floods; 78.27 (2) the property is located in the county of Polk, Clay, 78.28 Kittson, Marshall, Norman, or Wilkin; 78.29 (3) the agricultural land and buildings remain under the 78.30 same ownership for the current assessment year as existed for 78.31 the 1997 assessment year and continue to be used for 78.32 agricultural purposes; 78.33 (4) the dwelling occupied by the owner is located in 78.34 Minnesota and is within 30 miles of one of the parcels of 78.35 agricultural land that is owned by the taxpayer; and 78.36 (5) the owner notifies the county assessor that the 79.1 relocation was due to the 1997 floods, and the owner furnishes 79.2 the assessor any information deemed necessary by the assessor in 79.3 verifying the change in dwelling. Further notifications to the 79.4 assessor are not required if the property continues to meet all 79.5 the requirements in this paragraph and any dwellings on the 79.6 agricultural land remain uninhabited. 79.7 (f) Agricultural land and buildings that were class 2a 79.8 homestead property under section 273.13, subdivision 23, 79.9 paragraph (a), for the 1998 assessment shall remain classified 79.10 agricultural homesteads for subsequent assessments if: 79.11 (1) the property owner abandoned the homestead dwelling 79.12 located on the agricultural homestead as a result of damage 79.13 caused by a March 29, 1998, tornado; 79.14 (2) the property is located in the county of Blue Earth, 79.15 Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice; 79.16 (3) the agricultural land and buildings remain under the 79.17 same ownership for the current assessment year as existed for 79.18 the 1998 assessment year; 79.19 (4) the dwelling occupied by the owner is located in this 79.20 state and is within 50 miles of one of the parcels of 79.21 agricultural land that is owned by the taxpayer; and 79.22 (5) the owner notifies the county assessor that the 79.23 relocation was due to a March 29, 1998, tornado, and the owner 79.24 furnishes the assessor any information deemed necessary by the 79.25 assessor in verifying the change in homestead dwelling. For 79.26 taxes payable in 1999, the owner must notify the assessor by 79.27 December 1, 1998. Further notifications to the assessor are not 79.28 required if the property continues to meet all the requirements 79.29 in this paragraph and any dwellings on the agricultural land 79.30 remain uninhabited. 79.31 (g) Agricultural property consisting of at least 40 acres 79.32 of a family farm corporation, joint family farm venture, family 79.33 farm limited liability company, or partnership operating a 79.34 family farm as described under subdivision 8 shall be classified 79.35 homestead, to the same extent as other agricultural homestead 79.36 property, if all of the following criteria are met: 80.1 (1)thea shareholder, member, or partner of that entity is 80.2 actively farming the agricultural property; 80.3 (2)thethat shareholder, member, or partnerofwho is 80.4 actively farming the agricultural property is a Minnesota 80.5 resident; 80.6 (3) neitherthethat shareholder, member, or partner, nor 80.7 the spouse ofthethat shareholder, member, or partner claims 80.8 another agricultural homestead in Minnesota; and 80.9 (4)thethat shareholder, member, or partner does not live 80.10 farther than four townships or cities, or a combination of four 80.11 townships or cities, from the agricultural property. 80.12 Homestead treatment applies under this paragraph for 80.13 property leased to a family farm corporation, joint farm 80.14 venture, limited liability company, or partnership operating a 80.15 family farm if legal title to the property is in the name of an 80.16 individual who is a member, shareholder, or partner in the 80.17 entity. 80.18 [EFFECTIVE DATE.] This section is effective for the 2001 80.19 assessment, taxes payable in 2002, and thereafter. 80.20 Sec. 32. Minnesota Statutes 2000, section 273.13, 80.21 subdivision 22, is amended to read: 80.22 Subd. 22. [CLASS 1.] (a) Except as provided in subdivision 80.23 23 and in paragraphs (b) and (c), real estate which is 80.24 residential and used for homestead purposes is class11a. The 80.25 market value of class 1a property must be determined based upon 80.26 the value of the house, garage, and land. 80.27 The first$76,000$500,000 of market value of class 1a 80.28 property has a net class rate of one percent of its market 80.29 value; and the market value of class 1a property that 80.30 exceeds$76,000$500,000 has a class rate of1.651.25 percent 80.31 of its market value. 80.32 (b) Class 1b property includes homestead real estate or 80.33 homestead manufactured homes used for the purposes of a 80.34 homestead by 80.35 (1) any blind person, or the blind person and the blind 80.36 person's spouse; or 81.1 (2) any person, hereinafter referred to as "veteran," who: 81.2 (i) served in the active military or naval service of the 81.3 United States; and 81.4 (ii) is entitled to compensation under the laws and 81.5 regulations of the United States for permanent and total 81.6 service-connected disability due to the loss, or loss of use, by 81.7 reason of amputation, ankylosis, progressive muscular 81.8 dystrophies, or paralysis, of both lower extremities, such as to 81.9 preclude motion without the aid of braces, crutches, canes, or a 81.10 wheelchair; and 81.11 (iii) has acquired a special housing unit with special 81.12 fixtures or movable facilities made necessary by the nature of 81.13 the veteran's disability, or the surviving spouse of the 81.14 deceased veteran for as long as the surviving spouse retains the 81.15 special housing unit as a homestead; or 81.16 (3) any person who: 81.17 (i) is permanently and totally disabled and 81.18 (ii) receives 90 percent or more of total household income, 81.19 as defined in section 290A.03, subdivision 5, from 81.20 (A) aid from any state as a result of that disability; or 81.21 (B) supplemental security income for the disabled; or 81.22 (C) workers' compensation based on a finding of total and 81.23 permanent disability; or 81.24 (D) social security disability, including the amount of a 81.25 disability insurance benefit which is converted to an old age 81.26 insurance benefit and any subsequent cost of living increases; 81.27 or 81.28 (E) aid under the federal Railroad Retirement Act of 1937, 81.29 United States Code Annotated, title 45, section 228b(a)5; or 81.30 (F) a pension from any local government retirement fund 81.31 located in the state of Minnesota as a result of that 81.32 disability; or 81.33 (G) pension, annuity, or other income paid as a result of 81.34 that disability from a private pension or disability plan, 81.35 including employer, employee, union, and insurance plans and 81.36 (iii) has household income as defined in section 290A.03, 82.1 subdivision 5, of $50,000 or less; or 82.2 (4) any person who is permanently and totally disabled and 82.3 whose household income as defined in section 290A.03, 82.4 subdivision 5, is 275 percent or less of the federal poverty 82.5 level. 82.6 Property is classified and assessed under clause (4) only 82.7 if the government agency or income-providing source certifies, 82.8 upon the request of the homestead occupant, that the homestead 82.9 occupant satisfies the disability requirements of this paragraph. 82.10 Property is classified and assessed pursuant to clause (1) 82.11 only if the commissioner of economic security certifies to the 82.12 assessor that the homestead occupant satisfies the requirements 82.13 of this paragraph. 82.14 Permanently and totally disabled for the purpose of this 82.15 subdivision means a condition which is permanent in nature and 82.16 totally incapacitates the person from working at an occupation 82.17 which brings the person an income. The first $32,000 market 82.18 value of class 1b property has a net class rate of .45 percent 82.19 of its market value. The remaining market value of class 1b 82.20 property has anetclass rate using the rates for class11a or 82.21 class 2a property, whichever is appropriate, of similar market 82.22 value. 82.23 (c) Class 1c property is commercial use real property that 82.24 abuts a lakeshore line and is devoted to temporary and seasonal 82.25 residential occupancy for recreational purposes but not devoted 82.26 to commercial purposes for more than 250 days in the year 82.27 preceding the year of assessment, and that includes a portion 82.28 used as a homestead by the owner, which includes a dwelling 82.29 occupied as a homestead by a shareholder of a corporation that 82.30 owns the resort or a partner in a partnership that owns the 82.31 resort, even if the title to the homestead is held by the 82.32 corporation or partnership. For purposes of this clause, 82.33 property is devoted to a commercial purpose on a specific day if 82.34 any portion of the property, excluding the portion used 82.35 exclusively as a homestead, is used for residential occupancy 82.36 and a fee is charged for residential occupancy. The first 83.1 $500,000 of market value of class 1c property has a class rate 83.2 of one percentof total, and the remaining market value of class 83.3 1c property has a class rate of one percent, with the following 83.4 limitation: the area of the property must not exceed 100 feet 83.5 of lakeshore footage for each cabin or campsite located on the 83.6 property up to a total of 800 feet and 500 feet in depth, 83.7 measured away from the lakeshore. If any portion of the class 83.8 1c resort property is classified as class 4c under subdivision 83.9 25, the entire property must meet the requirements of 83.10 subdivision 25, paragraph (d), clause (1), to qualify for class 83.11 1c treatment under this paragraph. 83.12 (d) Class 1d property includes structures that meet all of 83.13 the following criteria: 83.14 (1) the structure is located on property that is classified 83.15 as agricultural property under section 273.13, subdivision 23; 83.16 (2) the structure is occupied exclusively by seasonal farm 83.17 workers during the time when they work on that farm, and the 83.18 occupants are not charged rent for the privilege of occupying 83.19 the property, provided that use of the structure for storage of 83.20 farm equipment and produce does not disqualify the property from 83.21 classification under this paragraph; 83.22 (3) the structure meets all applicable health and safety 83.23 requirements for the appropriate season; and 83.24 (4) the structure is not salable as residential property 83.25 because it does not comply with local ordinances relating to 83.26 location in relation to streets or roads. 83.27 The market value of class 1d property has the same class 83.28 rates as class 1a property under paragraph (a). 83.29 [EFFECTIVE DATE.] This section is effective for taxes 83.30 payable in 2002 and thereafter. 83.31 Sec. 33. Minnesota Statutes 2000, section 273.13, 83.32 subdivision 23, is amended to read: 83.33 Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural 83.34 land including any improvements that is homesteaded. The market 83.35 value of the house and garage and immediately surrounding one 83.36 acre of land has the same class rates as class 1a property under 84.1 subdivision 22. The value of the remaining land including 84.2 improvements up to$115,000 has a net class rate of 0.35 percent84.3of market value. The value of class 2a property over $115,00084.4of market value up toand including $600,000 market value has a 84.5 net class rate of0.80.55 percent of market value. The 84.6 remaining property over $600,000 market value has a class rate 84.7 of1.20one percent of market value. 84.8 (b) Class 2b property is (1) real estate, rural in 84.9 character and used exclusively for growing trees for timber, 84.10 lumber, and wood and wood products; (2) real estate that is not 84.11 improved with a structure and is used exclusively for growing 84.12 trees for timber, lumber, and wood and wood products, if the 84.13 owner has participated or is participating in a cost-sharing 84.14 program for afforestation, reforestation, or timber stand 84.15 improvement on that particular property, administered or 84.16 coordinated by the commissioner of natural resources; (3) real 84.17 estate that is nonhomestead agricultural land; or (4) a landing 84.18 area or public access area of a privately owned public use 84.19 airport. Class 2b property has a net class rate of1.20one 84.20 percent of market value. 84.21 (c) Agricultural land as used in this section means 84.22 contiguous acreage of ten acres or more, used during the 84.23 preceding year for agricultural purposes. "Agricultural 84.24 purposes" as used in this section means the raising or 84.25 cultivation of agricultural products or enrollment in the 84.26 Reinvest in Minnesota program under sections 103F.501 to 84.27 103F.535 or the federal Conservation Reserve Program as 84.28 contained in Public Law Number 99-198. Contiguous acreage on 84.29 the same parcel, or contiguous acreage on an immediately 84.30 adjacent parcel under the same ownership, may also qualify as 84.31 agricultural land, but only if it is pasture, timber, waste, 84.32 unusable wild land, or land included in state or federal farm 84.33 programs. Agricultural classification for property shall be 84.34 determined excluding the house, garage, and immediately 84.35 surrounding one acre of land, and shall not be based upon the 84.36 market value of any residential structures on the parcel or 85.1 contiguous parcels under the same ownership. 85.2 (d) Real estate, excluding the house, garage, and 85.3 immediately surrounding one acre of land, of less than ten acres 85.4 which is exclusively and intensively used for raising or 85.5 cultivating agricultural products, shall be considered as 85.6 agricultural land. 85.7 Land shall be classified as agricultural even if all or a 85.8 portion of the agricultural use of that property is the leasing 85.9 to, or use by another person for agricultural purposes. 85.10 Classification under this subdivision is not determinative 85.11 for qualifying under section 273.111. 85.12 The property classification under this section supersedes, 85.13 for property tax purposes only, any locally administered 85.14 agricultural policies or land use restrictions that define 85.15 minimum or maximum farm acreage. 85.16 (e) The term "agricultural products" as used in this 85.17 subdivision includes production for sale of: 85.18 (1) livestock, dairy animals, dairy products, poultry and 85.19 poultry products, fur-bearing animals, horticultural and nursery 85.20 stock described in sections 18.44 to 18.61, fruit of all kinds, 85.21 vegetables, forage, grains, bees, and apiary products by the 85.22 owner; 85.23 (2) fish bred for sale and consumption if the fish breeding 85.24 occurs on land zoned for agricultural use; 85.25 (3) the commercial boarding of horses if the boarding is 85.26 done in conjunction with raising or cultivating agricultural 85.27 products as defined in clause (1); 85.28 (4) property which is owned and operated by nonprofit 85.29 organizations used for equestrian activities, excluding racing; 85.30 (5) game birds and waterfowl bred and raised for use on a 85.31 shooting preserve licensed under section 97A.115; 85.32 (6) insects primarily bred to be used as food for 85.33 animals;and85.34 (7) trees, grown for sale as a crop, and not sold for 85.35 timber, lumber, wood, or wood products; and 85.36 (8) maple syrup taken from trees grown by a person licensed 86.1 by the Minnesota department of agriculture under chapter 28A as 86.2 a food processor. 86.3 (f) If a parcel used for agricultural purposes is also used 86.4 for commercial or industrial purposes, including but not limited 86.5 to: 86.6 (1) wholesale and retail sales; 86.7 (2) processing of raw agricultural products or other goods; 86.8 (3) warehousing or storage of processed goods; and 86.9 (4) office facilities for the support of the activities 86.10 enumerated in clauses (1), (2), and (3), 86.11 the assessor shall classify the part of the parcel used for 86.12 agricultural purposes as class 1b, 2a, or 2b, whichever is 86.13 appropriate, and the remainder in the class appropriate to its 86.14 use. The grading, sorting, and packaging of raw agricultural 86.15 products for first sale is considered an agricultural purpose. 86.16 A greenhouse or other building where horticultural or nursery 86.17 products are grown that is also used for the conduct of retail 86.18 sales must be classified as agricultural if it is primarily used 86.19 for the growing of horticultural or nursery products from seed, 86.20 cuttings, or roots and occasionally as a showroom for the retail 86.21 sale of those products. Use of a greenhouse or building only 86.22 for the display of already grown horticultural or nursery 86.23 products does not qualify as an agricultural purpose. 86.24 The assessor shall determine and list separately on the 86.25 records the market value of the homestead dwelling and the one 86.26 acre of land on which that dwelling is located. If any farm 86.27 buildings or structures are located on this homesteaded acre of 86.28 land, their market value shall not be included in this separate 86.29 determination. 86.30 (g) To qualify for classification under paragraph (b), 86.31 clause (4), a privately owned public use airport must be 86.32 licensed as a public airport under section 360.018. For 86.33 purposes of paragraph (b), clause (4), "landing area" means that 86.34 part of a privately owned public use airport properly cleared, 86.35 regularly maintained, and made available to the public for use 86.36 by aircraft and includes runways, taxiways, aprons, and sites 87.1 upon which are situated landing or navigational aids. A landing 87.2 area also includes land underlying both the primary surface and 87.3 the approach surfaces that comply with all of the following: 87.4 (i) the land is properly cleared and regularly maintained 87.5 for the primary purposes of the landing, taking off, and taxiing 87.6 of aircraft; but that portion of the land that contains 87.7 facilities for servicing, repair, or maintenance of aircraft is 87.8 not included as a landing area; 87.9 (ii) the land is part of the airport property; and 87.10 (iii) the land is not used for commercial or residential 87.11 purposes. 87.12 The land contained in a landing area under paragraph (b), clause 87.13 (4), must be described and certified by the commissioner of 87.14 transportation. The certification is effective until it is 87.15 modified, or until the airport or landing area no longer meets 87.16 the requirements of paragraph (b), clause (4). For purposes of 87.17 paragraph (b), clause (4), "public access area" means property 87.18 used as an aircraft parking ramp, apron, or storage hangar, or 87.19 an arrival and departure building in connection with the airport. 87.20 [EFFECTIVE DATE.] This section is effective for taxes 87.21 levied in 2001, payable in 2002, and thereafter. 87.22 Sec. 34. Minnesota Statutes 2000, section 273.13, 87.23 subdivision 24, is amended to read: 87.24 Subd. 24. [CLASS 3.] (a) Commercial and industrial 87.25 property and utility real and personal property is class 3a. 87.26 (1) Except as otherwise provided, each parcel of 87.27 commercial, industrial, or utility real property has a class 87.28 rate of2.41.5 percent of the first tier of market value, 87.29 and3.42.0 percent of the remaining market value. In the case 87.30 of contiguous parcels of property owned by the same person or 87.31 entity, only the value equal to the first-tier value of the 87.32 contiguous parcels qualifies for the reduced class rate, except 87.33 that contiguous parcels owned by the same person or entity shall 87.34 be eligible for the first-tier value class rate on each separate 87.35 business operated by the owner of the property, provided the 87.36 business is housed in a separate structure. For the purposes of 88.1 this subdivision, the first tier means the first $150,000 of 88.2 market value. Real property owned in fee by a utility for 88.3 transmission line right-of-way shall be classified at the class 88.4 rate for the higher tier. 88.5 For purposes of this subdivision, parcels are considered to 88.6 be contiguous even if they are separated from each other by a 88.7 road, street, waterway, or other similar intervening type of 88.8 property. Connections between parcels that consist of power 88.9 lines or pipelines do not cause the parcels to be contiguous. 88.10 Property owners who have contiguous parcels of property that 88.11 constitute separate businesses that may qualify for the 88.12 first-tier class rate shall notify the assessor by July 1, for 88.13 treatment beginning in the following taxes payable year. 88.14 (2)PersonalAll railroad operating property and all 88.15 property that is: (i) part of an electric generation, 88.16 transmission, or distribution system; or (ii) part of a pipeline 88.17 system transporting or distributing water, gas, crude oil, or 88.18 petroleum products; and (iii) not described in clause (3), has a 88.19 class rate as provided under clause (1) for the first tier of 88.20 market value and the remaining market value. In the case of 88.21 multiple parcels in one county that are owned by one person or 88.22 entity, only one first tier amount is eligible for the reduced 88.23 rate. 88.24 (3) The entire market value of personal property that is: 88.25 (i) tools, implements, and machinery of an electric generation, 88.26 transmission, or distribution system; (ii) tools, implements, 88.27 and machinery of a pipeline system transporting or distributing 88.28 water, gas, crude oil, or petroleum products; or (iii) the mains 88.29 and pipes used in the distribution of steam or hot or chilled 88.30 water for heating or cooling buildings, has a class rate as 88.31 provided under clause (1) for the remaining market value in 88.32 excess of the first tier. 88.33 (b) Employment property defined in section 469.166, during 88.34 the period provided in section 469.170, shall constitute class 88.35 3b. The class rates for class 3b property are determined under 88.36 paragraph (a). 89.1(c)(1) Subject to the limitations of clause (2), structures89.2which are (i) located on property classified as class 3a, (ii)89.3constructed under an initial building permit issued after89.4January 2, 1996, (iii) located in a transit zone as defined89.5under section 473.3915, subdivision 3, (iv) located within the89.6boundaries of a school district, and (v) not primarily used for89.7retail or transient lodging purposes, shall have a class rate89.8equal to the lesser of 2.975 percent or the class rate of the89.9second tier of the commercial property rate under paragraph (a)89.10on any portion of the market value that does not qualify for the89.11first tier class rate under paragraph (a). As used in item (v),89.12a structure is primarily used for retail or transient lodging89.13purposes if over 50 percent of its square footage is used for89.14those purposes. A class rate equal to the lesser of 2.97589.15percent or the class rate of the second tier of the commercial89.16property class rate under paragraph (a) shall also apply to89.17improvements to existing structures that meet the requirements89.18of items (i) to (v) if the improvements are constructed under an89.19initial building permit issued after January 2, 1996, even if89.20the remainder of the structure was constructed prior to January89.212, 1996. For the purposes of this paragraph, a structure shall89.22be considered to be located in a transit zone if any portion of89.23the structure lies within the zone. If any property once89.24eligible for treatment under this paragraph ceases to remain89.25eligible due to revisions in transit zone boundaries, the89.26property shall continue to receive treatment under this89.27paragraph for a period of three years.89.28(2) This clause applies to any structure qualifying for the89.29transit zone reduced class rate under clause (1) on January 2,89.301999, or any structure meeting any of the qualification criteria89.31in item (i) and otherwise qualifying for the transit zone89.32reduced class rate under clause (1). Such a structure continues89.33to receive the transit zone reduced class rate until the89.34occurrence of one of the events in item (ii). Property89.35qualifying under item (i)(D), that is located outside of a city89.36of the first class, qualifies for the transit zone reduced class90.1rate as provided in that item. Property qualifying under item90.2(i)(E) qualifies for the transit zone reduced class rate as90.3provided in that item.90.4(i) A structure qualifies for the rate in this clause if it90.5is:90.6(A) property for which a building permit was issued before90.7December 31, 1998; or90.8(B) property for which a building permit was issued before90.9June 30, 2001, if:90.10(I) at least 50 percent of the land on which the structure90.11is to be built has been acquired or is the subject of signed90.12purchase agreements or signed options as of March 15, 1998, by90.13the entity that proposes construction of the project or an90.14affiliate of the entity;90.15(II) signed agreements have been entered into with one90.16entity or with affiliated entities to lease for the account of90.17the entity or affiliated entities at least 50 percent of the90.18square footage of the structure or the owner of the structure90.19will occupy at least 50 percent of the square footage of the90.20structure; and90.21(III) one of the following requirements is met:90.22the project proposer has submitted the completed data90.23portions of an environmental assessment worksheet by December90.2431, 1998; or90.25a notice of determination of adequacy of an environmental90.26impact statement has been published by April 1, 1999; or90.27an alternative urban areawide review has been completed by90.28April 1, 1999; or90.29(C) property for which a building permit is issued before90.30July 30, 1999, if:90.31(I) at least 50 percent of the land on which the structure90.32is to be built has been acquired or is the subject of signed90.33purchase agreements as of March 31, 1998, by the entity that90.34proposes construction of the project or an affiliate of the90.35entity;90.36(II) a signed agreement has been entered into between the91.1building developer and a tenant to lease for its own account at91.2least 200,000 square feet of space in the building;91.3(III) a signed letter of intent is entered into by July 1,91.41998, between the building developer and the tenant to lease the91.5space for its own account; and91.6(IV) the environmental review process required by state law91.7was commenced by December 31, 1998;91.8(D) property for which an irrevocable letter of credit with91.9a housing and redevelopment authority was signed before December91.1031, 1998. The structure shall receive the transit zone reduced91.11class rate during construction and for the duration of time that91.12the original tenants remain in the building. Any unoccupied net91.13leasable square footage that is not leased within 36 months91.14after the certificate of occupancy has been issued for the91.15building shall not be eligible to receive the reduced class91.16rate. This reduced class rate applies only if a qualifying91.17entity continues to own the property;91.18(E) property, located in a city of the first class, and for91.19which the building permits for the excavation, the parking ramp,91.20and the office tower were issued prior to April 1, 1999, shall91.21receive the reduced class rate during construction and for the91.22first five assessment years immediately following its initial91.23occupancy provided that, when completed, at least 25 percent of91.24the net leasable square footage must be occupied by a qualifying91.25entity each year during this time period. In order to receive91.26the reduced class rate on the structure in any subsequent91.27assessment years, at least 50 percent of the rentable square91.28footage must be occupied by a qualifying entity. This reduced91.29class rate applies only if a qualifying entity continues to own91.30the property.91.31(ii) A structure specified by this clause, other than a91.32structure qualifying under clause (i)(D) or (E), shall continue91.33to receive the transit zone reduced class rate until the91.34occurrence of one of the following events:91.35(A) if the structure upon initial occupancy will be owner91.36occupied by the entity initially constructing the structure or92.1an affiliated entity, the structure receives the reduced class92.2rate until the structure ceases to be at least 50 percent92.3occupied by the entity or an affiliated entity, provided, if the92.4portion of the structure occupied by that entity or an affiliate92.5of the entity is less than 85 percent, the transit zone class92.6rate reduction for the portion of structure not so occupied92.7terminates upon the leasing of such space to any nonaffiliated92.8entity; or92.9(B) if the structure is leased by a single entity or92.10affiliated entity at the time of initial occupancy, the92.11structure shall receive the reduced class rate until the92.12structure ceases to be at least 50 percent occupied by the92.13entity or an affiliated entity, provided, if the portion of the92.14structure occupied by that entity or an affiliate of the entity92.15is less than 85 percent, the transit zone class rate reduction92.16for the portion of structure not so occupied shall terminate92.17upon the leasing of such space to any nonaffiliated entity; or92.18(C) if the structure meets the criteria in item (i)(C), the92.19structure shall receive the reduced class rate until the92.20expiration of the initial lease term of the applicable tenants.92.21Percentages occupied or leased shall be determined based92.22upon net leasable square footage in the structure. The assessor92.23shall allocate the value of the structure in the same fashion as92.24provided in the general law for portions of any structure92.25receiving and not receiving the transit tax class reduction as a92.26result of this clause.92.27(3) For purposes of paragraph (c), "qualifying entity"92.28means the entity owning the property on September 1, 2000, or an92.29affiliate of an entity that owned the property on September 1,92.302000.92.31 [EFFECTIVE DATE.] This section is effective for taxes 92.32 payable in 2002 and thereafter. 92.33 Sec. 35. Minnesota Statutes 2000, section 273.13, 92.34 subdivision 25, is amended to read: 92.35 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 92.36 estate containing four or more units and used or held for use by 93.1 the owner or by the tenants or lessees of the owner as a 93.2 residence for rental periods of 30 days or more. Class 4a also 93.3 includes hospitals licensed under sections 144.50 to 144.56, 93.4 other than hospitals exempt under section 272.02, and contiguous 93.5 property used for hospital purposes, without regard to whether 93.6 the property has been platted or subdivided. The market value 93.7 of class 4a propertyin a city with a population of 5,000 or93.8less, that is (1) located outside of the metropolitan area, as93.9defined in section 473.121, subdivision 2, or outside any county93.10contiguous to the metropolitan area, and (2) whose city boundary93.11is at least 15 miles from the boundary of any city with a93.12population greater than 5,000 has a class rate of 2.15 percent93.13of market value. All other class 4a propertyhas a class rate 93.14 of2.4 percent of market value. For purposes of this paragraph,93.15population has the same meaning given in section 477A.011,93.16subdivision 31.8 percent for taxes payable in 2002, 1.5 percent 93.17 for taxes payable in 2003, and 1.25 percent for taxes payable in 93.18 2004 and thereafter, except that class 4a property consisting of 93.19 a structure for which construction commenced after June 30, 93.20 2001, has a class rate of 1.25 percent of market value for taxes 93.21 payable in 2003 and subsequent years. 93.22 (b) Class 4b includes: 93.23 (1) residential real estate containing less than four units 93.24 that does not qualify as class 4bb, other than seasonal 93.25 residential, and recreational; 93.26 (2) manufactured homes not classified under any other 93.27 provision; 93.28 (3) a dwelling, garage, and surrounding one acre of 93.29 property on a nonhomestead farm classified under subdivision 23, 93.30 paragraph (b) containing two or three units; 93.31 (4) unimproved property that is classified residential as 93.32 determined under subdivision 33. 93.33 The market value of class 4b property has a class rate of 93.341.65 percent of market value1.5 percent for taxes payable in 93.35 2002, and 1.25 percent for taxes payable in 2003 and thereafter. 93.36 (c) Class 4bb includes: 94.1 (1) nonhomestead residential real estate containing one 94.2 unit, other than seasonal residential, and recreational; and 94.3 (2) a single family dwelling, garage, and surrounding one 94.4 acre of property on a nonhomestead farm classified under 94.5 subdivision 23, paragraph (b). 94.6 Class 4bb property hasa class rate of 1.2 percent on the94.7first $76,000 of market value and a class rate of 1.65 percent94.8of its market value that exceeds $76,000the same class rates as 94.9 class 1a property under subdivision 22. 94.10 Property that has been classified as seasonal recreational 94.11 residential property at any time during which it has been owned 94.12 by the current owner or spouse of the current owner does not 94.13 qualify for class 4bb. 94.14 (d) Class 4c property includes: 94.15 (1) except as provided in subdivision 22, paragraph (c), 94.16 real property devoted to temporary and seasonal residential 94.17 occupancy for recreation purposes, including real property 94.18 devoted to temporary and seasonal residential occupancy for 94.19 recreation purposes and not devoted to commercial purposes for 94.20 more than 250 days in the year preceding the year of 94.21 assessment. For purposes of this clause, property is devoted to 94.22 a commercial purpose on a specific day if any portion of the 94.23 property is used for residential occupancy, and a fee is charged 94.24 for residential occupancy. In order for a property to be 94.25 classified as class 4c, seasonal recreational residential for 94.26 commercial purposes, at least 40 percent of the annual gross 94.27 lodging receipts related to the property must be from business 94.28 conducted during 90 consecutive days and either (i) at least 60 94.29 percent of all paid bookings by lodging guests during the year 94.30 must be for periods of at least two consecutive nights; or (ii) 94.31 at least 20 percent of the annual gross receipts must be from 94.32 charges for rental of fish houses, boats and motors, 94.33 snowmobiles, downhill or cross-country ski equipment, or charges 94.34 for marina services, launch services, and guide services, or the 94.35 sale of bait and fishing tackle. For purposes of this 94.36 determination, a paid booking of five or more nights shall be 95.1 counted as two bookings. Class 4c also includes commercial use 95.2 real property used exclusively for recreational purposes in 95.3 conjunction with class 4c property devoted to temporary and 95.4 seasonal residential occupancy for recreational purposes, up to 95.5 a total of two acres, provided the property is not devoted to 95.6 commercial recreational use for more than 250 days in the year 95.7 preceding the year of assessment and is located within two miles 95.8 of the class 4c property with which it is used. Class 4c 95.9 property classified in this clause also includes the remainder 95.10 of class 1c resorts provided that the entire property including 95.11 that portion of the property classified as class 1c also meets 95.12 the requirements for class 4c under this clause; otherwise the 95.13 entire property is classified as class 3. Owners of real 95.14 property devoted to temporary and seasonal residential occupancy 95.15 for recreation purposes and all or a portion of which was 95.16 devoted to commercial purposes for not more than 250 days in the 95.17 year preceding the year of assessment desiring classification as 95.18 class 1c or 4c, must submit a declaration to the assessor 95.19 designating the cabins or units occupied for 250 days or less in 95.20 the year preceding the year of assessment by January 15 of the 95.21 assessment year. Those cabins or units and a proportionate 95.22 share of the land on which they are located will be designated 95.23 class 1c or 4c as otherwise provided. The remainder of the 95.24 cabins or units and a proportionate share of the land on which 95.25 they are located will be designated as class 3a. The owner of 95.26 property desiring designation as class 1c or 4c property must 95.27 provide guest registers or other records demonstrating that the 95.28 units for which class 1c or 4c designation is sought were not 95.29 occupied for more than 250 days in the year preceding the 95.30 assessment if so requested. The portion of a property operated 95.31 as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 95.32 nonresidential facility operated on a commercial basis not 95.33 directly related to temporary and seasonal residential occupancy 95.34 for recreation purposes shall not qualify for class 1c or 4c; 95.35 (2) qualified property used as a golf course if: 95.36 (i) it is open to the public on a daily fee basis. It may 96.1 charge membership fees or dues, but a membership fee may not be 96.2 required in order to use the property for golfing, and its green 96.3 fees for golfing must be comparable to green fees typically 96.4 charged by municipal courses; and 96.5 (ii) it meets the requirements of section 273.112, 96.6 subdivision 3, paragraph (d). 96.7 A structure used as a clubhouse, restaurant, or place of 96.8 refreshment in conjunction with the golf course is classified as 96.9 class 3a property; 96.10 (3) real property up to a maximum of one acre of land owned 96.11 by a nonprofit community service oriented organization; provided 96.12 that the property is not used for a revenue-producing activity 96.13 for more than six days in the calendar year preceding the year 96.14 of assessment and the property is not used for residential 96.15 purposes on either a temporary or permanent basis. For purposes 96.16 of this clause, a "nonprofit community service oriented 96.17 organization" means any corporation, society, association, 96.18 foundation, or institution organized and operated exclusively 96.19 for charitable, religious, fraternal, civic, or educational 96.20 purposes, and which is exempt from federal income taxation 96.21 pursuant to section 501(c)(3), (10), or (19) of the Internal 96.22 Revenue Code of 1986, as amended through December 31, 1990. For 96.23 purposes of this clause, "revenue-producing activities" shall 96.24 include but not be limited to property or that portion of the 96.25 property that is used as an on-sale intoxicating liquor or 3.2 96.26 percent malt liquor establishment licensed under chapter 340A, a 96.27 restaurant open to the public, bowling alley, a retail store, 96.28 gambling conducted by organizations licensed under chapter 349, 96.29 an insurance business, or office or other space leased or rented 96.30 to a lessee who conducts a for-profit enterprise on the 96.31 premises. Any portion of the property which is used for 96.32 revenue-producing activities for more than six days in the 96.33 calendar year preceding the year of assessment shall be assessed 96.34 as class 3a. The use of the property for social events open 96.35 exclusively to members and their guests for periods of less than 96.36 24 hours, when an admission is not charged nor any revenues are 97.1 received by the organization shall not be considered a 97.2 revenue-producing activity; 97.3 (4) post-secondary student housing of not more than one 97.4 acre of land that is owned by a nonprofit corporation organized 97.5 under chapter 317A and is used exclusively by a student 97.6 cooperative, sorority, or fraternity for on-campus housing or 97.7 housing located within two miles of the border of a college 97.8 campus; 97.9 (5) manufactured home parks as defined in section 327.14, 97.10 subdivision 3; 97.11 (6) real property that is actively and exclusively devoted 97.12 to indoor fitness, health, social, recreational, and related 97.13 uses, is owned and operated by a not-for-profit corporation, and 97.14 is located within the metropolitan area as defined in section 97.15 473.121, subdivision 2; and 97.16 (7) a leased or privately owned noncommercial aircraft 97.17 storage hangar not exempt under section 272.01, subdivision 2, 97.18 and the land on which it is located, provided that: 97.19 (i) the land is on an airport owned or operated by a city, 97.20 town, county, metropolitan airports commission, or group 97.21 thereof; and 97.22 (ii) the land lease, or any ordinance or signed agreement 97.23 restricting the use of the leased premise, prohibits commercial 97.24 activity performed at the hangar. 97.25 If a hangar classified under this clause is sold after June 97.26 30, 2000, a bill of sale must be filed by the new owner with the 97.27 assessor of the county where the property is located within 60 97.28 days of the sale. 97.29 Class 4c property has a class rate of1.651.5 percent of 97.30 market value, except that (i) each parcel of seasonal 97.31 residential recreational property not used for commercial 97.32 purposes has the same class rates as class 4bb property, (ii) 97.33 manufactured home parks assessed under clause (5) have the same 97.34 class rate as class 4b property,and(iii)property described in97.35paragraph (d), clause (4), has the same class rate as the rate97.36applicable to the first tier of class 4bb nonhomestead98.1residential real estate under paragraph (c)commercial-use 98.2 seasonal residential recreational property has a class rate of 98.3 one percent for the first $500,000 of market value, which 98.4 includes any market value receiving the one percent rate under 98.5 subdivision 22, and 1.25 percent for the remaining market value, 98.6 (iv) the market value of property described in clause (4) has a 98.7 class rate of one percent, and (v) the market value of property 98.8 described in clauses (2) and (6) has a class rate of 1.25 98.9 percent. 98.10 (e) Class 4d property is qualifying low-income rental 98.11 housing certified to the assessor by the housing finance agency 98.12 under sections 273.126 and 462A.071. Class 4d includes land in 98.13 proportion to the total market value of the building that is 98.14 qualifying low-income rental housing. For all properties 98.15 qualifying as class 4d, the market value determined by the 98.16 assessor must be based on the normal approach to value using 98.17 normal unrestricted rents. 98.18 Class 4d property has a class rate ofone percent of market98.19value0.9 percent for taxes payable in 2002, and one percent for 98.20 taxes payable in 2003 and 1.25 percent for taxes payable in 2004 98.21 and thereafter. 98.22 [EFFECTIVE DATE.] This section is effective for taxes 98.23 payable in 2002 and thereafter. 98.24 Sec. 36. Minnesota Statutes 2000, section 273.13, 98.25 subdivision 31, is amended to read: 98.26 Subd. 31. [CLASS 5.] Class 5 property includes: 98.27 (1) unmined iron ore and low-grade iron-bearing formations 98.28 as defined in section 273.14; and 98.29 (2) all other property not otherwise classified. 98.30 Class 5 property has a class rate of3.42.0 percent of 98.31 market value. 98.32 [EFFECTIVE DATE.] This section is effective for taxes 98.33 payable in 2002 and thereafter. 98.34 Sec. 37. [273.1384] [MARKET VALUE HOMESTEAD CREDITS.] 98.35 Subdivision 1. [RESIDENTIAL HOMESTEAD MARKET VALUE 98.36 CREDIT.] Each county auditor shall determine a homestead credit 99.1 for each class 1a, 1b, 1c, and 2a homestead property within the 99.2 county equal to .4 percent of the market value of the property. 99.3 The amount of homestead credit for a homestead may not exceed 99.4 $304 and is reduced by .09 percent of the market value in excess 99.5 of $76,000. In the case of an agricultural or resort homestead, 99.6 only the market value of the house, garage, and immediately 99.7 surrounding one acre of land is eligible in determining the 99.8 property's homestead credit. 99.9 Subd. 2. [AGRICULTURAL HOMESTEAD MARKET VALUE 99.10 CREDIT.] Property classified as class 2a agricultural homestead 99.11 is eligible for an agricultural credit. The credit is equal to 99.12 0.2 percent of the first $115,000 of the property's market 99.13 value. The credit under this subdivision is limited to $230 for 99.14 each homestead. 99.15 Subd. 3. [CREDIT REIMBURSEMENTS.] The county auditor shall 99.16 determine the tax reductions allowed under this section within 99.17 the county for each taxes payable year and shall certify that 99.18 amount to the commissioner of revenue as a part of the abstracts 99.19 of tax lists submitted by the county auditors under section 99.20 275.29. Any prior year adjustments shall also be certified on 99.21 the abstracts of tax lists. The commissioner shall review the 99.22 certifications for accuracy, and may make such changes as are 99.23 deemed necessary, or return the certification to the county 99.24 auditor for correction. The credits under this section must be 99.25 used to proportionately reduce the net tax capacity-based 99.26 property tax payable to each local taxing jurisdiction as 99.27 provided in section 273.1393. 99.28 Subd. 4. [PAYMENT.] (a) The commissioner of revenue shall 99.29 reimburse each local taxing jurisdiction, other than school 99.30 districts, for the tax reductions granted under this section in 99.31 two equal installments on October 31 and December 26 of the 99.32 taxes payable year for which the reductions are granted, 99.33 including in each payment the prior year adjustments certified 99.34 on the abstracts for that taxes payable year. The 99.35 reimbursements related to tax increments shall be issued in one 99.36 installment each year on December 26. 100.1 (b) The commissioner of revenue shall certify the total of 100.2 the tax reductions granted under this section for each taxes 100.3 payable year within each school district to the commissioner of 100.4 the department of children, families, and learning and the 100.5 commissioner of children, families, and learning shall pay the 100.6 reimbursement amounts to each school district as provided in 100.7 section 273.1392. 100.8 Subd. 5. [APPROPRIATION.] An amount sufficient to make the 100.9 payments required by this section to taxing jurisdictions other 100.10 than school districts is annually appropriated from the general 100.11 fund to the commissioner of revenue. An amount sufficient to 100.12 make the payments required by this section for school districts 100.13 is annually appropriated from the general fund to the 100.14 commissioner of children, families, and learning. 100.15 [EFFECTIVE DATE.] This section is effective for taxes, 100.16 credits, and reimbursements payable in 2002 and thereafter. 100.17 Sec. 38. Minnesota Statutes 2000, section 273.1392, is 100.18 amended to read: 100.19 273.1392 [PAYMENT; SCHOOL DISTRICTS.] 100.20 The amounts of conservation tax credits under section 100.21 273.119; disaster or emergency reimbursement under section 100.22 273.123;attached machinery aid under section 273.138; homestead100.23credit under section 273.13homestead and agricultural credits 100.24 under section 273.1384; aids and credits under section 273.1398; 100.25 wetlands reimbursement under section 275.295; enterprise zone 100.26 property credit payments under section 469.171; and metropolitan 100.27 agricultural preserve reduction under section 473H.10 for school 100.28 districts, shall be certified to the department of children, 100.29 families, and learning by the department of revenue. The 100.30 amounts so certified shall be paid according to section 127A.45, 100.31 subdivisions 9 and 13. 100.32 [EFFECTIVE DATE.] This section is effective for aids and 100.33 credits payable in 2002 and thereafter. 100.34 Sec. 39. Minnesota Statutes 2000, section 273.1393, is 100.35 amended to read: 100.36 273.1393 [COMPUTATION OF NET PROPERTY TAXES.] 101.1 Notwithstanding any other provisions to the contrary, "net" 101.2 property taxes are determined by subtracting the credits in the 101.3 order listed from the gross tax: 101.4 (1) disaster credit as provided in section 273.123; 101.5 (2) powerline credit as provided in section 273.42; 101.6 (3) agricultural preserves credit as provided in section 101.7 473H.10; 101.8 (4) enterprise zone credit as provided in section 469.171; 101.9 (5) disparity reduction credit; 101.10 (6) conservation tax credit as provided in section 273.119; 101.11 (7)educationhomesteadcreditand agricultural credits as 101.12 provided in section273.1382273.1384; 101.13 (8) taconite homestead credit as provided in section 101.14 273.135; and 101.15 (9) supplemental homestead credit as provided in section 101.16 273.1391. 101.17 The combination of all property tax credits must not exceed 101.18 the gross tax amount. 101.19 [EFFECTIVE DATE.] This section is effective for taxes 101.20 payable in 2002 and thereafter. 101.21 Sec. 40. Minnesota Statutes 2000, section 273.1398, is 101.22 amended by adding a subdivision to read: 101.23 Subd. 2e. [HOMESTEAD AND AGRICULTURAL AID FOR CITIES, 101.24 TOWNS, AND SPECIAL TAXING DISTRICTS.] Notwithstanding the 101.25 provisions of subdivision 2, the amount of homestead and 101.26 agricultural credit aid for a statutory or home rule charter 101.27 city, town, school district, or special taxing district for aid 101.28 payable in calendar year 2002 and thereafter is zero. 101.29 [EFFECTIVE DATE.] This section is effective for aids 101.30 payable in 2002 and future years. 101.31 Sec. 41. Minnesota Statutes 2000, section 273.166, 101.32 subdivision 2, is amended to read: 101.33 Subd. 2. [MANUFACTURED HOME HOMESTEAD AND AGRICULTURAL 101.34 CREDIT AID.]ForIn calendar year 2002, and each calendar year 101.35 thereafter,themanufactured home homestead and agricultural 101.36 credit aidfor each taxing jurisdiction equals the taxing102.1jurisdiction'sshall be paid to each county under this section 102.2 in an amount equal to the county's manufactured home homestead 102.3 and agricultural credit aid determined under this subdivision 102.4 for the preceding aid payable year times the growth adjustment 102.5 factor for thejurisdiction plus the net tax capacity adjustment102.6for the jurisdictioncounty. Payment will not be made to 102.7 anytaxing jurisdictioncounty that has ceased to levy a 102.8 property tax. 102.9 [EFFECTIVE DATE.] This section is effective for aid paid in 102.10 2002 and thereafter. 102.11 Sec. 42. Minnesota Statutes 2000, section 273.166, 102.12 subdivision 3, is amended to read: 102.13 Subd. 3. [AID CALCULATION.] The commissioner of revenue 102.14 shall make the calculation required in subdivision 2 and 102.15 annually pay manufactured home homestead and agricultural credit 102.16 aid tothe local governmentscounties at the times provided in 102.17 section 473H.10 for local governments other than school 102.18 districts.Aid payments to the school districts must be102.19certified to the commissioner of children, families, and102.20learning and paid under section 273.1392.102.21 [EFFECTIVE DATE.] This section is effective for aid paid in 102.22 2002 and thereafter. 102.23 Sec. 43. Minnesota Statutes 2000, section 273.166, 102.24 subdivision 5, is amended to read: 102.25 Subd. 5. [APPROPRIATION.]There is annually appropriated102.26from the general fund to the commissioner of children, families,102.27and learning a sum sufficient to pay the aids provided under102.28this section for school districts, intermediate school102.29districts, or any group of school districts levying as a single102.30taxing entity.There is annually appropriated from the general 102.31 fund to the commissioner of revenue a sum sufficient to pay the 102.32 aids provided under this section to counties, cities, towns, and102.33special taxing districts. 102.34 [EFFECTIVE DATE.] This section is effective for fiscal year 102.35 2003 and thereafter. 102.36 Sec. 44. Minnesota Statutes 2000, section 273.42, is 103.1 amended by adding a subdivision to read: 103.2 Subd. 3. [STATE TAX ON TRANSMISSION AND DISTRIBUTION 103.3 LINES.] Notwithstanding section 273.425, the entire tax capacity 103.4 of property taxed at the average local tax rate under 103.5 subdivision 1 is subject to the state tax rate provided in 103.6 section 275.025. Notwithstanding subdivisions 1 and 2, the 103.7 entire proceeds of the state tax levy for each such property 103.8 must be distributed to the state under the procedures provided 103.9 in chapter 276. No portion of the proceeds from the state levy 103.10 on such property is distributed within the county under 103.11 subdivision 1 or 2. 103.12 [EFFECTIVE DATE.] This section is effective for taxes 103.13 payable in 2002 and thereafter. 103.14 Sec. 45. Minnesota Statutes 2000, section 275.02, is 103.15 amended to read: 103.16 275.02 [STATE LEVY, EXCEPTIONSFOR BONDED DEBT; 103.17 CERTIFICATION OF TAX RATE.] 103.18TheA state tax for bonded debt pursuant to the Minnesota 103.19 Constitution, article XI, shall be levied on the tax capacity of 103.20 all taxable property in the state. The rate of the tax shall be 103.21 certified by the state auditor to each county auditor on or 103.22 before November151 annually. The tax under this section is 103.23 not treated as a local tax rate under 469.177. 103.24 [EFFECTIVE DATE.] This section is effective the day 103.25 following final enactment. 103.26 Sec. 46. [275.025] [STATE GENERAL TAX.] 103.27 Subdivision 1. [LEVY AMOUNT.] The state general levy is 103.28 levied against commercial-industrial property and seasonal 103.29 recreational property, as defined in this section. The state 103.30 general levy is $592,000,000 for taxes payable in 2002. For 103.31 taxes payable in subsequent years, the levy is increased each 103.32 year by multiplying the amount for the prior year by the sum of 103.33 one plus the rate of increase, if any, in the implicit price 103.34 deflator for government consumption expenditures and gross 103.35 investment for state and local governments prepared by the 103.36 Bureau of Economic Analysts of the United States Department of 104.1 Commerce for the 12-month period ending March 31 of the year 104.2 prior to the year the taxes are payable. The tax under this 104.3 section is not treated as a local tax rate under section 469.177 104.4 and is not the levy of a governmental unit under chapters 276A 104.5 and 473F. Beginning in fiscal year 2004, and in each year 104.6 thereafter, the commissioner of finance shall deposit in an 104.7 education reserve account, which account is hereby established, 104.8 the increased amount of the state general levy received for 104.9 deposit in the general fund for that year over the amount of the 104.10 state general levy received for deposit in the general fund in 104.11 fiscal year 2003. The amounts in the education reserve account 104.12 do not lapse or cancel each year, but remain until appropriated 104.13 by law for education aid or higher education funding. 104.14 Subd. 2. [COMMERCIAL-INDUSTRIAL TAX CAPACITY.] For the 104.15 purposes of this section, "commercial-industrial tax capacity" 104.16 means the tax capacity of all taxable property classified as 104.17 class 3 or class 5(1) under section 273.13, except for electric 104.18 generation attached machinery under class 3 and property 104.19 described in section 473.625. County commercial-industrial tax 104.20 capacity amounts are not adjusted for the captured net tax 104.21 capacity of a tax increment financing district under section 104.22 469.177, subdivision 2, the net tax capacity of transmission 104.23 lines deducted from a local government's total net tax capacity 104.24 under section 273.425, or fiscal disparities contribution and 104.25 distribution net tax capacities under chapter 276A or 473F. 104.26 Subd. 3. [SEASONAL RECREATIONAL TAX CAPACITY.] For the 104.27 purposes of this section, "seasonal recreational tax capacity" 104.28 means the tax capacity of all class 4c(1) property under section 104.29 273.13, subdivision 25, except that the first $76,000 of market 104.30 value of each noncommercial class 4c(1) property has a tax 104.31 capacity for this purpose equal to 40 percent of its tax 104.32 capacity under section 273.13. 104.33 Subd. 4. [APPORTIONMENT AND LEVY OF STATE GENERAL 104.34 TAX.] The state general tax must be distributed among the 104.35 counties by applying a uniform rate to each county's 104.36 commercial-industrial tax capacity and its seasonal recreational 105.1 tax capacity. Within each county, the tax must be levied by 105.2 applying a uniform rate against commercial-industrial tax 105.3 capacity and seasonal recreational tax capacity. By November 1 105.4 each year, the commissioner of revenue shall certify the state 105.5 general levy rate to each county auditor. 105.6 [EFFECTIVE DATE.] This section is effective for taxes 105.7 payable in 2002 and subsequent years. 105.8 Sec. 47. Minnesota Statutes 2000, section 275.065, 105.9 subdivision 3, is amended to read: 105.10 Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 105.11 county auditor shall prepare and the county treasurer shall 105.12 deliver after November 10 and on or before November 24 each 105.13 year, by first class mail to each taxpayer at the address listed 105.14 on the county's current year's assessment roll, a notice of 105.15 proposed property taxes. 105.16 (b) The commissioner of revenue shall prescribe the form of 105.17 the notice. 105.18 (c) The notice must inform taxpayers that it contains the 105.19 amount of property taxes each taxing authority proposes to 105.20 collect for taxes payable the following year. In the case of a 105.21 town, or in the case of the state determined portion of the 105.22 school district levy, the final tax amount will be its proposed 105.23 tax. In the case of taxing authorities required to hold a 105.24 public meeting under subdivision 6, the notice must clearly 105.25 state that each taxing authority, including regional library 105.26 districts established under section 134.201, and including the 105.27 metropolitan taxing districts as defined in paragraph (i), but 105.28 excluding all other special taxing districts and towns, will 105.29 hold a public meeting to receive public testimony on the 105.30 proposed budget and proposed or final property tax levy, or, in 105.31 case of a school district, on the current budget and proposed 105.32 property tax levy. It must clearly state the time and place of 105.33 each taxing authority's meeting, a telephone number for the 105.34 taxing authority that taxpayers may call if they have questions 105.35 related to the notice, and an address where comments will be 105.36 received by mail. 106.1 (d) The notice must state for each parcel: 106.2 (1) the market value of the property as determined under 106.3 section 273.11, and used for computing property taxes payable in 106.4 the following year and for taxes payable in the current year as 106.5 each appears in the records of the county assessor on November 1 106.6 of the current year; and, in the case of residential property, 106.7 whether the property is classified as homestead or 106.8 nonhomestead. The notice must clearly inform taxpayers of the 106.9 years to which the market values apply and that the values are 106.10 final values; 106.11 (2) the items listed below, shown separately by county, 106.12 city or town, state determined school tax net of the education 106.13 homestead credit under section 273.1382, voter approved school 106.14 levy, other local school levy, and the sum of the special taxing 106.15 districts, and as a total of all taxing authorities: 106.16 (i) the actual tax for taxes payable in the current year; 106.17 (ii) the tax change due to spending factors, defined as the 106.18 proposed tax minus the constant spending tax amount; 106.19 (iii) the tax change due to other factors, defined as the 106.20 constant spending tax amount minus the actual current year tax; 106.21 and 106.22 (iv) the proposed tax amount. 106.23 In the case of a town or the state determined school tax, 106.24 the final tax shall also be its proposed tax unless the town 106.25 changes its levy at a special town meeting under section 106.26 365.52. If a school district has certified under section 106.27 126C.17, subdivision 9, that a referendum will be held in the 106.28 school district at the November general election, the county 106.29 auditor must note next to the school district's proposed amount 106.30 that a referendum is pending and that, if approved by the 106.31 voters, the tax amount may be higher than shown on the notice. 106.32 In the case of the city of Minneapolis, the levy for the 106.33 Minneapolis library board and the levy for Minneapolis park and 106.34 recreation shall be listed separately from the remaining amount 106.35 of the city's levy. In the case of a parcel where tax increment 106.36 or the fiscal disparities areawide tax under chapter 276A or 107.1 473F applies, the proposed tax levy on the captured value or the 107.2 proposed tax levy on the tax capacity subject to the areawide 107.3 tax must each be stated separately and not included in the sum 107.4 of the special taxing districts; and 107.5 (3) the increase or decrease between the total taxes 107.6 payable in the current year and the total proposed taxes, 107.7 expressed as a percentage. 107.8 For purposes of this section, the amount of the tax on 107.9 homesteads qualifying under the senior citizens' property tax 107.10 deferral program under chapter 290B is the total amount of 107.11 property tax before subtraction of the deferred property tax 107.12 amount. 107.13 (e) The notice must clearly state that the proposed or 107.14 final taxes do not include the following: 107.15 (1) special assessments; 107.16 (2) levies approved by the voters after the date the 107.17 proposed taxes are certified, including bond referenda, school 107.18 district levy referenda, and levy limit increase referenda; 107.19 (3) amounts necessary to pay cleanup or other costs due to 107.20 a natural disaster occurring after the date the proposed taxes 107.21 are certified; 107.22 (4) amounts necessary to pay tort judgments against the 107.23 taxing authority that become final after the date the proposed 107.24 taxes are certified; and 107.25 (5) the contamination tax imposed on properties which 107.26 received market value reductions for contamination. 107.27 (f) Except as provided in subdivision 7, failure of the 107.28 county auditor to prepare or the county treasurer to deliver the 107.29 notice as required in this section does not invalidate the 107.30 proposed or final tax levy or the taxes payable pursuant to the 107.31 tax levy. 107.32 (g) If the notice the taxpayer receives under this section 107.33 lists the property as nonhomestead, and satisfactory 107.34 documentation is provided to the county assessor by the 107.35 applicable deadline, and the property qualifies for the 107.36 homestead classification in that assessment year, the assessor 108.1 shall reclassify the property to homestead for taxes payable in 108.2 the following year. 108.3 (h) In the case of class 4 residential property used as a 108.4 residence for lease or rental periods of 30 days or more, the 108.5 taxpayer must either: 108.6 (1) mail or deliver a copy of the notice of proposed 108.7 property taxes to each tenant, renter, or lessee; or 108.8 (2) post a copy of the notice in a conspicuous place on the 108.9 premises of the property. 108.10 The notice must be mailed or posted by the taxpayer by 108.11 November 27 or within three days of receipt of the notice, 108.12 whichever is later. A taxpayer may notify the county treasurer 108.13 of the address of the taxpayer, agent, caretaker, or manager of 108.14 the premises to which the notice must be mailed in order to 108.15 fulfill the requirements of this paragraph. 108.16 (i) For purposes of this subdivision, subdivisions 5a and 108.17 6, "metropolitan special taxing districts" means the following 108.18 taxing districts in the seven-county metropolitan area that levy 108.19 a property tax for any of the specified purposes listed below: 108.20 (1) metropolitan council under section 473.132, 473.167, 108.21 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 108.22 (2) metropolitan airports commission under section 473.667, 108.23 473.671, or 473.672; and 108.24 (3) metropolitan mosquito control commission under section 108.25 473.711. 108.26 For purposes of this section, any levies made by the 108.27 regional rail authorities in the county of Anoka, Carver, 108.28 Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 108.29 398A shall be included with the appropriate county's levy and 108.30 shall be discussed at that county's public hearing. 108.31 (j) If a statutory or home rule charter city or a town has 108.32 exercised the local levy option provided by section 473.388, 108.33 subdivision 7, it may include in the notice of its proposed 108.34 taxes the amount of its proposed taxes attributable to its 108.35 exercise of the option. In the first year of the city or town's 108.36 exercise of this option, the statement shall include an estimate 109.1 of the reduction of the metropolitan council's tax on the parcel 109.2 due to exercise of that option. The metropolitan council's levy 109.3 shall be adjusted accordingly. 109.4 [EFFECTIVE DATE.] This section is effective for notices of 109.5 proposed property taxes required in 2001 for taxes payable in 109.6 2002, and thereafter. 109.7 Sec. 48. Minnesota Statutes 2000, section 275.065, 109.8 subdivision 5a, is amended to read: 109.9 Subd. 5a. [PUBLIC ADVERTISEMENT.] (a) A city that has a 109.10 population of more than 2,500, county, a metropolitan special 109.11 taxing district as defined in subdivision 3, paragraph (i), a 109.12 regional library district established under section 134.201, or 109.13 school district shall advertise in a newspaper a notice of its 109.14 intent to adopt a budget and property tax levy or, in the case 109.15 of a school district, to review its current budget and proposed 109.16 property taxes payable in the following year, at a public 109.17 hearing, if a public hearing is required under subdivision 6. 109.18 The notice must be published not less than two business days nor 109.19 more than six business days before the hearing. 109.20 The advertisement must be at least one-eighth page in size 109.21 of a standard-size or a tabloid-size newspaper. The 109.22 advertisement must not be placed in the part of the newspaper 109.23 where legal notices and classified advertisements appear. The 109.24 advertisement must be published in an official newspaper of 109.25 general circulation in the taxing authority. The newspaper 109.26 selected must be one of general interest and readership in the 109.27 community, and not one of limited subject matter. The 109.28 advertisement must appear in a newspaper that is published at 109.29 least once per week. 109.30 For purposes of this section, the metropolitan special 109.31 taxing district's advertisement must only be published in the 109.32 Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 109.33 In addition to other requirements, a county and a city 109.34 having a population of more than 2,500 must show in the public 109.35 advertisement required under this subdivision the current local 109.36 tax rate, the proposed local tax rate if no property tax levy 110.1 increase is adopted, and the proposed rate if the proposed levy 110.2 is adopted. For purposes of this subdivision, "local tax rate" 110.3 means the city's or county's net tax capacity levy divided by 110.4 the city's or county's taxable net tax capacity. 110.5 (b) The advertisement for school districts, metropolitan 110.6 special taxing districts, and regional library districts must be 110.7 in the following form, except that the notice for a school 110.8 district may include references to the current budget in regard 110.9 to proposed property taxes. 110.10 "NOTICE OF 110.11 PROPOSED PROPERTY TAXES 110.12 (School District/Metropolitan 110.13 Special Taxing District/Regional 110.14 Library District) of ......... 110.15 The governing body of ........ will soon hold budget hearings 110.16 and vote on the property taxes for (metropolitan special taxing 110.17 district/regional library district services that will be 110.18 provided in (year)/school district services that will be 110.19 provided in (year) and (year)). 110.20 NOTICE OF PUBLIC HEARING: 110.21 All concerned citizens are invited to attend a public hearing 110.22 and express their opinions on the proposed (school 110.23 district/metropolitan special taxing district/regional library 110.24 district) budget and property taxes, or in the case of a school 110.25 district, its current budget and proposed property taxes, 110.26 payable in the following year. The hearing will be held on 110.27 (Month/Day/Year) at (Time) at (Location, Address)." 110.28 (c) The advertisement for cities and counties must be in 110.29 the following form. 110.30 "NOTICE OF PROPOSED 110.31 TOTAL BUDGET AND PROPERTY TAXES 110.32 The (city/county) governing body or board of commissioners will 110.33 hold a public hearing to discuss the budget and to vote on the 110.34 amount of property taxes to collect for services the 110.35 (city/county) will provide in (year). 110.36 111.1 SPENDING: The total budget amounts below compare 111.2 (city's/county's) (year) total actual budget with the amount the 111.3 (city/county) proposes to spend in (year). 111.4 111.5 (Year) Total Proposed (Year) Change from 111.6 Actual Budget Budget (Year)-(Year) 111.7 111.8 $....... $....... ...% 111.9 111.10 TAXES: The property tax amounts below compare that portion of 111.11 the current budget levied in property taxes in (city/county) for 111.12 (year) with the property taxes the (city/county) proposes to 111.13 collect in (year). 111.14 111.15 (Year) Property Proposed (Year) Change from 111.16 Taxes Property Taxes (Year)-(Year) 111.17 111.18 $....... $....... ...% 111.19 111.20 LOCAL TAX RATE COMPARISON: The current local tax rate, the 111.21 local tax rate if no tax levy increase is adopted, and the 111.22 proposed local tax rate if the proposed levy is adopted. 111.23 111.24 (Year) (Year) (Year) 111.25 Tax Rate Tax Rate if NO Proposed 111.26 Levy Increase Tax Rate 111.28 ....... ....... ....... 111.29 111.30 ATTEND THE PUBLIC HEARING 111.31 All (city/county) residents are invited to attend the public 111.32 hearing of the (city/county) to express your opinions on the 111.33 budget and the proposed amount of (year) property taxes. The 111.34 hearing will be held on: 111.35 (Month/Day/Year/Time) 111.36 (Location/Address) 112.1 If the discussion of the budget cannot be completed, a time and 112.2 place for continuing the discussion will be announced at the 112.3 hearing. You are also invited to send your written comments to: 112.4 (City/County) 112.5 (Location/Address)" 112.6 (d) For purposes of this subdivision, the budget amounts 112.7 listed on the advertisement mean: 112.8 (1) for cities, the total government fund expenditures, as 112.9 defined by the state auditor under section 471.6965, less any 112.10 expenditures for improvements or services that are specially 112.11 assessed or charged under chapter 429, 430, 435, or the 112.12 provisions of any other law or charter; and 112.13 (2) for counties, the total government fund expenditures, 112.14 as defined by the state auditor under section 375.169, less any 112.15 expenditures for direct payments to recipients or providers for 112.16 the human service aids listed below: 112.17 (i) Minnesota family investment program under chapters 256J 112.18 and 256K; 112.19 (ii) medical assistance under sections 256B.041, 112.20 subdivision 5, and 256B.19, subdivision 1; 112.21 (iii) general assistance medical care under section 112.22 256D.03, subdivision 6; 112.23 (iv) general assistance under section 256D.03, subdivision 112.24 2; 112.25 (v) emergency assistance under section 256J.48; 112.26 (vi) Minnesota supplemental aid under section 256D.36, 112.27 subdivision 1; 112.28 (vii) preadmission screening under section 256B.0911, and 112.29 alternative care grants under section 256B.0913; 112.30 (viii) general assistance medical care claims processing, 112.31 medical transportation and related costs under section 256D.03, 112.32 subdivision 4; 112.33 (ix) medical transportation and related costs under section 112.34 256B.0625, subdivisions 17 to 18a; 112.35 (x) group residential housing under section 256I.05, 112.36 subdivision 8, transferred from programs in clauses (iv) and 113.1 (vi); or 113.2 (xi) any successor programs to those listed in clauses (i) 113.3 to (x). 113.4 (e) A city with a population of over 500 but not more than 113.5 2,500 that is required to hold a public hearing under 113.6 subdivision 6 must advertise by posted notice as defined in 113.7 section 645.12, subdivision 1. The advertisement must be posted 113.8 at the time provided in paragraph (a). It must be in the form 113.9 required in paragraph (b). 113.10 (f) For purposes of this subdivision, the population of a 113.11 city is the most recent population as determined by the state 113.12 demographer under section 4A.02. 113.13 (g) The commissioner of revenue, subject to the approval of 113.14 the chairs of the house and senate tax committees, shall 113.15 prescribe the form and format of theadvertisement113.16 advertisements required under this subdivision. 113.17 [EFFECTIVE DATE.] This section is effective for public 113.18 advertisements required in 2001 for taxes payable in 2002, and 113.19 thereafter. 113.20 Sec. 49. Minnesota Statutes 2000, section 275.065, 113.21 subdivision 6, is amended to read: 113.22 Subd. 6. [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 113.23 (a) For purposes of this section, the following terms shall have 113.24 the meanings given: 113.25 (1) "Initial hearing" means the first and primary hearing 113.26 held to discuss the taxing authority's proposed budget and 113.27 proposed property tax levy for taxes payable in the following 113.28 year, or, for school districts, the current budget and the 113.29 proposed property tax levy for taxes payable in the following 113.30 year. 113.31 (2) "Continuation hearing" means a hearing held to complete 113.32 the initial hearing, if the initial hearing is not completed on 113.33 its scheduled date. 113.34 (3) "Subsequent hearing" means the hearing held to adopt 113.35 the taxing authority's final property tax levy, and, in the case 113.36 of taxing authorities other than school districts, the final 114.1 budget, for taxes payable in the following year. 114.2 (b) Between November 29 and December 20, the governing 114.3 bodies of a city that has a population over 500, county, 114.4 metropolitan special taxing districts as defined in subdivision 114.5 3, paragraph (i), and regional library districts shall each hold 114.6 an initial public hearing to discuss and seek public comment on 114.7 its final budget and property tax levy for taxes payable in the 114.8 following year, and the governing body of the school district 114.9 shall hold an initial public hearing to review its current 114.10 budget and proposed property tax levy for taxes payable in the 114.11 following year. The metropolitan special taxing districts shall 114.12 be required to hold only a single joint initial public hearing, 114.13 the location of which will be determined by the affected 114.14 metropolitan agencies. A city, county, metropolitan special 114.15 taxing district as defined in subdivision 3, paragraph (i), 114.16 regional library district established under section 134.201, or 114.17 school district is not required to hold a public hearing under 114.18 this subdivision unless its proposed property tax levy for taxes 114.19 payable in the following year, as certified under subdivision 1, 114.20 has increased over its final property tax levy for taxes payable 114.21 in the current year by a percentage that is greater than the 114.22 percentage increase in the implicit price deflator for 114.23 government consumption expenditures and gross investment for 114.24 state and local governments prepared by the Bureau of Economic 114.25 Analysts of the United States Department of Commerce for the 114.26 12-month period ending March 31 of the current year. 114.27 (c) The initial hearing must be held after 5:00 p.m. if 114.28 scheduled on a day other than Saturday. No initial hearing may 114.29 be held on a Sunday. 114.30 (d) At the initial hearing under this subdivision, the 114.31 percentage increase in property taxes proposed by the taxing 114.32 authority, if any, and the specific purposes for which property 114.33 tax revenues are being increased must be discussed. During the 114.34 discussion, the governing body shall hear comments regarding a 114.35 proposed increase and explain the reasons for the proposed 114.36 increase. The public shall be allowed to speak and to ask 115.1 questions. At the public hearing, the school district must also 115.2 provide and discuss information on the distribution of its 115.3 revenues by revenue source, and the distribution of its spending 115.4 by program area. 115.5 (e) If the initial hearing is not completed on its 115.6 scheduled date, the taxing authority must announce, prior to 115.7 adjournment of the hearing, the date, time, and place for the 115.8 continuation of the hearing. The continuation hearing must be 115.9 held at least five business days but no more than 14 business 115.10 days after the initial hearing. A continuation hearing may not 115.11 be held later than December 20 except as provided in paragraphs 115.12 (f) and (g). A continuation hearing must be held after 5:00 115.13 p.m. if scheduled on a day other than Saturday. No continuation 115.14 hearing may be held on a Sunday. 115.15 (f) The governing body of a county shall hold its initial 115.16 hearing on the first Thursday in December each year, and may 115.17 hold additional initial hearings on other dates before December 115.18 20 if necessary for the convenience of county residents. If the 115.19 county needs a continuation of its hearing, the continuation 115.20 hearing shall be held on the third Tuesday in December. If the 115.21 third Tuesday in December falls on December 21, the county's 115.22 continuation hearing shall be held on Monday, December 20. 115.23 (g) The metropolitan special taxing districts shall hold a 115.24 joint initial public hearing on the first Wednesday of 115.25 December. A continuation hearing, if necessary, shall be held 115.26 on the second Wednesday of December even if that second 115.27 Wednesday is after December 10. 115.28 (h) The county auditor shall provide for the coordination 115.29 of initial and continuation hearing dates for all school 115.30 districts and cities within the county to prevent conflicts 115.31 under clauses (i) and (j). 115.32 (i) By August 10, each school board and the board of the 115.33 regional library district shall certify to the county auditors 115.34 of the counties in which the school district or regional library 115.35 district is located the dates on which it elects to hold its 115.36 initial hearing and any continuation hearing. If a school board 116.1 or regional library district does not certify these dates by 116.2 August 10, the auditor will assign the initial and continuation 116.3 hearing dates. The dates elected or assigned must not conflict 116.4 with the initial and continuation hearing dates of the county or 116.5 the metropolitan special taxing districts. 116.6 (j) By August 20, the county auditor shall notify the 116.7 clerks of the cities within the county of the dates on which 116.8 school districts and regional library districts have elected to 116.9 hold their initial and continuation hearings. At the time a 116.10 city certifies its proposed levy under subdivision 1 it shall 116.11 certify the dates on which it elects to hold its initial hearing 116.12 and any continuation hearing. Until September 15, the first and 116.13 second Mondays of December are reserved for the use of the 116.14 cities. If a city does not certify its hearing dates by 116.15 September 15, the auditor shall assign the initial and 116.16 continuation hearing dates. The dates elected or assigned for 116.17 the initial hearing must not conflict with the initial hearing 116.18 dates of the county, metropolitan special taxing districts, 116.19 regional library districts, or school districts within which the 116.20 city is located. To the extent possible, the dates of the 116.21 city's continuation hearing should not conflict with the 116.22 continuation hearing dates of the county, metropolitan special 116.23 taxing districts, regional library districts, or school 116.24 districts within which the city is located. This paragraph does 116.25 not apply to cities of 500 population or less. 116.26 (k) The county initial hearing date and the city, 116.27 metropolitan special taxing district, regional library district, 116.28 and school district initial hearing dates must be designated on 116.29 the notices required under subdivision 3. The continuation 116.30 hearing dates need not be stated on the notices. 116.31 (l) At a subsequent hearing, each county, school district, 116.32 city over 500 population, and metropolitan special taxing 116.33 district may amend its proposed property tax levy and must adopt 116.34 a final property tax levy. Each county, city over 500 116.35 population, and metropolitan special taxing district may also 116.36 amend its proposed budget and must adopt a final budget at the 117.1 subsequent hearing. The final property tax levy must be adopted 117.2 prior to adopting the final budget. A school district is not 117.3 required to adopt its final budget at the subsequent hearing. 117.4 The subsequent hearing of a taxing authority must be held on a 117.5 date subsequent to the date of the taxing authority's initial 117.6 public hearing. If a continuation hearing is held, the 117.7 subsequent hearing must be held either immediately following the 117.8 continuation hearing or on a date subsequent to the continuation 117.9 hearing. The subsequent hearing may be held at a regularly 117.10 scheduled board or council meeting or at a special meeting 117.11 scheduled for the purposes of the subsequent hearing. The 117.12 subsequent hearing of a taxing authority does not have to be 117.13 coordinated by the county auditor to prevent a conflict with an 117.14 initial hearing, a continuation hearing, or a subsequent hearing 117.15 of any other taxing authority. All subsequent hearings must be 117.16 held prior to five working days after December 20 of the levy 117.17 year. The date, time, and place of the subsequent hearing must 117.18 be announced at the initial public hearing or at the 117.19 continuation hearing. 117.20 (m) The property tax levy certified under section 275.07 by 117.21 a city of any population, county, metropolitan special taxing 117.22 district, regional library district, or school district must not 117.23 exceed the proposed levy determined under subdivision 1, except 117.24 by an amount up to the sum of the following amounts: 117.25 (1) the amount of a school district levy whose voters 117.26 approved a referendum to increase taxes under section 123B.63, 117.27 subdivision 3, or 126C.17, subdivision 9, after the proposed 117.28 levy was certified; 117.29 (2) the amount of a city or county levy approved by the 117.30 voters after the proposed levy was certified; 117.31 (3) the amount of a levy to pay principal and interest on 117.32 bonds approved by the voters under section 475.58 after the 117.33 proposed levy was certified; 117.34 (4) the amount of a levy to pay costs due to a natural 117.35 disaster occurring after the proposed levy was certified, if 117.36 that amount is approved by the commissioner of revenue under 118.1 subdivision 6a; 118.2 (5) the amount of a levy to pay tort judgments against a 118.3 taxing authority that become final after the proposed levy was 118.4 certified, if the amount is approved by the commissioner of 118.5 revenue under subdivision 6a; 118.6 (6) the amount of an increase in levy limits certified to 118.7 the taxing authority by the commissioner of children, families, 118.8 and learning or the commissioner of revenue after the proposed 118.9 levy was certified; and 118.10 (7) the amount required under section 126C.55. 118.11 (n) This subdivision does not apply to towns and special 118.12 taxing districts other than regional library districts and 118.13 metropolitan special taxing districts. 118.14 (o) Notwithstanding the requirements of this section, the 118.15 employer is required to meet and negotiate over employee 118.16 compensation as provided for in chapter 179A. 118.17 [EFFECTIVE DATE.] This section is effective for hearings 118.18 required in 2001 for taxes payable in 2002 and thereafter. 118.19 Sec. 50. Minnesota Statutes 2000, section 275.066, is 118.20 amended to read: 118.21 275.066 [SPECIAL TAXING DISTRICTS; DEFINITION.] 118.22 For the purposes of property taxation and property tax 118.23 state aids, the term "special taxing districts" includes the 118.24 following entities: 118.25 (1) watershed districts under chapter 103D; 118.26 (2) sanitary districts under sections 115.18 to 115.37; 118.27 (3) regional sanitary sewer districts under sections 115.61 118.28 to 115.67; 118.29 (4) regional public library districts under section 118.30 134.201; 118.31 (5) park districts under chapter 398; 118.32 (6) regional railroad authorities under chapter 398A; 118.33 (7) hospital districts under sections 447.31 to 447.38; 118.34 (8) St. Cloud metropolitan transit commission under 118.35 sections 458A.01 to 458A.15; 118.36 (9) Duluth transit authority under sections 458A.21 to 119.1 458A.37; 119.2 (10) regional development commissions under sections 119.3 462.381 to 462.398; 119.4 (11) housing and redevelopment authorities under sections 119.5 469.001 to 469.047; 119.6 (12) port authorities under sections 469.048 to 469.068; 119.7 (13) economic development authorities under sections 119.8 469.090 to 469.1081; 119.9 (14) metropolitan council under sections 473.123 to 119.10 473.549; 119.11 (15) metropolitan airports commission under sections 119.12 473.601 to 473.680; 119.13 (16) metropolitan mosquito control commission under 119.14 sections 473.701 to 473.716; 119.15 (17) Morrison county rural development financing authority 119.16 under Laws 1982, chapter 437, section 1; 119.17 (18) Croft Historical Park District under Laws 1984, 119.18 chapter 502, article 13, section 6; 119.19 (19) East Lake county medical clinic district under Laws 119.20 1989, chapter 211, sections 1 to 6; 119.21 (20) Floodwood area ambulance district under Laws 1993, 119.22 chapter 375, article 5, section 39; 119.23 (21) Middle Mississippi river watershed management 119.24 organization under sections 103B.211 and 103B.241;and119.25 (22) emergency medical services special taxing districts 119.26 under section 144F.01; 119.27 (23) a county levying under the authority of section 119.28 103B.241, 103B.245, or 103B.251; and 119.29 (24) any other political subdivision of the state of 119.30 Minnesota, excluding counties, school districts, cities, and 119.31 towns, that has the power to adopt and certify a property tax 119.32 levy to the county auditor, as determined by the commissioner of 119.33 revenue. 119.34 [EFFECTIVE DATE.] Clause (22) of this section is effective 119.35 for taxes levied in 2002, payable in 2003, through taxes levied 119.36 in 2007, payable in 2008. Clause (23) of this section is 120.1 effective for taxes levied in 2001, payable in 2002, and 120.2 thereafter. 120.3 Sec. 51. Minnesota Statutes 2000, section 275.07, 120.4 subdivision 1, is amended to read: 120.5 Subdivision 1. [CERTIFICATION OF LEVY.] (a) Except as 120.6 provided under paragraph (b), the taxes voted by cities, 120.7 counties, school districts, and special districts shall be 120.8 certified by the proper authorities to the county auditor on or 120.9 before five working days after December 20 in each year. A town 120.10 must certify the levy adopted by the town board to the county 120.11 auditor by September 15 each year. If the town board modifies 120.12 the levy at a special town meeting after September 15, the town 120.13 board must recertify its levy to the county auditor on or before 120.14 five working days after December 20. The taxes certified shall 120.15 not be reduced by the county auditor by the aid received under 120.16 section 273.1398, subdivision 2, but shall be reduced by the 120.17 county auditor by the aid received under section 273.1398, 120.18 subdivision 3. If a city, town, county, school district, or 120.19 special district fails to certify its levy by that date, its 120.20 levy shall be the amount levied by it for the preceding year. 120.21 (b)(i) The taxes voted by counties under sections 103B.241, 120.22 103B.245, and 103B.251 shall be separately certified by the 120.23 county to the county auditor on or before five working days 120.24 after December 20 in each year. The taxes certified shall not 120.25 be reduced by the county auditor by the aid received under 120.26 section 273.1398, subdivisions 2 and 3. If a county fails to 120.27 certify its levy by that date, its levy shall be the amount 120.28 levied by it for the preceding year. 120.29 (ii) For purposes of the proposed property tax notice under 120.30 section 275.065 and the property tax statement under section 120.31 276.04, for the first year in which the county implements the 120.32 provisions of this paragraph, the county auditor shall reduce 120.33 the county's levy for the preceding year to reflect any amount 120.34 levied for water management purposes under clause (i) included 120.35 in the county's levy. 120.36 [EFFECTIVE DATE.] This section is effective for taxes 121.1 levied in 2001, payable in 2002, and thereafter. 121.2 Sec. 52. Minnesota Statutes 2000, section 275.28, 121.3 subdivision 1, is amended to read: 121.4 Subdivision 1. [AUDITOR TO MAKE.] The county auditor shall 121.5 make out the tax lists according to the prescribed form, and to 121.6 correspond with the assessment districts. The rate percent 121.7 necessary to raise the required amount of the various taxes 121.8 shall be calculated on the net tax capacity of property as 121.9 determined by the state board of equalization, but, in 121.10 calculating such rates, no rate shall be used resulting in a 121.11 fraction other than a decimal fraction, or less than a gross 121.12 local tax rate of .01 percent or a net local tax rate of .01 121.13 percent; and, in extending any tax, whenever it amounts to the 121.14 fractional part of a cent, it shall be made one cent. The tax 121.15 lists shall also be made out to correspond with the assessment 121.16 books in reference to ownership and description of property, 121.17 with columns for the valuation and for the various items of tax 121.18 included in the total amount of all taxes set down opposite each 121.19 description. The auditor shall enter both the state tax 121.20 determined under sections 275.02 and 275.025, and the local 121.21 taxes determined under sections 275.08 and 275.083, on the tax 121.22 lists. The total ad valorem property tax for each description 121.23 of property before credits is the sum of the amounts of the 121.24 various local taxes that apply to the parcel plus the amount of 121.25 any applicable state tax. Opposite each description which has 121.26 been sold for taxes, and which is subject to redemption, but not 121.27 redeemed, shall be placed the words "sold for taxes." The 121.28 amount of all special taxes shall be entered in the proper 121.29 columns, but the general taxes may be shown by entering the rate 121.30 percent of each tax at the head of the proper columns, without 121.31 extending the same, in which case a schedule of the rates 121.32 percent of such taxes shall be made on the first page of each 121.33 tax list. If the auditor fails to enter on any such list before 121.34 its delivery to the treasurer any tax levied, the tax may be 121.35 subsequently entered. The tax lists shall be deemed completed, 121.36 and all taxes extended thereon, as of January 1 annually. 122.1 [EFFECTIVE DATE.] This section is effective for taxes 122.2 payable in 2002 and thereafter. 122.3 Sec. 53. Minnesota Statutes 2000, section 275.61, is 122.4 amended to read: 122.5 275.61 [VOTER APPROVED LEVY; MARKET VALUE.] 122.6 Subdivision 1. [MARKET VALUE.] For local governmental 122.7 subdivisions other than school districts, any levy, including 122.8 the issuance of debt obligations payable in whole or in part 122.9 from property taxes, required to be approved and approved by the 122.10 voters at a general or special election for taxes payable in 122.11 1993 and thereafter, shall be levied against the referendum 122.12 market value of all taxable property within the governmental 122.13 subdivision, as defined in section 126C.01, subdivision 3. Any 122.14 levy amount subject to the requirements of this section shall be 122.15 certified separately to the county auditor under section 275.07. 122.16 The ballot shall state the maximum amount of the increased 122.17 levy as a percentage of market value and the amount that will be 122.18 raised by the new referendum tax rate in the first year it is to 122.19 be levied. 122.20 Subd. 2. [CONVERSION TO NET TAX CAPACITY.] Any referendum 122.21 levy approved under subdivision 1 prior to January 1, 2001, may 122.22 be converted from a referendum market value basis to a net tax 122.23 capacity basis, provided that the proportion of the 122.24 jurisdiction's referendum market value exempted under article 2, 122.25 section 8, is at least ten percent for property taxes payable in 122.26 2001. A jurisdiction choosing to exercise the option to convert 122.27 the referendum tax to a net tax capacity basis must notify the 122.28 county auditor of its intent prior to October 1, 2001. A 122.29 decision to convert a referendum levy under this subdivision 122.30 shall be a permanent change affecting all future years. The 122.31 option to convert a levy under this subdivision shall cease 122.32 after October 1, 2001. 122.33 [EFFECTIVE DATE.] This section is effective for taxes 122.34 payable in 2002 and thereafter. 122.35 Sec. 54. Minnesota Statutes 2000, section 275.62, 122.36 subdivision 1, is amended to read: 123.1 Subdivision 1. [REPORT ON TAXES LEVIED.] The commissioner 123.2 of revenue shall establish procedures for the annual reporting 123.3 of local government levies. Each local governmental unit shall 123.4 submit a report to the commissioner by December 30 of the year 123.5 in which the tax is levied. The report shall include, but is 123.6 not limited to, information on the amount of the tax levied by 123.7 the governmental unit for the following purposes: 123.8 (1)debt, which includes taxes levied for the purposes123.9defined in Minnesota Statutes 1991 Supplement, section 275.50,123.10subdivision 5, clauses (b), (c), (d), and (e);123.11(2)social services and related programs, which include 123.12 taxes levied for the purposes defined in Minnesota Statutes 1991 123.13 Supplement, section 275.50, subdivision 5, clauses (a), (j), and 123.14 (v); 123.15(3) libraries, which include taxes levied for the purposes123.16defined in Minnesota Statutes 1991 Supplement, section 275.50,123.17subdivision 5, clause (n);123.18(4) for counties only, the amount of levy needed to fund123.19increased county costs associated with the welfare reform under123.20Laws 1997, chapter 85, including increased administration and123.21program costs of the income maintenance programs and also123.22related support services as they relate directly to the welfare123.23reform(2) the amounts levied for each of the purposes listed in 123.24 section 275.70, subdivision 5; and 123.25(5)(3) other levies, which include the taxes levied for 123.26 all purposes not included in clause (1), (2), or (3), or (4). 123.27 [EFFECTIVE DATE.] This section is effective the day 123.28 following final enactment. 123.29 Sec. 55. Minnesota Statutes 2000, section 276.04, 123.30 subdivision 2, is amended to read: 123.31 Subd. 2. [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 123.32 shall provide for the printing of the tax statements. The 123.33 commissioner of revenue shall prescribe the form of the property 123.34 tax statement and its contents. The statement must contain a 123.35 tabulated statement of the dollar amount due to each taxing 123.36 authority and the amount of the statedetermined schooltax from 124.1 the parcel of real property for which a particular tax statement 124.2 is prepared. The dollar amounts attributable to the county, the 124.3 statedetermined schooltax, the voter approved school tax, the 124.4 other local school tax, the township or municipality, and the 124.5 total of the metropolitan special taxing districts as defined in 124.6 section 275.065, subdivision 3, paragraph (i), must be 124.7 separately stated. The amounts due all other special taxing 124.8 districts, if any, may be aggregated. The amount of the tax on 124.9 homesteads qualifying under the senior citizens' property tax 124.10 deferral program under chapter 290B is the total amount of 124.11 property tax before subtraction of the deferred property tax 124.12 amount. The amount of the tax on contamination value imposed 124.13 under sections 270.91 to 270.98, if any, must also be separately 124.14 stated. The dollar amounts, including the dollar amount of any 124.15 special assessments, may be rounded to the nearest even whole 124.16 dollar. For purposes of this section whole odd-numbered dollars 124.17 may be adjusted to the next higher even-numbered dollar. The 124.18 amount of market value excluded under section 273.11, 124.19 subdivision 16, if any, must also be listed on the tax 124.20 statement.The statement shall include the following sentences,124.21printed in upper case letters in boldface print: "EVEN THOUGH124.22THE STATE OF MINNESOTA DOES NOT RECEIVE ANY PROPERTY TAX124.23REVENUES, IT SETS THE AMOUNT OF THE STATE-DETERMINED SCHOOL TAX124.24LEVY. THE STATE OF MINNESOTA REDUCES YOUR PROPERTY TAX BY124.25PAYING CREDITS AND REIMBURSEMENTS TO LOCAL UNITS OF GOVERNMENT."124.26 (b) The property tax statements for manufactured homes and 124.27 sectional structures taxed as personal property shall contain 124.28 the same information that is required on the tax statements for 124.29 real property. 124.30 (c) Real and personal property tax statements must contain 124.31 the following information in the order given in this paragraph. 124.32 The information must contain the current year tax information in 124.33 the right column with the corresponding information for the 124.34 previous year in a column on the left: 124.35 (1) the property's estimated market value under section 124.36 273.11, subdivision 1; 125.1 (2) the property's taxable market value after reductions 125.2 under section 273.11, subdivisions 1a and 16; 125.3 (3) the property's gross tax, calculated by adding the 125.4 property's total property tax to the sum of the aids enumerated 125.5 in clause (4); 125.6 (4) a total of the following aids: 125.7 (i) education aids payable under chapters 122A, 123A, 123B, 125.8 124D, 125A, 126C, and 127A; 125.9 (ii) local government aids for cities, towns, and counties 125.10 under chapter 477A; 125.11 (iii) disparity reduction aid under section 273.1398; and 125.12 (iv) homestead and agricultural credit aid under section 125.13 273.1398; 125.14 (5) for homestead residential and agricultural properties, 125.15 theeducation homestead creditcredits under section273.1382125.16 273.1384; 125.17 (6) any credits received under sections 273.119; 273.123; 125.18 273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 125.19 473H.10, except that the amount of credit received under section 125.20 273.135 must be separately stated and identified as "taconite 125.21 tax relief"; and 125.22 (7) the net tax payable in the manner required in paragraph 125.23 (a). 125.24 (d) If the county uses envelopes for mailing property tax 125.25 statements and if the county agrees, a taxing district may 125.26 include a notice with the property tax statement notifying 125.27 taxpayers when the taxing district will begin its budget 125.28 deliberations for the current year, and encouraging taxpayers to 125.29 attend the hearings. If the county allows notices to be 125.30 included in the envelope containing the property tax statement, 125.31 and if more than one taxing district relative to a given 125.32 property decides to include a notice with the tax statement, the 125.33 county treasurer or auditor must coordinate the process and may 125.34 combine the information on a single announcement. 125.35 The commissioner of revenue shall certify to the county 125.36 auditor the actual or estimated aids enumerated in clause (4) 126.1 that local governments will receive in the following year. The 126.2 commissioner must certify this amount by January 1 of each year. 126.3 [EFFECTIVE DATE.] This section is effective July 1, 2001 126.4 and thereafter, for statements required in 2002 and thereafter. 126.5 Sec. 56. Minnesota Statutes 2000, section 276.11, 126.6 subdivision 1, is amended to read: 126.7 Subdivision 1. [GENERALLY.] As soon as practical after the 126.8 settlement day determined in section 276.09, the county 126.9 treasurer shall pay to the state treasurer or the treasurer of a 126.10 town, city, school district, or special district, on the warrant 126.11 of the county auditor, all receipts of taxes levied by the 126.12 taxing district and deliver up all orders and other evidences of 126.13 indebtedness of the taxing district, taking triplicate receipts 126.14 for them. The treasurer shall file one of the receipts with the 126.15 county auditor, and shall return one by mail on the day of its 126.16 receipt to the clerk of the town, city, school district, or 126.17 special district to which payment was made. The clerk shall 126.18 keep the receipt in the clerk's office. Upon written request of 126.19 the taxing district, to the extent practicable, the county 126.20 treasurer shall make partial payments of amounts collected 126.21 periodically in advance of the next settlement and 126.22 distribution. A statement prepared by the county treasurer must 126.23 accompany each payment. It must state the years for which taxes 126.24 included in the payment were collected and, for each year, the 126.25 amount of the taxes and any penalties on the tax. Upon written 126.26 request of a taxing district, except school districts, the 126.27 county treasurer shall pay at least 70 percent of the estimated 126.28 collection within 30 days after the settlement date determined 126.29 in section 276.09. Within seven business days after the due 126.30 date, or 28 calendar days after the postmark date on the 126.31 envelopes containing real or personal property tax statements, 126.32 whichever is latest, the county treasurer shall pay to the 126.33 treasurer of the school districts 50 percent of the estimated 126.34 collections arising from taxes levied by and belonging to the 126.35 school district, unless the school district elects to receive 50 126.36 percent of the estimated collections arising from taxes levied 127.1 by and belonging to the school district after making a 127.2 proportionate reduction to reflect any loss in collections as 127.3 the result of any delay in mailing tax statements. In that 127.4 case, 50 percent of those adjusted, estimated collections shall 127.5 be paid by the county treasurer to the treasurer of the school 127.6 district within seven business days of the due date. The 127.7 remaining 50 percent of the estimated collections must be paid 127.8 to the treasurer of the school district within the next seven 127.9 business days of the later of the dates in the preceding 127.10 sentence, unless the school district elects to receive the 127.11 remainder of its estimated collections after a proportionate 127.12 reduction has been made to reflect any loss in collections as 127.13 the result of any delay in mailing tax statements. In that 127.14 case, the remaining 50 percent of those adjusted, estimated 127.15 collections shall be paid by the county treasurer to the 127.16 treasurer of the school district within 14 days of the due 127.17 date. The treasurer shall pay the balance of the amounts 127.18 collected to the state before June 30, or to a municipal 127.19 corporation or other body within 60 days after the settlement 127.20 date determined in section 276.09. After 45 days interest at an 127.21 annual rate of eight percent accrues and must be paid to the 127.22 taxing district. Interest must be paid upon appropriation from 127.23 the general revenue fund of the county. If not paid, it may be 127.24 recovered by the taxing district, in a civil action. 127.25 [EFFECTIVE DATE.] This section is effective for taxes 127.26 payable in 2002 and subsequent years. 127.27 Sec. 57. Minnesota Statutes 2000, section 276A.06, 127.28 subdivision 3, is amended to read: 127.29 Subd. 3. [APPORTIONMENT OF LEVY.] The county auditor shall 127.30 apportion the levy of each governmental unit in the county in 127.31 the manner prescribed by this subdivision. The auditor shall: 127.32 (a) by August 20 of 1997 and each subsequent year, 127.33 determine the areawide portion of the levy for each governmental 127.34 unit by multiplying the local tax rate of the governmental unit 127.35 for the preceding levy year times the distribution value set 127.36 forth in subdivision 2, clause (b);and128.1 (b) by September 5 of 1997 and each subsequent year, 128.2 determine the local portion of the current year's levy by 128.3 subtracting the resulting amount from clause (a) from the 128.4 governmental unit's current year's levy; and 128.5 (c) for determinations made under paragraph (a) in the case 128.6 of school districts, for taxes payable in 2002, exclude the 128.7 general education tax rate and the portion of the referendum tax 128.8 rate attributable to the first $415 per pupil unit from the 128.9 local tax rate for the preceding levy year. 128.10 [EFFECTIVE DATE.] This section is effective the day 128.11 following final enactment. 128.12 Sec. 58. Minnesota Statutes 2000, section 281.17, is 128.13 amended to read: 128.14 281.17 [PERIOD FOR REDEMPTION.] 128.15 Except for properties for which the period of redemption 128.16 has been limited under sections 281.173 and 281.174, the 128.17 following periods for redemption apply. 128.18 The period of redemption for all lands sold to the state at 128.19 a tax judgment sale shall be three years from the date of sale 128.20 to the state of Minnesota if the land is within an incorporated 128.21 area unless it is: (a) nonagricultural homesteaded land as 128.22 defined in section 273.13, subdivision 22; (b) homesteaded 128.23 agricultural land as defined in section 273.13, subdivision 23, 128.24 paragraph (a); or (c) seasonal recreational land as defined in 128.25 section 273.13, subdivision 22, paragraph (c), or 25, paragraph 128.26(c)(d), clause(5)(1), for which the period of redemption is 128.27 five years from the date of sale to the state of Minnesota. 128.28 The period of redemption for homesteaded lands as defined 128.29 in section 273.13, subdivision 22, located in a targeted 128.30 neighborhood as defined in Laws 1987, chapter 386, article 6, 128.31 section 4, and sold to the state at a tax judgment sale is three 128.32 years from the date of sale. The period of redemption for all 128.33 lands located in a targeted neighborhood as defined in Laws 128.34 1987, chapter 386, article 6, section 4, except (1) homesteaded 128.35 lands as defined in section 273.13, subdivision 22, and (2) for 128.36 periods of redemption beginning after June 30, 1991, but before 129.1 July 1, 1996, lands located in the Loring Park targeted 129.2 neighborhood on which a notice of lis pendens has been served, 129.3 and sold to the state at a tax judgment sale is one year from 129.4 the date of sale. 129.5 The period of redemption for all real property constituting 129.6 a mixed municipal solid waste disposal facility that is a 129.7 qualified facility under section 115B.39, subdivision 1, is one 129.8 year from the date of the sale to the state of Minnesota. 129.9 The period of redemption for all other lands sold to the 129.10 state at a tax judgment sale shall be five years from the date 129.11 of sale, except that the period of redemption for nonhomesteaded 129.12 agricultural land as defined in section 273.13, subdivision 23, 129.13 paragraph (b), shall be two years from the date of sale if at 129.14 that time that property is owned by a person who owns one or 129.15 more parcels of property on which taxes are delinquent, and the 129.16 delinquent taxes are more than 25 percent of the prior year's 129.17 school district levy. 129.18 [EFFECTIVE DATE.] This section is effective the day 129.19 following final enactment. 129.20 Sec. 59. Minnesota Statutes 2000, section 282.01, 129.21 subdivision 1, is amended to read: 129.22 Subdivision 1. [CLASSIFICATION AS CONSERVATION OR 129.23 NONCONSERVATION.] It is the general policy of this state to 129.24 encourage the best use of tax-forfeited lands, recognizing that 129.25 some lands in public ownership should be retained and managed 129.26 for public benefits while other lands should be returned to 129.27 private ownership. Parcels of land becoming the property of the 129.28 state in trust under law declaring the forfeiture of lands to 129.29 the state for taxes must be classified by the county board of 129.30 the county in which the parcels lie as conservation or 129.31 nonconservation. In making the classification the board shall 129.32 consider the present use of adjacent lands, the productivity of 129.33 the soil, the character of forest or other growth, accessibility 129.34 of lands to established roads, schools, and other public 129.35 services, their peculiar suitability or desirability for 129.36 particular uses and the suitability of the forest resources on 130.1 the land for multiple use, sustained yield management. The 130.2 classification, furthermore, must encourage and foster a mode of 130.3 land utilization that will facilitate the economical and 130.4 adequate provision of transportation, roads, water supply, 130.5 drainage, sanitation, education, and recreation; facilitate 130.6 reduction of governmental expenditures; conserve and develop the 130.7 natural resources; and foster and develop agriculture and other 130.8 industries in the districts and places best suited to them. 130.9 In making the classification the county board may use 130.10 information made available by any office or department of the 130.11 federal, state, or local governments, or by any other person or 130.12 agency possessing pertinent information at the time the 130.13 classification is made. The lands may be reclassified from time 130.14 to time as the county board considers necessary or desirable, 130.15 except for conservation lands held by the state free from any 130.16 trust in favor of any taxing district. 130.17 If the lands are located within the boundaries of an 130.18 organized town, with taxable valuation in excess of $20,000, or 130.19 incorporated municipality, the classification or 130.20 reclassification and sale must first be approved by the town 130.21 board of the town or the governing body of the municipality in 130.22 which the lands are located. The town board of the town or the 130.23 governing body of the municipality is considered to have 130.24 approved the classification or reclassification and sale if the 130.25 county board is not notified of the disapproval of the 130.26 classification or reclassification and sale within 60 days of 130.27 the date the request for approval was transmitted to the town 130.28 board of the town or governing body of the municipality. If the 130.29 town board or governing body desires to acquire any parcel lying 130.30 in the town or municipality by procedures authorized in this 130.31 section, it must file a written application with the county 130.32 board to withhold the parcel from public sale. The application 130.33 must be filed within 60 days of the request for classification 130.34 or reclassification and sale. The county board shall then 130.35 withhold the parcel from public sale for six months. A 130.36 municipality or governmental subdivision shall pay maintenance 131.1 costs incurred by the county during the six-month period while 131.2 the property is withheld from public sale, provided the property 131.3 is not offered for public sale after the six-month period. A 131.4 clerical error made by county officials does not serve to 131.5 eliminate the request of the town board or governing body if the 131.6 board or governing body has forwarded the application to the 131.7 county auditor. If the town board or governing body of the 131.8 municipality fails to submit an application and a resolution of 131.9 the board or governing body to acquire the property within the 131.10 withholding period, the county may offer the property for sale 131.11 upon the expiration of the withholding period. 131.12 [EFFECTIVE DATE.] This section is effective the day 131.13 following final enactment. 131.14 Sec. 60. Minnesota Statutes 2000, section 282.01, 131.15 subdivision 1b, is amended to read: 131.16 Subd. 1b. [CONVEYANCE; TARGETED NEIGHBORHOOD LANDS.] (a) 131.17 Notwithstanding subdivision 1a, in the case of tax-forfeited 131.18 lands located in a targeted neighborhood, as defined in section 131.19 469.201, subdivision 10,outside the metropolitan area, as131.20defined inand section 473.121, subdivision 2, the commissioner 131.21 of revenuemayshall convey by deed in the name of the state any 131.22 tract of tax-forfeited land held in trust in favor of the taxing 131.23 districts, to a political subdivision that submits an 131.24 application to the commissioner of revenue and the 131.25 recommendation of the county board. 131.26 (b)Notwithstanding subdivision 1a, in the case of131.27tax-forfeited lands located in a targeted neighborhood, as131.28defined in section 469.201, subdivision 10, in a county in the131.29metropolitan area, as defined in section 473.121, subdivision 2,131.30the commissioner of revenue shall convey by deed in the name of131.31the state any tract of tax-forfeited land held in trust in favor131.32of the taxing districts, to a political subdivision that submits131.33an application to the commissioner of revenue and the county131.34board.131.35(c)The application under paragraph (a)or (b)must include 131.36 a statement of facts as to the use to be made of the tract, the 132.1 need therefor, and a resolution, adopted by the governing body 132.2 of the political subdivision, finding that the conveyance of a 132.3 tract of tax-forfeited land to the political subdivision is 132.4 necessary to provide for the redevelopment of land as productive 132.5 taxable property. Deeds of conveyance issued under paragraph 132.6 (a) are not conditioned on continued use of the property for the 132.7 use stated in the application. 132.8 [EFFECTIVE DATE.] This section is effective for deeds 132.9 issued on or after August 1, 2001. 132.10 Sec. 61. Minnesota Statutes 2000, section 282.01, 132.11 subdivision 1c, is amended to read: 132.12 Subd. 1c. [DEED OF CONVEYANCE; FORM; APPROVALS.] The deed 132.13 of conveyance for property conveyed for a public use must be on 132.14 a form approved by the attorney general and must be conditioned 132.15 on continued use for the purpose stated in the application.If,132.16however, the governing body of the governmental subdivision by132.17resolution determines that some other public use should be made132.18of the lands, and the change of use is approved by the county132.19board and an application for change of use is made to, and132.20approved by, the commissioner, the changed use may be made132.21without conveying the lands back to the state and securing a new132.22conveyance for the new public use.132.23 [EFFECTIVE DATE.] This section is effective for deeds 132.24 issued on or after August 1, 2001. 132.25 Sec. 62. Minnesota Statutes 2000, section 282.01, 132.26 subdivision 1d, is amended to read: 132.27 Subd. 1d. [REVERTER FOR FAILURE TO USE; CONVEYANCE TO 132.28 STATE.]WhenIf after three years from the date of the 132.29 conveyance a governmental subdivision to which tax-forfeited 132.30 land has been conveyed for a specified public use as provided in 132.31 this section fails to put the land to that use,or to some other132.32authorized public use as provided in this section,or abandons 132.33 that use, the governing body of the subdivisionshallmay, with 132.34 the approval of the county board, purchase the property for an 132.35 authorized public purpose at the present appraised value as 132.36 determined by the county board. In that case, the commissioner 133.1 of revenue shall, upon proper written application approved by 133.2 the county board, issue an appropriate deed to the subdivisions 133.3 free of a use restriction and reverter. The governing body may 133.4 also authorize the proper officers to convey the land, or the 133.5 part of the land not required for an authorized public use, to 133.6 the state of Minnesota. The officers shall execute a deed of 133.7 conveyance immediately. The conveyance is subject to the 133.8 approval of the commissioner and its form must be approved by 133.9 the attorney general. A sale, lease, transfer, or other 133.10 conveyance of tax-forfeited lands by a housing and redevelopment 133.11 authority, a port authority, an economic development authority, 133.12 or a city as authorized by chapter 469 is not an abandonment of 133.13 use and the lands shall not be reconveyed to the state nor shall 133.14 they revert to the state. A certificate made by a housing and 133.15 redevelopment authority, a port authority, an economic 133.16 development authority, or a city referring to a conveyance by it 133.17 and stating that the conveyance has been made as authorized by 133.18 chapter 469 may be filed with the county recorder or registrar 133.19 of titles, and the rights of reverter in favor of the state 133.20 provided by subdivision 1e will then terminate. No vote of the 133.21 people is required for the conveyance. 133.22 [EFFECTIVE DATE.] This section is effective August 1, 2001. 133.23 For deeds existing on the effective date, the three-year 133.24 limitation begins on August 1, 2001, except no deed issued prior 133.25 to August 1, 2001, shall have a limitation of less than five 133.26 years. 133.27 Sec. 63. Minnesota Statutes 2000, section 282.01, 133.28 subdivision 1e, is amended to read: 133.29 Subd. 1e. [NOTICE AND DECLARATION OF REVERSION.] If the 133.30 tax-forfeited land is not either purchased or conveyed to the 133.31 state in accordance with subdivision 1d, the commissioner of 133.32 revenue shall by written instrument, in form approved by the 133.33 attorney general, declare the land to have reverted to the 133.34 state, and shall serve a notice of reversion, with a copy of the 133.35 declaration, by certified mail upon the clerk or recorder of the 133.36 governmental subdivision concerned. No declaration of reversion 134.1 under this subdivision shall be made earlier thanfive years134.2from the date of conveyance for failure to put land to the use134.3specified or from the date of abandonment of that use if the134.4lands have been put to that use60 days after the expiration of 134.5 the three-year period described in subdivision 1d. The 134.6 commissioner shall file the original declaration in the 134.7 commissioner's office, with verified proof of service. The 134.8 governmental subdivision may appeal to the district court of the 134.9 county in which the land lies by filing with the court 134.10 administrator a notice of appeal, specifying the grounds of 134.11 appeal and the description of the land involved, mailing a copy 134.12 of the notice of appeal by certified mail to the commissioner of 134.13 revenue, and filing a copy for record with the county recorder 134.14 or registrar of titles, all within 30 days after the mailing of 134.15 the notice of reversion. The appeal shall be tried by the court 134.16 in like manner as a civil action. If no appeal is taken as 134.17 provided in this subdivision, the declaration of reversion is 134.18 final. The commissioner of revenue shall file for record with 134.19 the county recorder or registrar of titles, of the county within 134.20 which the land lies, a certified copy of the declaration of 134.21 reversion and proof of service. 134.22 [EFFECTIVE DATE.] This section is effective for deeds 134.23 issued on or after August 1, 2001. 134.24 Sec. 64. Minnesota Statutes 2000, section 282.241, is 134.25 amended to read: 134.26 282.241 [REPURCHASE AFTER FORFEITURE.] 134.27 Subdivision 1. [REPURCHASE REQUIREMENTS.] The owner at the 134.28 time of forfeiture, or the owner's heirs, devisees, or 134.29 representatives, or any person to whom the right to pay taxes 134.30 was given by statute, mortgage, or other agreement, may 134.31 repurchase any parcel of land claimed by the state to be 134.32 forfeited to the state for taxes unless before the time 134.33 repurchase is made the parcel is sold under installment 134.34 payments, or otherwise, by the state as provided by law, or is 134.35 under mineral prospecting permit or lease, or proceedings have 134.36 been commenced by the state or any of its political subdivisions 135.1 or by the United States to condemn the parcel of land. The 135.2 parcel of land may be repurchased for the sum of all delinquent 135.3 taxes and assessments computed under section 282.251, together 135.4 with penalties, interest, and costs, that accrued or would have 135.5 accrued if the parcel of land had not forfeited to the state. 135.6 Except for property which was homesteaded on the date of 135.7 forfeiture, repurchase is permitted during one year only from 135.8 the date of forfeiture, and in any case only after the adoption 135.9 of a resolution by the board of county commissioners determining 135.10 that by repurchase undue hardship or injustice resulting from 135.11 the forfeiture will be corrected, or that permitting the 135.12 repurchase will promote the use of the lands that will best 135.13 serve the public interest. If the county board has good cause 135.14 to believe that a repurchase installment payment plan for a 135.15 particular parcel is unnecessary and not in the public interest, 135.16 the county board may require as a condition of repurchase that 135.17 the entire repurchase price be paid at the time of repurchase. 135.18 A repurchase is subject to any easement, lease, or other 135.19 encumbrance granted by the state before the repurchase, and if 135.20 the land is located within a restricted area established by any 135.21 county under Laws 1939, chapter 340, the repurchase must not be 135.22 permitted unless the resolution approving the repurchase is 135.23 adopted by the unanimous vote of the board of county 135.24 commissioners. 135.25 The person seeking to repurchase under this section shall 135.26 pay all maintenance costs incurred by the county auditor during 135.27 the time the property was tax-forfeited. 135.28 Subd. 2. [ALTERNATIVE COMPUTATION OF REPURCHASE AMOUNT.] A 135.29 county board may by resolution establish an alternative method 135.30 of computing the repurchase amount under this subdivision for 135.31 property homesteaded at the time of forfeiture that has been in 135.32 forfeited status for more than ten years. Equivalent taxes, 135.33 penalties, interest, and costs for each year the property was in 135.34 forfeiture status must be computed using the simple average of 135.35 the assessor's estimated market value at forfeiture and the 135.36 assessor's current estimated market value multiplied by the 136.1 class rates under current law and applying the current tax, 136.2 penalty, and interest rates. Those amounts, plus any unpaid 136.3 special assessments reinstated and included in the purchase 136.4 price under section 282.251, including the penalties and 136.5 interest that accrued or would have accrued on the special 136.6 assessments, computed under current rates, are the repurchase 136.7 price. The county assessor shall determine the current market 136.8 value and classification of the property. 136.9 [EFFECTIVE DATE.] This section is effective the day 136.10 following final enactment. 136.11 Sec. 65. Minnesota Statutes 2000, section 297B.09, 136.12 subdivision 1, is amended to read: 136.13 Subdivision 1. [GENERAL FUND SHARE.] Money collected and 136.14 received under this chapter must be deposited as provided in 136.15 this subdivision. 136.16 Thirty-two percent of the money collected and received must 136.17 be deposited in the highway user tax distribution fund,and20.5 136.18 percent must be deposited in the metropolitan area transit fund 136.19 under section 16A.88, and 1.25 percent must be deposited in the 136.20 greater Minnesota transit fund under section 16A.88. In fiscal 136.21 year 2004 and thereafter, two percent of the money collected and 136.22 received must be deposited in the metropolitan area transit 136.23 appropriation account under section 16A.88. The remaining68136.24percent of themoney must be deposited in the general fund. 136.25 [EFFECTIVE DATE.] This section is effective July 1, 2002. 136.26 Sec. 66. [383A.76] [TAX-FORFEITED LANDS.] 136.27 Subdivision 1. [SALE; VALUATION.] The Ramsey county board 136.28 may sell tax-forfeited lands in the county to an organized or 136.29 incorporated governmental subdivision of the state for any 136.30 public purpose for which the subdivision is authorized to 136.31 acquire property. In the case of tax-forfeited land in the 136.32 county which a governmental subdivision has requested for 136.33 housing purposes, the county board may sell that property to the 136.34 requesting subdivision for the specified housing use at a value, 136.35 which may be less than its appraised value, as determined by the 136.36 county board. Factors that may be considered by the county 137.1 board in determining value for lands to be held for a permitted 137.2 public purpose or redeveloped under chapter 469 include the 137.3 projected gap financing and public subsidy needed for a 137.4 redevelopment project, expected increases in property taxes, 137.5 before and after redevelopment appraised values, the potential 137.6 use of the property for affordable housing, environmental 137.7 contamination and pollution, site preparation and infrastructure 137.8 costs, and any other relevant factors. The commissioner of 137.9 revenue shall convey by deed in the name of the state a tract of 137.10 tax-forfeited land held in trust in favor of the taxing 137.11 districts to a governmental subdivision for an authorized public 137.12 use, if an application is submitted to the commissioner. The 137.13 application must include a statement of facts as to the use to 137.14 be made of the tract, the need for it, and the recommendation of 137.15 the county board. Property conveyed under this section for a 137.16 value that is less than its appraised value cannot be included 137.17 in a tax increment financing district. To the extent the 137.18 provisions of chapter 282 are not inconsistent with this 137.19 section, the provisions of chapter 282 apply to the sale of tax 137.20 forfeited land in Ramsey county. 137.21 Subd. 2. [USE OF LAND.] For lands located within Ramsey 137.22 county, the deed of conveyance of tax-forfeited land to an 137.23 organized or incorporated governmental subdivision of the state 137.24 for an authorized use must be on a form approved by the attorney 137.25 general and must be conditioned on continued use for the purpose 137.26 stated in the application. If the governing body of the 137.27 governmental subdivision determines by resolution after public 137.28 hearing that some other public use should be made of the lands, 137.29 the changed use may be made upon filing with the county recorder 137.30 or registrar of titles a certified copy of the resolution and 137.31 without conveying the lands back to the state and securing a new 137.32 conveyance for the new public use. Permitted public uses under 137.33 this section include street, storm water ponding, drainage, 137.34 parks, watershed, wetlands, library, fire and police stations, 137.35 utility easements, and public facilities. 137.36 Subd. 3. [REVERTER OF LAND.] When a subdivision to which 138.1 tax-forfeited land has been conveyed for a housing purpose at a 138.2 value of less than the appraised value, fails to pass a 138.3 resolution designating a developer or approving a redevelopment 138.4 contract within three years of the date of conveyance, the 138.5 Ramsey county board may by resolution declare the land to have 138.6 reverted to the state, and shall serve a notice of reversion, 138.7 with a copy of the declaration, by certified mail to the 138.8 subdivision and shall reimburse the subdivision for the 138.9 consideration for the lands from the tax-forfeited sale fund. 138.10 The Ramsey county board shall file for record with the Ramsey 138.11 county recorder or registrar of titles a certified copy of the 138.12 declaration of reversion and proof of service. A certificate 138.13 made by a subdivision referring to a conveyance made to it and 138.14 stating that it has passed a resolution designating a developer 138.15 or approving a redevelopment contract for a housing 138.16 redevelopment project may be filed with the Ramsey county 138.17 recorder or registrar of titles, and the right of reverter in 138.18 favor of the state under this section will then terminate. 138.19 Subd. 4. [REPORT BY SUBDIVISION.] Each subdivision to 138.20 which tax-forfeited lands have been conveyed under this section 138.21 for a value of less than its appraised value must file a report 138.22 with the commissioner of revenue by September 1, 2004, and by 138.23 September 1 of each third year thereafter. The report shall 138.24 contain a description of the lands conveyed to it, a status of 138.25 the development efforts for the lands, the intended or actual 138.26 uses being made of the lands, and the amount of property taxes 138.27 being paid on the lands. The commissioner shall retain each 138.28 report for a minimum of ten years. Failure of a subdivision to 138.29 file a report shall be cause for the commissioner to declare a 138.30 reversion of the parcel under section 282.01, subdivision 1e. 138.31 [EFFECTIVE DATE.] This section is effective only after its 138.32 approval by a majority of the governing body of Ramsey county 138.33 and upon compliance with the provisions of Minnesota Statutes, 138.34 section 645.021, subdivision 3. 138.35 Sec. 67. Minnesota Statutes 2000, section 469.040, 138.36 subdivision 5, is amended to read: 139.1 Subd. 5. [DESIGNATED HOUSING CORPORATION.] (a) To the 139.2 extent not exempt from taxation under section 272.01, 139.3 subdivision 1, property located within the exterior boundaries 139.4 ofthe White Earthan Indian reservation in the state that is 139.5 owned by the tribe's designated housing entity as defined in 139.6 United States Code, title 25, section 4103(21), and that is a 139.7 housing project or a housing development project, as defined in 139.8 section 469.002, subdivisions 13 and 15, is exempt from all real 139.9 and personal property taxes of the city, the county, the state, 139.10 or any political subdivision thereof, but the property. 139.11 (b) Property exempt from taxation under paragraph (a) is 139.12 subject to subdivision 3. A copy of those portions of the 139.13 annual reports submitted on behalf of the housing entity to the 139.14 Secretary of the United States Department of Housing and Urban 139.15 Development for the project that contain information sufficient 139.16 to determine the amount due under subdivision 3 satisfies the 139.17 reporting requirements of subdivision 3 for the project. 139.18 [EFFECTIVE DATE.] This section is effective for taxes 139.19 levied in 2001, payable in 2002, and thereafter. 139.20 Sec. 68. Minnesota Statutes 2000, section 469.202, 139.21 subdivision 2, is amended to read: 139.22 Subd. 2. [ELIGIBILITY REQUIREMENTS FOR TARGETED 139.23 NEIGHBORHOODS.] An area within a city is eligible for 139.24 designation as a targeted neighborhood if the area meets two of 139.25 the following three criteria: 139.26 (a) The area had an unemployment rate that was twice the 139.27 unemployment rate for the Minneapolis and Saint Paul standard 139.28 metropolitan statistical area as determined by the1980most 139.29 recent federal decennial census. 139.30 (b) The median household income in the area was no more 139.31 than half the median household income for the Minneapolis and 139.32 Saint Paul standard metropolitan statistical area as determined 139.33 by the1980most recent federal decennial census. 139.34 (c) The area is characterized by residential dwelling units 139.35 in need of substantial rehabilitation. An area qualifies under 139.36 this paragraph if 25 percent or more of the residential dwelling 140.1 units are in substandard condition as determined by the city, or 140.2 if 70 percent or more of the residential dwelling units in the 140.3 area were built before 1940 as determined by the1980most 140.4 recent federal decennial census. 140.5 [EFFECTIVE DATE.] This section is effective upon the 140.6 availability of the federal 2000 census data required to 140.7 determine eligibility requirements under this section. 140.8 Sec. 69. Minnesota Statutes 2000, section 469.303, is 140.9 amended to read: 140.10 469.303 [ELIGIBILITY REQUIREMENTS.] 140.11 An area within the city is eligible for designation as an 140.12 enterprise zone if the area (1) includes census tracts eligible 140.13 for a federal empowerment zone or enterprise community as 140.14 defined by the United States Department of Housing and Urban 140.15 Development under Public Law Number 103-66, notwithstanding the 140.16 maximum zone population standard under the federal empowerment 140.17 zone program for cities with a population under 500,000, (2) is 140.18 an area within a city of the second class that is designated as 140.19 an economically depressed area by the United States Department 140.20 of Commerce, or (3) includes property located in St. Paul in a 140.21 transit zone as defined in Minnesota Statutes 2000, section 140.22 473.3915, subdivision 3. 140.23 Sec. 70. Minnesota Statutes 2000, section 473.388, 140.24 subdivision 4, is amended to read: 140.25 Subd. 4. [FINANCIAL ASSISTANCE.] The councilmaymust 140.26 grant the requested financial assistance if it determines that 140.27 the proposed service is intended to replace the service to the 140.28 applying city or town or combination thereof by the council and 140.29 that the proposed service will meet the needs of the applicant 140.30 at least as efficiently and effectively as the existing service. 140.31 The amount of assistance which the councilmaymust provide 140.32 to a system under this section may notexceed the sum ofbe less 140.33 than the sum of the amounts determined for each municipality 140.34 comprising the system as follows: 140.35 (a) theportion of the available local transit funds which140.36the applicant proposes to use to subsidize the proposed service;141.1andtransit operating assistance grants received under this 141.2 subdivision by the municipality in calendar year 2001 or the tax 141.3 revenues for transit services levied by the municipality for 141.4 taxes payable in 2001, including that portion of the levy 141.5 derived from the areawide pool under section 473F.08, 141.6 subdivision 3, clause (a), plus the portion of the 141.7 municipality's aid under section 273.1398, subdivision 2, 141.8 attributable to the transit levy; times 141.9 (b)an amount of financial assistance bearing an identical141.10proportional relationship to the amount under clause (a) as the141.11total amount of funds used by the council to fund its transit141.12operations bears to the total amount of taxes collected by the141.13council under section 473.446.the ratio of (i) the 141.14 appropriation from the transit fund to the council for nondebt 141.15 transit operations for the current fiscal year to (ii) the total 141.16 levy certified by the council under section 473.446 and the 141.17 opt-out municipalities under this section for taxes payable in 141.18 2001, including the portion of homestead and agricultural credit 141.19 aid under section 273.1398, subdivision 2, attributable to 141.20 nondebt transit levies, times 141.21 (c) the ratio of (i) the municipality's total taxable 141.22 market value for taxes payable in the most recent year for which 141.23 data is available divided by the municipality's total taxable 141.24 market value for taxes payable in 2001, to (ii) the total 141.25 taxable market value of all property in the metropolitan area 141.26 for taxes payable in the most recent year for which data is 141.27 available divided by the total taxable market value of all 141.28 property in the metropolitan area for taxes payable in 2001. 141.29 The council shall pay the amount to be provided to the recipient 141.30 from the funds the council would otherwise use to fund its 141.31 transit operations. 141.32For purposes of this section, "available local transit141.33funds" means 90 percent of the tax revenues which would accrue141.34to the council from the tax it levies under section 473.446 in141.35the applicant city or town or combination thereof.141.36For purposes of this section, "tax revenues" in the city or142.1town means the sum of the following:142.2(1) the nondebt spread levy, which is the total of the142.3taxes extended by application of the local tax rate for nondebt142.4purposes on the taxable net tax capacity;142.5(2) the portion of the fiscal disparity distribution levy142.6under section 473F.08, subdivision 3, attributable to nondebt142.7purposes; and142.8(3) the portion of the homestead credit and agricultural142.9credit aid and disparity reduction aid amounts under section142.10273.1398, subdivisions 2 and 3, attributable to nondebt purposes.142.11Tax revenues do not include the state feathering142.12reimbursement under section 473.446.142.13 [EFFECTIVE DATE.] This section is effective for calendar 142.14 year 2002 and subsequent years. 142.15 Sec. 71. Minnesota Statutes 2000, section 473.388, 142.16 subdivision 7, is amended to read: 142.17 Subd. 7. [LOCAL LEVY OPTION.] (a) A statutory or home rule 142.18 charter city or town that is eligible for assistance under this 142.19 section, in lieu of receiving the assistance,may levy a taxfor142.20payment of the operating and capital expenditures for transit142.21and other related activities and to providefor payment of 142.22 obligations issued by the municipality forsuch purposes,142.23provided that the tax must be sufficient to maintain the level142.24of transit service provided in the municipality in the previous142.25yearcapital expenditures for transit and other related 142.26 activities, provided that property taxes were pledged to satisfy 142.27 the obligations, and provided that legislative appropriations 142.28 are insufficient to satisfy the obligations. 142.29 (b)The transit tax revenues derived by the municipality142.30may not exceed:142.31(1) for the first transit levy year and any subsequent142.32transit levy year immediately following a year in which the142.33municipality declines to make the levy, the maximum available142.34local transit funds for the municipality for taxes payable in142.35the current year under section 473.446, calculated as if the142.36percentage of transit tax revenues for the municipality were 88143.1percent instead of 90 percent, and multiplied by the143.2municipality's market value adjustment ratio; and143.3(2) for taxes levied in any year that immediately follows a143.4year in which the municipality elects to levy under this143.5subdivision, the maximum transit tax that the municipality may143.6have levied in the previous year under this subdivision,143.7multiplied by the municipality's market value adjustment ratio.143.8The commissioner of revenue shall certify the143.9municipality's levy limitation under this subdivision to the143.10municipality by June 1 of the levy year. The tax must be143.11accumulated and kept in a separate fund to be known as the143.12"replacement transit fund."143.13(c) To enable the municipality to receive revenues143.14described in clauses (2) and (3) of the definition of "tax143.15revenues" in subdivision 4, that would otherwise be lost if the143.16municipality's transit tax levy was not treated as a successor143.17levy to that made by the council under section 473.446:143.18(1) in the first transit levy year and any subsequent143.19transit levy year immediately following a year in which the143.20municipality declined to make the levy, 88 percent of the143.21council's nondebt spread levy for the current taxes payable year143.22shall be treated as levied by the municipality, and not the143.23council, for purposes of section 473F.08, subdivision 3, for the143.24purpose of determining its local tax rate for the preceding143.25year; and143.26(2) 88 percent of the revenues described in clause (3) of143.27the definition of "tax revenues" in subdivision 4, payable in143.28the first transit levy year, or payable in any subsequent143.29transit levy year following a year in which a municipality143.30declined to make the levy, shall be permanently transferred from143.31the council to the municipality. If a municipality levies a tax143.32under this subdivision in one year, but declines to levy in a143.33subsequent year, the aid transferred under this clause shall be143.34transferred back to the council.143.35(d) Any transit taxes levied under this subdivision are not143.36subject to, or counted towards, any limit hereafter imposed by144.1law on the levy of taxes upon taxable property within any144.2municipality unless the law specifically includes the transit144.3tax.144.4(e)This subdivision is consistent with the transit 144.5 redesign plan. Eligible municipalities opting tolevy the144.6transit taxoperate under this subdivision shall continue to 144.7 meet the regional performance standards established by the 144.8 council. 144.9(f)(c) Within the designated Americans with Disabilities 144.10 Act area, metro mobility remains the obligation of the state. 144.11(g) For purposes of this subdivision, "transit levy year"144.12is any year in which the municipality elects to levy under this144.13subdivision.144.14(h) A municipality may not levy taxes under this144.15subdivision in any year unless it notifies the council and the144.16commissioner of revenue of its intent to levy before July 1 of144.17the levy year. The notification must include the amount of the144.18municipality's proposed transit tax for the current levy year.144.19After June 30 in the levy year, a municipality's decision to144.20levy or not levy taxes under this subdivision is irrevocable for144.21that levy year.144.22 [EFFECTIVE DATE.] This section is effective for taxes 144.23 payable in 2002 and subsequent years. 144.24 Sec. 72. Minnesota Statutes 2000, section 473.446, 144.25 subdivision 1, is amended to read: 144.26 Subdivision 1. [WITHIN TRANSIT TAXING DISTRICT144.27 METROPOLITAN AREA TRANSIT TAX.] For the purposes of sections 144.28 473.405 to 473.449 and the metropolitan transit system, except 144.29 as otherwise provided in this subdivisionand subdivision 1b, 144.30 the council shall levy each year upon all taxable property 144.31 within the metropolitantransit taxing districtarea, defined in 144.32 section 473.121, subdivision 2, a transit tax consisting of: 144.33 (a) an amountwhich shall be used for payment of the144.34expenses of operating transit and paratransit service and to144.35provide for payment of obligations issued by the council under144.36section 473.436, subdivision 6;145.1(b) an additional amount, if any, the council determines to145.2be necessary to provide for the full and timely payment of its145.3certificates of indebtedness and other obligations outstanding145.4on July 1, 1985, to which property taxes under this section have145.5been pledged; and145.6(c) an additional amountnecessary to provide full and 145.7 timely payment of certificates of indebtedness, bonds, including 145.8 refunding bonds or other obligations issued or to be issued 145.9 under section 473.39 by the council for purposes of acquisition 145.10 and betterment of property and other improvements of a capital 145.11 nature and to which the council has specifically pledged tax 145.12 levies under this clause.; and 145.13The property tax levied by the council for general purposes145.14under paragraph (a) must not exceed the following amount for the145.15years specified:145.16(1) for taxes payable in 1995, the council's property tax145.17levy limitation for general transit purposes is equal to the145.18former regional transit board's property tax levy limitation for145.19general transit purposes under this subdivision, for taxes145.20payable in 1994, multiplied by an index for market valuation145.21changes equal to the total market valuation of all taxable145.22property located within the metropolitan transit taxing district145.23for the current taxes payable year divided by the total market145.24valuation of all taxable property located within the145.25metropolitan transit taxing district for the previous taxes145.26payable year; and145.27(2) for taxes payable in 1996 and subsequent years, the145.28product of (i) the council's property tax levy limitation for145.29general transit purposes for the previous year determined under145.30this subdivision before reduction by the amount levied by any145.31municipality in the previous year under section 473.388,145.32subdivision 7, multiplied by (ii) an index for market valuation145.33changes equal to the total market valuation of all taxable145.34property located within the metropolitan transit taxing district145.35for the current taxes payable year divided by the total market145.36valuation of all taxable property located within the146.1metropolitan transit taxing district for the previous taxes146.2payable year, minus the amount levied by any municipality in the146.3current levy year under section 473.388, subdivision 7.146.4The portion of the property tax levy for transit district146.5operating purposes attributable to a municipality that has146.6exercised a local levy option under section 473.388, subdivision146.77, is the amount as determined under subdivision 1b. The146.8portion of the property tax levy for transit district operating146.9purposes attributable to the remaining municipalities within the146.10transit district is found by subtracting the portions146.11attributable to the municipalities that have exercised a local146.12levy option under section 473.388, subdivision 7.146.13For the taxes payable year 1995, the index for market146.14valuation changes shall be multiplied by an amount equal to the146.15sum of the regional transit board's property tax levy limitation146.16for the taxes payable year 1994 and $160,665. The $160,665146.17increase shall be a permanent adjustment to the levy limit base146.18used in determining the regional transit board's property tax146.19levy limitation for general purposes for subsequent taxes146.20payable years.146.21For the purpose of determining the council's property tax146.22levy limitation for general transit purposes under this146.23subdivision, "total market valuation" means the total market146.24valuation of all taxable property within the metropolitan146.25transit taxing district without valuation adjustments for fiscal146.26disparities (chapter 473F), tax increment financing (sections146.27469.174 to 469.179), and high voltage transmission lines146.28(section 273.425).146.29The county auditor shall reduce the tax levied pursuant to146.30this section and section 473.388 on all property within146.31statutory and home rule charter cities and towns that receive146.32full-peak service and limited off-peak service by an amount146.33equal to the tax levy that would be produced by applying a rate146.34of 0.510 percent of net tax capacity on the property. The146.35county auditor shall reduce the tax levied pursuant to this146.36section and section 473.388 on all property within statutory and147.1home rule charter cities and towns that receive limited peak147.2service by an amount equal to the tax levy that would be147.3produced by applying a rate of 0.765 percent of net tax capacity147.4on the property. The amounts so computed by the county auditor147.5shall be submitted to the commissioner of revenue as part of the147.6abstracts of tax lists required to be filed with the147.7commissioner under section 275.29. Any prior year adjustments147.8shall also be certified in the abstracts of tax lists. The147.9commissioner shall review the certifications to determine their147.10accuracy and may make changes in the certification as necessary147.11or return a certification to the county auditor for147.12corrections. The commissioner shall pay to the council and to147.13the municipalities levying under section 473.388, subdivision 7,147.14the amounts certified by the county auditors on the dates147.15provided in section 273.1398, apportioned between the council147.16and the municipality in the same proportion as the total transit147.17levy is apportioned within the municipality. There is annually147.18appropriated from the general fund in the state treasury to the147.19department of revenue the amounts necessary to make these147.20payments.147.21For the purposes of this subdivision, "full-peak and147.22limited off-peak service" means peak period regular route147.23service, plus weekday midday regular route service at intervals147.24longer than 60 minutes on the route with the greatest frequency;147.25and "limited peak period service" means peak period regular147.26route service only.147.27For the purposes of property taxes payable in the following147.28year, the council shall annually determine which cities and147.29towns qualify for the 0.510 percent or 0.765 percent tax147.30capacity rate reduction and shall certify this list to the147.31county auditor of the county wherein such cities and towns are147.32located on or before September 15. No changes may be made to147.33the annual list after September 15.147.34 (b) an additional amount necessary to provide full and 147.35 timely payment of certificates of indebtedness issued by the 147.36 council, after consultation with the commissioner of finance, if 148.1 revenues to the metropolitan area transit fund in the fiscal 148.2 year in which the indebtedness is issued increase over those 148.3 revenues in the previous fiscal year by a percentage less than 148.4 the percentage increase for the same period in the revised 148.5 consumer price index for all urban consumers for the St. 148.6 Paul-Minneapolis metropolitan area prepared by the United States 148.7 Department of Labor. 148.8 Indebtedness to which property taxes have been pledged 148.9 under paragraph (b) that is incurred in any fiscal year may not 148.10 exceed the amount necessary to make up the difference between 148.11 (1) the amount that the council received or expects to receive 148.12 in that fiscal year from the metropolitan area transit fund and 148.13 (2) the amount the council received from that fund in the 148.14 previous fiscal year multiplied by the percentage increase for 148.15 the same period in the revised consumer price index for all 148.16 urban consumers for the St. Paul-Minneapolis metropolitan area 148.17 prepared by the United States Department of Labor. 148.18 [EFFECTIVE DATE.] This section is effective for taxes 148.19 payable in 2002 and subsequent years. 148.20 Sec. 73. Minnesota Statutes 2000, section 473F.08, 148.21 subdivision 3, is amended to read: 148.22 Subd. 3. [APPORTIONMENT OF LEVY.] The county auditor shall 148.23 apportion the levy of each governmental unit in the auditor's 148.24 county in the manner prescribed by this subdivision. The 148.25 auditor shall: 148.26 (a) by August 20, determine the areawide portion of the 148.27 levy for each governmental unit by multiplying the local tax 148.28 rate of the governmental unit for the preceding levy year times 148.29 the distribution value set forth in subdivision 2, clause (b); 148.30and148.31 (b) by September 5, determine the local portion of the 148.32 current year's levy by subtracting the resulting amount from 148.33 clause (a) from the governmental unit's current year's levy.; 148.34 (c) for determinations made under clause (a) in the case of 148.35 school districts, for taxes payable in 2002, exclude the general 148.36 education tax rate and the portion of the referendum tax rate 149.1 attributable to the first $415 per pupil unit from the local tax 149.2 rate for the preceding levy year; 149.3 (d) for determinations made under clause (a) in the case of 149.4 the metropolitan council, for taxes payable in 2002, exclude the 149.5 transit operating tax rate from the local tax rate for the 149.6 preceding levy year; and 149.7 (e) for determinations made under clause (a) in the case of 149.8 transit opt-out cities, for taxes payable in 2002, exclude the 149.9 opt-out transit rate from the local tax rate for the preceding 149.10 levy year. 149.11 [EFFECTIVE DATE.] This section is effective the day 149.12 following final enactment. 149.13 Sec. 74. Minnesota Statutes 2000, section 477A.011, 149.14 subdivision 35, is amended to read: 149.15 Subd. 35. [TAX EFFORT RATE.] "Tax effort rate" means the 149.16 sum of (1) the net levy for all cities plus (2) for aid payable 149.17 in 2002 only, the total aid payments to all cities under section 149.18 273.1398 in the previous year; divided by the sum of the city 149.19 net tax capacity for all cities. For purposes of this section, 149.20 "net levy" means the city levy, after all adjustments, used for 149.21 calculating the local tax rate under section 275.08 for taxes 149.22 payable in the year prior to the aid distribution. The fiscal 149.23 disparity distribution levy under chapter 276A or 473F is 149.24 included in net levy. 149.25 [EFFECTIVE DATE.] This section is effective for aids 149.26 payable in 2002 and future years. 149.27 Sec. 75. Minnesota Statutes 2000, section 477A.011, 149.28 subdivision 36, is amended to read: 149.29 Subd. 36. [CITY AID BASE.] (a) Except as provided in 149.30 paragraphs (b) to(n)(o), "city aid base" means, for each city, 149.31 the sum of the local government aid and equalization aid it was 149.32 originally certified to receive in calendar year 1993 under 149.33 Minnesota Statutes 1992, section 477A.013, subdivisions 3 and 5, 149.34 and the amount of disparity reduction aid it received in 149.35 calendar year 1993 under Minnesota Statutes 1992, section 149.36 273.1398, subdivision 3. 150.1 (b) For aids payable in 1996 and thereafter, a city that in 150.2 1992 or 1993 transferred an amount from governmental funds to 150.3 its sewer and water fund, which amount exceeded its net levy for 150.4 taxes payable in the year in which the transfer occurred, has a 150.5 "city aid base" equal to the sum of (i) its city aid base, as 150.6 calculated under paragraph (a), and (ii) one-half of the 150.7 difference between its city aid distribution under section 150.8 477A.013, subdivision 9, for aids payable in 1995 and its city 150.9 aid base for aids payable in 1995. 150.10 (c) The city aid base for any city with a population less 150.11 than 500 is increased by $40,000 for aids payable in calendar 150.12 year 1995 and thereafter, and the maximum amount of total aid it 150.13 may receive under section 477A.013, subdivision 9, paragraph 150.14 (c), is also increased by $40,000 for aids payable in calendar 150.15 year 1995 only, provided that: 150.16 (i) the average total tax capacity rate for taxes payable 150.17 in 1995 exceeds 200 percent; 150.18 (ii) the city portion of the tax capacity rate exceeds 100 150.19 percent; and 150.20 (iii) its city aid base is less than $60 per capita. 150.21 (d) The city aid base for a city is increased by $20,000 in 150.22 1998 and thereafter and the maximum amount of total aid it may 150.23 receive under section 477A.013, subdivision 9, paragraph (c), is 150.24 also increased by $20,000 in calendar year 1998 only, provided 150.25 that: 150.26 (i) the city has a population in 1994 of 2,500 or more; 150.27 (ii) the city is located in a county, outside of the 150.28 metropolitan area, which contains a city of the first class; 150.29 (iii) the city's net tax capacity used in calculating its 150.30 1996 aid under section 477A.013 is less than $400 per capita; 150.31 and 150.32 (iv) at least four percent of the total net tax capacity, 150.33 for taxes payable in 1996, of property located in the city is 150.34 classified as railroad property. 150.35 (e) The city aid base for a city is increased by $200,000 150.36 in 1999 and thereafter and the maximum amount of total aid it 151.1 may receive under section 477A.013, subdivision 9, paragraph 151.2 (c), is also increased by $200,000 in calendar year 1999 only, 151.3 provided that: 151.4 (i) the city was incorporated as a statutory city after 151.5 December 1, 1993; 151.6 (ii) its city aid base does not exceed $5,600; and 151.7 (iii) the city had a population in 1996 of 5,000 or more. 151.8 (f) The city aid base for a city is increased by $450,000 151.9 in 1999 to 2008 and the maximum amount of total aid it may 151.10 receive under section 477A.013, subdivision 9, paragraph (c), is 151.11 also increased by $450,000 in calendar year 1999 only, provided 151.12 that: 151.13 (i) the city had a population in 1996 of at least 50,000; 151.14 (ii) its population had increased by at least 40 percent in 151.15 the ten-year period ending in 1996; and 151.16 (iii) its city's net tax capacity for aids payable in 1998 151.17 is less than $700 per capita. 151.18 (g) Beginning in 2002, the city aid base for a city is 151.19 equal to the sum of its city aid base in 2001 and the amount of 151.20 additional aid it was certified to receive under section 477A.06 151.21 in 2001. For 2002 only, the maximum amount of total aid a city 151.22 may receive under section 477A.013, subdivision 9, paragraph 151.23 (c), is also increased by the amount it was certified to receive 151.24 under section 477A.06 in 2001. 151.25 (h) The city aid base for a city is increased by $150,000 151.26 for aids payable in 2000 and thereafter, and the maximum amount 151.27 of total aid it may receive under section 477A.013, subdivision 151.28 9, paragraph (c), is also increased by $150,000 in calendar year 151.29 2000 only, provided that: 151.30 (1) the city has a population that is greater than 1,000 151.31 and less than 2,500; 151.32 (2) its commercial and industrial percentage for aids 151.33 payable in 1999 is greater than 45 percent; and 151.34 (3) the total market value of all commercial and industrial 151.35 property in the city for assessment year 1999 is at least 15 151.36 percent less than the total market value of all commercial and 152.1 industrial property in the city for assessment year 1998. 152.2 (i) The city aid base for a city is increased by $200,000 152.3 in 2000 and thereafter, and the maximum amount of total aid it 152.4 may receive under section 477A.013, subdivision 9, paragraph 152.5 (c), is also increased by $200,000 in calendar year 2000 only, 152.6 provided that: 152.7 (1) the city had a population in 1997 of 2,500 or more; 152.8 (2) the net tax capacity of the city used in calculating 152.9 its 1999 aid under section 477A.013 is less than $650 per 152.10 capita; 152.11 (3) the pre-1940 housing percentage of the city used in 152.12 calculating 1999 aid under section 477A.013 is greater than 12 152.13 percent; 152.14 (4) the 1999 local government aid of the city under section 152.15 477A.013 is less than 20 percent of the amount that the formula 152.16 aid of the city would have been if the need increase percentage 152.17 was 100 percent; and 152.18 (5) the city aid base of the city used in calculating aid 152.19 under section 477A.013 is less than $7 per capita. 152.20 (j) The city aid base for a city is increased by $225,000 152.21 in calendar years 2000 to 2002 and the maximum amount of total 152.22 aid it may receive under section 477A.013, subdivision 9, 152.23 paragraph (c), is also increased by $225,000 in calendar year 152.24 2000 only, provided that: 152.25 (1) the city had a population of at least 5,000; 152.26 (2) its population had increased by at least 50 percent in 152.27 the ten-year period ending in 1997; 152.28 (3) the city is located outside of the Minneapolis-St. Paul 152.29 metropolitan statistical area as defined by the United States 152.30 Bureau of the Census; and 152.31 (4) the city received less than $30 per capita in aid under 152.32 section 477A.013, subdivision 9, for aids payable in 1999. 152.33 (k) The city aid base for a city is increased by $102,000 152.34 in 2000 and thereafter, and the maximum amount of total aid it 152.35 may receive under section 477A.013, subdivision 9, paragraph 152.36 (c), is also increased by $102,000 in calendar year 2000 only, 153.1 provided that: 153.2 (1) the city has a population in 1997 of 2,000 or more; 153.3 (2) the net tax capacity of the city used in calculating 153.4 its 1999 aid under section 477A.013 is less than $455 per 153.5 capita; 153.6 (3) the net levy of the city used in calculating 1999 aid 153.7 under section 477A.013 is greater than $195 per capita; and 153.8 (4) the 1999 local government aid of the city under section 153.9 477A.013 is less than 38 percent of the amount that the formula 153.10 aid of the city would have been if the need increase percentage 153.11 was 100 percent. 153.12 (l) The city aid base for a city is increased by $32,000 in 153.13 2001 and thereafter, and the maximum amount of total aid it may 153.14 receive under section 477A.013, subdivision 9, paragraph (c), is 153.15 also increased by $32,000 in calendar year 2001 only, provided 153.16 that: 153.17 (1) the city has a population in 1998 that is greater than 153.18 200 but less than 500; 153.19 (2) the city's revenue need used in calculating aids 153.20 payable in 2000 was greater than $200 per capita; 153.21 (3) the city net tax capacity for the city used in 153.22 calculating aids available in 2000 was equal to or less than 153.23 $200 per capita; 153.24 (4) the city aid base of the city used in calculating aid 153.25 under section 477A.013 is less than $65 per capita; and 153.26 (5) the city's formula aid for aids payable in 2000 was 153.27 greater than zero. 153.28 (m) The city aid base for a city is increased by $7,200 in 153.29 2001 and thereafter, and the maximum amount of total aid it may 153.30 receive under section 477A.013, subdivision 9, paragraph (c), is 153.31 also increased by $7,200 in calendar year 2001 only, provided 153.32 that: 153.33 (1) the city had a population in 1998 that is greater than 153.34 200 but less than 500; 153.35 (2) the city's commercial industrial percentage used in 153.36 calculating aids payable in 2000 was less than ten percent; 154.1 (3) more than 25 percent of the city's population was 60 154.2 years old or older according to the 1990 census; 154.3 (4) the city aid base of the city used in calculating aid 154.4 under section 477A.013 is less than $15 per capita; and 154.5 (5) the city's formula aid for aids payable in 2000 was 154.6 greater than zero. 154.7 (n) The city aid base for a city is increased by $45,000 in 154.8 2001 and thereafter and by an additional $50,000 in calendar 154.9 years 2002 to 2011, and the maximum amount of total aid it may 154.10 receive under section 477A.013, subdivision 9, paragraph (c), is 154.11 also increased by $45,000 in calendar year 2001 only, and by 154.12 $50,000 in calendar year 2002 only, provided that: 154.13 (1) the net tax capacity of the city used in calculating 154.14 its 2000 aid under section 477A.013 is less than $810 per 154.15 capita; 154.16 (2) the population of the city declined more than two 154.17 percent between 1988 and 1998; 154.18 (3) the net levy of the city used in calculating 2000 aid 154.19 under section 477A.013 is greater than $240 per capita; and 154.20 (4) the city received less than $36 per capita in aid under 154.21 section 477A.013, subdivision 9, for aids payable in 2000. 154.22 (o) The city aid base for a city with a population of 154.23 10,000 or more which is located outside of the seven-county 154.24 metropolitan area is increased in 2002 and thereafter, and the 154.25 maximum amount of total aid it may receive under section 154.26 477A.013, subdivision 9, paragraph (b) or (c), is also increased 154.27 in calendar year 2002 only, by an amount equal to the lesser of: 154.28 (1)(i) the total population of the city, as determined by 154.29 the United States Bureau of the Census, in the 2000 census, (ii) 154.30 minus 5,000, (iii) times 60; or 154.31 (2) $2,500,000. 154.32 (p) The city aid base is increased by $50,000 in 2002 and 154.33 thereafter, and the maximum amount of total aid it may receive 154.34 under section 477A.013, subdivision 9, paragraph (c), is also 154.35 increased by $50,000 in calendar year 2002 only, provided that: 154.36 (1) the city is located in the seven-county metropolitan 155.1 area; 155.2 (2) its population in 2000 is between 10,000 and 20,000; 155.3 and 155.4 (3) its commercial industrial percentage, as calculated for 155.5 city aid payable in 2001, was greater than 25 percent. 155.6 (q) The city aid base for a city is increased by $150,000 155.7 in calendar years 2002 to 2011 and the maximum amount of total 155.8 aid it may receive under section 477A.013, subdivision 9, 155.9 paragraph (c), is also increased by $150,000 in calendar year 155.10 2002 only, provided that: 155.11 (1) the city had a population of at least 3,000 but no more 155.12 than 4,000 in 1999; 155.13 (2) its home county is located within the seven-county 155.14 metropolitan area; 155.15 (3) its pre-1940 housing percentage is less than 15 155.16 percent; and 155.17 (4) its city net tax capacity per capita for taxes payable 155.18 in 2000 is less than $900 per capita. 155.19 [EFFECTIVE DATE.] This section is effective beginning with 155.20 aids payable in 2002. 155.21 Sec. 76. Minnesota Statutes 2000, section 477A.013, 155.22 subdivision 1, is amended to read: 155.23 Subdivision 1. [TOWNS.] In1994 each town that had levied155.24for taxes payable in the prior year a local tax rate of at least155.25.008 shall receive a distribution equal to the amount it155.26received in 1993 under this section before any nonpermanent155.27reductions made under section 477A.0132. In 1995 each town that155.28had levied for taxes payable in 1993 a local tax rate of at155.29least .008 shall receive a distribution equal to 102 percent of155.30the amount it received in 1994 under this section before any155.31increases or reductions under sections 16A.711, subdivision 5,155.32and 477A.0132. In 1996 and subsequent years each town that had155.33levied for taxes payable in 1993 a local tax rate of at least155.34.008 shall receive a distribution equal to the amount it155.35received in the previous year under this section, adjusted for155.36inflation as provided under section 477A.03, subdivision 32002, 156.1 no town is eligible for a distribution under this subdivision. 156.2 [EFFECTIVE DATE.] This section is effective for aids 156.3 payable in 2002 and subsequent years. 156.4 Sec. 77. Minnesota Statutes 2000, section 477A.013, 156.5 subdivision 9, is amended to read: 156.6 Subd. 9. [CITY AID DISTRIBUTION.] (a) In calendar year 156.719942002 and thereafter, each city shall receive an aid 156.8 distribution equal to the sum of (1) the city formula aid under 156.9 subdivision 8, and (2) its city aid base. 156.10 (b) The percentage increase for a first class city in 156.11 calendar year 1995 and thereafter, except for 2002, shall not 156.12 exceed the percentage increase in the sum of the aid to all 156.13 cities under this section in the current calendar year compared 156.14 to the sum of the aid to all cities in the previous year. For 156.15 aids payable in 2002 only, the amount of the aid paid to a first 156.16 class city shall not exceed the sum of its aid amount for 156.17 calendar year 2001 under this section and its aid payment in 156.18 calendar year 2001 under section 273.1398, subdivision 2, by 156.19 more than 2.5 percent. 156.20 (c) For aids payable in all years except 2002, the total 156.21 aid for any city, except a first class city, shall not exceed 156.22 the sum of (1) ten percent of the city's net levy for the year 156.23 prior to the aid distribution plus (2) its total aid in the 156.24 previous year before any increases or decreases under sections 156.25 16A.711, subdivision 5, and 477A.0132. For aids payable in 2002 156.26 only, the total aid for any city, except a first class city, 156.27 shall not exceed 40 percent of the sum of (1) the city's net 156.28 levy for taxes payable in the year prior to the aid distribution 156.29 plus (2) its total aid in the previous year under section 156.30 273.1398, subdivision 2, before any increases or decreases under 156.31 sections 16A.711, subdivision 5, and 477A.0132. 156.32(d) Notwithstanding paragraph (c), in 1995 only, for cities156.33which in 1992 or 1993 transferred an amount from governmental156.34funds to their sewer and water fund in an amount greater than156.35their net levy for taxes payable in the year in which the156.36transfer occurred, the total aid shall not exceed the sum of (1)157.120 percent of the city's net levy for the year prior to the aid157.2distribution plus (2) its total aid in the previous year before157.3any increases or decreases under sections 16A.711, subdivision157.45, and 477A.0132.157.5 [EFFECTIVE DATE.] This section is effective for aids 157.6 payable in 2002 and future years. 157.7 Sec. 78. Minnesota Statutes 2000, section 477A.03, 157.8 subdivision 2, is amended to read: 157.9 Subd. 2. [ANNUAL APPROPRIATION.] (a) A sum sufficient to 157.10 discharge the duties imposed by sections 477A.011 to 477A.014 is 157.11 annually appropriated from the general fund to the commissioner 157.12 of revenue. 157.13 (b) Aid payments to counties under section 477A.0121 are 157.14 limited to $20,265,000 in 1996. Aid payments to counties under 157.15 section 477A.0121 are limited to $27,571,625 in 1997. For aid 157.16 payable in 1998 and thereafter, the total aids paid under 157.17 section 477A.0121 are the amounts certified to be paid in the 157.18 previous year, adjusted for inflation as provided under 157.19 subdivision 3. 157.20 (c)(i) For aids payable in 1998 and thereafter, the total 157.21 aids paid to counties under section 477A.0122 are the amounts 157.22 certified to be paid in the previous year, adjusted for 157.23 inflation as provided under subdivision 3. 157.24 (ii) Aid payments to counties under section 477A.0122 in 157.25 2000 are further increased by an additional $20,000,000 in 2000. 157.26 (d) Aid payments to cities in19992002 under section 157.27 477A.013, subdivision 9, are limited to$380,565,489. For aids157.28payable in 2000, the total aids paid under section 477A.013,157.29subdivision 9, arethe amounts certified to be paid in the 157.30 previous year, adjusted for inflation as provided in subdivision 157.31 3, and increased bythe amount necessary to effectuate Laws157.321999, chapter 243, article 5, section 48, paragraph157.33(b)$140,000,000. For aids payable in2001 through2003, the 157.34 total aids paid under section 477A.013, subdivision 9, are the 157.35 amounts certified to be paid in the previous year, adjusted for 157.36 inflation as provided under subdivision 3. For aids payable in 158.1 2004, the total aids paid under section 477A.013, subdivision 9, 158.2 are the amounts certified to be paid in the previous year, 158.3 adjusted for inflation as provided under subdivision 3, and 158.4 increased by the amount certified to be paid in 2003 under 158.5 section 477A.06. For aids payable in 2005 and thereafter, the 158.6 total aids paid under section 477A.013, subdivision 9, are the 158.7 amounts certified to be paid in the previous year, adjusted for 158.8 inflation as provided under subdivision 3. The additional 158.9 amount authorized under subdivision 4 is not included when 158.10 calculating the appropriation limits under this paragraph. 158.11 [EFFECTIVE DATE.] This section is effective for aids 158.12 payable in 2002 and future years. 158.13 Sec. 79. [477A.07] [RENTAL HOUSING TAX BASE REPLACEMENT 158.14 AID.] 158.15 Subdivision 1. [AID AMOUNT.] (a) For aid payable in 2003, 158.16 each county and city is eligible for aid equal to the amount by 158.17 which (i) 0.3 percent of the assessment year 2001 taxable market 158.18 value of class 4a property, plus .25 percent of the assessment 158.19 year 2001 market value of class 4b property, as defined in 158.20 section 273.13, subdivision 25, exceeds (ii) 0.4 percent of the 158.21 jurisdiction's total taxable net tax capacity for taxes payable 158.22 in 2002, multiplied by the jurisdiction's average tax rate for 158.23 taxes payable in 2002. 158.24 (b) For aid payable in 2004, each county and city is 158.25 eligible for aid equal to the amount by which (i) 0.25 percent 158.26 of the assessment year 2002 taxable market value of class 4a 158.27 property, as defined in section 273.13, subdivision 25, exceeds 158.28 (ii) 0.4 percent of the jurisdiction's total taxable net tax 158.29 capacity for taxes payable in 2003, multiplied by the 158.30 jurisdiction's average tax rate for taxes payable in 2003. 158.31 Subd. 2. [COUNTY AID.] Each county's aid amount for 2003 158.32 determined under subdivision 1 must be permanently added to the 158.33 county's homestead and agricultural credit aid base under 158.34 section 273.1398 for aid payable in 2003. Each county's aid 158.35 amount for 2004 determined under subdivision 1 must be 158.36 permanently added to the county's homestead and agricultural 159.1 credit aid base for aid payable in 2004. 159.2 Subd. 3. [CITY AID.] Each city's 2003 aid amount 159.3 determined under subdivision 1 must be permanently added to its 159.4 city aid base under section 477A.011, subdivision 36, for aid 159.5 payable in 2003. Each city's 2004 aid amount determined under 159.6 subdivision 1 must be permanently added to its city aid base 159.7 under section 477A.011, subdivision 36, for aid payable in 2004. 159.8 Subd. 4. [APPROPRIATION INCREASE.] For aid payable in 159.9 2003, the total aid amount payable to cities under section 159.10 477A.03, subdivision 2, paragraph (d), is permanently increased 159.11 by the total amount payable to all cities under subdivision 3 159.12 for aid payable in 2003. For aid payable in 2004, the total aid 159.13 amount payable to cities under section 477A.03, subdivision 2, 159.14 paragraph (d), is permanently increased by the total amount 159.15 payable to all cities under subdivision 3 for aid payable in 159.16 2004. 159.17 [EFFECTIVE DATE.] This section is effective for aids 159.18 payable in 2003 and subsequent years. 159.19 Sec. 80. Minnesota Statutes 2000, section 477A.12, is 159.20 amended to read: 159.21 477A.12 [ANNUAL APPROPRIATIONS; LANDS ELIGIBLE; 159.22 CERTIFICATION OF ACREAGE.] 159.23 Subdivision 1. [TYPES OF LAND; PAYMENTS.] (a) As an offset 159.24 for expenses incurred by counties and towns in support of 159.25 natural resources lands, the following amounts are annually 159.26 appropriated to the commissioner of natural resources from the 159.27 general fund for transfer to the commissioner of revenue. The 159.28 commissioner of revenue shall pay the transferred funds to 159.29 counties as required by sections 477A.11 to 477A.145. The 159.30 amounts are: 159.31 (1) for acquired natural resources land, $3, as adjusted 159.32 for inflation under section 477A.145, multiplied by the total 159.33 number of acres of acquired natural resources land or, at the 159.34 county's option three-fourths of one percent of the appraised 159.35 value of all acquired natural resources land in the county, 159.36 whichever is greater; 160.1 (2) 75 cents, as adjusted for inflation under section 160.2 477A.145, multiplied by the number of acres of 160.3 county-administered other natural resources land; and 160.4 (3) 37.5 cents, as adjusted for inflation under section 160.5 477A.145, multiplied by the number of acres of 160.6 commissioner-administered other natural resources land located 160.7 in each county as of July 1 of each year prior to the payment 160.8 year. 160.9 (b) The amount determined under paragraph (a), clause (1), 160.10 is payable for land that is acquired from a private owner and 160.11 owned by the department of transportation for the purpose of 160.12 replacing wetland losses caused by transportation projects, but 160.13 only if the county contains more than 500 acres of such land at 160.14 the time the certification is made under subdivision 2. 160.15 Subd. 2. [PROCEDURE.] Lands for which payments in lieu are 160.16 made pursuant to section 97A.061, subdivision 3, and Laws 1973, 160.17 chapter 567, shall not be eligible for payments under this 160.18 section. Each county auditor shall certify to the department of 160.19 natural resources during July of each year prior to the payment 160.20 year the number of acres of county-administered other natural 160.21 resources land within the county. The department of natural 160.22 resources may, in addition to the certification of acreage, 160.23 require descriptive lists of land so certified. The 160.24 commissioner of natural resources shall determine and certify to 160.25 the commissioner of revenue by March 1 of the payment year: 160.26 (1) the number of acres and most recent appraised value of 160.27 acquired natural resources land within each county; 160.28 (2) the number of acres of commissioner-administered 160.29 natural resources land within each county; and 160.30 (3) the number of acres of county-administered other 160.31 natural resources land within each county, based on the reports 160.32 filed by each county auditor with the commissioner of natural 160.33 resources. 160.34 The commissioner of transportation shall determine and 160.35 certify to the commissioner of revenue by March 1 of the payment 160.36 year the number of acres of land and the appraised value of the 161.1 land described in subdivision 1, paragraph (b), but only if it 161.2 exceeds 500 acres. 161.3 The commissioner of revenue shall determine the 161.4 distributions provided for in this section using the number of 161.5 acres and appraised values certified by the commissioner of 161.6 natural resources and the commissioner of transportation by 161.7 March 1 of the payment year. 161.8(c)Subd 3. [DETERMINATION OF APPRAISED VALUE.] For the 161.9 purposes of this section, the appraised value of acquired 161.10 natural resources land is the purchase price for the first five 161.11 years after acquisition. The appraised value of acquired 161.12 natural resources land received as a donation is the value 161.13 determined for the commissioner of natural resources by a 161.14 licensed appraiser, or the county assessor's estimated market 161.15 value if no appraisal is done. The appraised value must be 161.16 determined by the county assessor every five years after the 161.17 land is acquired. 161.18 [EFFECTIVE DATE.] This section is effective for payments in 161.19 2002 and thereafter. 161.20 Sec. 81. Minnesota Statutes 2000, section 477A.14, is 161.21 amended to read: 161.22 477A.14 [USE OF FUNDS.] 161.23 Except as provided in section 97A.061, subdivision 5, 40 161.24 percent of the total payment to the county shall be deposited in 161.25 the county general revenue fund to be used to provide property 161.26 tax levy reduction. The remainder shall be distributed by the 161.27 county in the following priority: 161.28 (a) 37.5 cents, as adjusted for inflation under section 161.29 477A.145, for each acre of county-administered other natural 161.30 resources land shall be deposited in a resource development fund 161.31 to be created within the county treasury for use in resource 161.32 development, forest management, game and fish habitat 161.33 improvement, and recreational development and maintenance of 161.34 county-administered other natural resources land. Any county 161.35 receiving less than $5,000 annually for the resource development 161.36 fund may elect to deposit that amount in the county general 162.1 revenue fund; 162.2 (b) From the funds remaining, within 30 days of receipt of 162.3 the payment to the county, the county treasurer shall pay each 162.4 organized township 30 cents, as adjusted for inflation under 162.5 section 477A.145, for each acre of acquired natural resources 162.6 land and each acre of land described in section 477A.12, 162.7 subdivision 1, paragraph (b), and 7.5 cents, as adjusted for 162.8 inflation under section 477A.145, for each acre of other natural 162.9 resources land located within its boundaries. Payments for 162.10 natural resources lands not located in an organized township 162.11 shall be deposited in the county general revenue fund. Payments 162.12 to counties and townships pursuant to this paragraph shall be 162.13 used to provide property tax levy reduction, except that of the 162.14 payments for natural resources lands not located in an organized 162.15 township, the county may allocate the amount determined to be 162.16 necessary for maintenance of roads in unorganized townships. 162.17 Provided that, if the total payment to the county pursuant to 162.18 section 477A.12 is not sufficient to fully fund the distribution 162.19 provided for in this clause, the amount available shall be 162.20 distributed to each township and the county general revenue fund 162.21 on a pro rata basis; and 162.22 (c) Any remaining funds shall be deposited in the county 162.23 general revenue fund. Provided that, if the distribution to the 162.24 county general revenue fund exceeds $35,000, the excess shall be 162.25 used to provide property tax levy reduction. 162.26 [EFFECTIVE DATE.] This section is effective for payments in 162.27 2002 and thereafter. 162.28 Sec. 82. Laws 1992, chapter 499, article 7, section 31, as 162.29 amended by Laws 1998, chapter 398, article 1, section 39, Laws 162.30 1999, chapter 241, article 1, section 54, and Laws 2000, chapter 162.31 489, article 2, section 28, is amended to read: 162.32 Sec. 31. [REPEALER.] 162.33Minnesota Statutes 1990, sections 124A.02, subdivision 24;162.34124A.23, subdivisions 2 and 3; 124A.26, subdivisions 2 and 3;162.35124A.27; 124A.28; and 124A.29, subdivision 2; and Minnesota162.36Statutes 1991 Supplement, sections 124A.02, subdivisions 16 and163.123; 124A.03, subdivisions 1b, 1c, 1d, 1e, 1f, 1g, 1h, and 1i;163.2124A.04; 124A.22, subdivisions 2, 3, 4, 4a, 4b, 8, and 9;163.3124A.23, subdivisions 1, 4, and 5; 124A.24; 124A.26, subdivision163.41; and 124A.29, subdivision 1, are repealed effective June 30,163.52004;Laws 1991, chapter 265, article 7, section 35, is repealed. 163.6 [EFFECTIVE DATE.] This section is effective July 1, 2001. 163.7 Sec. 83. [CONVEYANCE OF TAX-FORFEITED LAND; DAKOTA 163.8 COUNTY.] 163.9 (a) If special school district No. 6 conveys the land 163.10 described in paragraph (c) to the state according to Minnesota 163.11 Statutes, section 282.01, subdivision 1d, then, notwithstanding 163.12 any other provision of Minnesota Statutes, chapter 282, the 163.13 commissioner of revenue shall reconvey the land described in 163.14 paragraph (c) to special school district No. 6 for no 163.15 consideration. 163.16 (b) The conveyance must be in a form approved by the 163.17 attorney general. Notwithstanding Minnesota Statutes, chapter 163.18 282, or other law to the contrary, special school district No. 6 163.19 may use or sell the land for other than a public use. 163.20 Notwithstanding Minnesota Statutes, chapter 282, or other law to 163.21 the contrary, the state shall not retain a reversionary interest 163.22 and shall convey the land free of the trust in favor of the 163.23 taxing district. 163.24 (c) The land to be conveyed is in the city of South St. 163.25 Paul, Dakota county, and is described as: 163.26 (1) Lots 4, 5, 6, and 7, Block 1, Lookout Park Addition; 163.27 (2) Lots 25 and 26, Block 1, Lookout Park Addition; 163.28 (3) Lots 11, 12, 13, 14, 15, 16, 17, 18, 19, and 20, Block 163.29 2, Lookout Park Addition; 163.30 (4) Lots 1, 2, 3, 4, and 5, Block 1, Bryants First Addition 163.31 to the city of South St. Paul; and 163.32 (5) Lot 21, Block 1, Bryants First Addition to the city of 163.33 South St. Paul, together with that part of the vacated alley and 163.34 vacated Stanley Place accruing thereto. 163.35 [EFFECTIVE DATE.] This section is effective the day 163.36 following final enactment. 164.1 Sec. 84. [MINNEHAHA CREEK WATERSHED DISTRICT.] 164.2 Subdivision 1. [LEVY AUTHORIZED.] Notwithstanding 164.3 Minnesota Statutes, section 103D.905, subdivision 3, the 164.4 Minnehaha Creek watershed district may annually levy an 164.5 additional amount up to $50,000 for enforcing rules and permits. 164.6 Subd. 2. [EFFECTIVE DATE.] This section is effective, 164.7 without local approval, beginning with taxes levied in 2001, 164.8 payable in 2002. 164.9 Sec. 85. [PRIVATE SALE OF TAX-FORFEITED LAND; ST. LOUIS 164.10 COUNTY.] 164.11 (a) Notwithstanding the public sale provisions of Minnesota 164.12 Statutes, chapter 282, or other law to the contrary, St. Louis 164.13 county may sell by private sale the tax-forfeited land described 164.14 in paragraph (c) to one or more of the owners at the time of 164.15 forfeiture. 164.16 (b) The conveyance must be in a form approved by the 164.17 attorney general for a consideration of taxes due on the 164.18 property and any penalties, interest, and costs. 164.19 (c) The land to be sold is located in St. Louis county and 164.20 is described as: 164.21 (1) Parcel 200-10-1720: Sec. 11, Twp. 61, Rge 19 NW 1/4 of 164.22 NW 1/4; and 164.23 (2) Parcel 200-10-280: Sec. 2, Twp. 61, Rge 19 SW 1/4 of 164.24 SW 1/4. 164.25 (d) The county has determined that the county's land 164.26 management interests would best be served if the lands were 164.27 returned to private ownership. 164.28 [EFFECTIVE DATE.] This section is effective the day 164.29 following final enactment. 164.30 Sec. 86. [RED RIVER WATERSHED MANAGEMENT BOARD; PAYMENT IN 164.31 LIEU OF TAXES.] 164.32 (a) The Red River watershed management board may spend 164.33 money from its general fund to compensate counties and townships 164.34 for lost tax revenue from land that becomes tax exempt after it 164.35 is acquired by the board or a member watershed district for 164.36 flood damage reduction project. The amount that may be paid 165.1 under this section to a county or township must not exceed the 165.2 tax that was payable to that taxing jurisdiction on the land in 165.3 the last taxes payable year before the land became exempt due to 165.4 the acquisition, not to exceed $4 per acre, multiplied by 20. 165.5 This total amount may be paid in one payment, or in equal annual 165.6 installments over a period that does not exceed 20 years. A 165.7 member watershed district of the Red River management board may 165.8 spend money from its construction fund for the purposes 165.9 described in this section. 165.10 (b) For the purposes of this section, "Red River watershed 165.11 management board" refers to the board established by Laws 1976, 165.12 chapter 162, section 1, as amended by Laws 1982, chapter 474, 165.13 section 1, Laws 1983, chapter 338, section 1, Laws 1989 First 165.14 Special Session chapter 1, article 5, section 45, Laws 1991, 165.15 chapter 167, section 1, and Laws 1998, chapter 389, article 3, 165.16 section 29. 165.17 Sec. 87. [INDEPENDENT SCHOOL DISTRICT NO. 319, 165.18 NASHWAUK-KEEWATIN, ADDITIONAL LEVY.] 165.19 In addition to other levies, independent school district 165.20 No. 319, Nashwauk-Keewatin, may levy an amount up to $25,000 165.21 each year to finance the Nashwauk School-Community Library and 165.22 Community Service Project. 165.23 [EFFECTIVE DATE.] This section is effective July 1, 2001. 165.24 Sec. 88. [WYOMING TOWNSHIP; CITY OF CHISAGO CITY; 165.25 MUNICIPAL REIMBURSEMENT.] 165.26 Notwithstanding the limitation on duration or equality of 165.27 payment imposed under Minnesota Statutes, section 414.036, the 165.28 city of Chisago City may provide reimbursement for orderly 165.29 annexed property to the town of Wyoming for a period and in such 165.30 amounts agreed to by the city and the town under a joint powers 165.31 agreement entered into for the purposes of establishing a joint 165.32 commercial and business park in the annexed area. 165.33 [EFFECTIVE DATE.] This section is effective July 1, 2002. 165.34 Sec. 89. [FORGIVENESS OF PENALTY AND INTEREST.] 165.35 If the owner of record of property located in St. Louis 165.36 county that has parcel number 060-0030-03840 enters into an 166.1 agreement with the county by August 15, 2001, to make 166.2 installment payments over a ten-year period of the amount of 166.3 taxes and special assessments due on the property for the 1997 166.4 payable year and the owner makes the payments required under the 166.5 agreement when due, the amount of penalties, interest, and 166.6 related fees due as of August 15, 2001, with respect to the 166.7 delinquent taxes will not be required to be paid. 166.8 [EFFECTIVE DATE.] This section is effective the day 166.9 following final enactment. 166.10 Sec. 90. [RENEWAL OF RULEMAKING AUTHORITY.] 166.11 Notwithstanding Minnesota Statutes, section 14.125, the 166.12 Minnesota housing finance agency may adopt administrative rules 166.13 under Minnesota Statutes, chapter 14, to carry out the 166.14 provisions of Minnesota Statutes, section 462A.071, and 166.15 determinations made under Minnesota Statutes, section 462A.071, 166.16 subdivision 11, paragraph (b), are valid until January 1, 2003. 166.17 [EFFECTIVE DATE.] This section is effective the day 166.18 following final enactment. 166.19 Sec. 91. [PROPOSED NOTICES; PUBLIC HEARINGS; TAXES PAYABLE 166.20 2002 ONLY.] 166.21 Subdivision 1. [PUBLIC HEARINGS.] The public hearing 166.22 requirements contained in Minnesota Statutes, section 275.065, 166.23 are suspended for property taxes levied in 2001, payable in 166.24 2002. However, this does not prohibit a taxing authority from 166.25 holding a public hearing on its proposed levy if it so chooses. 166.26 The hearing requirements contained in Minnesota Statutes, 166.27 section 275.065, are reinstated beginning for taxes payable in 166.28 2003. 166.29 Subd. 2. [PROPOSED NOTICES.] (a) The parcel-specific 166.30 notice requirements contained in Minnesota Statutes, section 166.31 275.065, are suspended for property taxes levied in 2001, 166.32 payable in 2002, and are replaced by the requirements contained 166.33 in this section. The payable 2002 notice shall be 166.34 parcel-specific, unless waived by the commissioner in 166.35 extenuating circumstances as provided in subdivision 3. The 166.36 notice shall contain the amount of property taxes that each of 167.1 the taxing authorities propose to collect from the parcel for 167.2 taxes payable in 2002. The proposed amount shall be shown 167.3 separately for the county, city or town, school district, sum of 167.4 the special taxing districts, the state general tax, tax 167.5 increment, fiscal disparities, and the total tax of all taxing 167.6 authorities. In the case of school districts, the state 167.7 mandated school levy, which will show a zero levy due to the 167.8 state takeover, the voter approved levies, and the other levies 167.9 should be itemized separately, if possible. The amount of any 167.10 residential homestead market value credit and agricultural 167.11 homestead market value credit, and the resulting net tax shall 167.12 be listed. 167.13 (b) The parcel's total net tax for taxes payable in 2001 167.14 shall be listed on the notice. The notice shall also contain 167.15 the property classification and the taxable market value of the 167.16 parcel for taxes payable in 2001 and 2002. 167.17 (c) The commissioner of revenue shall prescribe the form of 167.18 the notice and may modify its contents as necessary, provided 167.19 that, to the extent possible, the information requested in this 167.20 section is contained in the notice. The notices shall be mailed 167.21 by December 14, 2001. 167.22 Subd. 3. [WAIVERS.] Based on information supplied by a 167.23 particular county, and at the request of the county board, the 167.24 commissioner may waive the requirement for parcel specific 167.25 notices or modify the form of the notices for a specific county 167.26 and may waive any procedure or deadline having to do with the 167.27 administration of the property tax, if the commissioner 167.28 determines that doing so will not materially prejudice the 167.29 rights of taxpayers in that county. This authority does not 167.30 extend to the provisions of Minnesota Statutes, chapters 279, 167.31 280, 281, 282, and 284. 167.32 Subd. 4. [SUPERSEDES.] This section supersedes the public 167.33 hearing and notice requirements in Minnesota Statutes, section 167.34 275.065, for taxes payable in 2002. 167.35 [EFFECTIVE DATE.] This section is effective only for 167.36 hearings in 2001 and parcel-specific notices and property tax 168.1 administration procedures and deadlines related only to taxes 168.2 levied in 2001, payable in 2002. 168.3 Sec. 92. [REPORT ON ASSESSMENT PRACTICES AND MARKET 168.4 VALUES.] 168.5 The department of revenue shall report to the legislature 168.6 each year by March 1, the following information on values and 168.7 assessment practices. The information should be provided by 168.8 major types of property on a statewide basis and at the most 168.9 disaggregate jurisdictional level that is useful and 168.10 appropriate. The information must include: 168.11 (1) recent market value trends and, to the extent possible, 168.12 projections of market value trends for up to five years; 168.13 (2) analysis of the effects of the limited market value 168.14 law; 168.15 (3) tax shift implications of market value trends and 168.16 limited market value; 168.17 (4) assessment quality indicators such as sales ratios and 168.18 coefficients of dispersion; 168.19 (5) to the extent possible, consideration should be given 168.20 to quality factors such as: 168.21 (i) number of sales; 168.22 (ii) time period; 168.23 (iii) geographical area; and 168.24 (iv) other; 168.25 (6) summary of state board orders; and 168.26 (7) percentage of parcels that change in value per year. 168.27 [EFFECTIVE DATE.] This section is effective the day 168.28 following final enactment. 168.29 Sec. 93. [STATE AID CERTIFICATIONS.] 168.30 The commissioner of revenue is allowed until September 1, 168.31 2001, to certify to the various local units of government the 168.32 state aid or reimbursement amounts administered or paid by the 168.33 commissioner that such units are to receive in calendar year 168.34 2002. 168.35 [EFFECTIVE DATE.] This section is effective the day 168.36 following final enactment. 169.1 Sec. 94. [CLASS 4D; TAXES PAYABLE IN 2003.] 169.2 If a parcel of property qualified under Minnesota Statutes, 169.3 section 273.126, for classification of all or part of its value 169.4 as class 4d for property taxes payable in 2002, the same 169.5 percentage of the value of the parcel qualifies for 169.6 classification as class 4d for taxes payable in 2003 as 169.7 qualified for taxes payable in 2002. The income restriction and 169.8 rent restriction agreement remain in effect for calendar year 169.9 2003, but no application for designation need be made under 169.10 Minnesota Statutes, section 462A.071. A property subject to a 169.11 rent restriction agreement may elect to terminate the agreement 169.12 for taxes payable in 2003 and cease to qualify as class 4d. 169.13 Sec. 95. [APPROPRIATION.] 169.14 $5,000,000 is appropriated from the general fund to the 169.15 metropolitan council in fiscal year 2002 for transition revenue 169.16 associated with the conversion of metropolitan area transit 169.17 services funding for calendar year 2002. 169.18 [EFFECTIVE DATE.] This section is effective the day 169.19 following final enactment. 169.20 Sec. 96. [REPEALER.] 169.21 (a) Minnesota Statutes 2000, sections 273.13, subdivision 169.22 24a; 273.1382; 273.1399; 275.078; 275.08, subdivision 1e; 169.23 473.446, subdivisions 1a and 1b; and 473.3915, are repealed 169.24 effective for taxes levied in 2001, payable in 2002, and 169.25 thereafter and aids or credits payable in 2002 and thereafter. 169.26 (b) Laws 1988, chapter 426, section 1; Laws 1988, chapter 169.27 702, section 16; Laws 1992, chapter 511, article 2, section 52, 169.28 as amended by Laws 1997, chapter 231, article 2, section 50, and 169.29 Laws 1998, chapter 389, article 3, section 32; Laws 1996, 169.30 chapter 471, article 8, section 45; Laws 1999, chapter 243, 169.31 article 6, section 14; Laws 1999, chapter 243, article 6, 169.32 section 15; and Laws 2000, chapter 490, article 6, section 17, 169.33 are repealed effective for taxes levied in 2001, payable in 2002 169.34 and thereafter. 169.35 (c) Minnesota Statutes 2000, sections 126C.30; 126C.31; 169.36 126C.32; 126C.33; 126C.34; 126C.35; and 126C.36, are repealed 170.1 effective July 1, 2001. 170.2 (d) Minnesota Statutes 2000, section 273.126 and 462A.071, 170.3 are repealed effective for property taxes payable in 2004, and 170.4 any agreement entered into pursuant to the provisions of those 170.5 sections expires, effective January 1, 2004, regardless of the 170.6 term of the agreement. 170.7 ARTICLE 4 170.8 PROPERTY TAX REFUND 170.9 Section 1. Minnesota Statutes 2000, section 290A.03, 170.10 subdivision 6, is amended to read: 170.11 Subd. 6. [HOMESTEAD.] "Homestead" means the dwelling 170.12 occupied as the claimant's principal residence and so much of 170.13 the land surrounding it, not exceeding ten acres, as is 170.14 reasonably necessary for use of the dwelling as a home and any 170.15 other property used for purposes of a homestead as defined in 170.16 section 273.13, subdivision 22, except for agricultural land 170.17 assessed as part of a homestead pursuant to section 273.13, 170.18 subdivision 23, "homestead" is limited to thefirst $600,000 of170.19market value or, where the farm homestead is rented,house and 170.20 garage and immediately surrounding one acre of land. The 170.21 homestead may be owned or rented and may be a part of a 170.22 multidwelling or multipurpose building and the land on which it 170.23 is built. A manufactured home, as defined in section 273.125, 170.24 subdivision 8, or a park trailer taxed as a manufactured home 170.25 under section 168.012, subdivision 9, assessed as personal 170.26 property may be a dwelling for purposes of this subdivision. 170.27 [EFFECTIVE DATE.] This section is effective beginning with 170.28 refunds based on property taxes payable in 2002. 170.29 Sec. 2. Minnesota Statutes 2000, section 290A.03, 170.30 subdivision 13, is amended to read: 170.31 Subd. 13. [PROPERTY TAXES PAYABLE.] "Property taxes 170.32 payable" means the property tax exclusive of special 170.33 assessments, penalties, and interest payable on a claimant's 170.34 homestead after deductions made under sections 273.135, 170.35 273.1382, 273.1391, 273.42, subdivision 2, and any other state 170.36 paid property tax credits in any calendar year, and after any 171.1 refund claimed and allowable under section 290A.04, subdivision 171.2 2h, that is first payable in the year that the property tax is 171.3 payable. In the case of a claimant who makes ground lease 171.4 payments, "property taxes payable" includes the amount of the 171.5 payments directly attributable to the property taxes assessed 171.6 against the parcel on which the house is located. No 171.7 apportionment or reduction of the "property taxes payable" shall 171.8 be required for the use of a portion of the claimant's homestead 171.9 for a business purpose if the claimant does not deduct any 171.10 business depreciation expenses for the use of a portion of the 171.11 homestead in the determination of federal adjusted gross 171.12 income. For homesteads which are manufactured homes as defined 171.13 in section 273.125, subdivision 8, and for homesteads which are 171.14 park trailers taxed as manufactured homes under section 168.012, 171.15 subdivision 9, "property taxes payable" shall also include 19 171.16 percent of the gross rent paid in the preceding year for the 171.17 site on which the homestead is located. When a homestead is 171.18 owned by two or more persons as joint tenants or tenants in 171.19 common, such tenants shall determine between them which tenant 171.20 may claim the property taxes payable on the homestead. If they 171.21 are unable to agree, the matter shall be referred to the 171.22 commissioner of revenue whose decision shall be final. Property 171.23 taxes are considered payable in the year prescribed by law for 171.24 payment of the taxes. 171.25 In the case of a claim relating to "property taxes 171.26 payable," the claimant must have owned and occupied the 171.27 homestead on January 2 of the year in which the tax is payable 171.28 and (i) the property must have been classified as homestead 171.29 property pursuant to section 273.124, on or before December 15 171.30 of the assessment year to which the "property taxes payable" 171.31 relate; or (ii) the claimant must provide documentation from the 171.32 local assessor that application for homestead classification has 171.33 been made on or before December 15 of the year in which the 171.34 "property taxes payable" were payable and that the assessor has 171.35 approved the application. 171.36 [EFFECTIVE DATE.] This section is effective beginning with 172.1 refunds based on property taxes payable in 2002. 172.2 Sec. 3. Minnesota Statutes 2000, section 290A.04, 172.3 subdivision 2, is amended to read: 172.4 Subd. 2. [HOMEOWNERS.] A claimant whose property taxes 172.5 payable are in excess of the percentage of the household income 172.6 stated below shall pay an amount equal to the percent of income 172.7 shown for the appropriate household income level along with the 172.8 percent to be paid by the claimant of the remaining amount of 172.9 property taxes payable. The state refund equals the amount of 172.10 property taxes payable that remain, up to the state refund 172.11 amount shown below. 172.12 Percent Percent Maximum 172.13 Household Income of Income Paid by State 172.14 Claimant Refund 172.15$0 to 1,0291.2 percent18 percent$440172.16 $0 to 1,189 1.0 percent 15 percent $1,450 172.171,030 to 2,0591.3 percent18 percent$440172.18 1,190 to 2,379 1.1 percent 15 percent $1,450 172.192,060 to 3,0991.4 percent20 percent$440172.20 2,380 to 3,589 1.2 percent 15 percent $1,410 172.213,100 to 4,1291.6 percent20 percent$440172.22 3,590 to 4,789 1.3 percent 20 percent $1,410 172.234,130 to 5,1591.7 percent20 percent$440172.24 4,790 to 5,979 1.4 percent 20 percent $1,360 172.255,160 to 7,2291.9 percent25 percent$440172.26 5,980 to 8,369 1.5 percent 20 percent $1,360 172.277,230 to 8,2592.1 percent25 percent$440172.28 8,370 to 9,559 1.6 percent 25 percent $1,310 172.298,260 to 9,2892.2 percent25 percent$440172.30 9,560 to 10,759 1.7 percent 25 percent $1,310 172.319,290 to 10,3192.3 percent30 percent$440172.32 10,760 to 11,949 1.8 percent 25 percent $1,260 172.3310,320 to 11,3492.4 percent30 percent$440172.34 11,950 to 13,139 1.9 percent 30 percent $1,260 172.3511,350 to 12,3892.5 percent30 percent$440172.36 13,140 to 14,349 2.0 percent 30 percent $1,210 172.3712,390 to 14,4492.6 percent30 percent$440172.38 14,350 to 16,739 2.1 percent 30 percent $1,210 172.3914,450 to 15,4792.8 percent35 percent$440172.40 16,740 to 17,929 2.2 percent 35 percent $1,160 172.4115,480 to 16,5093.0 percent35 percent$440172.42 17,930 to 19,119 2.3 percent 35 percent $1,160 172.4316,510 to 17,5493.2 percent40 percent$440172.44 19,120 to 20,319 2.4 percent 35 percent $1,110 172.4517,550 to 21,6693.3 percent40 percent$440172.46 20,320 to 25,099 2.5 percent 40 percent $1,110 172.4721,670 to 24,7693.4 percent45 percent$440172.48 25,100 to 28,679 2.6 percent 40 percent $1,070 172.4924,770 to 30,9593.5 percent45 percent$440172.50 28,680 to 35,849 2.7 percent 40 percent $1,070 172.5130,960 to 36,1193.5 percent45 percent$440172.52 35,850 to 41,819 2.8 percent 45 percent $970 172.5336,120 to 41,2793.7 percent50 percent$440172.54 41,820 to 47,799 3.0 percent 45 percent $970 172.5541,280 to 58,8294.0 percent50 percent$440172.56 47,800 to 53,779 3.2 percent 45 percent $870 172.5758,830 to 59,8594.0 percent50 percent$310172.58 53,780 to 59,749 3.5 percent 50 percent $780 172.5959,860 to 60,8894.0 percent50 percent$210172.60 59,750 to 65,729 4.0 percent 50 percent $680 173.160,890 to 61,9294.0 percent50 percent$100173.2 65,730 to 69,319 4.0 percent 50 percent $580 173.3 69,320 to 71,719 4.0 percent 50 percent $480 173.4 71,720 to 74,619 4.0 percent 50 percent $390 173.5 74,620 to 77,519 4.0 percent 50 percent $290 173.6 The payment made to a claimant shall be the amount of the 173.7 state refund calculated under this subdivision. No payment is 173.8 allowed if the claimant's household income is$61,930$77,520 or 173.9 more. 173.10 [EFFECTIVE DATE.] This section is effective beginning with 173.11 refunds based on property taxes payable in 2002. 173.12 Sec. 4. Minnesota Statutes 2000, section 290A.04, 173.13 subdivision 2a, is amended to read: 173.14 Subd. 2a. [RENTERS.] A claimant whose rent constituting 173.15 property taxes exceeds the percentage of the household income 173.16 stated below must pay an amount equal to the percent of income 173.17 shown for the appropriate household income level along with the 173.18 percent to be paid by the claimant of the remaining amount of 173.19 rent constituting property taxes. The state refund equals the 173.20 amount of rent constituting property taxes that remain, up to 173.21 the maximum state refund amount shown below. 173.22 Percent Percent Maximum 173.23 Household Income of Income Paid by State 173.24 Claimant Refund 173.25 $0 to 3,099173.26 0 to 3,589 1.0 percent 5 percent$1,030$1,190 173.273,100 to 4,129173.28 3,590 to 4,779 1.0 percent 10 percent$1,030$1,190 173.294,130 to 5,159173.30 4,780 to 5,969 1.1 percent 10 percent$1,030$1,190 173.315,160 to 7,229173.32 5,970 to 8,369 1.2 percent 10 percent$1,030$1,190 173.337,230 to 9,289173.34 8,370 to 10,759 1.3 percent 15 percent$1,030$1,190 173.359,290 to 10,319173.36 10,760 to 11,949 1.4 percent 15 percent$1,030$1,190 173.3710,320 to 11,349173.38 11,950 to 13,139 1.4 percent 20 percent$1,030$1,190 173.3911,350 to 13,419173.40 13,140 to 15,539 1.5 percent 20 percent$1,030$1,190 173.4113,420 to 14,449173.42 15,540 to 16,729 1.6 percent 20 percent$1,030$1,190 173.4314,450 to 15,479173.44 16,730 to 17,919 1.7 percent 25 percent$1,030$1,190 173.4515,480 to 17,549173.46 17,920 to 20,319 1.8 percent 25 percent$1,030$1,190 173.4717,550 to 18,579173.48 20,320 to 21,509 1.9 percent 30 percent$1,030$1,190 173.4918,580 to 19,609173.50 21,510 to 22,699 2.0 percent 30 percent$1,030$1,190 173.5119,610 to 20,639173.52 22,700 to 23,899 2.2 percent 30 percent$1,030$1,190 173.5320,640 to 21,669173.54 23,900 to 25,089 2.4 percent 30 percent$1,030$1,190 174.121,670 to 22,709174.2 25,090 to 26,289 2.6 percent 35 percent$1,030$1,190 174.322,710 to 23,739174.4 26,290 to 27,489 2.7 percent 35 percent$1,030$1,190 174.523,740 to 24,769174.6 27,490 to 28,679 2.8 percent 35 percent$1,030$1,190 174.724,770 to 25,799174.8 28,680 to 29,869 2.9 percent 40 percent$1,030$1,190 174.925,800 to 26,839174.10 29,870 to 31,079 3.0 percent 40 percent$1,030$1,190 174.1126,840 to 27,869174.12 31,080 to 32,269 3.1 percent 40 percent$1,030$1,190 174.1327,870 to 28,899174.14 32,270 to 33,459 3.2 percent 40 percent$1,030$1,190 174.1528,900 to 29,929174.16 33,460 to 34,649 3.3 percent 45 percent$ 930$1,080 174.1729,930 to 30,959174.18 34,650 to 35,849 3.4 percent 45 percent$ 830$ 960 174.1930,960 to 31,999174.20 35,850 to 37,049 3.5 percent 45 percent$ 720$ 830 174.2132,000 to 33,029174.22 37,050 to 38,239 3.5 percent 50 percent$ 620$ 720 174.2333,030 to 34,059174.24 38,240 to 39,439 3.5 percent 50 percent$ 520$ 600 174.2534,060 to 35,089174.26 39,440 to 40,629 3.5 percent 50 percent$ 310$ 360 174.2735,090 to 36,119174.28 40,630 to 41,819 3.5 percent 50 percent$ 100$ 120 174.29 The payment made to a claimant is the amount of the state 174.30 refund calculated under this subdivision. No payment is allowed 174.31 if the claimant's household income is$36,120$41,820 or more. 174.32 [EFFECTIVE DATE.] This section is effective beginning with 174.33 refunds based on rent constituting property taxes paid in 2001. 174.34 Sec. 5. Minnesota Statutes 2000, section 290A.04, 174.35 subdivision 2h, is amended to read: 174.36 Subd. 2h. [ADDITIONAL REFUND.] (a) Beginning with gross 174.37 property taxes payable in 2003, if the gross property taxes 174.38 payable on a homestead increase more than 12 percent over the 174.39netproperty taxes payable in the prior year on the same 174.40 property that is owned and occupied by the same owner on January 174.41 2 of both years, and the amount of that increase is $100 or 174.42 more, a claimant who is a homeowner shall be allowed an 174.43 additional refund equal to 60 percent of the amount of the 174.44 increase over the greater of 12 percent of the prior year'snet174.45 property taxes payable or $100. This subdivision shall not 174.46 apply to any increase in the gross property taxes payable 174.47 attributable to improvements made to the homestead after the 174.48 assessment date for the prior year's taxes. This subdivision 174.49 shall not apply to any increase in the gross property taxes 175.1 payable attributable to the termination of valuation exclusions 175.2 under section 273.11, subdivision 16. 175.3 The maximum refund allowed under this subdivision is $1,000. 175.4 (b) For purposes of this subdivision, the following terms175.5have the meanings given:175.6(1) "Net property taxes payable" means property taxes175.7payable minus refund amounts for which the claimant qualifies175.8pursuant to subdivision 2 and this subdivision.175.9(2)"gross property taxes payable" meansnetproperty taxes 175.10 payable determined without regard to the refund allowed under 175.11 this subdivision. 175.12 (c) In addition to the other proofs required by this 175.13 chapter, each claimant under this subdivision shall file with 175.14 the property tax refund return a copy of the property tax 175.15 statement for taxes payable in the preceding year or other 175.16 documents required by the commissioner. 175.17 (d) Upon request, the appropriate county official shall 175.18 make available the names and addresses of the property taxpayers 175.19 who may be eligible for the additional property tax refund under 175.20 this section. The information shall be provided on a magnetic 175.21 computer disk. The county may recover its costs by charging the 175.22 person requesting the information the reasonable cost for 175.23 preparing the data. The information may not be used for any 175.24 purpose other than for notifying the homeowner of potential 175.25 eligibility and assisting the homeowner, without charge, in 175.26 preparing a refund claim. 175.27 [EFFECTIVE DATE.] This section is effective beginning with 175.28 refunds based on property taxes payable in 2002. 175.29 Sec. 6. Minnesota Statutes 2000, section 290A.04, 175.30 subdivision 4, is amended to read: 175.31 Subd. 4. [INFLATION ADJUSTMENT.] Beginning for property 175.32 tax refunds payable in calendar year19962002, the commissioner 175.33 shall annually adjust the dollar amounts of the income 175.34 thresholds and the maximum refunds under subdivisions 2 and 2a 175.35 for inflation. The commissioner shall make the inflation 175.36 adjustments in accordance with section290.06, subdivision 2d1f 176.1 of the Internal Revenue Code, except that for purposes of this 176.2 subdivision the percentage increase shall be determined from the 176.3 year ending on June 30,19942000, to the year ending on June 30 176.4 of the year preceding that in which the refund is payable. The 176.5 commissioner shall use the appropriate percentage increase to 176.6 annually adjust the income thresholds and maximum refunds under 176.7 subdivisions 2 and 2a for inflation without regard to whether or 176.8 not the income tax brackets are adjusted for inflation in that 176.9 year. The commissioner shall round the thresholds and the 176.10 maximum amounts, as adjusted to the nearest $10 amount. If the 176.11 amount ends in $5, the commissioner shall round it up to the 176.12 next $10 amount. 176.13 The commissioner shall annually announce the adjusted 176.14 refund schedule at the same time provided under section 290.06. 176.15 The determination of the commissioner under this subdivision is 176.16 not a rule under the Administrative Procedure Act. 176.17 [EFFECTIVE DATE.] This section is effective the day 176.18 following final enactment. 176.19 ARTICLE 5 176.20 STATE TAKEOVER OF COUNTY SERVICES 176.21 Section 1. Minnesota Statutes 2000, section 97A.065, 176.22 subdivision 2, as amended by Laws 2001, chapter 185, section 23, 176.23 is amended to read: 176.24 Subd. 2. [FINES AND FORFEITED BAIL.] (a) Fines and 176.25 forfeited bail collected from prosecutions of violations of: 176.26 the game and fish laws or rules adopted thereunder; sections 176.27 84.091 to 84.15 or rules adopted thereunder; sections 84.81 to 176.28 84.91 or rules adopted thereunder; section 169A.20, when the 176.29 violation involved an off-road recreational vehicle as defined 176.30 in section 169A.03, subdivision 16; chapter 348; and any other 176.31 law relating to wild animals or aquatic vegetation, must be paid 176.32 to the treasurer of the county where the violation is 176.33 prosecuted. The county treasurer shall submit one-half of the 176.34 receipts to the commissioner and credit the balance to the 176.35 county general revenue fund except as provided in paragraphs 176.36 (b), (c), and (d). In a county in a judicial district under 177.1 section 480.181, subdivision 1, paragraph (b),as added in Laws177.21999, chapter 216, article 7, section 26,the share that would 177.3 otherwise go to the county under this paragraph must be 177.4 submitted to the state treasurer for deposit in the state 177.5 treasury and credited to the general fund. 177.6 (b) The commissioner must reimburse a county, from the game 177.7 and fish fund, for the cost of keeping prisoners prosecuted for 177.8 violations under this section if the county board, by 177.9 resolution, directs: (1) the county treasurer to submit all 177.10 fines and forfeited bail to the commissioner; and (2) the county 177.11 auditor to certify and submit monthly itemized statements to the 177.12 commissioner. 177.13 (c) The county treasurer shall submit one-half of the 177.14 receipts collected under paragraph (a) from prosecutions of 177.15 violations of sections 84.81 to 84.91 or rules adopted 177.16 thereunder, and 169A.20, except receipts that are surcharges 177.17 imposed under section 357.021, subdivision 6, to the 177.18 commissioner and credit the balance to the county general fund. 177.19 The commissioner shall credit these receipts to the snowmobile 177.20 trails and enforcement account in the natural resources fund. 177.21 (d) The county treasurer shall indicate the amount of the 177.22 receipts that are surcharges imposed under section 357.021, 177.23 subdivision 6, and shall submit all of those receipts to the 177.24 state treasurer. 177.25 [EFFECTIVE DATE.] This section is effective July 1, 2003, 177.26 in the second and fourth districts; July 1, 2004, in the first 177.27 and third districts; and July 1, 2005, in the sixth and tenth 177.28 districts. 177.29 Sec. 2. Minnesota Statutes 2000, section 179A.101, 177.30 subdivision 1, is amended to read: 177.31 Subdivision 1. [COURT EMPLOYEE UNITS.] (a) The state court 177.32 administrator shall meet and negotiate with the exclusive 177.33 representative of each of the units specified in this section. 177.34 The units provided in this section are the only appropriate 177.35 units for court employees. Court employees, unless otherwise 177.36 excluded, are included within the units which include the 178.1 classifications to which they are assigned for purposes of 178.2 compensation. Initial assignment of classifications to 178.3 bargaining units shall be made by the state court administrator 178.4 by August 15, 1999of the year preceding the year in which the 178.5 state assumes the cost of court administration in the judicial 178.6 district in which the bargaining unit is located. An exclusive 178.7 representative may appeal the initial assignment decision of the 178.8 state court administrator by filing a petition with the 178.9 commissioner within 45 days of being certified as the exclusive 178.10 representative for a judicial district. The units in this 178.11 subdivision are the appropriate units of court employees. 178.12 (b) The judicial district unit consists of clerical, 178.13 administrative, and technical employees of a judicial district 178.14 under section 480.181, subdivision 1, paragraph (b), or of two 178.15 or more of these districts that are represented by the same 178.16 employee organization or one or more subordinate bodies of the 178.17 same employee organization. The judicial district unit includes 178.18 individuals, not otherwise excluded, whose work is typically 178.19 clerical or secretarial in nature, including nontechnical data 178.20 recording and retrieval and general office work, and 178.21 individuals, not otherwise excluded, whose work is not typically 178.22 manual and which requires specialized knowledge or skills 178.23 acquired through two-year academic programs or equivalent 178.24 experience or on-the-job training. 178.25 (c) The appellate courts unit consists of clerical, 178.26 administrative, and technical employees of the court of appeals 178.27 and clerical, administrative, and technical employees of the 178.28 supreme court. The appellate courts unit includes individuals, 178.29 not otherwise excluded, whose work is typically clerical or 178.30 secretarial in nature, including nontechnical data recording and 178.31 retrieval and general office work, and individuals, not 178.32 otherwise excluded, whose work is not typically manual and which 178.33 requires specialized knowledge or skills acquired through 178.34 two-year academic programs or equivalent experience or 178.35 on-the-job training. 178.36 (d) The court employees professional employee unit consists 179.1 of professional employees, not otherwise excluded, that are 179.2 employed by the supreme court, the court of appeals, or a 179.3 judicial district under section 480.181, subdivision 1, 179.4 paragraph (b). 179.5 (e) The court employees court reporter unit consists of 179.6 court reporters not otherwise excluded who are employed by a 179.7 judicial district under section 480.181, subdivision 1, 179.8 paragraph (a). 179.9 (f) Notwithstanding any provision of this chapter or any 179.10 other law to the contrary, judges may appoint and remove court 179.11 reporters at their pleasure. 179.12 (g) Copies of collective bargaining agreements entered into 179.13 under this section must be submitted to the legislative 179.14 coordinating commission for the commission's information. 179.15 [EFFECTIVE DATE.] This section is effective July 1, 2003, 179.16 in the second and fourth districts; July 1, 2004, in the first 179.17 and third districts; and July 1, 2005, in the sixth and tenth 179.18 districts. 179.19 Sec. 3. Minnesota Statutes 2000, section 179A.102, 179.20 subdivision 6, is amended to read: 179.21 Subd. 6. [CONTRACT AND REPRESENTATION RESPONSIBILITIES.] 179.22 (a) Notwithstanding the provisions of section 179A.101, the 179.23 exclusive representatives of units of court employees certified 179.24 prior to the effective date of the judicial district coming 179.25 under section 480.181, subdivision 1, paragraph (b), remain 179.26 responsible for administration of their contracts and for other 179.27 contractual duties and have the right to dues and fair share fee 179.28 deduction and other contractual privileges and rights until a 179.29 contract is agreed upon with the state court administrator for a 179.30 new unit established under section 179A.101or until June 30,179.312001, whichever is earlier. Exclusive representatives of court 179.32 employees certified after the effective date of this section in 179.33 the judicial district are immediately upon certification 179.34 responsible for bargaining on behalf of employees within the 179.35 unit. They are also responsible for administering grievances 179.36 arising under previous contracts covering employees included 180.1 within the unit which remain unresolvedon June 30, 2001, or180.2 upon agreement with the state court administrator on a contract 180.3 for a new unit established under section 179A.101, whichever is180.4earlier. Where the employer does not object, these 180.5 responsibilities may be varied by agreement between the outgoing 180.6 and incoming exclusive representatives. All other rights and 180.7 duties of representation begin on July 1, 2001of the year in 180.8 which the state assumes the funding of court administration in 180.9 the judicial district, except that exclusive representatives 180.10 certified after the effective date of this section shall 180.11 immediately, upon certification, have the right to all employer 180.12 information and all forms of access to employees within the 180.13 bargaining unit which would be permitted to the current contract 180.14 holder, including the rights in section 179A.07, subdivision 6. 180.15 This section does not affect an existing collective bargaining 180.16 contract. Incoming exclusive representatives of court employees 180.17 from judicial districts that come under section 480.181, 180.18 subdivision 1, paragraph (b), are immediately, upon 180.19 certification, responsible for bargaining on behalf of all 180.20 previously unrepresented employees assigned to their units. All 180.21 other rights and duties of exclusive representatives begin on 180.22 July 1, 2001of the year in which the state assumes the funding 180.23 of court administration in the judicial district. 180.24 (b) Nothing in this act or Laws 1999, chapter 216, article 180.25 7, sections 3 to 15, prevents an exclusive representative 180.26 certified after the effectivedate of sections 3 to 15dates of 180.27 those provisions from assessing fair share or dues deductions 180.28 immediately upon certification for employees in a unit 180.29 established under section 179A.101 if the employees were 180.30 unrepresented for collective bargaining purposes before that 180.31 certification. 180.32 [EFFECTIVE DATE.] This section is effective July 1, 2003, 180.33 in the second and fourth districts; July 1, 2004, in the first 180.34 and third districts; and July 1, 2005, in the sixth and tenth 180.35 districts. 180.36 Sec. 4. Minnesota Statutes 2000, section 179A.103, 181.1 subdivision 1, is amended to read: 181.2 Subdivision 1. [CONTRACTS.] Contracts for the period 181.3 commencing July 1, 2000,of the year in which the state assumes 181.4 the cost of court administration in the judicial district for 181.5 the judicial district court employeesof judicial districts that181.6are under section 480.181, subdivision 1, paragraph (b),must be 181.7 negotiated with the state court administrator. Negotiations for 181.8 those contracts may begin any time after July 1, 1999of the 181.9 year before the state assumes the cost, and may be initiated by 181.10 either party notifying the other of the desire to begin the 181.11 negotiating process. Negotiations are subject to this chapter. 181.12 [EFFECTIVE DATE.] This section is effective July 1, 2003, 181.13 in the second and fourth districts; July 1, 2004, in the first 181.14 and third districts; and July 1, 2005, in the sixth and tenth 181.15 districts. 181.16 Sec. 5. Minnesota Statutes 2000, section 273.1398, 181.17 subdivision 4a, is amended to read: 181.18 Subd. 4a. [AID OFFSET FOR COURT COSTS.] (a) By July 15,181.191999of the year preceding the year in which the state assumes 181.20 the cost of court administration in the judicial district as 181.21 specified under section 480.183, the supreme court shall 181.22 determine and certify to the commissioner of revenue for each 181.23 county, other than counties located in the eighth judicial181.24district,the county's share of the costs assumed in the 181.25 judicial districts specified underLaws 1999, chapter 216,181.26article 7,section 480.183, subdivision 1, during the succeeding 181.27 fiscal yearbeginning July 1, 2000,. 181.28 (b) The amount certified in paragraph (a) shall be equal to 181.29 the following: 181.30 (1) 103 percent of the required court administration 181.31 expenditures as defined under section 480.183, subdivision 3, 181.32 for calendar year 2003, as determined under subdivision 4b, 181.33 paragraph (a); plus 181.34 (2) an adjustment for any cumulative percentage increase in 181.35 salary expenditures as defined under section 480.183, 181.36 subdivision 2, in excess of a maintenance of effort increase of 182.1 six percent; less 182.2 (3) an amount equal to the county's share of transferred 182.3 fines collected by the district courts in the county during the 182.4 calendar year1998preceding certification. 182.5 The court and the county may, if both parties agree, 182.6 negotiate and certify an amount higher than the amount 182.7 calculated under this paragraph. 182.8 (c) For purposes of this subdivision, the adjustment in 182.9 paragraph (b), clause (2), shall be equal to: 182.10 (1) the sum of the court administration expenditures as 182.11 defined under section 480.183, subdivision 3, required under 182.12 subdivision 4b, paragraph (a), plus the temporary aid payment 182.13 under subdivision 4c; multiplied by 182.14 (2) the difference between (i) the cumulative percentage 182.15 increase in actual and anticipated salary settlements for court 182.16 employees from July 1, 2001, until the date of the court 182.17 transfer and (ii) the percentage specified in subdivision 4b, 182.18 paragraph (a). 182.19(b)(d) Payments to a county under subdivision 2 or section 182.20 273.166 for the calendar year2000in which the state assumes 182.21 the cost of court administration as defined under section 182.22 480.183, subdivision 3, in the judicial district must be 182.23 permanently reduced by an amount equal to 75 percent of the net 182.24 cost to the state for assumption of district court costs as 182.25 certified in paragraph (a). 182.26(c)(e) Payments to a county under subdivision 2 or section 182.27 273.166 for the calendar year2001after the calendar year in 182.28 which the state assumes the cost of court administration as 182.29 defined under section 480.183, subdivision 3, in the judicial 182.30 district must be permanently reduced by an amount equal to 25 182.31 percent of the net cost to the state for assumption of district 182.32 court costs as certified in paragraph (a), provided that this 182.33 amount must be increased or decreased by an amount equal to the 182.34 positive or negative difference between the amount of fee and 182.35 fine revenue certified under paragraph (b), clause (3), and the 182.36 actual amount of fee and fine revenue of the county for the 183.1 calendar year when certification takes place. 183.2(d)(f) Payments to a county under subdivision 2 for 183.3 calendar year 2001 are permanently increased by an amount equal 183.4 to 7.5 percent of the county's share of transferred fines 183.5 collected by the district courts in the county during calendar 183.6 year 1998, as determined under paragraph (a). If the amount 183.7 determined in paragraph (a) exceeds the amount of aid a county 183.8 is scheduled to be paid under subdivision 2 in 2000, then the 183.9 county shall not receive an aid increase under this paragraph. 183.10 (g) Payments to a county under subdivision 2 or section 183.11 273.166, for the cost of mandated services, as defined in 183.12 section 480.183, subdivision 4, in the judicial district, must 183.13 be permanently reduced in 2002 by an amount equal to the cost to 183.14 the state for assumption of mandated court services as defined 183.15 in section 480.183, subdivision 4. The supreme court shall 183.16 determine the amount for each county and certify it to the 183.17 commissioner of revenue by July 15, 2001. 183.18 [EFFECTIVE DATE.] This section is effective the day 183.19 following final enactment. 183.20 Sec. 6. Minnesota Statutes 2000, section 273.1398, is 183.21 amended by adding a subdivision to read: 183.22 Subd. 4b. [COURT EXPENDITURES; MAINTENANCE OF EFFORT.] (a) 183.23 Until the costs of court administration as defined under section 183.24 480.183, subdivision 3, in a county have been transferred to the 183.25 state, each county in a judicial district transferring court 183.26 administration costs to state funding after July 1, 2001, shall 183.27 budget for the funding of these costs an amount at least equal 183.28 to the certified budget amount for calendar year 2001, increased 183.29 by six percent for each year from 2001 to 2003 and by eight 183.30 percent from 2004 to the year of the transfer. The county shall 183.31 budget, fund, and authorize expenditures not less than the 183.32 amount calculated under this paragraph plus the temporary aid 183.33 amount under subdivision 4c for maintenance of effort of 183.34 administrative costs. 183.35 (b) By July 15, 2001, the court shall certify to each 183.36 county in the judicial district its cost of court administration 184.1 as defined under section 480.183, subdivision 3, based on 2001 184.2 budgets. In making that determination, the court shall exclude 184.3 the budget costs of the county for the following categories: 184.4 (1) rent; 184.5 (2) examiner of titles; 184.6 (3) civil court appointed attorneys for civil matters; 184.7 (4) hospitalization costs; and 184.8 (5) cost of maintaining vital statistics. 184.9 The amount of funding provided by a county for courts that 184.10 is increased by the maintenance of effort requirement may not be 184.11 used by a county to pay the costs described in clauses (1) to 184.12 (5). 184.13 [EFFECTIVE DATE.] This section is effective the day 184.14 following final enactment. 184.15 Sec. 7. Minnesota Statutes 2000, section 273.1398, is 184.16 amended by adding a subdivision to read: 184.17 Subd. 4c. [TEMPORARY AID; COURT ADMINISTRATION COSTS.] For 184.18 calendar years 2004 and 2005, each county in a judicial district 184.19 that has not been transferred to the state by January 1 of that 184.20 year shall receive additional homestead and agricultural credit 184.21 aid. This amount is in addition to the amount calculated under 184.22 subdivision 2 and must not be included in the definition of 184.23 homestead and agricultural credit base under subdivision 1, 184.24 paragraph (j). The amount of additional aid is equal to the 184.25 difference between (1) the amount budgeted for court 184.26 administration costs in 2001 as determined under subdivision 4b, 184.27 paragraph (c), multiplied by the maintenance of effort percent 184.28 for the calendar year as determined under subdivision 4b, 184.29 paragraph (d), and (2) the amount calculated under subdivision 184.30 4b, paragraph (a), for calendar year 2003. This additional aid 184.31 must be used only to fund court administration expenditures as 184.32 defined in section 480.183, subdivision 3. This amount must be 184.33 added to the state court's base budget in the year when the 184.34 court in that judicial district in which the county is located 184.35 is transferred to the state. 184.36 [EFFECTIVE DATE.] This section is effective the day 185.1 following final enactment. 185.2 Sec. 8. Minnesota Statutes 2000, section 273.1398, is 185.3 amended by adding a subdivision to read: 185.4 Subd. 4d. [AID OFFSET FOR OUT-OF-HOME PLACEMENT 185.5 COSTS.] For aid payable in 2003, each county's aid under 185.6 subdivision 2 shall be permanently reduced by an amount equal to 185.7 the county's 2003 reimbursement for nonfederal expenditures for 185.8 out-of-home placements, as provided in section 245.775, provided 185.9 that payments will be made under section 477A.0123 in calendar 185.10 year 2003. The counties shall provide all information requested 185.11 by the commissioner of human services necessary to allow the 185.12 commissioner to certify the previous three years' average 185.13 nonfederal costs to the commissioner of revenue by July 15, 185.14 2003. The aid reduction under this subdivision must be made 185.15 prior to any aid reductions for the state takeover of courts 185.16 contained in this article. 185.17 [EFFECTIVE DATE.] This section is effective the day after 185.18 final enactment, for aids payable beginning in 2003. 185.19 Sec. 9. Minnesota Statutes 2000, section 299D.03, 185.20 subdivision 5, is amended to read: 185.21 Subd. 5. [FINES AND FORFEITED BAIL MONEY.] (a) All fines 185.22 and forfeited bail money, from traffic and motor vehicle law 185.23 violations, collected from persons apprehended or arrested by 185.24 officers of the state patrol, shall be paid by the person or 185.25 officer collecting the fines, forfeited bail money or 185.26 installments thereof, on or before the tenth day after the last 185.27 day of the month in which these moneys were collected, to the 185.28 county treasurer of the county where the violation occurred. 185.29 Three-eighths of these receipts shall be credited to the general 185.30 revenue fund of the county, except that in a county in a 185.31 judicial district under section 480.181, subdivision 1, 185.32 paragraph (b),as added in Laws 1999, chapter 216, article 7,185.33section 26,this three-eighths share must be transmitted to the 185.34 state treasurer for deposit in the state treasury and credited 185.35 to the general fund. The other five-eighths of these receipts 185.36 shall be transmitted by that officer to the state treasurer 186.1 andshall be credited as follows:186.2(1) In the fiscal year ending June 30, 1991, the first186.3$275,000 in money received by the state treasurer after June 4,186.41991, must be credited to the transportation services fund, and186.5the remainder in the fiscal year credited to the trunk highway186.6fund.186.7(2) In fiscal year 1992, the first $215,000 in money186.8received by the state treasurer in the fiscal year must be186.9credited to the transportation services fund, and the remainder186.10credited to the trunk highway fund.186.11(3) In fiscal year 1993 and subsequent years, the entire186.12amount received by the state treasurermust be credited to the 186.13 trunk highway fund. If, however, the violation occurs within a 186.14 municipality and the city attorney prosecutes the offense, and a 186.15 plea of not guilty is entered, one-third of the receipts shall 186.16 be credited to the general revenue fund of the county, one-third 186.17 of the receipts shall be paid to the municipality prosecuting 186.18 the offense, and one-third shall be transmitted to the state 186.19 treasurer as provided in this subdivision. All costs of 186.20 participation in a nationwide police communication system 186.21 chargeable to the state of Minnesota shall be paid from 186.22 appropriations for that purpose. 186.23 (b) Notwithstanding any other provisions of law, all fines 186.24 and forfeited bail money from violations of statutes governing 186.25 the maximum weight of motor vehicles, collected from persons 186.26 apprehended or arrested by employees of the state of Minnesota, 186.27 by means of stationary or portable scales operated by these 186.28 employees, shall be paid by the person or officer collecting the 186.29 fines or forfeited bail money, on or before the tenth day after 186.30 the last day of the month in which the collections were made, to 186.31 the county treasurer of the county where the violation 186.32 occurred. Five-eighths of these receipts shall be transmitted 186.33 by that officer to the state treasurer and shall be credited to 186.34 the highway user tax distribution fund. Three-eighths of these 186.35 receipts shall be credited to the general revenue fund of the 186.36 county, except that in a county in a judicial district under 187.1 section 480.181, subdivision 1, paragraph (b),as added in Laws187.21999, chapter 216, article 7, section 26,this three-eighths 187.3 share must be transmitted to the state treasurer for deposit in 187.4 the state treasury and credited to the general fund. 187.5 [EFFECTIVE DATE.] This section is effective July 1, 2003, 187.6 in the second and fourth districts; July 1, 2004, in the first 187.7 and third districts; and July 1, 2005, in the sixth and tenth 187.8 districts. 187.9 Sec. 10. Minnesota Statutes 2000, section 357.021, 187.10 subdivision 1a, is amended to read: 187.11 Subd. 1a. [TRANSMITTAL OF FEES TO STATE TREASURER.] (a) 187.12 Every person, including the state of Minnesota and all bodies 187.13 politic and corporate, who shall transact any business in the 187.14 district court, shall pay to the court administrator of said 187.15 court the sundry fees prescribed in subdivision 2. Except as 187.16 provided in paragraph (d), the court administrator shall 187.17 transmit the fees monthly to the state treasurer for deposit in 187.18 the state treasury and credit to the general fund. 187.19 (b) In a county which has a screener-collector position, 187.20 fees paid by a county pursuant to this subdivision shall be 187.21 transmitted monthly to the county treasurer, who shall apply the 187.22 fees first to reimburse the county for the amount of the salary 187.23 paid for the screener-collector position. The balance of the 187.24 fees collected shall then be forwarded to the state treasurer 187.25 for deposit in the state treasury and credited to the general 187.26 fund. In a county in a judicial district under section 480.181, 187.27 subdivision 1, paragraph (b),as added in Laws 1999, chapter187.28216, article 7, section 26,which has a screener-collector 187.29 position, the fees paid by a county shall be transmitted monthly 187.30 to the state treasurer for deposit in the state treasury and 187.31 credited to the general fund. A screener-collector position for 187.32 purposes of this paragraph is an employee whose function is to 187.33 increase the collection of fines and to review the incomes of 187.34 potential clients of the public defender, in order to verify 187.35 eligibility for that service. 187.36 (c) No fee is required under this section from the public 188.1 authority or the party the public authority represents in an 188.2 action for: 188.3 (1) child support enforcement or modification, medical 188.4 assistance enforcement, or establishment of parentage in the 188.5 district court, or in a proceeding under section 484.702; 188.6 (2) civil commitment under chapter 253B; 188.7 (3) the appointment of a public conservator or public 188.8 guardian or any other action under chapters 252A and 525; 188.9 (4) wrongfully obtaining public assistance under section 188.10 256.98 or 256D.07, or recovery of overpayments of public 188.11 assistance; 188.12 (5) court relief under chapter 260; 188.13 (6) forfeiture of property under sections 169A.63 and 188.14 609.531 to 609.5317; 188.15 (7) recovery of amounts issued by political subdivisions or 188.16 public institutions under sections 246.52, 252.27, 256.045, 188.17 256.25, 256.87, 256B.042, 256B.14, 256B.15, 256B.37, 260B.331, 188.18 and 260C.331, or other sections referring to other forms of 188.19 public assistance; 188.20 (8) restitution under section 611A.04; or 188.21 (9) actions seeking monetary relief in favor of the state 188.22 pursuant to section 16D.14, subdivision 5. 188.23 (d) The fees collected for child support modifications 188.24 under subdivision 2, clause (13), must be transmitted to the 188.25 county treasurer for deposit in the county general fund. The 188.26 fees must be used by the county to pay for child support 188.27 enforcement efforts by county attorneys. 188.28 [EFFECTIVE DATE.] This section is effective July 1, 2003, 188.29 in the second and fourth districts; July 1, 2004, in the first 188.30 and third districts; and July 1, 2005, in the sixth and tenth 188.31 districts. 188.32 Sec. 11. [477A.0123] [REIMBURSEMENT OF COUNTY FOR CERTAIN 188.33 OUT-OF-HOME PLACEMENT.] 188.34 Subdivision 1. [AID PAYMENTS.] (a) In calendar year 2003 188.35 and thereafter, the commissioner of revenue shall reimburse each 188.36 county for a portion of the nonfederal share of the cost of 189.1 out-of-home placement provided the commissioner of human 189.2 services, in consultation with the commissioner of corrections, 189.3 certifies to the commissioner of revenue that accurate data is 189.4 available to make the aid determination under this section. The 189.5 amount of reimbursement is a percent of the county's average 189.6 nonfederal share of the cost for out-of-home placement for the 189.7 most recent three calendar years for which data is available. 189.8 The commissioner shall pay the aid under the schedule used for 189.9 local government aid payments under section 477A.015. 189.10 (b) For aids payable in calendar year 2003, the percent of 189.11 reimbursement in paragraph (a) shall be equal to the maximum 189.12 percentage possible, up to 30 percent, that does not cause the 189.13 payment to any county in the seven county metropolitan area to 189.14 exceed the difference between the amount of aid it is scheduled 189.15 to receive in calendar year 2003 under section 273.1398, prior 189.16 to the offset under section 273.1398, subdivision 4d, and any 189.17 aid offset under section 273.1398, subdivision 4a, that is 189.18 scheduled to occur after July 1, 2003. For aids payable in 2004 189.19 and thereafter, the percent of reimbursement under paragraph (a) 189.20 shall be equal to the percent of reimbursement determined for 189.21 calendar year 2003, adjusted so that the total payments under 189.22 this section do not exceed the appropriation under section 189.23 477A.03, subdivision 2, paragraph (e). 189.24 (c) For purposes of this section, "out-of-home placement" 189.25 means the placement of a child in a child caring institution or 189.26 shelter licensed under Minnesota Rules, parts 9545.0905 to 189.27 9545.1125, in a group home licensed under Minnesota Rules, parts 189.28 9545.1400 to 9545.1480, in family foster care or group family 189.29 foster care licensed under Minnesota Rules, parts 9545.0010 to 189.30 9545.0260, or a correctional facility pursuant to a court order 189.31 under which a county social services agency or a county 189.32 correctional agency has been assigned responsibility for the 189.33 placement. 189.34 Subd. 2. [DETERMINATION OF NONFEDERAL SHARE OF COSTS.] (a) 189.35 By January 1, 2002, each county shall report the following 189.36 information to the commissioners of human services and 190.1 corrections, the separate amounts paid out of its social service 190.2 agency budget and its corrections budget for out-of-home 190.3 placement in calendar years 1998, 1999, and 2000, along with the 190.4 number of case days associated with the expenditures from each 190.5 budget. By March 15, 2002, the commissioner of human services, 190.6 in consultation with the commissioner of corrections, shall 190.7 certify to the commissioner of revenue and to the legislative 190.8 committees responsible for local government aids and out-of-home 190.9 placement funding, whether the data reported under this 190.10 subdivision accurately reflects total expenditures by counties 190.11 for out-of-home placement costs. 190.12 (b) By January 1 of calendar year 2004 and thereafter, each 190.13 county shall report to the commissioners of human services and 190.14 corrections the separate amounts paid out of its social service 190.15 agency budget and its corrections budget for out-of-home 190.16 placement in the calendar years two years before the current 190.17 calendar year along with the number of case days associated with 190.18 the expenditures from each budget. 190.19 (c) Until either the commissioner of human services or 190.20 corrections develops another mechanism for collecting and 190.21 verifying data on out-of-home placements, and the legislature 190.22 authorizes the use of that data, the data collected under this 190.23 subdivision shall be used to calculate payments under 190.24 subdivision 1. The commissioner of human services shall certify 190.25 the information to the commissioner of revenue by July 1 of the 190.26 year prior to the aid payment. 190.27 [EFFECTIVE DATE.] This section is effective for aids 190.28 payable in 2003 and thereafter except subdivision 2 is effective 190.29 the day after final enactment. 190.30 Sec. 12. Minnesota Statutes 2000, section 477A.03, 190.31 subdivision 2, is amended to read: 190.32 Subd. 2. [ANNUAL APPROPRIATION.] (a) A sum sufficient to 190.33 discharge the duties imposed by sections 477A.011 to 477A.014 is 190.34 annually appropriated from the general fund to the commissioner 190.35 of revenue. 190.36 (b) Aid payments to counties under section 477A.0121 are 191.1 limited to $20,265,000 in 1996. Aid payments to counties under 191.2 section 477A.0121 are limited to $27,571,625 in 1997. For aid 191.3 payable in 1998 and thereafter, the total aids paid under 191.4 section 477A.0121 are the amounts certified to be paid in the 191.5 previous year, adjusted for inflation as provided under 191.6 subdivision 3. 191.7 (c)(i) For aids payable in 1998 and thereafter, the total 191.8 aids paid to counties under section 477A.0122 are the amounts 191.9 certified to be paid in the previous year, adjusted for 191.10 inflation as provided under subdivision 3. 191.11 (ii) Aid payments to counties under section 477A.0122 in 191.12 2000 are further increased by an additional $20,000,000 in 2000. 191.13 (d) Aid payments to cities in 1999 under section 477A.013, 191.14 subdivision 9, are limited to $380,565,489. For aids payable in 191.15 2000, the total aids paid under section 477A.013, subdivision 9, 191.16 are the amounts certified to be paid in the previous year, 191.17 adjusted for inflation as provided in subdivision 3, and 191.18 increased by the amount necessary to effectuate Laws 1999, 191.19 chapter 243, article 5, section 48, paragraph (b). For aids 191.20 payable in 2001 through 2003, the total aids paid under section 191.21 477A.013, subdivision 9, are the amounts certified to be paid in 191.22 the previous year, adjusted for inflation as provided under 191.23 subdivision 3. For aids payable in 2004, the total aids paid 191.24 under section 477A.013, subdivision 9, are the amounts certified 191.25 to be paid in the previous year, adjusted for inflation as 191.26 provided under subdivision 3, and increased by the amount 191.27 certified to be paid in 2003 under section 477A.06. For aids 191.28 payable in 2005 and thereafter, the total aids paid under 191.29 section 477A.013, subdivision 9, are the amounts certified to be 191.30 paid in the previous year, adjusted for inflation as provided 191.31 under subdivision 3. The additional amount authorized under 191.32 subdivision 4 is not included when calculating the appropriation 191.33 limits under this paragraph. 191.34 (e) Reimbursements made to counties under section 477A.0123 191.35 in calendar year 2004 and thereafter are limited to an amount 191.36 equal to the maximum allowed appropriation under this section in 192.1 the previous year, multiplied by a percent to be established by 192.2 law. 192.3 [EFFECTIVE DATE.] This section is effective for aids 192.4 payable in calendar year 2003 and thereafter. 192.5 Sec. 13. Minnesota Statutes 2000, section 480.181, 192.6 subdivision 1, is amended to read: 192.7 Subdivision 1. [STATE EMPLOYEES; COMPENSATION.] (a) 192.8 District court referees, judicial officers, court reporters, law 192.9 clerks, district administration staff, other than district 192.10 administration staff in the second and fourth judicial 192.11 districts, guardian ad litem program coordinators and 192.12 staff, staff court interpreters in the second judicial district, 192.13 court psychological services staff in the fourth judicial 192.14 district, and other court employees under paragraph (b), are 192.15 state employees and are governed by the judicial branch 192.16 personnel rules adopted by the supreme court. The supreme 192.17 court, in consultation with the conference of chief judges, 192.18 shall establish the salary range of these employees under the 192.19 judicial branch personnel rules. In establishing the salary 192.20 ranges, the supreme court shall consider differences in the cost 192.21 of living in different areas of the state. 192.22 (b) The court administrator and employees of the court 192.23 administrator who are in the fifth, seventh, eighth, or ninth 192.24 judicial district are state employees. The court administrator 192.25 and employees of the court administrator in the remaining 192.26 judicial districts become state employees as follows: 192.27 (1) effective July 1, 2003, for the second and fourth 192.28 judicial districts; 192.29 (2) effective July 1, 2004, for the first and third 192.30 judicial districts; and 192.31 (3) effective July 1, 2005, for the sixth and tenth 192.32 judicial districts. 192.33 [EFFECTIVE DATE.] The amendment to paragraph (a) for the 192.34 second district is effective July 1, 2001, and for the fourth 192.35 judicial district is effective July 1, 2003. 192.36 Sec. 14. [480.1811] [POST-RETIREMENT BENEFIT COSTS.] 193.1 Where court administration, guardian ad litem, or 193.2 interpreter employees elect to retain county insurance benefits 193.3 under section 480.181 after July 1, 2001, and the county 193.4 provides those employees post-retirement insurance benefits 193.5 prior to July 1, 2001, the county shall pay the post-retirement 193.6 cost of those benefits. 193.7 [EFFECTIVE DATE.] This section is effective the day 193.8 following final enactment. 193.9 Sec. 15. [480.183] [JUDICIAL DISTRICTS; SCHEDULED DATES OF 193.10 STATE TRANSFER; DEFINITION OF SERVICES.] 193.11 Subdivision 1. [DATE OF STATE TRANSFER.] The court 193.12 administration expenditures as defined in this section for the 193.13 remaining judicial districts shall be transferred to the state 193.14 according to the following schedule: 193.15 (1) effective July 1, 2003, the second and fourth judicial 193.16 districts; 193.17 (2) effective July 1, 2004, the first and third judicial 193.18 districts; and 193.19 (3) effective July 1, 2005, the sixth and tenth judicial 193.20 districts. 193.21 Subd. 2. [DEFINITION; SALARY EXPENDITURES.] "Salary 193.22 expenditures" means the salary of court administration 193.23 employees, including salaries, related fringe benefits, and 193.24 insurance, granted to court and other county employees in 193.25 collective bargaining or county pay plans. 193.26 Subd. 3. [DEFINITION; COURT ADMINISTRATION 193.27 EXPENDITURES.] "Court administration expenditures" means the 193.28 total expenditures of (1) salary expenditures as defined under 193.29 subdivision 2 and (2) other related administrative operating 193.30 expenditures. 193.31 Subd. 4. [DEFINITION; MANDATED COURT SERVICES.] "Mandated 193.32 court services" means services for: 193.33 (1) guardian ad litem; 193.34 (2) interpreter; 193.35 (3) Minnesota Rules, parts 9525.0900 to 9525.1020 (rule 193.36 20); 194.1 (4) civil commitment examination, not including 194.2 hospitalization or treatment costs, for mental commitments and 194.3 related proceedings under chapter 253B; and 194.4 (5) in forma pauperis costs. 194.5 [EFFECTIVE DATE.] This section is effective the day 194.6 following final enactment. 194.7 Sec. 16. [484.77] [FACILITIES.] 194.8 The county board in each county shall provide suitable 194.9 facilities for court purposes at the county seat, or at other 194.10 locations agreed upon by the district court and the county. The 194.11 county shall also be responsible for the costs of renting, 194.12 maintaining, operating, remodeling, insuring, and renovating 194.13 those facilities occupied by the court. The county board and 194.14 the district court must mutually agree upon relocation, 194.15 renovation, new construction, and remodeling decisions related 194.16 to court facility needs. The state court administrator shall 194.17 convene court and county representatives who shall develop 194.18 written model guidelines for facilities that may be adopted in 194.19 each county. 194.20 [EFFECTIVE DATE.] This section is effective the day 194.21 following final enactment. 194.22 Sec. 17. Minnesota Statutes 2000, section 487.33, 194.23 subdivision 5, is amended to read: 194.24 Subd. 5. [ALLOCATION.] The court administrator shall 194.25 provide the county treasurer with the name of the municipality 194.26 or other subdivision of government where the offense was 194.27 committed which employed or provided by contract the arresting 194.28 or apprehending officer and the name of the municipality or 194.29 other subdivision of government which employed the prosecuting 194.30 attorney or otherwise provided for prosecution of the offense 194.31 for each fine or penalty and the total amount of fines or 194.32 penalties collected for each municipality or other subdivision 194.33 of government. On or before the last day of each month, the 194.34 county treasurer shall pay over to the treasurer of each 194.35 municipality or subdivision of government within the county all 194.36 fines or penalties for parking violations for which complaints 195.1 and warrants have not been issued and one-third of all fines or 195.2 penalties collected during the previous month for offenses 195.3 committed within the municipality or subdivision of government 195.4 from persons arrested or issued citations by officers employed 195.5 by the municipality or subdivision or provided by the 195.6 municipality or subdivision by contract. An additional 195.7 one-third of all fines or penalties shall be paid to the 195.8 municipality or subdivision of government providing prosecution 195.9 of offenses of the type for which the fine or penalty is 195.10 collected occurring within the municipality or subdivision, 195.11 imposed for violations of state statute or of an ordinance, 195.12 charter provision, rule or regulation of a city whether or not a 195.13 guilty plea is entered or bail is forfeited. Except as provided 195.14 in section 299D.03, subdivision 5, or as otherwise provided by 195.15 law, all other fines and forfeitures and all fees and statutory 195.16 court costs collected by the court administrator shall be paid 195.17 to the county treasurer of the county in which the funds were 195.18 collected who shall dispense them as provided by law. In a 195.19 county in a judicial district under section 480.181, subdivision 195.20 1, paragraph (b),as added in Laws 1999, chapter 216, article 7,195.21section 26,all other fines, forfeitures, fees, and statutory 195.22 court costs must be paid to the state treasurer for deposit in 195.23 the state treasury and credited to the general fund. 195.24 [EFFECTIVE DATE.] This section is effective July 1, 2003, 195.25 in the second and fourth districts; July 1, 2004, in the first 195.26 and third districts; and July 1, 2005, in the sixth and tenth 195.27 districts. 195.28 Sec. 18. Minnesota Statutes 2000, section 488A.03, is 195.29 amended by adding a subdivision to read: 195.30 Subd. 14. [REVENUES TO GENERAL FUND.] In a judicial 195.31 district under section 480.181, subdivision 1, paragraph (b), 195.32 the county's share of all fines, forfeitures, fees, and 195.33 statutory court costs must be paid to the state treasurer for 195.34 deposit in the state treasury and credited to the general fund. 195.35 [EFFECTIVE DATE.] This section is effective the day 195.36 following final enactment. 196.1 Sec. 19. Minnesota Statutes 2000, section 488A.20, is 196.2 amended by adding a subdivision to read: 196.3 Subd. 8. [REVENUES TO GENERAL FUND.] In a judicial 196.4 district under section 480.181, subdivision 1, paragraph (b), 196.5 the county's share of all fines, forfeitures, fees, and 196.6 statutory court costs must be paid to the state treasurer for 196.7 deposit in the state treasury and credited to the general fund. 196.8 [EFFECTIVE DATE.] This section is effective the day 196.9 following final enactment. 196.10 Sec. 20. Minnesota Statutes 2000, section 574.34, 196.11 subdivision 1, is amended to read: 196.12 Subdivision 1. [GENERAL.] Fines and forfeitures not 196.13 specially granted or appropriated by law shall be paid into the 196.14 treasury of the county where they are incurred, except in a 196.15 county in a judicial district under section 480.181, subdivision 196.16 1, paragraph (b),as added in Laws 1999, chapter 216, article 7,196.17section 26,the fines and forfeitures must be deposited in the 196.18 state treasury and credited to the general fund. 196.19 [EFFECTIVE DATE.] This section is effective July 1, 2003, 196.20 in the second and fourth districts; July 1, 2004, in the first 196.21 and third districts; and July 1, 2005, in the sixth and tenth 196.22 districts. 196.23 Sec. 21. [TRANSITIONAL PROVISIONS.] 196.24 Subdivision 1. [TRANSFER OF PROPERTY.] The title to 196.25 personal property that is used by employees being transferred to 196.26 state employment under this article in the scope of their 196.27 employment is transferred to the state when they become state 196.28 employees. 196.29 Subd. 2. [RULES.] The supreme court, in consultation with 196.30 the conference of chief judges, may adopt rules to implement 196.31 this article. 196.32 Subd. 3. [BUDGETS.] Notwithstanding any law to the 196.33 contrary, the fiscal year budgets for the year in which the 196.34 state assumes the cost of court administration in the judicial 196.35 district for the court administrators' offices being transferred 196.36 to state employment under this article, including the number of 197.1 complement positions and salaries, must be submitted by the 197.2 court administrators to the supreme court. The budgets must 197.3 include the current levels of funding and positions at the time 197.4 of submission as well as any requests for increases in funding 197.5 and positions. 197.6 [EFFECTIVE DATE.] This section is effective July 1, 2003, 197.7 in the second and fourth districts; July 1, 2004, in the first 197.8 and third districts; and July 1, 2005, in the sixth and tenth 197.9 districts. 197.10 Sec. 22. [APPROPRIATION.] 197.11 (a) The supreme court general fund appropriation base is 197.12 increased by $39,240,000 in fiscal year 2004 and by an 197.13 additional $17,316,000 in fiscal year 2005. In fiscal years 197.14 2006 and 2007 the supreme court may request additional base 197.15 adjustments to reflect the transfer of the remaining judicial 197.16 districts. 197.17 (b) $8,701,253 is appropriated to the supreme court from 197.18 the general fund in each of fiscal years 2002 and 2003 to be 197.19 used to pay the costs of mandated court services assumed by the 197.20 state under Minnesota Statutes, section 480.183, subdivision 1. 197.21 (c) For each of fiscal years 2004 and 2005, $1,700,000 is 197.22 appropriated from the general fund to the supreme court to fund 197.23 court takeover equity adjustments. These amounts must be added 197.24 to the court base budget in subsequent fiscal years. 197.25 [EFFECTIVE DATE.] This section is effective the day 197.26 following final enactment. 197.27 ARTICLE 6 197.28 MINERALS TAXES 197.29 Section 1. Minnesota Statutes 2000, section 116J.424, is 197.30 amended to read: 197.31 116J.424 [IRRRB CONTRIBUTION.] 197.32 The commissioner of the iron range resources and 197.33 rehabilitation board with approval of the board shall provide an 197.34 equal match for any loan or equity investment made for a 197.35 facility located in the tax relief area defined in section 197.36 273.134, paragraph (b), by the Minnesota minerals 21st century 198.1 fund created by section 116J.423. The match may be in the form 198.2 of a loan or equity investment, notwithstanding whether the fund 198.3 makes a loan or equity investment. The state shall not acquire 198.4 an equity interest because of an equity investment or loan by 198.5 the board and the board at its sole discretion shall decide what 198.6 interest it acquires in a project. The commissioner of trade 198.7 and economic development may require a commitment from the board 198.8 to make the match prior to disbursing money from the fund. 198.9 Sec. 2. Minnesota Statutes 2000, section 126C.21, 198.10 subdivision 4, is amended to read: 198.11 Subd. 4. [TACONITE DEDUCTIONS.] (1) Notwithstanding any 198.12 provisions of any other law to the contrary, the adjusted net 198.13 tax capacity used in calculating general education aid may 198.14 include only that property that is currently taxable in the 198.15 district. 198.16 (2) For districts that received payments under sections 198.17 298.018;298.24 to 298.28;298.34 to 298.39; 298.391 to 298.396; 198.18 and 298.405;, or any law imposing a tax upon severed mineral 198.19 values, or recognized revenue pursuant to section 477A.15; the 198.20 general education aid must be reduced in the final adjustment 198.21 payment by the difference between the dollar amount of the 198.22 payments received pursuant to those sections, or revenue198.23recognized pursuant to section 477A.15in the fiscal year to 198.24 which the final adjustment is attributable and the amount that 198.25 was calculated, pursuant to section 126C.48, subdivision 8, as a 198.26 reduction of the levy attributable to the fiscal year to which 198.27 the final adjustment is attributable. If the final adjustment 198.28 of a district's general education aid for a fiscal year is a 198.29 negative amount because of this clause, the next fiscal year's 198.30 general education aid to that district must be reduced by this 198.31 negative amount in the following manner: there must be withheld 198.32 from each scheduled general education aid payment due the 198.33 district in such fiscal year, 15 percent of the total negative 198.34 amount, until the total negative amount has been withheld. The 198.35 amount reduced from general education aid pursuant to this 198.36 clause must be recognized as revenue in the fiscal year to which 199.1 the final adjustment payment is attributable. 199.2 [EFFECTIVE DATE.] This section is effective for aids 199.3 payable in the 2002-2003 school year. 199.4 Sec. 3. Minnesota Statutes 2000, section 126C.48, 199.5 subdivision 8, is amended to read: 199.6 Subd. 8. [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1) 199.7 Reductions in levies pursuant to sections 126C.48, subdivision 199.8 1, and 273.138, must be made prior to the reductions in clause 199.9 (2). 199.10 (2) Notwithstanding any other law to the contrary, 199.11 districts which received payments pursuant to sections 298.018; 199.12298.24 to 298.28, except an amount distributed under section199.13298.28, subdivision 4, paragraph (c), clause (ii);298.34 to 199.14 298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 199.15 upon severed mineral values, or recognized revenue pursuant to199.16section 477A.15; must not include a portion of these aids in 199.17 their permissible levies pursuant to those sections, but instead 199.18 must reduce the permissible levies authorized by this chapter 199.19 and chapters 120B, 122A, 123A, 123B, 124A, 124D, 125A, and 127A 199.20 by the greater of the following: 199.21 (a) an amount equal to 50 percent of the total dollar 199.22 amount of the payments received pursuant to those sectionsor199.23revenue recognized pursuant to section 477A.15in the previous 199.24 fiscal year; or 199.25 (b) an amount equal to the total dollar amount of the 199.26 payments received pursuant to those sectionsor revenue199.27recognized pursuant to section 477A.15in the previous fiscal 199.28 year less the product of the same dollar amount of payments or 199.29 revenue times five percent. 199.30 (3)No reduction pursuant to this subdivision shall reduce199.31the levy made by the district pursuant to section 126C.13, to an199.32amount less than the amount raised by a levy of a net tax rate199.33of 6.82 percent times the adjusted net tax capacity for taxes199.34payable in 1990 and thereafter of that district for the199.35preceding year as determined by the commissioner.The amount of 199.36 any increased levy authorized by referendum pursuant to section 200.1 126C.17, subdivision 9, shall not be reduced pursuant to this 200.2 subdivision. The amount of any levy authorized by section 200.3 126C.43, to make payments for bonds issued and for interest 200.4 thereon, shall not be reduced pursuant to this subdivision. 200.5 (4) Before computing the reduction pursuant to this 200.6 subdivision of the health and safety levy authorized by sections 200.7 123B.57 and 126C.40, subdivision 5, the commissioner shall 200.8 ascertain from each affected school district the amount it 200.9 proposes to levy under each section or subdivision. The 200.10 reduction shall be computed on the basis of the amount so 200.11 ascertained. 200.12 (5) Notwithstanding any law to the contrary, any amounts 200.13 received by districts in any fiscal year pursuant to sections 200.14 298.018;298.24 to 298.28;298.34 to 298.39; 298.391 to 298.396; 200.15 298.405; or any law imposing a tax on severed mineral values; 200.16 and not deducted from general education aid pursuant to section 200.17 126C.21, subdivision 4, clause (2), and not applied to reduce 200.18 levies pursuant to this subdivision shall be paid by the 200.19 district to the St. Louis county auditor in the following amount 200.20 by March 15 of each year, the amount required to be subtracted 200.21 from the previous fiscal year's general education aid pursuant 200.22 to section 126C.21, subdivision 4, which is in excess of the 200.23 general education aid earned for that fiscal year. The county 200.24 auditor shall deposit any amounts received pursuant to this 200.25 clause in the St. Louis county treasury for purposes of paying 200.26 the taconite homestead credit as provided in section 273.135. 200.27 [EFFECTIVE DATE.] This section is effective for taxes 200.28 levied in 2001 for taxes payable in 2002. 200.29 Sec. 4. Minnesota Statutes 2000, section 273.134, is 200.30 amended to read: 200.31 273.134 [TACONITE AND IRON ORE AREAS; TAX RELIEF AREA; 200.32 DEFINITIONS.] 200.33 (a) For purposes of this section and section 273.135, 200.34 "municipality" means any city, however organized, or town, and 200.35 the applicable assessment date is the date as of which property 200.36 is listed and assessed for the tax in question. 201.1 For the purposes of section 273.135, "tax relief area" 201.2 means the geographic area contained,within the boundaries of a 201.3 school district on January 2, 2000, which contains a 201.4 municipality which meets the following qualifications: 201.5 (1) it is a municipality in which the assessed valuation of 201.6 unmined iron ore on May 1, 1941, was not less than 40 percent of 201.7 the assessed valuation of all real property; or 201.8 (2) it is a municipality in which, on January 1, 1977 or 201.9 the applicable assessment date, there is a taconite 201.10 concentrating plant or where taconite is mined or quarried or 201.11 where there is located an electric generating plant which 201.12 qualifies as a taconite facility. 201.13 For purposes of this paragraph, a "tax relief area" does 201.14 not include a school district whose boundaries are more than 20 201.15 miles from a taconite mine or plant or in which the assessed 201.16 valuation of unmined iron ore on May 1, 1941, was less than 40 201.17 percent of the assessed valuation of all real property. 201.18 (b) For purposes of section 273.1391, subdivision 2, 201.19 paragraph (c), and chapter 298, "tax relief area" means the 201.20 geographic area contained within the boundaries of a school 201.21 district which contains a municipality that meets the following 201.22 qualifications: 201.23 (1) it is a municipality in which the assessed valuation of 201.24 unmined iron ore on May 1, 1941, was not less than 40 percent of 201.25 the assessed valuation of all real property; or 201.26 (2) it is a municipality in which, on January 1, 1977, or 201.27 the applicable assessment date, there is a taconite 201.28 concentrating plant or where taconite is mined or quarried or 201.29 where there is located an electric generating plant which 201.30 qualifies as a taconite facility. 201.31 [EFFECTIVE DATE.] This section is effective for taxes and 201.32 aids payable and expenditures authorized in 2002 and thereafter. 201.33 Sec. 5. Minnesota Statutes 2000, section 273.135, 201.34 subdivision 1, is amended to read: 201.35 Subdivision 1. The property tax to be paid in respect to 201.36 property taxable within a tax relief area as defined in section 202.1 273.134, paragraph (a), on homestead property, as otherwise 202.2 determined by law and regardless of the market value of the 202.3 property, for all purposes shall be reduced in the amount 202.4 prescribed by subdivision 2, subject to the limitations 202.5 contained therein. 202.6 [EFFECTIVE DATE.] This section is effective for taxes 202.7 payable in 2002 and thereafter. 202.8 Sec. 6. Minnesota Statutes 2000, section 273.135, 202.9 subdivision 2, is amended to read: 202.10 Subd. 2. The amount of the reduction authorized by 202.11 subdivision 1 shall be: 202.12 (a) In the case of property located within a tax relief 202.13 area as defined under section 273.134, paragraph (a), that is 202.14 within the boundaries of a municipality which meets the 202.15 qualifications prescribed in section 273.134, paragraph (a), 66 202.16 percent of the tax, provided that the reduction shall not exceed 202.17 the maximum amounts specified inclauseparagraph (c). 202.18 (b) In the case of property located within the boundaries 202.19 of a school district which qualifies as a tax relief area under 202.20 section 273.134, paragraph (a), but which is outside the 202.21 boundaries of a municipality which meets the qualifications 202.22 prescribed in section 273.134, paragraph (a), 57 percent of the 202.23 tax, provided that the reduction shall not exceed the maximum 202.24 amounts specified inclauseparagraph (c). 202.25 (c) The maximum reduction of the tax is $315.10 on property 202.26 described inclauseparagraph (a) and $289.80 on property 202.27 described inclauseparagraph (b). 202.28 [EFFECTIVE DATE.] This section is effective for taxes 202.29 payable in 2002 and thereafter. 202.30 Sec. 7. Minnesota Statutes 2000, section 273.136, 202.31 subdivision 2, is amended to read: 202.32 Subd. 2. The commissioner of revenue shall determine, not 202.33 later than April 1 of each year, the amount of reduction 202.34 resulting from section 273.135 in each county containing a tax 202.35 relief area as defined by section 273.134, paragraph (b), basing 202.36 determinations on a review of abstracts of tax lists submitted 203.1 by the county auditors pursuant to section 275.29. The 203.2 commissioner may make changes in the abstracts of tax lists as 203.3 deemed necessary. The commissioner of revenue, after such 203.4 review, shall submit to the St. Louis county auditor, on or 203.5 before April 15, the amount of the first half payment payable 203.6 hereunder and on or before September 15 the amount of the second 203.7 half payment. 203.8 [EFFECTIVE DATE.] This section is effective for taxes 203.9 payable in 2002 and thereafter. 203.10 Sec. 8. Minnesota Statutes 2000, section 273.1391, 203.11 subdivision 2, is amended to read: 203.12 Subd. 2. The amount of the reduction authorized by 203.13 subdivision 1 shall be: 203.14 (a) In the case of property located within a school 203.15 district which does not meet the qualifications of section 203.16 273.134 as a tax relief area, but which is located in a county 203.17 with a population of less than 100,000 in which taconite is 203.18 mined or quarried and wherein a school district is located which 203.19 does meet the qualifications of a tax relief area, and provided 203.20 that at least 90 percent of the area of the school district 203.21 which does not meet the qualifications of section 273.134 lies 203.22 within such county, 57 percent of the tax on qualified property 203.23 located in the school district that does not meet the 203.24 qualifications of section 273.134, provided that the amount of 203.25 said reduction shall not exceed the maximum amounts specified in 203.26clause (c)paragraph (d). The reduction provided by this clause 203.27 shall only be applicable to property located within the 203.28 boundaries of the county described therein. 203.29 (b) In the case of property located within a school 203.30 district which does not meet the qualifications of section 203.31 273.134 as a tax relief area, but which is located in a school 203.32 district in a county containing a city of the first class and a 203.33 qualifying municipality, but not in a school district containing 203.34 a city of the first class or adjacent to a school district 203.35 containing a city of the first class unless the school district 203.36 so adjacent contains a qualifying municipality, 57 percent of 204.1 the tax, but not to exceed the maximums specified inclause204.2(c)paragraph (d). 204.3 (c) In the case of property located within the boundaries 204.4 of a municipality that meets the qualifications in section 204.5 273.134, paragraph (b), but not the qualifications in section 204.6 273.134, paragraph (a), 66 percent of the tax, provided that the 204.7 reduction shall not exceed $315.10. In the case of property 204.8 located within the boundaries of a school district which 204.9 qualifies as a tax relief area under section 273.134, paragraph 204.10 (b), but does not qualify as a tax relief area under section 204.11 273.134, paragraph (a), but which is outside the boundaries of a 204.12 municipality which meets the qualifications of the preceding 204.13 sentence, 57 percent of the tax, provided that the reduction 204.14 shall not exceed the maximum amounts specified in paragraph (d). 204.15 (d) Except as otherwise provided in this section, the 204.16 maximum reduction of the tax is $289.80. 204.17 [EFFECTIVE DATE.] This section is effective for taxes 204.18 payable in 2002 and thereafter. 204.19 Sec. 9. Minnesota Statutes 2000, section 273.1391, 204.20 subdivision 3, is amended to read: 204.21 Subd. 3. Not later than December 1, each county auditor 204.22 having jurisdiction over one or more tax relief areas defined in 204.23 subdivision 2 shall certify to the commissioner of revenue an 204.24 estimate of the total amount of the reduction, determined under 204.25 subdivision 2, in taxes payable the next succeeding year with 204.26 respect to all tax relief areas in the auditor's county. The 204.27 commissioner shall make payments to the countyby May 15 and204.28October 15 annuallyat the times provided in section 477A.015. 204.29 The county treasurer shall distribute as part of the May and 204.30 October settlements the funds received from the commissioner. 204.31 [EFFECTIVE DATE.] This section is effective for payments in 204.32 2002 and thereafter. 204.33 Sec. 10. Minnesota Statutes 2000, section 276A.01, 204.34 subdivision 2, is amended to read: 204.35 Subd. 2. [AREA.] "Area" means the territory included 204.36 within all tax relief areas defined in section 273.134, 205.1 paragraph (b). 205.2 [EFFECTIVE DATE.] This section is effective for taxes 205.3 payable in 2002 and thereafter. 205.4 Sec. 11. Minnesota Statutes 2000, section 298.018, 205.5 subdivision 1, is amended to read: 205.6 Subdivision 1. [WITHIN TACONITE TAX RELIEF AREA.] The 205.7 proceeds of the tax paid under sections 298.015 to 298.017 on 205.8 minerals and energy resources mined or extracted within the 205.9 taconite tax relief area defined in section 273.134, paragraph 205.10 (b), shall be allocated as follows: 205.11 (1) five percent to the city or town within which the 205.12 minerals or energy resources are mined or extracted; 205.13 (2) ten percent to the taconite municipal aid account to be 205.14 distributed as provided in section 298.282; 205.15 (3) ten percent to the school district within which the 205.16 minerals or energy resources are mined or extracted; 205.17 (4) 20 percent to a group of school districts comprised of 205.18 those school districts wherein the mineral or energy resource 205.19 was mined or extracted or in which there is a qualifying 205.20 municipality as defined by section 273.134, paragraph (b), in 205.21 direct proportion to school district indexes as follows: for 205.22 each school district, its pupil units determined under section 205.23 126C.05 for the prior school year shall be multiplied by the 205.24 ratio of the average adjusted net tax capacity per pupil unit 205.25 for school districts receiving aid under this clause as 205.26 calculated pursuant to chapters 122A, 126C, and 127A for the 205.27 school year ending prior to distribution to the adjusted net tax 205.28 capacity per pupil unit of the district. Each district shall 205.29 receive that portion of the distribution which its index bears 205.30 to the sum of the indices for all school districts that receive 205.31 the distributions; 205.32 (5) 20 percent to the county within which the minerals or 205.33 energy resources are mined or extracted; 205.34 (6) 20 percent to St. Louis county acting as the counties' 205.35 fiscal agent to be distributed as provided in sections 273.134 205.36 to 273.136; 206.1 (7) five percent to the iron range resources and 206.2 rehabilitation board for the purposes of section 298.22; 206.3 (8) five percent to the northeast Minnesota economic 206.4 protection trust fund; and 206.5 (9) five percent to the taconite environmental protection 206.6 fund. 206.7 The proceeds of the tax shall be distributed on July 15 206.8 each year. 206.9 Sec. 12. Minnesota Statutes 2000, section 298.018, 206.10 subdivision 2, is amended to read: 206.11 Subd. 2. [OUTSIDE TACONITE TAX RELIEF AREA.] The proceeds 206.12 of the tax paid under sections 298.015 to 298.017 on minerals 206.13 and energy resources mined or extracted outside of the taconite 206.14 tax relief area defined in section 273.134, paragraph (b), shall 206.15 be deposited in the general fund. 206.16 Sec. 13. Minnesota Statutes 2000, section 298.17, is 206.17 amended to read: 206.18 298.17 [OCCUPATION TAXES TO BE APPORTIONED.] 206.19 All occupation taxes paid by persons, copartnerships, 206.20 companies, joint stock companies, corporations, and 206.21 associations, however or for whatever purpose organized, engaged 206.22 in the business of mining or producing iron ore or other ores, 206.23 when collected shall be apportioned and distributed in 206.24 accordance with the Constitution of the state of Minnesota, 206.25 article X, section 3, in the manner following: 90 percent shall 206.26 be deposited in the state treasury and credited to the general 206.27 fund of which four-ninths shall be used for the support of 206.28 elementary and secondary schools; and ten percent of the 206.29 proceeds of the tax imposed by this section shall be deposited 206.30 in the state treasury and credited to the general fund for the 206.31 general support of the university. Of the moneys apportioned to 206.32 the general fund by this section there is annually appropriated 206.33 and credited to the iron range resources and rehabilitation 206.34 board account in the special revenue fund an amount equal to 206.35 that which would have been generated by a 1.5 cent tax imposed 206.36 by section 298.24 on each taxable ton produced in the preceding 207.1 calendar year, to be expended for the purposes of section 207.2 298.22. The money appropriated pursuant to this section shall 207.3 be used (1) to provide environmental development grants to local 207.4 governments located within any county in region 3 as defined in 207.5 governor's executive order number 60, issued on June 12, 1970, 207.6 which does not contain a municipality qualifying pursuant to 207.7 section 273.134, paragraph (b), or (2) to provide economic 207.8 development loans or grants to businesses located within any 207.9 such county, provided that the county board or an advisory group 207.10 appointed by the county board to provide recommendations on 207.11 economic development shall make recommendations to the iron 207.12 range resources and rehabilitation board regarding the loans. 207.13 Payment to the iron range resources and rehabilitation board 207.14 account shall be made by May 15 annually. 207.15 Of the money allocated to Koochiching county, one-third 207.16 must be paid to the Koochiching county economic development 207.17 commission. 207.18 Sec. 14. Minnesota Statutes 2000, section 298.22, 207.19 subdivision 2, is amended to read: 207.20 Subd. 2. [IRON RANGE RESOURCES AND REHABILITATION BOARD.] 207.21 There is hereby created the iron range resources and 207.22 rehabilitation board, consisting of 13 members, five of whom are 207.23 state senators appointed by the subcommittee on committees of 207.24 the rules committee of the senate, and five of whom are 207.25 representatives, appointed by the speaker of the house of 207.26 representatives. The remaining members shall be appointed one 207.27 each by the senate majority leader, the speaker of the house of 207.28 representatives, and the governor and must be nonlegislators who 207.29 reside in a tax relief area as defined in section 273.134, 207.30 paragraph (b). The members shall be appointed in January of 207.31 every odd-numbered year, except that the initial nonlegislator 207.32 members shall be appointed by July 1, 1999, and shall serve 207.33 until January of the next odd-numbered year. Vacancies on the 207.34 board shall be filled in the same manner as the original members 207.35 were chosen. At least a majority of the legislative members of 207.36 the board shall be elected from state senatorial or legislative 208.1 districts in which over 50 percent of the residents reside 208.2 within a tax relief area as defined in section 273.134, 208.3 paragraph (b). All expenditures and projects made by the 208.4 commissioner of iron range resources and rehabilitation shall be 208.5 consistent with the priorities established in subdivision 8 and 208.6 shall first be submitted to the iron range resources and 208.7 rehabilitation board for approval by a majority of the board of 208.8 expenditures and projects for rehabilitation purposes as 208.9 provided by this section, and the method, manner, and time of 208.10 payment of all funds proposed to be disbursed shall be first 208.11 approved or disapproved by the board. The board shall 208.12 biennially make its report to the governor and the legislature 208.13 on or before November 15 of each even-numbered year. The 208.14 expenses of the board shall be paid by the state from the funds 208.15 raised pursuant to this section. 208.16 Sec. 15. Minnesota Statutes 2000, section 298.22, is 208.17 amended by adding a subdivision to read: 208.18 Subd. 8. [SPENDING PRIORITY.] In making or approving any 208.19 expenditures on programs or projects, the commissioner and the 208.20 board shall give the highest priority to programs and projects 208.21 that target relief to those areas of the taconite tax relief 208.22 area as defined in section 273.134, paragraph (b), that have the 208.23 largest percentages of job losses and population losses directly 208.24 attributable to the economic downturn in the taconite industry 208.25 since the 1980s. The commissioner and the board shall compare 208.26 the 1980 population and employment figures with the 2000 208.27 population and employment figures, and shall specifically 208.28 consider the job losses in 2000 and 2001 resulting from the 208.29 closure of LTV Steel Mining Company, in making or approving 208.30 expenditures consistent with this subdivision, as well as the 208.31 areas of residence of persons who suffered job loss for which 208.32 relief is to be targeted under this subdivision. This 208.33 subdivision supersedes any other conflicting provisions of law 208.34 and does not preclude the commissioner and the board from making 208.35 expenditures for programs and projects in other areas. 208.36 Sec. 16. Minnesota Statutes 2000, section 298.2211, 209.1 subdivision 2, is amended to read: 209.2 Subd. 2. [AREA OF OPERATION.] Projects undertaken, 209.3 developed, or financed pursuant to this section shall be located 209.4 within the tax relief area defined in section 273.134, paragraph 209.5 (b). 209.6 Sec. 17. Minnesota Statutes 2000, section 298.2213, 209.7 subdivision 3, is amended to read: 209.8 Subd. 3. [USE OF MONEY.] The money appropriated under this 209.9 section may be used to provide loans, loan guarantees, interest 209.10 buy-downs, and other forms of participation with private sources 209.11 of financing, provided that a loan to a private enterprise must 209.12 be for a principal amount not to exceed one-half of the cost of 209.13 the project for which financing is sought, and the rate of 209.14 interest on a loan must be no less than the lesser of eight 209.15 percent or the rate of interest that is three percentage points 209.16 less than a full faith and credit obligation of the United 209.17 States government of comparable maturity, at the time that the 209.18 loan is approved. 209.19 Money appropriated in this section must be expended only in 209.20 or for the benefit of the tax relief area defined in section 209.21 273.134, paragraph (b), and as otherwise provided in this 209.22 section. 209.23 Sec. 18. Minnesota Statutes 2000, section 298.2214, 209.24 subdivision 1, is amended to read: 209.25 Subdivision 1. [CREATION OF COMMITTEE; PURPOSE.] A 209.26 committee is created to advise the commissioner of iron range 209.27 resources and rehabilitation on providing higher education 209.28 programs in the taconite tax relief area defined in section 209.29 273.134, paragraph (b). The committee is subject to section 209.30 15.059. 209.31 Sec. 19. Minnesota Statutes 2000, section 298.223, 209.32 subdivision 1, is amended to read: 209.33 Subdivision 1. [CREATION; PURPOSES.] A fund called the 209.34 taconite environmental protection fund is created for the 209.35 purpose of reclaiming, restoring and enhancing those areas of 209.36 northeast Minnesota located within a tax relief area defined in 210.1 section 273.134, paragraph (b), that are adversely affected by 210.2 the environmentally damaging operations involved in mining 210.3 taconite and iron ore and producing iron ore concentrate and for 210.4 the purpose of promoting the economic development of northeast 210.5 Minnesota. The taconite environmental protection fund shall be 210.6 used for the following purposes: 210.7 (a) to initiate investigations into matters the iron range 210.8 resources and rehabilitation board determines are in need of 210.9 study and which will determine the environmental problems 210.10 requiring remedial action; 210.11 (b) reclamation, restoration, or reforestation of minelands 210.12 not otherwise provided for by state law; 210.13 (c) local economic development projects including 210.14 construction of sewer and water systems, and other public works 210.15 located within a tax relief area defined in section 273.134, 210.16 paragraph (b); 210.17 (d) monitoring of mineral industry related health problems 210.18 among mining employees. 210.19 Sec. 20. Minnesota Statutes 2000, section 298.225, 210.20 subdivision 1, is amended to read: 210.21 Subdivision 1. (a) The distribution of the taconite 210.22 production tax as provided in section 298.28, subdivisions23 210.23 to 5, 6, paragraph (b), 7, and 8, shall equal the lesser of the 210.24 following amounts: 210.25 (1) the amount distributed pursuant to this section and 210.26 section 298.28, with respect to 1983 production if the 210.27 production for the year prior to the distribution year is no 210.28 less than 42,000,000 taxable tons. If the production is less 210.29 than 42,000,000 taxable tons, the amount of the distributions 210.30 shall be reduced proportionately at the rate of two percent for 210.31 each 1,000,000 tons, or part of 1,000,000 tons by which the 210.32 production is less than 42,000,000 tons; or 210.33 (2)(i) for the distributions made pursuant to section 210.34 298.28, subdivisions 4, paragraphs (b) and (c), and 6, paragraph 210.35 (c), 40.5 percent of the amount distributed pursuant to this 210.36 section and section 298.28, with respect to 1983 production; 211.1 (ii) for the distributions made pursuant to section 298.28, 211.2 subdivision 5, paragraphs (b) and (d), 75 percent of the amount 211.3 distributed pursuant to this section and section 298.28, with 211.4 respect to 1983 production. 211.5 (b) The distribution of the taconite production tax as 211.6 provided in section 298.28, subdivision 2, shall equal the 211.7 following amount: 211.8 (1) if the production for the year prior to the 211.9 distribution year is at least 42,000,000 taxable tons, the 211.10 amount distributed pursuant to this section and section 298.28 211.11 with respect to 1999 production; or 211.12 (2) if the production for the year prior to the 211.13 distribution year is less than 42,000,000 taxable tons, the 211.14 amount distributed pursuant to this section and section 298.28 211.15 with respect to 1999 production, reduced proportionately at the 211.16 rate of two percent for each 1,000,000 tons or part of 1,000,000 211.17 tons by which the production is less than 42,000,000 tons. 211.18 [EFFECTIVE DATE; RETROACTIVE APPLICATION.] This section is 211.19 effective for distributions in 2001 and thereafter. For the 211.20 distribution paid in February 2001 only, as soon as practicable 211.21 after the date of final enactment of this act, the commissioner 211.22 of iron range resources and rehabilitation shall pay two-thirds 211.23 of any additional amounts required under this section from the 211.24 taconite environmental protection fund and one-third of any 211.25 additional amounts required under this section from the 211.26 northeast Minnesota economic protection trust fund, as directed 211.27 by the commissioner of revenue. 211.28 Sec. 21. Minnesota Statutes 2000, section 298.227, is 211.29 amended to read: 211.30 298.227 [TACONITE ECONOMIC DEVELOPMENT FUND.] 211.31 An amount equal to that distributed pursuant to each 211.32 taconite producer's taxable production and qualifying sales 211.33 under section 298.28, subdivision 9a, shall be held by the iron 211.34 range resources and rehabilitation board in a separate taconite 211.35 economic development fund for each taconite and direct reduced 211.36 ore producer. Money from the fund for each producer shall be 212.1 releasedonly on the written authorization ofby the 212.2 commissioner after review by a joint committee consisting of an 212.3 equal number of representatives of the salaried employees and 212.4 the nonsalaried production and maintenance employees of that 212.5 producer. The district 11 director of the United States 212.6 Steelworkers of America, on advice of each local employee 212.7 president, shall select the employee members. In nonorganized 212.8 operations, the employee committee shall be elected by the 212.9 nonsalaried production and maintenance employees.Each212.10producer's joint committee may authorize release ofThe review 212.11 must be completed no later than six months after the producer 212.12 presents a proposal for expenditure of the funds to the 212.13 committee. The funds held pursuant to this section may be 212.14 released only for acquisition of equipment and facilities for 212.15 the producer or for research and development in Minnesota on new 212.16 mining, or taconite, iron, or steel production technology, but 212.17 only if the producer provides a matching expenditure to be used 212.18 for the same purpose of at least 50 percent of the distribution 212.19 based on 14.7 cents per ton beginning with distributions in 212.20 2002.Funds may be released only upon a majority vote of the212.21representatives of the committee.If a taconite production 212.22 facility is sold after operations at the facility had ceased, 212.23 any money remaining in the fund for the former producer may be 212.24 released to the purchaser of the facility on the terms otherwise 212.25 applicable to the former producer under this section. If a 212.26 producer fails to provide matching funds for a proposed 212.27 expenditure within six months after the commissioner approves 212.28 release of the funds, the funds are available for release to 212.29 another producer in proportion to the distribution provided and 212.30 under the conditions of this section. Any portion of the fund 212.31 which is not released bya joint committeethe commissioner 212.32 within two years of its deposit in the fund shall be divided 212.33 between the taconite environmental protection fund created in 212.34 section 298.223 and the northeast Minnesota economic protection 212.35 trust fund created in section 298.292 for placement in their 212.36 respective special accounts. Two-thirds of the unreleased funds 213.1 shall be distributed to the taconite environmental protection 213.2 fund and one-third to the northeast Minnesota economic 213.3 protection trust fund. 213.4 Sec. 22. Minnesota Statutes 2000, section 298.24, 213.5 subdivision 1, is amended to read: 213.6 Subdivision 1. (a) For concentrate produced in19992001, 213.7 2002, and 2003, there is imposed upon taconite and iron 213.8 sulphides, and upon the mining and quarrying thereof, and upon 213.9 the production of iron ore concentrate therefrom, and upon the 213.10 concentrate so produced, a tax of$2.141$2.103 per gross ton of 213.11 merchantable iron ore concentrate produced therefrom. 213.12 (b) For concentrates produced in20002004 and subsequent 213.13 years, the tax rate shall be equal to the preceding year's tax 213.14 rate plus an amount equal to the preceding year's tax rate 213.15 multiplied by the percentage increase in the implicit price 213.16 deflator from the fourth quarter of the second preceding year to 213.17 the fourth quarter of the preceding year. "Implicit price 213.18 deflator" means the implicit price deflator for the gross 213.19 domestic product prepared by the bureau of economic analysis of 213.20 the United States Department of Commerce. 213.21 (c) On concentrates produced in 1997 and thereafter, an 213.22 additional tax is imposed equal to three cents per gross ton of 213.23 merchantable iron ore concentrate for each one percent that the 213.24 iron content of the product exceeds 72 percent, when dried at 213.25 212 degrees Fahrenheit. 213.26 (d) The tax shall be imposed on the average of the 213.27 production for the current year and the previous two years. The 213.28 rate of the tax imposed will be the current year's tax rate. 213.29 This clause shall not apply in the case of the closing of a 213.30 taconite facility if the property taxes on the facility would be 213.31 higher if this clause and section 298.25 were not applicable. 213.32 (e) If the tax or any part of the tax imposed by this 213.33 subdivision is held to be unconstitutional, a tax 213.34 of$2.141$2.103 per gross ton of merchantable iron ore 213.35 concentrate produced shall be imposed. 213.36 (f) Consistent with the intent of this subdivision to 214.1 impose a tax based upon the weight of merchantable iron ore 214.2 concentrate, the commissioner of revenue may indirectly 214.3 determine the weight of merchantable iron ore concentrate 214.4 included in fluxed pellets by subtracting the weight of the 214.5 limestone, dolomite, or olivine derivatives or other basic flux 214.6 additives included in the pellets from the weight of the 214.7 pellets. For purposes of this paragraph, "fluxed pellets" are 214.8 pellets produced in a process in which limestone, dolomite, 214.9 olivine, or other basic flux additives are combined with 214.10 merchantable iron ore concentrate. No subtraction from the 214.11 weight of the pellets shall be allowed for binders, mineral and 214.12 chemical additives other than basic flux additives, or moisture. 214.13 (g)(1) Notwithstanding any other provision of this 214.14 subdivision, for the first two years of a plant's production of 214.15 direct reduced ore, no tax is imposed under this section. As 214.16 used in this paragraph, "direct reduced ore" is ore that results 214.17 in a product that has an iron content of at least 75 percent. 214.18 For the third year of a plant's production of direct reduced 214.19 ore, the rate to be applied to direct reduced ore is 25 percent 214.20 of the rate otherwise determined under this subdivision. For 214.21 the fourth such production year, the rate is 50 percent of the 214.22 rate otherwise determined under this subdivision; for the fifth 214.23 such production year, the rate is 75 percent of the rate 214.24 otherwise determined under this subdivision; and for all 214.25 subsequent production years, the full rate is imposed. 214.26 (2) Subject to clause (1), production of direct reduced ore 214.27 in this state is subject to the tax imposed by this section, but 214.28 if that production is not produced by a producer of taconite or 214.29 iron sulfides, the production of taconite or iron sulfides 214.30 consumed in the production of direct reduced iron in this state 214.31 is not subject to the tax imposed by this section on taconite or 214.32 iron sulfides. 214.33 Sec. 23. Minnesota Statutes 2000, section 298.28, 214.34 subdivision 3, is amended to read: 214.35 Subd. 3. [CITIES; TOWNS.] (a) 12.5 cents per taxable ton, 214.36 less any amount distributed under subdivision 8, and paragraph 215.1 (b), must be allocated to the taconite municipal aid account to 215.2 be distributed as provided in section 298.282. 215.3 (b) An amount must be allocated to towns or cities that is 215.4 annually certified by the county auditor of a county containing 215.5 a taconite tax relief area as defined in section 273.134, 215.6 paragraph (b), within which there is (1) an organized township 215.7 if, as of January 2, 1982, more than 75 percent of the assessed 215.8 valuation of the township consists of iron ore or (2) a city if, 215.9 as of January 2, 1980, more than 75 percent of the assessed 215.10 valuation of the city consists of iron ore. 215.11 (c) The amount allocated under paragraph (b) will be the 215.12 portion of a township's or city's certified levy equal to the 215.13 proportion of (1) the difference between 50 percent of January 215.14 2, 1982, assessed value in the case of a township and 50 percent 215.15 of the January 2, 1980, assessed value in the case of a city and 215.16 its current assessed value to (2) the sum of its current 215.17 assessed value plus the difference determined in (1), provided 215.18 that the amount distributed shall not exceed $55 per capita in 215.19 the case of a township or $75 per capita in the case of a city. 215.20 For purposes of this limitation, population will be determined 215.21 according to the 1980 decennial census conducted by the United 215.22 States Bureau of the Census. If the current assessed value of 215.23 the township exceeds 50 percent of the township's January 2, 215.24 1982, assessed value, or if the current assessed value of the 215.25 city exceeds 50 percent of the city's January 2, 1980, assessed 215.26 value, this paragraph shall not apply. For purposes of this 215.27 paragraph, "assessed value," when used in reference to years 215.28 other than 1980 or 1982, means the appropriate net tax 215.29 capacities multiplied by 10.2. 215.30 Sec. 24. Minnesota Statutes 2000, section 298.28, 215.31 subdivision 4, is amended to read: 215.32 Subd. 4. [SCHOOL DISTRICTS.] (a) 22.28 cents per taxable 215.33 ton plus the increase provided in paragraph (d) must be 215.34 allocated to qualifying school districts to be distributed, 215.35 based upon the certification of the commissioner of revenue, 215.36 under paragraphs (b) and (c), except as otherwise provided in 216.1 paragraph (f). 216.2 (b) 4.46 cents per taxable ton must be distributed to the 216.3 school districts in which the lands from which taconite was 216.4 mined or quarried were located or within which the concentrate 216.5 was produced. The distribution must be based on the 216.6 apportionment formula prescribed in subdivision 2. 216.7 (c)(i) 17.82 cents per taxable ton, less any amount 216.8 distributed under paragraph (e), shall be distributed to a group 216.9 of school districts comprised of those school districts in which 216.10 the taconite was mined or quarried or the concentrate produced 216.11 or in which there is a qualifying municipality as defined by 216.12 section 273.134, paragraph (b), in direct proportion to school 216.13 district indexes as follows: for each school district, its 216.14 pupil units determined under section 126C.05 for the prior 216.15 school year shall be multiplied by the ratio of the average 216.16 adjusted net tax capacity per pupil unit for school districts 216.17 receiving aid under this clause as calculated pursuant to 216.18 chapters 122A, 126C, and 127A for the school year ending prior 216.19 to distribution to the adjusted net tax capacity per pupil unit 216.20 of the district. Each district shall receive that portion of 216.21 the distribution which its index bears to the sum of the indices 216.22 for all school districts that receive the distributions. 216.23 (ii) Notwithstanding clause (i), each school district that 216.24 receives a distribution under sections 298.018; 298.23 to 216.25 298.28, exclusive of any amount received under this clause; 216.26 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 216.27 imposing a tax on severed mineral values that is less than the 216.28 amount of its levy reduction under section 126C.48, subdivision 216.29 8, for the second year prior to the year of the distribution 216.30 shall receive a distribution equal to the difference; the amount 216.31 necessary to make this payment shall be derived from 216.32 proportionate reductions in the initial distribution to other 216.33 school districts under clause (i). 216.34 (d) Any school district described in paragraph (c) where a 216.35 levy increase pursuant to section 126C.17, subdivision 9,iswas 216.36 authorized by referendum for taxes payable in 2001, shall 217.1 receive a distribution from a fund that receives a distribution 217.2 in 1998 of 21.3 cents per ton. On July 15 of 1999, and each 217.3 year thereafter, the increase over the amount established for 217.4 the prior year shall be determined according to the increase in 217.5 the implicit price deflator as provided in section 298.24, 217.6 subdivision 1. Each district shall receivethe product of:217.7(i)$175 times the pupil units identified in section 217.8 126C.05, subdivision 1, enrolled in the second previous year or 217.9 the 1983-1984 school year, whichever is greater, less the 217.10 product of 1.8 percent times the district's taxable net tax 217.11 capacity in the second previous year; times217.12(ii) the lesser of:217.13(A) one, or217.14(B) the ratio of the sum of the amount certified pursuant217.15to section 126C.17, subdivision 6, in the previous year, plus217.16the amount certified pursuant to section 126C.17, subdivision 8,217.17in the previous year, plus the referendum aid according to217.18section 126C.17, subdivision 7, for the current year, plus an217.19amount equal to the reduction under section 126C.17, subdivision217.2012, to the product of 1.8 percent times the district's taxable217.21net tax capacity in the second previous year. 217.22 If the total amount provided by paragraph (d) is 217.23 insufficient to make the payments herein required then the 217.24 entitlement of $175 per pupil unit shall be reduced uniformly so 217.25 as not to exceed the funds available. Any amounts received by a 217.26 qualifying school district in any fiscal year pursuant to 217.27 paragraph (d) shall not be applied to reduce general education 217.28 aid which the district receives pursuant to section 126C.13 or 217.29 the permissible levies of the district. Any amount remaining 217.30 after the payments provided in this paragraph shall be paid to 217.31 the commissioner of iron range resources and rehabilitation who 217.32 shall deposit the same in the taconite environmental protection 217.33 fund and the northeast Minnesota economic protection trust fund 217.34 as provided in subdivision 11. 217.35 Each district receiving money according to this paragraph 217.36 shall reserve $25 times the number of pupil units in the 218.1 district. It may use the money for early childhood programs or 218.2 for outcome-based learning programs that enhance the academic 218.3 quality of the district's curriculum. The outcome-based 218.4 learning programs must be approved by the commissioner of 218.5 children, families, and learning. 218.6 (e) There shall be distributed to any school district the 218.7 amount which the school district was entitled to receive under 218.8 section 298.32 in 1975. 218.9 (f) Effective with the distribution in 2003 and thereafter, 218.10 five percent of the distributions to school districts under 218.11 paragraphs (b), (c), and (e); subdivision 6, paragraph (c); 218.12 subdivision 11; and section 477A.15, shall be distributed to the 218.13 general fund. The remainder shall be distributed to the cities 218.14 and townships within each school district in the proportion that 218.15 their taxable net tax capacity within the school district bears 218.16 to the taxable net tax capacity of the school district for 218.17 property taxes payable in the year prior to distribution. No 218.18 city or township shall receive a distribution greater than its 218.19 levy for taxes payable in the year prior to distribution. 218.20 Sec. 25. Minnesota Statutes 2000, section 298.28, 218.21 subdivision 6, is amended to read: 218.22 Subd. 6. [PROPERTY TAX RELIEF.] (a) In1999, 38.812002 218.23 and thereafter, 35.9 cents per taxable ton, less any amount 218.24 required to be distributed under paragraphs (b) and (c), and 218.25 less any amount required to be deducted under paragraph (d), 218.26 must be allocated to St. Louis county acting as the counties' 218.27 fiscal agent, to be distributed as provided in sections 273.134 218.28 to 273.136. 218.29 (b) If an electric power plant owned by and providing the 218.30 primary source of power for a taxpayer mining and concentrating 218.31 taconite is located in a county other than the county in which 218.32 the mining and the concentrating processes are conducted, .1875 218.33 cent per taxable ton of the tax imposed and collected from such 218.34 taxpayer shall be paid to the county. 218.35 (c) If an electric power plant owned by and providing the 218.36 primary source of power for a taxpayer mining and concentrating 219.1 taconite is located in a school district other than a school 219.2 district in which the mining and concentrating processes are 219.3 conducted, .7282 cent per taxable ton of the tax imposed and 219.4 collected from the taxpayer shall be paid to the school district. 219.5 (d) Two cents per taxable ton must be deducted from the 219.6 amount allocated to the St. Louis county auditor under paragraph 219.7 (a). 219.8 [EFFECTIVE DATE.] This section is effective for 219.9 distributions in 2002 and thereafter. 219.10 Sec. 26. Minnesota Statutes 2000, section 298.28, 219.11 subdivision 7, is amended to read: 219.12 Subd. 7. [IRON RANGE RESOURCES AND REHABILITATION BOARD.] 219.13 For the 1998 distribution, 6.5 cents per taxable ton shall be 219.14 paid to the iron range resources and rehabilitation board for 219.15 the purposes of section 298.22. That amount shall be increased 219.16 in 1999 and subsequent years in the same proportion as the 219.17 increase in the implicit price deflator as provided in section 219.18 298.24, subdivision 1. The amount distributed pursuant to this 219.19 subdivision shall be expended within or for the benefit of a tax 219.20 relief area defined in section 273.134, paragraph (b). No part 219.21 of the fund provided in this subdivision may be used to provide 219.22 loans for the operation of private business unless the loan is 219.23 approved by the governor. 219.24 Sec. 27. Minnesota Statutes 2000, section 298.28, 219.25 subdivision 9a, is amended to read: 219.26 Subd. 9a. [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 219.2715.430.1 cents per ton for distributions in1999, 2000, 2001,219.28and2002 and thereafter must be paid to the taconite economic 219.29 development fund. No distribution shall be made under this 219.30 paragraph in any year in which total industry production falls 219.31 below 30 million tons. 219.32 (b) An amount equal to 50 percent of the tax under section 219.33 298.24 for concentrate sold in the form of pellet chips and 219.34 fines not exceeding 5/16 inch in size and not including crushed 219.35 pellets shall be paid to the taconite economic development 219.36 fund. The amount paid shall not exceed $700,000 annually for 220.1 all companies. If the initial amount to be paid to the fund 220.2 exceeds this amount, each company's payment shall be prorated so 220.3 the total does not exceed $700,000. 220.4 [EFFECTIVE DATE.] This section is effective for 220.5 distribution in 2002 and thereafter upon enactment of section 39. 220.6 Sec. 28. Minnesota Statutes 2000, section 298.28, 220.7 subdivision 10, is amended to read: 220.8 Subd. 10. [INCREASE.] Beginning with distributions in 220.9 2000, theamountsamount determined undersubdivisions 6,220.10paragraph (a), andsubdivision 9 shall be increased in the same 220.11 proportion as the increase in the implicit price deflator as 220.12 provided in section 298.24, subdivision 1. Beginning with 220.13 distributions in 2003, the amount determined under subdivision 220.14 6, paragraph (a), shall be increased in the same proportion as 220.15 the increase in the implicit price deflator as provided in 220.16 section 298.24, subdivision 1. 220.17 The distributions per ton determined under subdivisions 5, 220.18 paragraphs (b) and (d), and 6, paragraph (b), for distribution 220.19 in 1988 and subsequent years shall be the distribution per ton 220.20 determined for distribution in 1987. The distribution per ton 220.21 under subdivision 6, paragraph (c), for distribution in 2000 and 220.22 subsequent years shall be 81 percent of the distribution per ton 220.23 determined for distribution in 1987. 220.24 [EFFECTIVE DATE.] This section is effective for 220.25 distributions in 2002 and thereafter. 220.26 Sec. 29. Minnesota Statutes 2000, section 298.282, 220.27 subdivision 1, is amended to read: 220.28 Subdivision 1. The amount deposited with the county as 220.29 provided in section 298.28, subdivision 3,shallmust be 220.30 distributed as provided by this section,among the 220.31 municipalities comprising a tax relief area under section 220.32 273.134, paragraph (b),as amended hereby,each beingherein220.33 referred to in this section as a qualifying municipality. 220.34 Sec. 30. Minnesota Statutes 2000, section 298.292, 220.35 subdivision 2, is amended to read: 220.36 Subd. 2. [USE OF MONEY.] Money in the northeast Minnesota 221.1 economic protection trust fund may be used for the following 221.2 purposes: 221.3 (1) to provide loans, loan guarantees, interest buy-downs 221.4 and other forms of participation with private sources of 221.5 financing, but a loan to a private enterprise shall be for a 221.6 principal amount not to exceed one-half of the cost of the 221.7 project for which financing is sought, and the rate of interest 221.8 on a loan shall be no less than the lesser of eight percent or 221.9 an interest rate three percentage points less than a full faith 221.10 and credit obligation of the United States government of 221.11 comparable maturity, at the time that the loan is approved; 221.12 (2) to fund reserve accounts established to secure the 221.13 payment when due of the principal of and interest on bonds 221.14 issued pursuant to section 298.2211; 221.15 (3) to pay in periodic payments or in a lump sum payment 221.16 any or all of the interest on bonds issued pursuant to chapter 221.17 474 for the purpose of constructing, converting, or retrofitting 221.18 heating facilities in connection with district heating systems 221.19 or systems utilizing alternative energy sources; and 221.20 (4) to invest in a venture capital fund or enterprise that 221.21 will provide capital to other entities that are engaging in, or 221.22 that will engage in, projects or programs that have the purposes 221.23 set forth in subdivision 1. No investments may be made in a 221.24 venture capital fund or enterprise unless at least two other 221.25 unrelated investors make investments of at least $500,000 in the 221.26 venture capital fund or enterprise, and the investment by the 221.27 northeast Minnesota economic protection trust fund may not 221.28 exceed the amount of the largest investment by an unrelated 221.29 investor in the venture capital fund or enterprise. For 221.30 purposes of this subdivision, an "unrelated investor" is a 221.31 person or entity that is not related to the entity in which the 221.32 investment is made or to any individual who owns more than 40 221.33 percent of the value of the entity, in any of the following 221.34 relationships: spouse, parent, child, sibling, employee, or 221.35 owner of an interest in the entity that exceeds ten percent of 221.36 the value of all interests in it. For purposes of determining 222.1 the limitations under this clause, the amount of investments 222.2 made by an investor other than the northeast Minnesota economic 222.3 protection trust fund is the sum of all investments made in the 222.4 venture capital fund or enterprise during the period beginning 222.5 one year before the date of the investment by the northeast 222.6 Minnesota economic protection trust fund. 222.7 Money from the trust fund shall be expended only in or for 222.8 the benefit of the tax relief area defined in section 273.134, 222.9 paragraph (b). 222.10 Sec. 31. Minnesota Statutes 2000, section 298.293, is 222.11 amended to read: 222.12 298.293 [EXPENDING FUNDS.] 222.13 The funds provided by section 298.28, subdivision 11, 222.14 relating to the northeast Minnesota economic protection trust 222.15 fund, except money expended pursuant to Laws 1982, Second 222.16 Special Session, chapter 2, sections 8 to 14, shall be expended 222.17 only in an amount that does not exceed the sum of the net 222.18 interest, dividends, and earnings arising from the investment of 222.19 the trust for the preceding 12 calendar months from the date of 222.20 the authorization plus, for fiscal year 1983, $10,000,000 from 222.21 the corpus of the fund. The funds may be spent only in or for 222.22 the benefit of those areas that are tax relief areas as defined 222.23 in section 273.134, paragraph (b). If during any year the 222.24 taconite property tax account under sections 273.134 to 273.136 222.25 does not contain sufficient funds to pay the property tax relief 222.26 specified in Laws 1977, chapter 423, article X, section 4, there 222.27 is appropriated from this trust fund to the relief account 222.28 sufficient funds to pay the relief specified in Laws 1977, 222.29 chapter 423, article X, section 4. 222.30 Sec. 32. Minnesota Statutes 2000, section 298.296, 222.31 subdivision 2, is amended to read: 222.32 Subd. 2. [EXPENDITURE OF FUNDS.] Before January 1, 222.3320022003, funds may be expended on projects and for 222.34 administration of the trust fund only from the net interest, 222.35 earnings, and dividends arising from the investment of the trust 222.36 at any time, including net interest, earnings, and dividends 223.1 that have arisen prior to July 13, 1982, plus $10,000,000 made 223.2 available for use in fiscal year 1983, except that any amount 223.3 required to be paid out of the trust fund to provide the 223.4 property tax relief specified in Laws 1977, chapter 423, article 223.5 X, section 4, and to make school bond payments and payments to 223.6 recipients of taconite production tax proceeds pursuant to 223.7 section 298.225, may be taken from the corpus of the trust. 223.8 Additionally, upon recommendation by the board, up to 223.9 $13,000,000 from the corpus of the trust may be made available 223.10 for use as provided in subdivision 4, and up to $10,000,000 from 223.11 the corpus of the trust may be made available for use as 223.12 provided in section 298.2961. On and after January 1,2002223.13 2003, funds may be expended on projects and for administration 223.14 from any assets of the trust. Annual administrative costs, not 223.15 including detailed engineering expenses for the projects, shall 223.16 not exceed five percent of the net interest, dividends, and 223.17 earnings arising from the trust in the preceding fiscal year. 223.18 Principal and interest received in repayment of loans made 223.19 pursuant to this section, and earnings on other investments made 223.20 under section 298.292, subdivision 2, clause (4), shall be 223.21 deposited in the state treasury and credited to the trust. 223.22 These receipts are appropriated to the board for the purposes of 223.23 sections 298.291 to 298.298. 223.24 Sec. 33. Minnesota Statutes 2000, section 298.2961, is 223.25 amended to read: 223.26 298.2961 [PRODUCER GRANTS.] 223.27 Subdivision 1. [APPROPRIATION.] (a) $10,000,000 is 223.28 appropriated from the northeast Minnesota economic protection 223.29 trust fund to a special account in the taconite area 223.30 environmental protection fund for grantsor loansto producers 223.31 on a project-by-project basis as provided in this section. 223.32 (b) The proceeds of the tax designated under section 223.33 298.28, subdivision 9b, are appropriated for grantsand loansto 223.34 producers on a project-by-project basis as provided in this 223.35 section. 223.36 Subd. 2. [PROJECTS; APPROVAL.] (a) Projects funded must be 224.1 for: 224.2 (1) environmentally unique reclamation projects;or224.3 (2) pit or plant repairs, expansions, or modernizations 224.4 other than for a value added iron products plantthat extend the224.5life of the plant; or 224.6 (3) haulage trucks and equipment and mining shovels. 224.7 (b) To be proposed by the board, a project must be approved 224.8 by at least eight iron range resources and rehabilitation board 224.9 members. The money for a project may be spent only upon 224.10 approval of the project by the governor. The board may submit 224.11 supplemental projects for approval at any time. 224.12 (c) The board may require that it receive an equity 224.13 percentage in any project to which it contributes under this 224.14 section. 224.15 Sec. 34. Minnesota Statutes 2000, section 298.298, is 224.16 amended to read: 224.17 298.298 [LONG-RANGE PLAN.] 224.18 Consistent with the policy established in sections 298.291 224.19 to 298.298, the iron range resources and rehabilitation board 224.20 shall prepare and present to the governor and the legislature by 224.21 January 1, 1984 a long-range plan for the use of the northeast 224.22 Minnesota economic protection trust fund for the economic 224.23 development and diversification of the tax relief area defined 224.24 in section 273.134, paragraph (b). The iron range resources and 224.25 rehabilitation board shall, before November 15 of each even 224.26 numbered year, prepare a report to the governor and legislature 224.27 updating and revising this long-range plan and reporting on the 224.28 iron range resources and rehabilitation board's progress on 224.29 those matters assigned to it by law. After January 1, 1984, no 224.30 project shall be approved by the iron range resources and 224.31 rehabilitation board which is not consistent with the goals and 224.32 objectives established in the long-range plan. 224.33 Sec. 35. Minnesota Statutes 2000, section 298.75, 224.34 subdivision 1, is amended to read: 224.35 Subdivision 1. [DEFINITIONS.] Except as may otherwise be 224.36 provided, the following words, when used in this section, shall 225.1 have the meanings herein ascribed to them. 225.2 (1) "Aggregate material" shall mean nonmetallic natural 225.3 mineral aggregate including, but not limited to sand, silica 225.4 sand, gravel,building stone,crushed rock, limestone,and225.5 granite, and borrow, but only if the borrow is transported on a 225.6 public road, street, or highway. Aggregate material shall not 225.7 include dimension stone and dimension granite. Aggregate 225.8 material must be measured or weighed after it has been extracted 225.9 from the pit, quarry, or deposit. 225.10 (2) "Person" shall mean any individual, firm, partnership, 225.11 corporation, organization, trustee, association, or other entity. 225.12 (3) "Operator" shall mean any person engaged in the 225.13 business of removing aggregate material from the surface or 225.14 subsurface of the soil, for the purpose of sale, either directly 225.15 or indirectly, through the use of the aggregate material in a 225.16 marketable product or service. 225.17 (4) "Extraction site" shall mean a pit, quarry, or deposit 225.18 containing aggregate material and any contiguous property to the 225.19 pit, quarry, or deposit which is used by the operator for 225.20 stockpiling the aggregate material. 225.21 (5) "Importer" shall mean any person who buys aggregate 225.22 material produced from a county not listed in paragraph (6) or 225.23 another state and causes the aggregate material to be imported 225.24 into a county in this state which imposes a tax on aggregate 225.25 material. 225.26 (6) "County" shall mean the counties of Pope, Stearns, 225.27 Benton, Sherburne, Carver, Scott, Dakota, Le Sueur, Kittson, 225.28 Marshall, Pennington, Red Lake, Polk, Norman, Mahnomen, Clay, 225.29 Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, 225.30 Sibley, Hennepin, Washington, Chisago, and Ramsey. County also 225.31 means any other county whose board has voted after a public 225.32 hearing to impose the tax under this section and has notified 225.33 the commissioner of revenue of the imposition of the tax. 225.34 [EFFECTIVE DATE.] This section is effective August 1, 2001. 225.35 Sec. 36. Minnesota Statutes 2000, section 298.75, 225.36 subdivision 2, is amended to read: 226.1 Subd. 2. A county shall impose upon every importer and 226.2 operator a production taxequalup to ten cents per cubic yard 226.3 or up to seven cents per ton of aggregate material removed 226.4 except that the county board may decide not to impose this tax 226.5 if it determines that in the previous year operators removed 226.6 less than 20,000 tons or 14,000 cubic yards of aggregate 226.7 material from that county. The tax shall be imposed on 226.8 aggregate material produced in the county when the aggregate 226.9 material is transported from the extraction site or sold. When 226.10 aggregate material is stored in a stockpile within the state of 226.11 Minnesota and a public highway, road or street is not used for 226.12 transporting the aggregate material, the tax shall be imposed 226.13 either when the aggregate material is sold, or when it is 226.14 transported from the stockpile site, or when it is used from the 226.15 stockpile, whichever occurs first. The tax shall be imposed on 226.16 an importer when the aggregate material is imported into the 226.17 county that imposes the tax. 226.18 If the aggregate material is transported directly from the 226.19 extraction site to a waterway, railway, or another mode of 226.20 transportation other than a highway, road or street, the tax 226.21 imposed by this section shall be apportioned equally between the 226.22 county where the aggregate material is extracted and the county 226.23 to which the aggregate material is originally transported. If 226.24 that destination is not located in Minnesota, then the county 226.25 where the aggregate material was extracted shall receive all of 226.26 the proceeds of the tax. 226.27 [EFFECTIVE DATE.] This section is effective for aggregate 226.28 material sold, imported, transported, or used from a stockpile 226.29 after July 31, 2001. 226.30 Sec. 37. Minnesota Statutes 2000, section 471.58, is 226.31 amended to read: 226.32 471.58 [RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS; 226.33 MEMBERSHIP.] 226.34 For the purpose of providing an areawide approach to 226.35 problems which demand coordinated and cooperative actions and 226.36 which are common to those areas of northeast Minnesota affected 227.1 by operations involved in mining iron ore and taconite and 227.2 producing concentrate therefrom, and for the purpose of 227.3 promoting the general welfare and economic development of the 227.4 cities, towns and school districts within the iron ranges area 227.5 of northeast Minnesota, any city, town or school district in 227.6 which the net tax capacity consists in part of iron ore, or 227.7 lands containing taconite or semitaconite or which is located in 227.8 whole or part in the tax relief area defined by section 273.134, 227.9 paragraph (b), may pay annual dues in the range association of 227.10 municipalities and schools. The association may sue, be sued, 227.11 intervene and act in a civil action in which the outcome of the 227.12 action will have an effect upon the interest of any of its 227.13 members. 227.14 Sec. 38. [SPECIAL MUNICIPAL AID FOR TAXES PAYABLE IN 2002 227.15 ONLY.] 227.16 Subdivision 1. [QUALIFYING MUNICIPALITIES.] Municipalities 227.17 wholly or partially contained within a school district within 227.18 the taconite tax relief area defined in Minnesota Statutes, 227.19 section 273.134, paragraph (b), whose levy for taxes payable in 227.20 2001 was reduced under Minnesota Statutes, section 126C.48, 227.21 subdivision 8, are eligible for supplemental aid in calendar 227.22 year 2002 under this section. Each qualifying municipality is 227.23 eligible for aid equal to (i) the amount of the district's levy 227.24 reduction times (ii) the portion of the municipality's taxable 227.25 net tax capacity within the boundaries of the school district, 227.26 divided by (iii) the district's total taxable net tax capacity, 227.27 with all computations based on taxes payable in 2001. The 227.28 commissioner of revenue, in consultation with the commissioner 227.29 of children, families, and learning, shall make all necessary 227.30 calculations to determine the aid amounts under this section. 227.31 Subd. 2. [APPROPRIATION.] The amounts necessary to make 227.32 the payments required under this section are appropriated from 227.33 the taconite property tax relief account to the commissioner of 227.34 revenue in fiscal year 2003. Payments to qualifying 227.35 municipalities shall be made on the dates prescribed in 227.36 Minnesota Statutes, section 477A.015. 228.1 [EFFECTIVE DATE.] This section is effective for aids 228.2 payable in 2002 only. 228.3 Sec. 39. [APPROPRIATION.] 228.4 The commissioner of revenue shall determine a state aid 228.5 amount equal to a tax of 33 cents per taxable ton of iron ore 228.6 concentrates for production year 2001 and 22 cents per taxable 228.7 ton of iron ore concentrates for production years 2002 and 228.8 thereafter. There is appropriated from the general fund to the 228.9 commissioner an amount equal to the state aid determined under 228.10 this section. It must be distributed under Minnesota Statutes, 228.11 section 298.28, as if the aid were production tax revenues. 228.12 ARTICLE 7 228.13 TAX ADMINISTRATION 228.14 Section 1. Minnesota Statutes 2000, section 16D.08, 228.15 subdivision 2, is amended to read: 228.16 Subd. 2. [POWERS.] (a) In addition to the collection 228.17 remedies available to private collection agencies in this state, 228.18 the commissioner, with legal assistance from the attorney 228.19 general, may utilize any statutory authority granted to a 228.20 referring agency for purposes of collecting debt owed to that 228.21 referring agency. The commissioner may also delegate to the 228.22 enterprise the tax collection remedies in sections 270.06, 228.23 clauses (7) and (17), excluding the power to subpoena witnesses; 228.24 270.66; 270.69, excluding subdivisions 7 and 13; 270.70, 228.25 excluding subdivision 14; 270.7001 to 270.72; and 290.92, 228.26 subdivision 23, except that a continuous wage levy under section 228.27 290.92, subdivision 23, is only effective for 70 days, unless no 228.28 competing wage garnishments, executions, or levies are served 228.29 within the 70-day period, in which case a wage levy is 228.30 continuous until a competing garnishment, execution, or levy is 228.31 served in the second or a succeeding 70-day period, in which 228.32 case a continuous wage levy is effective for the remainder of 228.33 that period. A debtor who qualifies for cancellation of 228.34 collection costs under section 16D.11, subdivision 3, clause 228.35 (1), can apply to the commissioner for reduction or release of a 228.36 continuous wage levy, if the debtor establishes that the debtor 229.1 needs all or a portion of the wages being levied upon to pay for 229.2 essential living expenses, such as food, clothing, shelter, 229.3 medical care, or expenses necessary for maintaining employment. 229.4 The commissioner's determination not to reduce or release a 229.5 continuous wage levy is appealable to district court. The word 229.6 "tax" or "taxes" when used in the tax collection statutes listed 229.7 in this subdivision also means debts referred under this chapter. 229.8 (b) For debts other than state taxesor, child support, or 229.9 student loans, before any of the tax collection remedies listed 229.10 in this subdivision can be used, except for the remedies in 229.11 section 270.06, clauses (7) and (17), if the referring agency 229.12 has not already obtained a judgment or filed a lien, the 229.13 commissioner must first obtain a judgment against the debtor. 229.14 For student loans when the referring agency has not obtained a 229.15 judgment or filed a lien, before using the tax collection 229.16 remedies listed in this subdivision, except for the remedies in 229.17 section 270.06, clauses (7) and (17), the commissioner shall 229.18 give the debtor 30 days' notice in writing, which may be served 229.19 in any manner permitted in section 270.68 for service of a 229.20 summons and complaint. The notice must advise the debtor of the 229.21 debtor's right to request that the commissioner commence a court 229.22 action, and that if no such request is made within 30 days after 229.23 service of the notice, the commissioner may use these tax 229.24 collection remedies. If a timely request is made, the 229.25 commissioner shall obtain a judgment before using these tax 229.26 collection remedies. 229.27 [EFFECTIVE DATE.] This section is effective for student 229.28 loans referred to the commissioner for collection on or after 229.29 July 1, 2001. 229.30 Sec. 2. Minnesota Statutes 2000, section 84.922, is 229.31 amended by adding a subdivision to read: 229.32 Subd. 11. [PROOF OF SALES TAX PAYMENT.] A person applying 229.33 for initial registration in Minnesota of an all-terrain vehicle 229.34 shall provide a purchaser's certificate showing a complete 229.35 description of the all-terrain vehicle, the seller's name and 229.36 address, the full purchase price of the all-terrain vehicle, and 230.1 the trade-in allowance, if any. The certificate also must 230.2 include information showing either that (1) the sales and use 230.3 tax under chapter 297A was paid, or (2) the purchase was exempt 230.4 from tax under chapter 297A. The certificate is not required if 230.5 the applicant provides a receipt, invoice, or other document 230.6 that shows the all-terrain vehicle was purchased from a retailer 230.7 maintaining a place of business in this state as defined in 230.8 section 297A.66, subdivision 1. 230.9 [EFFECTIVE DATE.] This section is effective for 230.10 registrations occurring on or after August 1, 2001. 230.11 Sec. 3. Minnesota Statutes 2000, section 144.3831, 230.12 subdivision 2, is amended to read: 230.13 Subd. 2. [COLLECTION AND PAYMENT OF FEE.] The public water 230.14 supply described in subdivision 1 shall: 230.15 (1) collect the fees assessed on its service connections; 230.16 (2) pay the department ofrevenuehealth an amount 230.17 equivalent to the fees based on the total number of service 230.18 connections. The service connections for each public water 230.19 supply described in subdivision 1 shall be verified every four 230.20 years by the department of health; and 230.21 (3) pay one-fourth of the total yearly fee to the 230.22 department ofrevenuehealth each calendar quarter.The first230.23quarterly payment is due on or before September 30, 1992.In 230.24 lieu of quarterly payments, a public water supply described in 230.25 subdivision 1 with fewer than 50 service connections may make a 230.26 single annual payment by June 30 each year, starting in 1993. 230.27 The fees payable to the department ofrevenuehealth shall be 230.28 deposited in the state treasury as nondedicated state government 230.29 special revenue fund revenues. 230.30 [EFFECTIVE DATE.] This section is effective the day 230.31 following final enactment. 230.32 Sec. 4. Minnesota Statutes 2000, section 270.06, is 230.33 amended to read: 230.34 270.06 [POWERS AND DUTIES.] 230.35 The commissioner of revenue shall: 230.36 (1) have and exercise general supervision over the 231.1 administration of the assessment and taxation laws of the state, 231.2 over assessors, town, county, and city boards of review and 231.3 equalization, and all other assessing officers in the 231.4 performance of their duties, to the end that all assessments of 231.5 property be made relatively just and equal in compliance with 231.6 the laws of the state; 231.7 (2) confer with, advise, and give the necessary 231.8 instructions and directions to local assessors and local boards 231.9 of review throughout the state as to their duties under the laws 231.10 of the state; 231.11 (3) direct proceedings, actions, and prosecutions to be 231.12 instituted to enforce the laws relating to the liability and 231.13 punishment of public officers and officers and agents of 231.14 corporations for failure or negligence to comply with the 231.15 provisions of the laws of this state governing returns of 231.16 assessment and taxation of property, and cause complaints to be 231.17 made against local assessors, members of boards of equalization, 231.18 members of boards of review, or any other assessing or taxing 231.19 officer, to the proper authority, for their removal from office 231.20 for misconduct or negligence of duty; 231.21 (4) require county attorneys to assist in the commencement 231.22 of prosecutions in actions or proceedings for removal, 231.23 forfeiture and punishment for violation of the laws of this 231.24 state in respect to the assessment and taxation of property in 231.25 their respective districts or counties; 231.26 (5) require town, city, county, and other public officers 231.27 to report information as to the assessment of property, 231.28 collection of taxes received from licenses and other sources, 231.29 and such other information as may be needful in the work of the 231.30 department of revenue, in such form and upon such blanks as the 231.31 commissioner may prescribe; 231.32 (6) require individuals, copartnerships, companies, 231.33 associations, and corporations to furnish information concerning 231.34 their capital, funded or other debt, current assets and 231.35 liabilities, earnings, operating expenses, taxes, as well as all 231.36 other statements now required by law for taxation purposes; 232.1 (7) subpoena witnesses, at a time and place reasonable 232.2 under the circumstances, to appear and give testimony, and to 232.3 produce books, records, papers and documents for inspection and 232.4 copying relating to any matter which the commissioner may have 232.5 authority to investigate or determine; 232.6 (8) issue a subpoena which does not identify the person or 232.7 persons with respect to whose liability the subpoena is issued, 232.8 but only if (a) the subpoena relates to the investigation of a 232.9 particular person or ascertainable group or class of persons, 232.10 (b) there is a reasonable basis for believing that such person 232.11 or group or class of persons may fail or may have failed to 232.12 comply with any law administered by the commissioner, (c) the 232.13 information sought to be obtained from the examination of the 232.14 records (and the identity of the person or persons with respect 232.15 to whose liability the subpoena is issued) is not readily 232.16 available from other sources, (d) the subpoena is clear and 232.17 specific as to the information sought to be obtained, and (e) 232.18 the information sought to be obtained is limited solely to the 232.19 scope of the investigation. Provided further that the party 232.20 served with a subpoena which does not identify the person or 232.21 persons with respect to whose tax liability the subpoena is 232.22 issued shall have the right, within 20 days after service of the 232.23 subpoena, to petition the district court for the judicial 232.24 district in which lies the county in which that party is located 232.25 for a determination as to whether the commissioner of revenue 232.26 has complied with all the requirements in (a) to (e), and thus, 232.27 whether the subpoena is enforceable. If no such petition is 232.28 made by the party served within the time prescribed, the 232.29 subpoena shall have the force and effect of a court order; 232.30 (9) cause the deposition of witnesses residing within or 232.31 without the state, or absent therefrom, to be taken, upon notice 232.32 to the interested party, if any, in like manner that depositions 232.33 of witnesses are taken in civil actions in the district court, 232.34 in any matter which the commissioner may have authority to 232.35 investigate or determine; 232.36 (10) investigate the tax laws of other states and countries 233.1 and to formulate and submit to the legislature such legislation 233.2 as the commissioner may deem expedient to prevent evasions of 233.3 assessment and taxing laws, and secure just and equal taxation 233.4 and improvement in the system of assessment and taxation in this 233.5 state; 233.6 (11) consult and confer with the governor upon the subject 233.7 of taxation, the administration of the laws in regard thereto, 233.8 and the progress of the work of the department of revenue, and 233.9 furnish the governor, from time to time, such assistance and 233.10 information as the governor may require relating to tax matters; 233.11 (12) transmit to the governor, on or before the third 233.12 Monday in December of each even-numbered year, and to each 233.13 member of the legislature, on or before November 15 of each 233.14 even-numbered year, the report of the department of revenue for 233.15 the preceding years, showing all the taxable property in the 233.16 state and the value of the same, in tabulated form; 233.17 (13) inquire into the methods of assessment and taxation 233.18 and ascertain whether the assessors faithfully discharge their 233.19 duties, particularly as to their compliance with the laws 233.20 requiring the assessment of all property not exempt from 233.21 taxation; 233.22 (14) administer and enforce the assessment and collection 233.23 of state taxes and fees, including the use of any remedy 233.24 available to nongovernmental creditors, and, from time to time, 233.25 make, publish, and distribute rules for the administration and 233.26 enforcement of assessments and fees administered by the 233.27 commissioner and state tax laws. The rules have the force of 233.28 law; 233.29 (15) prepare blank forms for the returns required by state 233.30 tax law and distribute them throughout the state, furnishing 233.31 them subject to charge on application; 233.32 (16) prescribe rules governing the qualification and 233.33 practice of agents, attorneys, or other persons representing 233.34 taxpayers before the commissioner. The rules may require that 233.35 those persons, agents, and attorneys show that they are of good 233.36 character and in good repute, have the necessary qualifications 234.1 to give taxpayers valuable services, and are otherwise competent 234.2 to advise and assist taxpayers in the presentation of their case 234.3 before being recognized as representatives of taxpayers. After 234.4 due notice and opportunity for hearing, the commissioner may 234.5 suspend anddisbarbar from further practice before the 234.6 commissioner any person, agent, or attorney who is shown to be 234.7 incompetent or disreputable, who refuses to comply with the 234.8 rules, or who with intent to defraud, willfully or knowingly 234.9 deceives, misleads, or threatens a taxpayer or prospective 234.10 taxpayer, by words, circular, letter, or by advertisement. This 234.11 clause does not curtail the rights of individuals to appear in 234.12 their own behalf or partners or corporations' officers to appear 234.13 in behalf of their respective partnerships or corporations; 234.14 (17) appoint agents as the commissioner considers necessary 234.15 to make examinations and determinations. The agents have the 234.16 rights and powers conferred on the commissioner to subpoena, 234.17 examine, and copy books, records, papers, or memoranda, subpoena 234.18 witnesses, administer oaths and affirmations, and take 234.19 testimony. In addition to administrative subpoenas of the 234.20 commissioner and the agents, upon demand of the commissioner or 234.21 an agent, the court administrator of any district court shall 234.22 issue a subpoena for the attendance of a witness or the 234.23 production of books, papers, records, or memoranda before the 234.24 agent for inspection and copying. Disobedience of a court 234.25 administrator's subpoena shall be punished by the district court 234.26 of the district in which the subpoena is issued, or in the case 234.27 of a subpoena issued by the commissioner or an agent, by the 234.28 district court of the district in which the party served with 234.29 the subpoena is located, in the same manner as contempt of the 234.30 district court; 234.31 (18) appoint and employ additional help, purchase supplies 234.32 or materials, or incur other expenditures in the enforcement of 234.33 state tax laws as considered necessary. The salaries of all 234.34 agents and employees provided for in this chapter shall be fixed 234.35 by the appointing authority, subject to the approval of the 234.36 commissioner of administration; 235.1 (19) execute and administer any agreement with the 235.2 secretary of the treasury of the United States or a 235.3 representative of another state regarding the exchange of 235.4 information and administration of the tax laws; 235.5 (20) administer and enforce the provisions of sections 235.6 325D.30 to 325D.42, the Minnesota Unfair Cigarette Sales Act; 235.7 (21) authorize the use of unmarked motor vehicles to 235.8 conduct seizures or criminal investigations pursuant to the 235.9 commissioner's authority; and 235.10 (22) exercise other powers and perform other duties 235.11 required of or imposed upon the commissioner of revenue by law. 235.12 [EFFECTIVE DATE.] This section is effective the day 235.13 following final enactment. 235.14 Sec. 5. Minnesota Statutes 2000, section 270.60, is 235.15 amended by adding a subdivision to read: 235.16 Subd. 5. [FEES; APPROPRIATION.] (a) The commissioner may 235.17 enter into an agreement with the governing body of any federally 235.18 recognized Indian reservation in Minnesota concerning fees 235.19 administered by the commissioner that are paid by the tribe, 235.20 members of the tribe, or persons who conduct business with the 235.21 tribe, or otherwise imposed on on-reservation activities. The 235.22 agreement may provide for the refund or sharing of the fee. The 235.23 commissioner may make any payments required by the agreement 235.24 from the fees collected. 235.25 (b) Each head of an agency, board, or other governmental 235.26 entity that administers a program that is funded by fees 235.27 administered by the commissioner may sign an agreement entered 235.28 into by the commissioner under this subdivision. An agreement 235.29 is not valid until signed by the head of each agency, board, or 235.30 other governmental entity that administers a program funded by 235.31 the particular fee covered in an agreement and by the 235.32 commissioner of revenue. 235.33 (c) There is annually appropriated to the commissioner of 235.34 revenue from the funds for which the fees are collected the 235.35 amounts necessary to make payments as provided in this 235.36 subdivision. 236.1 [EFFECTIVE DATE.] This section is effective the day 236.2 following final enactment and applies to all fees administered 236.3 by the commissioner of revenue for which timely claims for 236.4 refund have been, or can be, filed. 236.5 Sec. 6. Minnesota Statutes 2000, section 270.70, 236.6 subdivision 13, is amended to read: 236.7 Subd. 13. [LEVY AND SALE BY SHERIFF.] If any tax payable 236.8 to the commissioner of revenue or to the department of revenue 236.9 is not paid as provided in subdivision 2, the commissioner may,236.10within five years after the date of assessment of the236.11tax, within the time periods provided in subdivision 1 for 236.12 collection of taxes, delegate the authority granted by 236.13 subdivision 1, by means of issuing a warrant to the sheriff of 236.14 any county of the state commanding the sheriff, as agent for the 236.15 commissioner, to levy upon and sell the real and personal 236.16 property of the person liable for the payment or collection of 236.17 the tax and to levy upon the rights to property of that person 236.18 within the county, or to levy upon and seize any property within 236.19 the county on which there is a lien provided in section 270.69, 236.20 and to return the warrant to the commissioner and pay to the 236.21 commissioner the money collected by virtue thereof by a time to 236.22 be therein specified not less than 60 days from the date of the 236.23 warrant. The sheriff shall proceed thereunder to levy upon and 236.24 seize any property of the person and to levy upon the rights to 236.25 property of the person within the county (except the person's 236.26 homestead or that property which is exempt from execution 236.27 pursuant to section 550.37), or to levy upon and seize any 236.28 property within the county on which there is a lien provided in 236.29 section 270.69. For purposes of the preceding sentence, the 236.30 term "tax" shall include any penalty, interest and costs 236.31 properly payable. The sheriff shall then sell so much of the 236.32 property levied upon as is required to satisfy the taxes, 236.33 interest, and penalties, together with the sheriff's costs; but 236.34 the sales, and the time and manner of redemption therefrom, 236.35 shall, to the extent not provided in sections 270.701 to 236.36 270.709, be governed by chapter 550. The proceeds of the sales, 237.1 less the sheriff's costs, shall be turned over to the 237.2 commissioner, who shall then apply the proceeds as provided in 237.3 section 270.708. 237.4 [EFFECTIVE DATE.] This section is effective the day 237.5 following final enactment for all taxes for which issuance of a 237.6 warrant under this subdivision has not been barred as of that 237.7 date. 237.8 Sec. 7. Minnesota Statutes 2000, section 270.73, 237.9 subdivision 1, is amended to read: 237.10 Subdivision 1. [POSTING, NOTICE.] Pursuant to the 237.11 authority to disclose under section 270B.12, subdivision 4, the 237.12 commissioner shall, by the 15th of each month, submit to the 237.13 commissioner of public safety a list of all taxpayers who are 237.14 required to pay, withhold, or collect the tax imposed by section 237.15 290.02, 290.0922, 290.92, 290.9727, 290.9728, 290.9729, or 237.16 297A.02, or local sales and use tax payable to the commissioner 237.17 of revenue, or a local option tax administered and collected by 237.18 the commissioner of revenue, and who are ten days or more 237.19 delinquent in either filing a tax return or paying the tax. 237.20 The commissioner of revenue is under no obligation to list 237.21 a taxpayer whose business is inactive. At least ten days before 237.22 notifying the commissioner of public safety, the commissioner of 237.23 revenue shall notify the taxpayer of the intended action. 237.24 The commissioner of public safety shall post the list in 237.25 the same manner as provided in section 340A.318, subdivision 3. 237.26 The list will prominently show the date of posting. If a 237.27 taxpayer previously listed files all returns and pays all taxes 237.28 then due, the commissioner shall notify the commissioner of 237.29 public safety within two business days. 237.30 [EFFECTIVE DATE.] This section is effective for lists 237.31 submitted to the commissioner of public safety on or after the 237.32 day following final enactment. 237.33 Sec. 8. Minnesota Statutes 2000, section 270A.03, 237.34 subdivision 5, is amended to read: 237.35 Subd. 5. [DEBT.] "Debt" means a legal obligation of a 237.36 natural person to pay a fixed and certain amount of money, which 238.1 equals or exceeds $25 and which is due and payable to a claimant 238.2 agency. The term includes criminal fines imposed under section 238.3 609.10 or 609.125 and restitution. A debt may arise under a 238.4 contractual or statutory obligation, a court order, or other 238.5 legal obligation, but need not have been reduced to judgment. 238.6 A debt includes any legal obligation of a current recipient 238.7 of assistance which is based on overpayment of an assistance 238.8 grant where that payment is based on a client waiver or an 238.9 administrative or judicial finding of an intentional program 238.10 violation; or where the debt is owed to a program wherein the 238.11 debtor is not a client at the time notification is provided to 238.12 initiate recovery under this chapter and the debtor is not a 238.13 current recipient of food stamps, transitional child care, or 238.14 transitional medical assistance. 238.15 A debt does not include any legal obligation to pay a 238.16 claimant agency for medical care, including hospitalization if 238.17 the income of the debtor at the time when the medical care was 238.18 rendered does not exceed the following amount: 238.19 (1) for an unmarried debtor, an income of$6,400$8,800 or 238.20 less; 238.21 (2) for a debtor with one dependent, an income 238.22 of$8,200$11,270 or less; 238.23 (3) for a debtor with two dependents, an income 238.24 of$9,700$13,330 or less; 238.25 (4) for a debtor with three dependents, an income of 238.26$11,000$15,120 or less; 238.27 (5) for a debtor with four dependents, an income 238.28 of$11,600$15,950 or less; and 238.29 (6) for a debtor with five or more dependents, an income of 238.30$12,100$16,630 or less. 238.31 The income amounts in this subdivision shall be adjusted 238.32 for inflation for debts incurred in calendar years19912001 and 238.33 thereafter. The dollar amount of each income level that applied 238.34 to debts incurred in the prior year shall be increased in the 238.35 same manner as provided in section290.06, subdivision 2d, for238.36the expansion of the tax rate brackets1f of the Internal 239.1 Revenue Code of 1986, as amended through December 31, 2000, 239.2 except that for the purposes of this subdivision the percentage 239.3 increase shall be determined from the year starting September 1, 239.4 1999, and ending August 31, 2000, as the base year for adjusting 239.5 for inflation for debts incurred after December 31, 2000. 239.6 Debt also includes an agreement to pay a MinnesotaCare 239.7 premium, regardless of the dollar amount of the premium 239.8 authorized under section 256L.15, subdivision 1a. 239.9 [EFFECTIVE DATE.] This section is effective for debts 239.10 incurred after December 31, 2000. 239.11 Sec. 9. Minnesota Statutes 2000, section 270A.11, is 239.12 amended to read: 239.13 270A.11 [DATA PRIVACY.] 239.14 Private and confidential data on individuals may be 239.15 exchanged among the department, the taxpayer's rights advocate, 239.16 the attorney general, the claimant agency, and the debtor as 239.17 necessary to accomplish and effectuate the intent of sections 239.18 270A.01 to 270A.12, as provided by section 13.05, subdivision 4, 239.19 clause (b). The department may disclose to the claimant agency 239.20 only the debtor's name, address, social security number and the 239.21 amount of the refund, and in the case of a joint return, the 239.22 name of the debtor's spouse. Any person employed by, or 239.23 formerly employed by, a claimant agency who discloses any such 239.24 information for any other purpose, shall be subject to the civil 239.25 and criminal penalties of section 270B.18. Data collected by 239.26 the department from claimant agencies relating to claims filed 239.27 under this chapter are private data on individuals. 239.28 [EFFECTIVE DATE.] This section is effective the day 239.29 following final enactment. 239.30 Sec. 10. Minnesota Statutes 2000, section 270B.02, 239.31 subdivision 2, is amended to read: 239.32 Subd. 2. [PROTECTED NONPUBLIC DATA.] The following are 239.33 protected nonpublic data as defined in section 13.02, 239.34 subdivision 13: 239.35 (1) criteria for determining which computer processed 239.36 returns are selected for audit; 240.1 (2) criteria for determining which returns are selected for 240.2 an in-depth audit;and240.3 (3) criteria for determining which accounts receivable 240.4 balances below a stated amount are written off or canceled; and 240.5 (4) criteria or information used in determining which 240.6 alleged criminal violations of any law administered by the 240.7 commissioner are selected for criminal investigation. 240.8 [EFFECTIVE DATE.] This section is effective the day 240.9 following final enactment. 240.10 Sec. 11. Minnesota Statutes 2000, section 270B.02, 240.11 subdivision 3, is amended to read: 240.12 Subd. 3. [CONFIDENTIAL DATA ON INDIVIDUALS; PROTECTED 240.13 NONPUBLIC DATA.] (a) Except as provided in paragraph (b), the 240.14 name or existence of an informer, informer letters, and other 240.15unsoliciteddata, in whatever form, given to the department of 240.16 revenue by a person, other than the data subject, who informs 240.17 that a specific taxpayer is not or may not be in compliance with 240.18 tax laws, or nontax laws administered by the department of 240.19 revenue, including laws not listed in section 270B.01, 240.20 subdivision 8, are confidential data on individuals or protected 240.21 nonpublic data as defined in section 13.02, subdivisions 3 and 240.22 13. 240.23 (b) Data under paragraph (a) may be disclosed with the 240.24 consent of the informer or upon a written finding by a court 240.25 that the information provided by the informer was false and that 240.26 there is evidence that the information was provided in bad 240.27 faith. This subdivision does not alter disclosure 240.28 responsibilities or obligations under the rules of criminal 240.29 procedure. 240.30 [EFFECTIVE DATE.] This section is effective the day 240.31 following final enactment. 240.32 Sec. 12. Minnesota Statutes 2000, section 270B.03, 240.33 subdivision 6, is amended to read: 240.34 Subd. 6. [INVESTIGATIVE DATA.] For purposes of any law 240.35 administered by the department of revenue, including laws not 240.36 listed in section 270B.01, subdivision 8, investigative data 241.1 collected or created by the department of revenue in order to 241.2 prepare a case against a person, whether known or unknown, for 241.3 the commission of a crime is confidential or protected nonpublic 241.4 during an investigation. When the investigation becomes 241.5 inactive, as defined in section 13.82, subdivision 5, the 241.6classifications otherwise applicable under any other laws become241.7effectivedata is private or nonpublic. 241.8 [EFFECTIVE DATE.] This section is effective the day 241.9 following final enactment. 241.10 Sec. 13. Minnesota Statutes 2000, section 272.02, 241.11 subdivision 10, is amended to read: 241.12 Subd. 10. [PERSONAL PROPERTY USED FOR POLLUTION CONTROL.] 241.13 Personal property used primarily for the abatement and control 241.14 of air, water, or land pollution is exempt to the extent that it 241.15 is so used, and real property is exempt if it is used primarily 241.16 for abatement and control of air, water, or land pollution as 241.17 part of an agricultural operation, as a part of a centralized 241.18 treatment and recovery facility operating under a permit issued 241.19 by the Minnesota pollution control agency pursuant to chapters 241.20 115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 241.21 and 7045.0020 to 7045.1260, as a wastewater treatment facility 241.22 and for the treatment, recovery, and stabilization of metals, 241.23 oils, chemicals, water, sludges, or inorganic materials from 241.24 hazardous industrial wastes, or as part of an electric 241.25 generation system. For purposes of this subdivision, personal 241.26 property includes ponderous machinery and equipment used in a 241.27 business or production activity that at common law is considered 241.28 real property. 241.29 Any taxpayer requesting exemption of all or a portion of 241.30 any real property or any equipment or device, or part thereof, 241.31 operated primarily for the control or abatement of airor, 241.32 water, or land pollution shall file an application with the 241.33 commissioner of revenue.The equipment or device shall meet241.34standards, rules, or criteria prescribed by the Minnesota241.35pollution control agency, and must be installed or operated in241.36accordance with a permit or order issued by that agency.The 242.1 Minnesota pollution control agency shall upon request of the 242.2 commissioner furnish informationorand advice to the 242.3 commissioner. 242.4 The information and advice furnished by the Minnesota 242.5 pollution control agency must include statements as to whether 242.6 the equipment, device, or real property meets a standard, rule, 242.7 criteria, guideline, policy, or order of the Minnesota pollution 242.8 control agency, and whether the equipment, device, or real 242.9 property is installed or operated in accordance with it. On 242.10 determining that property qualifies for exemption, the 242.11 commissioner shall issue an order exempting the property from 242.12 taxation. The equipmentor, device, or real property shall 242.13 continue to be exempt from taxation as long as thepermitorder 242.14 issued by theMinnesota pollution control agencycommissioner 242.15 remains in effect. 242.16 [EFFECTIVE DATE.] This section is effective for exemption 242.17 applications received on or after August 1, 2001. 242.18 Sec. 14. Minnesota Statutes 2000, section 273.061, 242.19 subdivision 1, is amended to read: 242.20 Subdivision 1. [OFFICE CREATED; APPOINTMENT, 242.21 QUALIFICATIONS.] Every county in this state shall have a county 242.22 assessor. The county assessor shall be appointed by the board 242.23 of county commissioners. The assessor shall be selected and 242.24 appointed because of knowledge and training in the field of 242.25 property taxation and appointment shall be approved by the 242.26 commissioner of revenue before the same shall become effective. 242.27 Upon receipt by the county commissioners of the commissioner of 242.28 revenue's refusal to approve an appointment, the term of the 242.29 appointee shall terminate at the end of that day. 242.30 The commissioner of revenue may grant approval on a 242.31 probationary basis for a period of two years. The commissioner 242.32 must base the decision to impose a probationary period on 242.33 objective and consistent criteria. At the end of the two-year 242.34 probationary period, the commissioner may either refuse to 242.35 approve the person's appointment for the remainder of the 242.36 person's four-year term, approve the person's appointment but 243.1 only for another two-year probationary period, or 243.2 unconditionally approve the person's appointment for the 243.3 remainder of the four-year term for which the person was 243.4 originally appointed by the county board. The criteria shall 243.5 not be considered rules and are not subject to the 243.6 Administrative Procedure Act. 243.7 Notwithstanding any law to the contrary, a county assessor 243.8 must have senior accreditation from the state board of assessors 243.9 by January 1, 1992, or within two years of the assessor's first 243.10 appointment under this section, whichever is later. 243.11 [EFFECTIVE DATE.] This section is effective the day 243.12 following final enactment. 243.13 Sec. 15. Minnesota Statutes 2000, section 273.061, 243.14 subdivision 2, is amended to read: 243.15 Subd. 2. [TERM; VACANCY.] (a) The terms of county 243.16 assessors appointed under this section shall be four years. A 243.17 new term shall begin on January 1 of every fourth year after 243.18 1973. When any vacancy in the office occurs, the board of 243.19 county commissioners, within3090 days thereafter, shall fill 243.20 the same by appointment for the remainder of the term, following 243.21 the procedure prescribed in subdivision 1. The term of the 243.22 county assessor may be terminated by the board of county 243.23 commissioners at any time, on charges ofinefficiency or neglect243.24of dutymalfeasance, misfeasance, or nonfeasance by the 243.25 commissioner of revenue. If the board of county commissioners 243.26 does not intend to reappoint a county assessor who has been 243.27 certified by the state board of assessors, the board shall 243.28 present written notice to the county assessor not later than 90 243.29 days prior to the termination of the assessor's term, that it 243.30 does not intend to reappoint the assessor. If written notice is 243.31 not timely made, the county assessor will automatically be 243.32 reappointed by the board of county commissioners. 243.33 The commissioner of revenue may recommend to the state 243.34 board of assessors the nonrenewal, suspension, or revocation of 243.35 an assessor's license as provided in sections 270.41 to 270.53. 243.36 (b) In the event of a vacancy in the office of county 244.1 assessor, through death, resignation or other reasons, the 244.2 deputy (or chief deputy, if more than one) shall perform the 244.3 functions of the office. If there is no deputy, the county 244.4 auditor shall designate a person to perform the duties of the 244.5 office until an appointment is made as provided in clause (a). 244.6 Such person shall perform the duties of the office for a period 244.7 not exceeding3090 days during which the county board must 244.8 appoint a county assessor. Such30-day90-day period may, 244.9 however, be extended by written approval of the commissioner of 244.10 revenue. 244.11 (c) In the case of the first appointment under paragraph 244.12 (a) of a county assessor who is accredited but who does not have 244.13 senior accreditation, an approval of the appointment by the 244.14 commissioner shall be provisional, provided that a county 244.15 assessor appointed to a provisional term under this paragraph 244.16 must reapply to the commissioner at the end of the provisional 244.17 term. A provisional term may not exceed two years. The 244.18 commissioner shall not approve the appointment for the remainder 244.19 of the four-year term unless the assessor has obtained senior 244.20 accreditation. 244.21 [EFFECTIVE DATE.] This section is effective the day 244.22 following final enactment. 244.23 Sec. 16. Minnesota Statutes 2000, section 273.072, 244.24 subdivision 1, is amended to read: 244.25 Subdivision 1. Any county and any city or town lying 244.26 wholly or partially within the county and constituting a 244.27 separate assessment district may, by agreement entered into 244.28 under section 471.59and approved by the commissioner of244.29revenue, provide for the assessment of property in the 244.30 municipality or town by the county assessor. Any two or more 244.31 cities or towns constituting separate assessment districts,244.32whether their assessors are elective or appointive,may enter 244.33 into an agreement under section 471.59 for the assessment of 244.34 property in the contracting units by the assessor of one of the 244.35 units or by an assessor who is jointly employed. 244.36 [EFFECTIVE DATE.] This section is effective the day 245.1 following final enactment. 245.2 Sec. 17. [273.0755] [TRAINING AND EDUCATION OF PROPERTY 245.3 TAX PERSONNEL.] 245.4 (a) Beginning with the four-year period starting on July 1, 245.5 2000, every person licensed by the state board of assessors at 245.6 the Accredited Minnesota Assessor level or higher, shall 245.7 successfully complete a week-long Minnesota laws course 245.8 sponsored by the department of revenue at least once in every 245.9 four-year period. An assessor need not attend the course if 245.10 they successfully pass the test for the course. 245.11 (b) The commissioner of revenue may require that each 245.12 county, and each city for which the city assessor performs the 245.13 duties of county assessor, have (i) a person on the assessor's 245.14 staff who is certified by the department of revenue in sales 245.15 ratio calculations, (ii) an officer or employee who is certified 245.16 by the department of revenue in tax calculations, and (iii) an 245.17 officer or employee who is certified by the department of 245.18 revenue in the proper preparation of abstracts of assessment. 245.19 The commissioner of revenue may require that each county have an 245.20 officer or employee who is certified by the department of 245.21 revenue in the proper preparation of abstracts of tax lists. 245.22 [EFFECTIVE DATE.] This section is effective July 1, 2001, 245.23 and thereafter. 245.24 Sec. 18. Minnesota Statutes 2000, section 273.1104, 245.25 subdivision 2, is amended to read: 245.26 Subd. 2. [NOTICE OF MARKET VALUE.] On or before May 1 in 245.27 each year, the commissioner shall send to each person subject to 245.28 the tax on unmined iron ores and to each taxing district 245.29 affected, a notice of the market value of the unmined ores as 245.30 determined by the commissionerprior to adjustment under245.31subdivision 1. Said notice shall be sent by mail directed to 245.32 such person at the address given in the report filed and the 245.33 assessor of such taxing district, but the validity of the tax 245.34 shall not be affected by the failure of the commissioner of 245.35 revenue to mail such notice or the failure of the person subject 245.36 to the tax to receive it. 246.1 On the first secular day following May 20, the commissioner 246.2 of revenue shall hold a hearing which may be adjourned from day 246.3 to day. All relevant and material evidence having probative 246.4 value with respect to the issues shall be submitted at the 246.5 hearing and such hearing shall not be a "contested case" within 246.6 the meaning of section 14.02, subdivision 3. Every person 246.7 subject to such tax may at such hearing present evidence and 246.8 argument on any matter bearing upon the validity or correctness 246.9 of the tax determined to be due, and the commissioner of revenue 246.10 shall review the determination of such tax. 246.11 [EFFECTIVE DATE.] This section is effective the day 246.12 following final enactment. 246.13 Sec. 19. Minnesota Statutes 2000, section 273.111, 246.14 subdivision 4, is amended to read: 246.15 Subd. 4. [DETERMINATION OF VALUE.] The value of any real 246.16 estate described in subdivision 3 shall upon timely application 246.17 by the owner, in the manner provided in subdivision 8, be 246.18 determined solely with reference to its appropriate agricultural 246.19 classification and value notwithstanding sections 272.03, 246.20 subdivision 8, and 273.11. In determining the value for ad 246.21 valorem tax purposes, the assessor shall use sales dataobtained246.22fromfor agricultural lands located outside the seven 246.23 metropolitan countiesbut within the region used for computing246.24the range of values under section 273.11, subdivision 10. The246.25sales shall havehaving similar soil types, number of degree 246.26 days, and other similar agricultural characteristicsas246.27contained in section 273.11, subdivision 10. Furthermore, the 246.28 assessor shall not consider any added values resulting from 246.29 nonagricultural factors. 246.30 [EFFECTIVE DATE.] This section is effective the day 246.31 following final enactment. 246.32 Sec. 20. Minnesota Statutes 2000, section 273.121, is 246.33 amended to read: 246.34 273.121 [VALUATION OF REAL PROPERTY, NOTICE.] 246.35 Any county assessor or city assessor having the powers of a 246.36 county assessor, valuing or classifying taxable real property 247.1 shall in each year notify those persons whose property is to be 247.2assessed or reclassifiedincluded on the assessment roll that 247.3 year if the person's address is known to the assessor, otherwise 247.4 the occupant of the property. The notice shall be in writing 247.5 and shall be sent by ordinary mail at least ten days before the 247.6 meeting of the local board ofreview orappeal and equalization 247.7 under section 274.01 or the review process established under 247.8 section 274.13, subdivision 1c. It shall contain: (1) the 247.9 market value for the current and prior assessment, (2) the 247.10 limited market value under section 273.11, subdivision 1a for 247.11 the current and prior assessment, (3) the qualifying amount of 247.12 any improvements under section 273.11, subdivision 16 for the 247.13 current assessment, (4) the market value subject to taxation 247.14 after subtracting the amount of any qualifying improvements for 247.15 the current assessment, (5) thenewclassification of the 247.16 property for the current and prior assessment, (6) a note that 247.17 if the property is homestead and at least 35 years old, 247.18 improvements made to the property may be eligible for a 247.19 valuation exclusion under section 273.11, subdivision 16, (7) 247.20 the assessor's office address, and (8) the dates, places, and 247.21 times set for the meetings of the local board ofreview or247.22 appeal and equalization, the review process established under 247.23 section 274.13, subdivision 1c, and the county board of appeal 247.24 and equalization.If the assessment roll is not complete, the247.25notice shall be sent by ordinary mail at least ten days prior to247.26the date on which the board of review has adjournedThe 247.27 commissioner of revenue shall specify the form of the notice. 247.28 The assessor shall attach to the assessment roll a statement 247.29 that the notices required by this section have been mailed. Any 247.30 assessor who is not provided sufficient funds from the 247.31 assessor's governing body to provide such notices, may make 247.32 application to the commissioner of revenue to finance such 247.33 notices. The commissioner of revenue shall conduct an 247.34 investigation and, if satisfied that the assessor does not have 247.35 the necessary funds, issue a certification to the commissioner 247.36 of finance of the amount necessary to provide such notices. The 248.1 commissioner of finance shall issue a warrant for such amount 248.2 and shall deduct such amount from any state payment to such 248.3 county or municipality. The necessary funds to make such 248.4 payments are hereby appropriated. Failure to receive the notice 248.5 shall in no way affect the validity of the assessment, the 248.6 resulting tax, the procedures of any board of review or 248.7 equalization, or the enforcement of delinquent taxes by 248.8 statutory means. 248.9 [EFFECTIVE DATE.] This section is effective for notices 248.10 required to be mailed in 2002 and thereafter. 248.11 Sec. 21. Minnesota Statutes 2000, section 274.01, 248.12 subdivision 1, is amended to read: 248.13 Subdivision 1. [ORDINARY BOARD; MEETINGS, DEADLINES, 248.14 GRIEVANCES.] (a) The town board of a town, or the council or 248.15 other governing body of a city, is the board ofreviewappeal 248.16 and equalization except (1) in cities whose charters provide for 248.17 a board of equalization or (2) in any city or town that has 248.18 transferred its local board of review power and duties to the 248.19 county board as provided in subdivision 3. The county assessor 248.20 shall fix a day and time when the board or the board of 248.21 equalization shall meet in the assessment districts of the 248.22 county. Notwithstanding any law or city charter to the 248.23 contrary, a city board of equalization shall be referred to as a 248.24 board of appeal and equalization. On or before February 15 of 248.25 each year the assessor shall give written notice of the time to 248.26 the city or town clerk. Notwithstanding the provisions of any 248.27 charter to the contrary, the meetings must be held between April 248.28 1 and May 31 each year. The clerk shall give published and 248.29 posted notice of the meeting at least ten days before the date 248.30 of the meeting. 248.31If in any county, at least 25 percent of the total net tax248.32capacity of a city or town is noncommercial seasonal residential248.33recreational property classified under section 273.13,248.34subdivision 25, the county must hold two countywide248.35informational meetings on Saturdays. The meetings will allow248.36noncommercial seasonal residential recreational taxpayers to249.1discuss their property valuation with the appropriate assessment249.2staff. These Saturday informational meetings must be scheduled249.3to allow the owner of the noncommercial seasonal residential249.4recreational property the opportunity to attend one of the249.5meetings prior to the scheduled board of review for their city249.6or town. The Saturday meeting dates must be contained on the249.7notice of valuation of real property under section 273.121.249.8 The board shall meet at the office of the clerk to review 249.9 the assessment and classification of property in the town or 249.10 city. No changes in valuation or classification which are 249.11 intended to correct errors in judgment by the county assessor 249.12 may be made by the county assessor after the boardof reviewhas 249.13 adjourned in those cities or towns that hold a local board of 249.14 review; however, corrections of errors that are merely clerical 249.15 in nature or changes that extend homestead treatment to property 249.16 are permitted after adjournment until the tax extension date for 249.17 that assessment year. The changes must be fully documented and 249.18 maintained in the assessor's office and must be available for 249.19 review by any person. A copy of the changes made during this 249.20 period in those cities or towns that hold a local board of 249.21 review must be sent to the county board no later than December 249.22 31 of the assessment year. 249.23 (b) The board shall determine whether the taxable property 249.24 in the town or city has been properly placed on the list and 249.25 properly valued by the assessor. If real or personal property 249.26 has been omitted, the board shall place it on the list with its 249.27 market value, and correct the assessment so that each tract or 249.28 lot of real property, and each article, parcel, or class of 249.29 personal property, is entered on the assessment list at its 249.30 market value. No assessment of the property of any person may 249.31 be raised unless the person has been duly notified of the intent 249.32 of the board to do so. On application of any person feeling 249.33 aggrieved, the board shall review the assessment or 249.34 classification, or both, and correct it as appears just. The 249.35 board may not make an individual market value adjustment or 249.36 classification change that would benefit the property in cases 250.1 where the owner or other person having control over the property 250.2 will not permit the assessor to inspect the property and the 250.3 interior of any buildings or structures. 250.4 (c) A local boardof reviewmay reduce assessments upon 250.5 petition of the taxpayer but the total reductions must not 250.6 reduce the aggregate assessment made by the county assessor by 250.7 more than one percent. If the total reductions would lower the 250.8 aggregate assessments made by the county assessor by more than 250.9 one percent, none of the adjustments may be made. The assessor 250.10 shall correct any clerical errors or double assessments 250.11 discovered by the boardof reviewwithout regard to the one 250.12 percent limitation. 250.13 (d) A majority of the members may act at the meeting, and 250.14 adjourn from day to day until they finish hearing the cases 250.15 presented. The assessor shall attend, with the assessment books 250.16 and papers, and take part in the proceedings, but must not 250.17 vote. The county assessor, or an assistant delegated by the 250.18 county assessor shall attend the meetings. The board shall list 250.19 separately, on a form appended to the assessment book, all 250.20 omitted property added to the list by the board and all items of 250.21 property increased or decreased, with the market value of each 250.22 item of property, added or changed by the board, placed opposite 250.23 the item. The county assessor shall enter all changes made by 250.24 the board in the assessment book. 250.25 (e) Except as provided in subdivision 3, if a person fails 250.26 to appear in person, by counsel, or by written communication 250.27 before the board after being duly notified of the board's intent 250.28 to raise the assessment of the property, or if a person feeling 250.29 aggrieved by an assessment or classification fails to apply for 250.30 a review of the assessment or classification, the person may not 250.31 appear before the county board of appeal and equalization for a 250.32 review of the assessment or classification. This paragraph does 250.33 not apply if an assessment was made after the local board 250.34 meeting, as provided in section 273.01, or if the person can 250.35 establish not having received notice of market value at least 250.36 five days before the local boardof reviewmeeting. 251.1 (f) The local boardof review or the board of equalization251.2 must complete its work and adjourn within 20 days from the time 251.3 of convening stated in the notice of the clerk, unless a longer 251.4 period is approved by the commissioner of revenue. No action 251.5 taken after that date is valid. All complaints about an 251.6 assessment or classification made after the meeting of the board 251.7 must be heard and determined by the county board of 251.8 equalization. A nonresident may, at any time, before the 251.9 meeting of the boardof reviewfile written objections to an 251.10 assessment or classification with the county assessor. The 251.11 objections must be presented to the boardof reviewat its 251.12 meeting by the county assessor for its consideration. 251.13 [EFFECTIVE DATE.] This section is effective January 1, 251.14 2002, and thereafter. 251.15 Sec. 22. Minnesota Statutes 2000, section 274.13, 251.16 subdivision 1, is amended to read: 251.17 Subdivision 1. [MEMBERS; MEETINGS; RULES FOR EQUALIZING 251.18 ASSESSMENTS.] The county commissioners, or a majority of them, 251.19 with the county auditor, or, if the auditor cannot be present, 251.20 the deputy county auditor, or, if there is no deputy, the court 251.21 administrator of the district court, shall form a board for the 251.22 equalization of the assessment of the property of the county, 251.23 including the property of all cities whose charters provide for 251.24 a board of equalization. This board shall be referred to as the 251.25 county board of appeal and equalization. The board shall meet 251.26 annually, on the date specified in section 274.14, at the office 251.27 of the auditor. Each member shall take an oath to fairly and 251.28 impartially perform duties as a member. The board shall examine 251.29 and compare the returns of the assessment of property of the 251.30 towns or districts, and equalize them so that each tract or lot 251.31 of real property and each article or class of personal property 251.32 is entered on the assessment list at its market value, subject 251.33 to the following rules: 251.34 (1) The board shall raise the valuation of each tract or 251.35 lot of real property which in its opinion is returned below its 251.36 market value to the sum believed to be its market value. The 252.1 board must first give notice of intention to raise the valuation 252.2 to the person in whose name it is assessed, if the person is a 252.3 resident of the county. The notice must fix a time and place 252.4 for a hearing. 252.5 (2) The board shall reduce the valuation of each tract or 252.6 lot which in its opinion is returned above its market value to 252.7 the sum believed to be its market value. 252.8 (3) The board shall raise the valuation of each class of 252.9 personal property which in its opinion is returned below its 252.10 market value to the sum believed to be its market value. It 252.11 shall raise the aggregate value of the personal property of 252.12 individuals, firms, or corporations, when it believes that the 252.13 aggregate valuation, as returned, is less than the market value 252.14 of the taxable personal property possessed by the individuals, 252.15 firms, or corporations, to the sum it believes to be the market 252.16 value. The board must first give notice to the persons of 252.17 intention to do so. The notice must set a time and place for a 252.18 hearing. 252.19 (4) The board shall reduce the valuation of each class of 252.20 personal property that is returned above its market value to the 252.21 sum it believes to be its market value. Upon complaint of a 252.22 party aggrieved, the board shall reduce the aggregate valuation 252.23 of the individual's personal property, or of any class of 252.24 personal property for which the individual is assessed, which in 252.25 its opinion has been assessed at too large a sum, to the sum it 252.26 believes was the market value of the individual's personal 252.27 property of that class. 252.28 (5) The board must not reduce the aggregate value of all 252.29 the property of its county, as submitted to the county board of 252.30 equalization, with the additions made by the auditor under this 252.31 chapter, by more than one percent of its whole valuation. The 252.32 board may raise the aggregate valuation of real property, and of 252.33 each class of personal property, of the county, or of any town 252.34 or district of the county, when it believes it is below the 252.35 market value of the property, or class of property, to the 252.36 aggregate amount it believes to be its market value. 253.1 (6) The board shall change the classification of any 253.2 property which in its opinion is not properly classified. 253.3 [EFFECTIVE DATE.] This section is effective January 1, 253.4 2002, and thereafter. 253.5 Sec. 23. Minnesota Statutes 2000, section 282.04, 253.6 subdivision 2, is amended to read: 253.7 Subd. 2. [RIGHTS BEFORE SALE; IMPROVEMENTS, INSURANCE, 253.8 DEMOLITION.] Before the sale of a parcel of forfeited land the 253.9 county auditor may, with the approval of the county board of 253.10 commissioners, provide for the repair and improvement of any 253.11 building or structure located upon the parcel, and may provide 253.12 for maintenance of tax-forfeited lands, if it is determined by 253.13 the county board that such repairs, improvements, or maintenance 253.14 are necessary for the operation, use, preservation and safety of 253.15 the building or structure. If so authorized by the county 253.16 board, the county auditor may insure the building or structure 253.17 against loss or damage resulting from fire or windstorm, may 253.18 purchase workers' compensation insurance to insure the county 253.19 against claims for injury to the persons employed in the 253.20 building or structure by the county, and may insure the county, 253.21 its officers and employees against claims for injuries to 253.22 persons or property because of the management, use or operation 253.23 of the building or structure. The county auditor may, with the 253.24 approval of the county board, provide for the demolition of the 253.25 building or structure, which has been determined by the county 253.26 board to be within the purview of section 299F.10, and for the 253.27 sale of salvaged materials from the building or structure. The 253.28 county auditor, with the approval of the county board, may 253.29 provide for the sale of abandoned personal propertyunder either253.30chapter 345 or 566, as appropriate. The sale may be made by the 253.31 sheriff using the procedures for the sale of abandoned property 253.32 in section 345.15 or by the county auditor using the procedures 253.33 for the sale of abandoned property in section 504B.271. The net 253.34 proceeds from any sale of the personal property, salvaged 253.35 materials, timber or other products, or leases made under this 253.36 law must be deposited in the forfeited tax sale fund and must be 254.1 distributed in the same manner as if the parcel had been sold. 254.2 The county auditor, with the approval of the county board, 254.3 may provide for the demolition of any structure on tax-forfeited 254.4 lands, if in the opinion of the county board, the county 254.5 auditor, and the land commissioner, if there is one, the sale of 254.6 the land with the structure on it, or the continued existence of 254.7 the structure by reason of age, dilapidated condition or 254.8 excessive size as compared with nearby structures, will result 254.9 in a material lessening of net tax capacities of real estate in 254.10 the vicinity of the tax-forfeited lands, or if the demolition of 254.11 the structure or structures will aid in disposing of the 254.12 tax-forfeited property. 254.13 Before the sale of a parcel of forfeited land located in an 254.14 urban area, the county auditor may with the approval of the 254.15 county board provide for the grading of the land by filling or 254.16 the removal of any surplus material from it. If the physical 254.17 condition of forfeited lands is such that a reasonable grading 254.18 of the lands is necessary for the protection and preservation of 254.19 the property of any adjoining owner, the adjoining property 254.20 owner or owners may apply to the county board to have the 254.21 grading done. If, after considering the application, the county 254.22 board believes that the grading will enhance the value of the 254.23 forfeited lands commensurate with the cost involved, it may 254.24 approve it, and the work must be performed under the supervision 254.25 of the county or city engineer, as the case may be, and the 254.26 expense paid from the forfeited tax sale fund. 254.27 [EFFECTIVE DATE.] This section is effective the day 254.28 following final enactment. 254.29 Sec. 24. Minnesota Statutes 2000, section 287.035, is 254.30 amended to read: 254.31 287.035 [IMPOSITION OF TAX.] 254.32 A taxof 23 cents is imposed upon each $100, or fraction254.33thereof,is imposed on the privilege of recording a mortgage. 254.34 The tax rate is .0023 of the debt or portion of a debt that is 254.35 secured by any recorded mortgage of real property located in 254.36 this state. The person liable for the tax is themortgagee255.1 mortgagor. The tax is not imposed on the lawful interest 255.2 amounts that may accrue with respect to a debt. 255.3 [EFFECTIVE DATE.] This section is effective for mortgages 255.4 acknowledged and recorded after July 31, 2001. 255.5 Sec. 25. Minnesota Statutes 2000, section 287.04, is 255.6 amended to read: 255.7 287.04 [EXEMPTIONS.] 255.8 The tax imposed by section 287.035 does not apply to: 255.9 (a) A decree of marriage dissolution or an instrument made 255.10 pursuant to it. 255.11 (b) A mortgage given to correct a misdescription of the 255.12 mortgaged property. 255.13 (c) A mortgage or other instrument that adds additional 255.14 security for the same debt for which mortgage registry tax has 255.15 been paid. 255.16 (d) A contract for the conveyance of any interest in real 255.17 property, including a contract for deed. 255.18 (e) A mortgage secured by real property subject to the 255.19 minerals production tax of sections 298.24 to 298.28. 255.20 (f) The principal amount ofbonds or other obligations255.21issued by the St. Paul port authority under its common revenue255.22bond fund if each of the following conditions are met.255.23(1) The bonds or other obligations are secured by a255.24mortgage on property, title to which is held by the political255.25subdivision.255.26(2) The mortgage is recorded after May 19, 1993.255.27(3) The bonds or other obligations are either (i)255.28outstanding on May 19, 1993, or (ii) issued in exchange for or255.29to otherwise refund bonds or other obligations the original255.30series of which were issued before May 19, 1993a mortgage loan 255.31 made under a low and moderate income or other affordable housing 255.32 program, if the mortgagee is a federal, state, or local 255.33 government agency. 255.34 (g) Mortgagestaken in good faith by persons orgranted 255.35corporations whose property is expressly exempted from taxation255.36by section 272.02, subdivisions 2 to 8, or mortgagees that are256.1 by fraternal benefit societies subject to section 64B.24. 256.2 (h) A mortgage amendment or extension, as defined in 256.3 section 287.01. 256.4 (i) An agricultural mortgage if the proceeds of the loan 256.5 secured by the mortgage are used to acquire or improve real 256.6 property classified under section 273.13, subdivision 23, 256.7 paragraph (a), or (b), clause (1), (2), or (3). 256.8 [EFFECTIVE DATE.] This section is effective for mortgages 256.9 acknowledged and recorded after July 31, 2001. 256.10 Sec. 26. Minnesota Statutes 2000, section 287.08, is 256.11 amended to read: 256.12 287.08 [TAX, HOW PAYABLE; RECEIPTS.] 256.13 (a) The tax imposed by sections 287.01 to 287.12 must be 256.14 paid to the treasurer of any county in this state in which the 256.15 real property or some part is located at or before the time of 256.16 filing the mortgage for record. The treasurer shall endorse 256.17 receipt on the mortgage and the receipt is conclusive proof that 256.18 the tax has been paid in the amount stated and authorizes any 256.19 county recorder or registrar of titles to record the mortgage. 256.20 Its form, in substance, shall be "registration tax hereon of 256.21 ..................... dollars paid." If the mortgage is exempt 256.22 from taxation the endorsement shall, in substance, be "exempt 256.23 from registration tax." In either case the receipt must be 256.24 signed by the treasurer. In case the treasurer is unable to 256.25 determine whether a claim of exemption should be allowed, the 256.26 tax must be paid as in the case of a taxable mortgage. 256.27 (b)Upon written application of the taxpayer,The county 256.28 treasurer may refund in whole or in part any mortgage registry 256.29 taxthat has been erroneously paid, or a person having paid a256.30mortgage registry tax amount may seek a refund of the tax, or256.31other appropriate relief,overpayment if a written application 256.32 by the taxpayer is submitted to the county treasurer within 256.33 three and one-half years from the date of the overpayment. If 256.34 the county has not issued a denial of the application, the 256.35 taxpayer may bring an action in tax court in the county in which 256.36 the tax was paid at any time after the expiration of six months 257.1 from the time that the application was submitted. A denial of 257.2 refund may be appealed within 60 days from the date of the 257.3 denial by bringing an action in tax court in the county in which 257.4 the tax was paid, within 60 days of the payment. The action is 257.5 commenced by the serving of a petition for relief on the county 257.6 treasurer, and by filing a copy with the court. The county 257.7 attorney shall defend the action. The county treasurer shall 257.8 notify the treasurer of each county that has or would receive a 257.9 portion of the tax as paid. 257.10 (c) If the county treasurer determines a refund should be 257.11 paid, or if a refund is ordered by the court, the county 257.12 treasurer of each county that actually received a portion of the 257.13 tax shall immediately pay a proportionate share of three percent 257.14 of the refund using any available county funds. The county 257.15 treasurer of each county that received, or would have received, 257.16 a portion of the tax shall also pay their county's proportionate 257.17 share of the remaining 97 percent of the court-ordered refund on 257.18 or before the 20th day of the following month using solely the 257.19 mortgage registry tax funds that would be paid to the 257.20 commissioner of revenue on that date under section 287.12. If 257.21 the funds on hand under this procedure are insufficient to fully 257.22 fund 97 percent of the court-ordered refund, the county 257.23 treasurer of the county in which the action was brought shall 257.24 file a claim with the commissioner of revenue under section 257.25 16A.48 for the remaining portion of 97 percent of the refund, 257.26 and shall pay over the remaining portion upon receipt of a 257.27 warrant from the state issued pursuant to the claim. 257.28 (d) When any mortgage covers real property located in more 257.29 than one county in this state the total tax must be paid to the 257.30 treasurer of the county where the mortgage is first presented 257.31 for recording, and the payment must be receipted as provided in 257.32 paragraph (a). If the principal debt or obligation secured by 257.33 such a multiple county mortgage exceeds $1,000,000, the nonstate 257.34 portion of the tax must be divided and paid over by the county 257.35 treasurer receiving it, on or before the 20th day of each month 257.36 after receipt, to the county or counties entitled in the ratio 258.1 that the market value of the real property covered by the 258.2 mortgage in each county bears to the market value of all the 258.3 real property in this state described in the mortgage. In 258.4 making the division and payment the county treasurer shall send 258.5 a statement giving the description of the real property 258.6 described in the mortgage and the market value of the part 258.7 located in each county. For this purpose, the treasurer of any 258.8 county may require the treasurer of any other county to certify 258.9 to the former the market valuation of any tract of real property 258.10 in any mortgage. 258.11 (e) The mortgagor must pay the tax imposed by sections 258.12 287.01 to 287.12. The mortgagee may undertake to collect and 258.13 remit the tax on behalf of the mortgagor. If the mortgagee 258.14 collects money from the mortgagor to remit the tax on behalf of 258.15 the mortgagor, the mortgagee has a fiduciary duty to remit the 258.16 tax on behalf of the mortgagor as to the amount of the tax 258.17 collected for that purpose and the mortgagor is relieved of any 258.18 further obligation to pay the tax as to the amount collected by 258.19 the mortgagee for this purpose. 258.20 [EFFECTIVE DATE.] The changes in paragraph (b) of this 258.21 section are effective for overpayments occurring after July 31, 258.22 2001, and the remaining changes are effective for documents 258.23 acknowledged and recorded after July 31, 2001. 258.24 Sec. 27. Minnesota Statutes 2000, section 287.13, is 258.25 amended by adding a subdivision to read: 258.26 Subd. 3. [PAYMENT TO MORTGAGEE.] If a mortgagee undertakes 258.27 to collect from the mortgagor the amount of the tax due under 258.28 sections 287.01 to 287.12 as provided in section 287.08, 258.29 paragraph (e), the mortgagor is not subject to the penalties 258.30 under this section and the mortgagee is subject to the 258.31 provisions of this section. 258.32 [EFFECTIVE DATE.] This section is effective for documents 258.33 acknowledged and recorded after July 31, 2001. 258.34 Sec. 28. Minnesota Statutes 2000, section 287.20, 258.35 subdivision 2, is amended to read: 258.36 Subd. 2. [CONSIDERATION.] (a) "Consideration" means 259.1 generally the total monetary value that is given in return for a 259.2 conveyance of real property in this state and includes all 259.3 lump-sum payments, all prior or future installment payments that 259.4 are required under the agreement between the parties, and the 259.5 fair market value of any property taken, or to be taken, in 259.6 exchange. 259.7 (b) Consideration does not include the reasonable and 259.8 lawful amounts of interest paid for the privilege of paying the 259.9 purchase price in installments and the fair market value of any 259.10 items of intangible personal property that are conveyed by the 259.11 taxable instrument. 259.12 (c) Consideration does not include the amount paid for the 259.13 personal property located on the real property being conveyed 259.14 and transferred as a part of the total consideration, except 259.15 that the amount paid for the personal property located on the 259.16 real property being conveyed must be included if the real 259.17 property being conveyed is a one-, two-, or three-unit 259.18 residential structure. 259.19 (d) When a conveyance of real property is made pursuant to 259.20 a contract for deed, the consideration is the price for the real 259.21 property reflected in the contract; except that, subject to the 259.22 limitations under section 287.221,when the conveyance is made259.23by a person engaged in the business of land sales or259.24construction of buildings and other improvements, or by an259.25affiliated personif the contract for deed, or other agreement 259.26 entered into as a condition to the seller executing the 259.27 contract, requires the property to be improved during the term 259.28 of the contract and the price of the real property as reflected 259.29 in the contract does not include the consideration for the 259.30 required improvements, then the consideration is theamount paid259.31for the landprice for the real property as reflected in the 259.32 contract and the consideration for the required improvements 259.33 added during the term of the contract.By January 1, 2001, the259.34commissioner shall adopt rules that define the phrases "engaged259.35in the business of land sales or construction of buildings and259.36other improvements" and "affiliated person" as those phrases are260.1used in this paragraph.260.2 (e) "Total consideration" has the same meaning as 260.3 consideration. 260.4 (f) "Consideration, exclusive of the value of any lien or 260.5 encumbrance remaining at the time of sale" or "net 260.6 consideration" means the amount of consideration as reduced by 260.7 the amount outstanding under any lien that attached to the real 260.8 property prior to the time of sale and that is not released or 260.9 satisfied as a result of the sale. 260.10 [EFFECTIVE DATE.] This section is effective for deeds 260.11 acknowledged and recorded after July 31, 2001. 260.12 Sec. 29. Minnesota Statutes 2000, section 287.20, 260.13 subdivision 9, is amended to read: 260.14 Subd. 9. [REORGANIZATION.] "Reorganization" means the 260.15 transfer of substantially all of the assets of a corporation, a 260.16 limited liability company, or a partnership not in the usual or 260.17 regular course of business if at the time of the transfer the 260.18 transfer qualifies as: (i) a corporate reorganization under 260.19 section 368(a) of the Internal Revenue Code of 1986, as amended 260.20 through December 31, 2000; or (ii) a transfer pursuant to the 260.21 continuation of an existing partnership under section 708 of the 260.22 Internal Revenue Code of 1986, as amended through December 31, 260.23 2000. 260.24 [EFFECTIVE DATE.] This section is effective for taxable 260.25 deeds acknowledged and recorded after July 31, 2001. 260.26 Sec. 30. Minnesota Statutes 2000, section 287.21, 260.27 subdivision 1, is amended to read: 260.28 Subdivision 1. [DETERMINATION OF TAX.] (a) A tax is 260.29 imposed on each deed or instrument by which any real property in 260.30 this state is granted, assigned, transferred, or otherwise 260.31 conveyed. The tax applies against the net consideration. 260.32 (b) The tax is determined in the following manner: (1) 260.33 when transfers are made by instruments pursuant to mergers, 260.34 consolidations, sales, or transfers of substantially all of the 260.35 assets of the entities as defined in section 287.20, subdivision 260.36 9, pursuant to plans of reorganization, the tax is $1.65; (2) 261.1 when there is no consideration or when the consideration, 261.2 exclusive of the value of any lien or encumbrance remaining 261.3 thereon at the time of sale, is $500 or less, the tax is $1.65; 261.4 or (3) when the consideration, exclusive of the value of any 261.5 lien or encumbrance remaining at the time of sale, exceeds $500, 261.6 the tax is$1.65 plus $1.65 for each additional $500 or fraction261.7of that amount.0033 of the net consideration. 261.8 (c) The tax is due at the time a taxable deed or instrument 261.9 is presented for recording. 261.10 [EFFECTIVE DATE.] This section is effective for documents 261.11 acknowledged and recorded after July 31, 2001. 261.12 Sec. 31. Minnesota Statutes 2000, section 287.28, is 261.13 amended to read: 261.14 287.28 [REFUNDS OR REDEMPTION.] 261.15 (a) The county treasurer mayrefund in whole or in part any261.16tax which has been erroneously paid and may allow for orredeem 261.17such of thestamps,issued under the authority of sections 261.18 287.20 to 287.31as maythat have been spoiled, destroyed, or 261.19 rendered useless or unfit for the purpose intended or for which 261.20 the owner may have no use or which through mistake may have been 261.21 improperly or unnecessarily used.Such orderRedemption shall 261.22 be made only upon written application of the taxpayer. 261.23 (b)A person having paid a deed tax amount may seek a261.24refund of the tax, or other appropriate relief,The county 261.25 treasurer may refund any deed tax overpayment if a written 261.26 application by the taxpayer is submitted to the county treasurer 261.27 within three and one-half years from the date of the 261.28 overpayment. If the county has not issued a denial of the 261.29 application, the taxpayer may bring an action in tax court in 261.30 the county in which the tax was paid at any time after the 261.31 expiration of six months from the time that the application was 261.32 submitted. A denial of refund may be appealed within 60 days 261.33 from the date of the denial by commencing an action in tax court 261.34 in the county where the tax was paid, within 60 days of the261.35payment. The action is commenced by serving a petition for 261.36 relief on the county treasurer, and filing a copy with the 262.1 court. The county attorney shall defend the action. The county 262.2 treasurer shall notify the treasurer of each county that has, or 262.3 would receive a portion of the tax as paid. Any refund of deed 262.4 tax which the county treasurer determines should be made, and 262.5 any court ordered refund of deed tax, shall be accomplished 262.6 using the refund procedures in section 287.08. 262.7 [EFFECTIVE DATE.] This section is effective for 262.8 overpayments occurring after July 31, 2001. 262.9 Sec. 32. Minnesota Statutes 2000, section 289A.12, 262.10 subdivision 3, is amended to read: 262.11 Subd. 3. [RETURNS OR REPORTS BY PARTNERSHIPS, FIDUCIARIES, 262.12 AND S CORPORATIONS.] (a) Partnerships must file a return with 262.13 the commissioner for each taxable year. The return must conform 262.14 to the requirements of section290.31290.311, and must include 262.15 the names and addresses of the partners entitled to a 262.16 distributive share in their taxable net income, gain, loss, or 262.17 credit, and the amount of the distributive share to which each 262.18 is entitled. A partnership required to file a return for a 262.19 partnership taxable year must furnish a copy of the information 262.20 required to be shown on the return to a person who is a partner 262.21 at any time during the taxable year, on or before the day on 262.22 which the return for the taxable year was filed. 262.23 (b) The fiduciary of an estate or trust making the return 262.24 required to be filed under section 289A.08, subdivision 2, for a 262.25 taxable year must give a beneficiary who receives a distribution 262.26 from the estate or trust with respect to the taxable year or to 262.27 whom any item with respect to the taxable year is allocated, a 262.28 statement containing the information required to be shown on the 262.29 return, on or before the date on which the return was filed. 262.30 (c) An S corporation must file a return with the 262.31 commissioner for a taxable year during which an election under 262.32 section 290.9725 is in effect, stating specifically the names 262.33 and addresses of the persons owning stock in the corporation at 262.34 any time during the taxable year, the number of shares of stock 262.35 owned by a shareholder at all times during the taxable year, the 262.36 shareholder's pro rata share of each item of the corporation for 263.1 the taxable year, and other information the commissioner 263.2 requires. An S corporation required to file a return under this 263.3 paragraph for any taxable year must furnish a copy of the 263.4 information shown on the return to the person who is a 263.5 shareholder at any time during the taxable year, on or before 263.6 the day on which the return for the taxable year was filed. 263.7 (d) The partnership or S corporation return must be signed 263.8 by someone designated by the partnership or S corporation. 263.9 [EFFECTIVE DATE.] This section is effective for tax years 263.10 beginning after December 31, 2000. 263.11 Sec. 33. Minnesota Statutes 2000, section 289A.50, 263.12 subdivision 2a, is amended to read: 263.13 Subd. 2a. [REFUND OF SALES TAX TO PURCHASERS.] If a vendor 263.14 has collected from a purchaser a tax on a transaction that is 263.15 not subject to the tax imposed by chapter 297A, the purchaser 263.16 may apply directly to the commissioner for a refund under this 263.17 section if: 263.18 (a) the purchaser is currently registered to collect and 263.19 remit the salesandtax or to remit the use tax; and 263.20 (b) the amount of the refund applied for exceeds $500. 263.21 The purchaser may not file more than two applications for 263.22 refund under this subdivision in a calendar year. 263.23 [EFFECTIVE DATE.] This section is effective the day 263.24 following final enactment. 263.25 Sec. 34. Minnesota Statutes 2000, section 290.06, 263.26 subdivision 2c, is amended to read: 263.27 Subd. 2c. [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 263.28 AND TRUSTS.] (a) The income taxes imposed by this chapter upon 263.29 married individuals filing joint returns and surviving spouses 263.30 as defined in section 2(a) of the Internal Revenue Code must be 263.31 computed by applying to their taxable net income the following 263.32 schedule of rates: 263.33 (1) On the first $25,680, 5.35 percent; 263.34 (2) On all over $25,680, but not over $102,030, 7.05 263.35 percent; 263.36 (3) On all over $102,030, 7.85 percent. 264.1 Married individuals filing separate returns, estates, and 264.2 trusts must compute their income tax by applying the above rates 264.3 to their taxable income, except that the income brackets will be 264.4 one-half of the above amounts. 264.5 (b) The income taxes imposed by this chapter upon unmarried 264.6 individuals must be computed by applying to taxable net income 264.7 the following schedule of rates: 264.8 (1) On the first $17,570, 5.35 percent; 264.9 (2) On all over $17,570, but not over $57,710, 7.05 264.10 percent; 264.11 (3) On all over $57,710, 7.85 percent. 264.12 (c) The income taxes imposed by this chapter upon unmarried 264.13 individuals qualifying as a head of household as defined in 264.14 section 2(b) of the Internal Revenue Code must be computed by 264.15 applying to taxable net income the following schedule of rates: 264.16 (1) On the first $21,630, 5.35 percent; 264.17 (2) On all over $21,630, but not over $86,910, 7.05 264.18 percent; 264.19 (3) On all over $86,910, 7.85 percent. 264.20 (d) In lieu of a tax computed according to the rates set 264.21 forth in this subdivision, the tax of any individual taxpayer 264.22 whose taxable net income for the taxable year is less than an 264.23 amount determined by the commissioner must be computed in 264.24 accordance with tables prepared and issued by the commissioner 264.25 of revenue based on income brackets of not more than $100. The 264.26 amount of tax for each bracket shall be computed at the rates 264.27 set forth in this subdivision, provided that the commissioner 264.28 may disregard a fractional part of a dollar unless it amounts to 264.29 50 cents or more, in which case it may be increased to $1. 264.30 (e) An individual who is not a Minnesota resident for the 264.31 entire year must compute the individual's Minnesota income tax 264.32 as provided in this subdivision. After the application of the 264.33 nonrefundable credits provided in this chapter, the tax 264.34 liability must then be multiplied by a fraction in which: 264.35 (1) the numerator is the individual's Minnesota source 264.36 federal adjusted gross income as defined in section 62 of the 265.1 Internal Revenue Code and increased by the additions required 265.2 under section 290.01, subdivision 19a, clauses (1) and (6), and 265.3 reduced by the Minnesota assignable portion of the subtraction 265.4 for United States government interest under section 290.01, 265.5 subdivision 19b, clause (1), after applying the allocation and 265.6 assignability provisions of section 290.081, clause (a), or 265.7 290.17; and 265.8 (2) the denominator is the individual's federal adjusted 265.9 gross income as defined in section 62 of the Internal Revenue 265.10 Code of 1986, increased by the amounts specified in section 265.11 290.01, subdivision 19a, clauses (1) and (6), and reduced by the 265.12 amounts specified in section 290.01, subdivision 19b, clause (1). 265.13 [EFFECTIVE DATE.] This section is effective for taxable 265.14 years beginning after December 31, 2000. 265.15 Sec. 35. Minnesota Statutes 2000, section 290.06, 265.16 subdivision 23, is amended to read: 265.17 Subd. 23. [REFUND OF CONTRIBUTIONS TO POLITICAL PARTIES 265.18 AND CANDIDATES.] (a) A taxpayer may claim a refund equal to the 265.19 amount of the taxpayer's contributions made in the calendar year 265.20 to candidates and to a political party. The maximum refund for 265.21 an individual must not exceed $50 and for a married couple, 265.22 filing jointly, must not exceed $100. A refund of a 265.23 contribution is allowed only if the taxpayer files a form 265.24 required by the commissioner and attaches to the form a copy of 265.25 an official refund receipt form issued by the candidate or party 265.26 and signed by the candidate, the treasurer of the candidate's 265.27 principal campaign committee, or the chair or treasurer of the 265.28 party unit, after the contribution was received. The receipt 265.29 forms must be numbered, and the data on the receipt that are not 265.30 public must be made available to the campaign finance and public 265.31 disclosure board upon its request. A claim must be filed with 265.32 the commissioner no sooner than January 1 of the calendar year 265.33 in which the contribution was made and no later than April 15 of 265.34 the calendar year following the calendar year in which the 265.35 contribution was made. A taxpayer may file only one claim per 265.36 calendar year. Amounts paid by the commissioner after June 15 266.1 of the calendar year following the calendar year in which the 266.2 contribution was made must include interest at the rate 266.3 specified in section 270.76. 266.4 (b) No refund is allowed under this subdivision for a 266.5 contribution to a candidate unless the candidate: 266.6 (1) has signed an agreement to limit campaign expenditures 266.7 as provided in section 10A.322; 266.8 (2) is seeking an office for which voluntary spending 266.9 limits are specified in section 10A.25; and 266.10 (3) has designated a principal campaign committee. 266.11 This subdivision does not limit the campaign expenditures 266.12 of a candidate who does not sign an agreement but accepts a 266.13 contribution for which the contributor improperly claims a 266.14 refund. 266.15 (c) For purposes of this subdivision, "political party" 266.16 means a major political party as defined in section 200.02, 266.17 subdivision 7, or a minor political party qualifying for 266.18 inclusion on the income tax or property tax refund form under 266.19 section 10A.31, subdivision 3a. 266.20 A "major party" or "minor party" includes the aggregate of 266.21 that party's organization within each house of the legislature, 266.22 the state party organization, and the party organization within 266.23 congressional districts, counties, legislative districts, 266.24 municipalities, and precincts. 266.25 "Candidate" means a candidate as defined in section 10A.01, 266.26 subdivision 10, except a candidate for judicial office. 266.27 "Contribution" means a gift of money. 266.28 (d) The commissioner shall make copies of the form 266.29 available to the public and candidates upon request. 266.30 (e) The following data collected or maintained by the 266.31 commissioner under this subdivision are private: the identities 266.32 of individuals claiming a refund, the identities of candidates 266.33 to whom those individuals have made contributions, and the 266.34 amount of each contribution. 266.35 (f) The commissioner shall report to the campaign finance 266.36 and public disclosure board by each August 1 a summary showing 267.1 the total number and aggregate amount of political contribution 267.2 refunds made on behalf of each candidate and each political 267.3 party. These data are public. 267.4 (g) The amount necessary to pay claims for the refund 267.5 provided in this section is appropriated from the general fund 267.6 to the commissioner of revenue. 267.7 (h) For a taxpayer who files a claim for refund via the 267.8 Internet or other electronic means, the commissioner may accept 267.9 the number on the official receipt as documentation that a 267.10 contribution was made rather than the actual receipt as required 267.11 by paragraph (a). 267.12 [EFFECTIVE DATE.] This section is effective for refund 267.13 claims based on contributions made after December 31, 2001. 267.14 Sec. 36. Minnesota Statutes 2000, section 290.067, 267.15 subdivision 2, is amended to read: 267.16 Subd. 2. [LIMITATIONS.] The credit for expenses incurred 267.17 for the care of each dependent shall not exceed $720 in any 267.18 taxable year, and the total credit for all dependents of a 267.19 claimant shall not exceed $1,440 in a taxable year. The maximum 267.20 total credit shall be reduced according to the amount of the 267.21 income of the claimant and a spouse, if any, as follows: 267.22 income up to$13,350$18,040, $720 maximum for one 267.23 dependent, $1,440 for all dependents; 267.24 income over$13,350$18,040, the maximum credit for one 267.25 dependent shall be reduced by $18 for every $350 of additional 267.26 income, $36 for all dependents. 267.27 The commissioner shall construct and make available to 267.28 taxpayers tables showing the amount of the credit at various 267.29 levels of income and expenses. The tables shall follow the 267.30 schedule contained in this subdivision, except that the 267.31 commissioner may graduate the transitions between expenses and 267.32 income brackets. 267.33 [EFFECTIVE DATE.] This section is effective for tax years 267.34 beginning after December 31, 1999. 267.35 Sec. 37. Minnesota Statutes 2000, section 290.067, 267.36 subdivision 2b, is amended to read: 268.1 Subd. 2b. [INFLATION ADJUSTMENT.] The dollar amount of the 268.2 income threshold at which the maximum credit begins to be 268.3 reduced under subdivision 2 must be adjusted for inflation. The 268.4 commissioner shalladjust the threshold amount by the percentage268.5determined under section 290.06, subdivision 2d, for the taxable268.6year.make the inflation adjustments in accordance with section 268.7 1f of the Internal Revenue Code except that for the purposes of 268.8 this subdivision the percentage increase must be determined from 268.9 the year starting September 1, 1999, and ending August 31, 2000, 268.10 as the base year for adjusting for inflation for the tax year 268.11 beginning after December 31, 2000. The determination of the 268.12 commissioner under this subdivision is not a rule under the 268.13 Administrative Procedures Act. 268.14 [EFFECTIVE DATE.] This section is effective for tax years 268.15 beginning after December 31, 2000. 268.16 Sec. 38. Minnesota Statutes 2000, section 290.0671, 268.17 subdivision 1, is amended to read: 268.18 Subdivision 1. [CREDIT ALLOWED.] (a) An individual is 268.19 allowed a credit against the tax imposed by this chapter equal 268.20 to a percentage of earned income. To receive a credit, a 268.21 taxpayer must be eligible for a credit under section 32 of the 268.22 Internal Revenue Code. 268.23 (b) For individuals with no qualifying children, the credit 268.24 equals 1.9125 percent of the first$4,460$4,620 of earned 268.25 income. The credit is reduced by 1.9125 percent of earned 268.26 income or modified adjusted gross income, whichever is greater, 268.27 in excess of$5,570$5,770, but in no case is the credit less 268.28 than zero. 268.29 (c) For individuals with one qualifying child, the credit 268.30 equals 8.5 percent of the first$6,680$6,920 of earned income 268.31 and 8.5 percent of earned income over$11,650$12,080 but less 268.32 than$12,990$13,450. The credit is reduced by 5.73 percent of 268.33 earned income or modified adjusted gross income, whichever is 268.34 greater, in excess of$14,560$15,080, but in no case is the 268.35 credit less than zero. 268.36 (d) For individuals with two or more qualifying children, 269.1 the credit equals ten percent of the first$9,390$9,720 of 269.2 earned income and 20 percent of earned income 269.3 over$14,350$14,860 but less than$16,230$16,800. The credit 269.4 is reduced by 10.3 percent of earned income or modified adjusted 269.5 gross income, whichever is greater, in excess 269.6 of$17,280$17,890, but in no case is the credit less than zero. 269.7 (e) For a nonresident or part-year resident, the credit 269.8 must be allocated based on the percentage calculated under 269.9 section 290.06, subdivision 2c, paragraph (e). 269.10 (f) For a person who was a resident for the entire tax year 269.11 and has earned income not subject to tax under this chapter, the 269.12 credit must be allocated based on the ratio of federal adjusted 269.13 gross income reduced by the earned income not subject to tax 269.14 under this chapter over federal adjusted gross income. 269.15 (g) The commissioner shall construct tables showing the 269.16 amount of the credit at various income levels and make them 269.17 available to taxpayers. The tables shall follow the schedule 269.18 contained in this subdivision, except that the commissioner may 269.19 graduate the transition between income brackets. 269.20 [EFFECTIVE DATE.] This section is effective for taxable 269.21 years beginning after December 31, 1999. 269.22 Sec. 39. Minnesota Statutes 2000, section 290.0671, 269.23 subdivision 7, is amended to read: 269.24 Subd. 7. [INFLATION ADJUSTMENT.] The earned income amounts 269.25 used to calculate the credit and the income thresholds at which 269.26 the maximum credit begins to be reduced in subdivision 1 must be 269.27 adjusted for inflation. The commissioner shalladjust the269.28earned income and threshold amounts by the percentage determined269.29under section 290.06, subdivision 2d, for the taxable year.make 269.30 the inflation adjustments in accordance with section 1f of the 269.31 Internal Revenue Code except that for the purposes of this 269.32 subdivision the percentage increase shall be determined from the 269.33 year starting September 1, 1999, and ending August 31, 2000, as 269.34 the base year for adjusting for inflation for the tax year 269.35 beginning after December 31, 2000. The determination of the 269.36 commissioner under this subdivision is not a rule under the 270.1 Administrative Procedures Act. 270.2 [EFFECTIVE DATE.] This section is effective for tax years 270.3 beginning after December 31, 2000. 270.4 Sec. 40. Minnesota Statutes 2000, section 290.0675, 270.5 subdivision 1, is amended to read: 270.6 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 270.7 section the following terms have the meanings given. 270.8 (b) "Earned income" means the sum of the following, to the 270.9 extent included in Minnesota taxable income: 270.10 (1) earned income as defined in section 32(c)(2) of the 270.11 Internal Revenue Code; 270.12 (2)to the extent included in Minnesota taxable income,270.13 income received from a retirement pension, profit-sharing, stock 270.14 bonus, or annuity plan; and 270.15 (3)to the extent included in Minnesota taxable income,270.16 social security benefits as defined in section 86(d)(1) of the 270.17 Internal Revenue Code. 270.18 (c) "Taxable income" means net income as defined in section 270.19 290.01, subdivision 19. 270.20 (d) "Earned income of lesser-earning spouse" means the 270.21 earned income of the spouse with the lesser amount of earned 270.22 income as defined in paragraph (b) for the taxable year. 270.23 [EFFECTIVE DATE.] This section is effective for taxable 270.24 years beginning after December 31, 2000. 270.25 Sec. 41. Minnesota Statutes 2000, section 290.0675, 270.26 subdivision 3, is amended to read: 270.27 Subd. 3. [CREDIT AMOUNT.] The credit amount isas shown in270.28the table in this subdivision, based on the couple's taxable270.29income for the tax year and on the earned income of the270.30lesser-earning spousethe difference between the tax on the 270.31 couple's joint Minnesota taxable income under the rates in 270.32 section 290.06, subdivision 2c, paragraph (a), and the sum of 270.33 the tax under the rates of section 290.06, subdivision 2c, 270.34 paragraph (b), on the earned income of the lesser-earning 270.35 spouse, and the tax under the rates of section 290.06, 270.36 subdivision 2c, paragraph (b), on the couple's joint Minnesota 271.1 taxable income, minus the earned income of the lesser-earning 271.2 spouse. 271.3Credit ForCredit For271.4Earned Income ofTaxable IncomeTaxable Income271.5Lesser Earning Spouse$25,680-$102,029$102,030-over271.6$14,250 - $15,249$7$0271.7$15,250 - $16,249$24$0271.8$16,250 - $17,249$41$0271.9$17,250 - $18,249$58$0271.10$18,250 - $19,249$75$0271.11$19,250 - $20,249$92$0271.12$20,250 - $21,249$109$0271.13$21,250 - $22,249$126$0271.14$22,250 - $23,249$143$0271.15$23,250 - $24,249$160$0271.16$24,250 - $25,249$161$0271.17$25,250 - $26,249$161$0271.18$26,250 - $27,249$161$0271.19$27,250 - $28,249$161$0271.20$28,250 - $29,249$161$0271.21$29,250 - $30,249$161$0271.22$30,250 - $31,249$161$0271.23$31,250 - $32,249$161$6271.24$32,250 - $33,249$161$14271.25$33,250 - $34,249$161$22271.26$34,250 - $35,249$161$30271.27$35,250 - $36,249$161$38271.28$36,250 - $37,249$161$46271.29$37,250 - $38,249$161$54271.30$38,250 - $39,249$161$62271.31$39,250 - $40,249$161$70271.32$40,250 - $41,249$161$78271.33$41,250 - $42,249$161$86271.34$42,250 - $43,249$161$94271.35$43,250 - $44,249$161$102271.36$44,250 - $45,249$161$110272.1$45,250 - $46,249$161$118272.2$46,250 - $47,249$161$126272.3$47,250 - $48,249$161$134272.4$48,250 - $49,249$161$142272.5$49,250 - $50,249$161$150272.6$50,250 - $51,249$161$158272.7$51,250 - $52,249$161$166272.8$52,250 - $53,249$161$174272.9$53,250 - $54,249$161$182272.10$54,250 - $55,249$161$190272.11$55,250 - $56,249$161$198272.12$56,250 - $57,249$161$206272.13$57,250 - $58,249$161$214272.14$58,250 - $59,249$161$222272.15$59,250 - $60,249$161$230272.16$60,250 - $61,249$161$238272.17$61,250 - $62,249$161$246272.18$62,250 - $63,249$161$254272.19$63,250 - $64,249$161$262272.20$64,250 and over$161$268272.21 For taxable years beginning after December 31, 2001, the 272.22 commissioner of revenue shall prepare and make available to 272.23 taxpayers a comprehensive table showing the credit under this 272.24 section at brackets of earnings of the lesser-earning spouse and 272.25 joint taxable income. The brackets of earnings shall not be 272.26 more than $2,000. 272.27 For taxable years beginning after December 31,20002002, 272.28 the commissioner shall update the table as necessary to provide 272.29 a credit that reflects the relationship between the marginal tax 272.30 rates imposed under section 290.06, subdivision 2c. 272.31 [EFFECTIVE DATE.] This section is effective for taxable 272.32 years beginning after December 31, 2000. 272.33 Sec. 42. Minnesota Statutes 2000, section 290.0921, 272.34 subdivision 3, is amended to read: 272.35 Subd. 3. [ALTERNATIVE MINIMUM TAXABLE INCOME.] 272.36 "Alternative minimum taxable income" is Minnesota net income as 273.1 defined in section 290.01, subdivision 19, and includes the 273.2 adjustments and tax preference items in sections 56, 57, 58, and 273.3 59(d), (e), (f), and (h) of the Internal Revenue Code. If a 273.4 corporation files a separate company Minnesota tax return, the 273.5 minimum tax must be computed on a separate company basis. If a 273.6 corporation is part of a tax group filing a unitary return, the 273.7 minimum tax must be computed on a unitary basis. The following 273.8 adjustments must be made. 273.9 (1) For purposes of the depreciation adjustments under 273.10 section 56(a)(1) and 56(g)(4)(A) of the Internal Revenue Code, 273.11 the basis for depreciable property placed in service in a 273.12 taxable year beginning before January 1, 1990, is the adjusted 273.13 basis for federal income tax purposes, including any 273.14 modification made in a taxable year under section 290.01, 273.15 subdivision 19e, or Minnesota Statutes 1986, section 290.09, 273.16 subdivision 7, paragraph (c). 273.17 For taxable years beginning after December 31, 2000, the 273.18 amount of any remaining modification made under section 290.01, 273.19 subdivision 19e, or Minnesota Statutes 1986, section 290.09, 273.20 subdivision 7, paragraph (c), not previously deducted is a 273.21 depreciation allowance in the first taxable year after December 273.22 31, 2000. 273.23 (2) The alternative tax net operating loss deduction under 273.24 sections 56(a)(4) and 56(d) of the Internal Revenue Code does 273.25 not apply. 273.26 (3) The special rule for certain dividends under section 273.27 56(g)(4)(C)(ii) of the Internal Revenue Code does not apply. 273.28 (4) The special rule for dividends from section 936 273.29 companies under section 56(g)(4)(C)(iii) does not apply. 273.30 (5) The tax preference for depletion under section 57(a)(1) 273.31 of the Internal Revenue Code does not apply. 273.32 (6) The tax preference for intangible drilling costs under 273.33 section 57(a)(2) of the Internal Revenue Code must be calculated 273.34 without regard to subparagraph (E) and the subtraction under 273.35 section 290.01, subdivision 19d, clause (4). 273.36 (7) The tax preference for tax exempt interest under 274.1 section 57(a)(5) of the Internal Revenue Code does not apply. 274.2 (8) The tax preference for charitable contributions of 274.3 appreciated property under section 57(a)(6) of the Internal 274.4 Revenue Code does not apply. 274.5 (9) For purposes of calculating the tax preference for 274.6 accelerated depreciation or amortization on certain property 274.7 placed in service before January 1, 1987, under section 57(a)(7) 274.8 of the Internal Revenue Code, the deduction allowable for the 274.9 taxable year is the deduction allowed under section 290.01, 274.10 subdivision 19e. 274.11 For taxable years beginning after December 31, 2000, the 274.12 amount of any remaining modification made under section 290.01, 274.13 subdivision 19e, not previously deducted is a depreciation or 274.14 amortization allowance in the first taxable year after December 274.15 31, 2000. 274.16 (10) For purposes of calculating the adjustment for 274.17 adjusted current earnings in section 56(g) of the Internal 274.18 Revenue Code, the term "alternative minimum taxable income" as 274.19 it is used in section 56(g) of the Internal Revenue Code, means 274.20 alternative minimum taxable income as defined in this 274.21 subdivision, determined without regard to the adjustment for 274.22 adjusted current earnings in section 56(g) of the Internal 274.23 Revenue Code. 274.24 (11) For purposes of determining the amount of adjusted 274.25 current earnings under section 56(g)(3) of the Internal Revenue 274.26 Code, no adjustment shall be made under section 56(g)(4) of the 274.27 Internal Revenue Code with respect to (i) the amount of foreign 274.28 dividend gross-up subtracted as provided in section 290.01, 274.29 subdivision 19d, clause (1), (ii) the amount of refunds of 274.30 income, excise, or franchise taxes subtracted as provided in 274.31 section 290.01, subdivision 19d, clause (10), or (iii) the 274.32 amount of royalties, fees or other like income subtracted as 274.33 provided in section 290.01, subdivision 19d, clause (11). 274.34 Items of tax preference must not be reduced below zero as a 274.35 result of the modifications in this subdivision. 274.36 [EFFECTIVE DATE.] This section is effective the day 275.1 following final enactment. 275.2 Sec. 43. Minnesota Statutes 2000, section 290.92, 275.3 subdivision 23, is amended to read: 275.4 Subd. 23. [WITHHOLDING BY EMPLOYER OF DELINQUENT TAXES.] 275.5 (1) The commissioner may, within five years after the date of 275.6 assessment of the tax, or if a lien has been filed under section 275.7 270.69, within the statutory period for enforcement of the lien, 275.8 give notice to any employer deriving income which has a taxable 275.9 situs in this state regardless of whether the income is exempt 275.10 from taxation, that an employee of that employer is delinquent 275.11 in a certain amount with respect to any state taxes, including 275.12 penalties, interest, and costs. The commissioner can proceed 275.13 under this subdivision only if the tax is uncontested or if the 275.14 time for appeal of the tax has expired. The commissioner shall 275.15 not proceed under this subdivision until the expiration of 30 275.16 days after mailing to the taxpayer, at the taxpayer's last known 275.17 address, a written notice of (a) the amount of taxes, interest, 275.18 and penalties due from the taxpayer and demand for their 275.19 payment, and (b) the commissioner's intention to require 275.20 additional withholding by the taxpayer's employer pursuant to 275.21 this subdivision. The effect of the notice shall expire180275.22daysone year after it has been mailed to the taxpayer provided 275.23 that the notice may be renewed by mailing a new notice which is 275.24 in accordance with this subdivision. The renewed notice shall 275.25 have the effect of reinstating the priority of the original 275.26 claim. The notice to the taxpayer shall be in substantially the 275.27 same form as that provided in section 571.72. The notice shall 275.28 further inform the taxpayer of the wage exemptions contained in 275.29 section 550.37, subdivision 14. If no statement of exemption is 275.30 received by the commissioner within 30 days from the mailing of 275.31 the notice, the commissioner may proceed under this 275.32 subdivision. The notice to the taxpayer's employer may be 275.33 served by mail or by delivery by an employee of the department 275.34 of revenue and shall be in substantially the same form as 275.35 provided in section 571.75. Upon receipt of notice, the 275.36 employer shall withhold from compensation due or to become due 276.1 to the employee, the total amount shown by the notice, subject 276.2 to the provisions of section 571.922. The employer shall 276.3 continue to withhold each pay period until the notice is 276.4 released by the commissioner under section 270.709. Upon 276.5 receipt of notice by the employer, the claim of the state of 276.6 Minnesota shall have priority over any subsequent garnishments 276.7 or wage assignments. The commissioner may arrange between the 276.8 employer and the employee for withholding a portion of the total 276.9 amount due the employee each pay period, until the total amount 276.10 shown by the notice plus accrued interest has been withheld. 276.11 The "compensation due" any employee is defined in 276.12 accordance with the provisions of section 571.921. The maximum 276.13 withholding allowed under this subdivision for any one pay 276.14 period shall be decreased by any amounts payable pursuant to a 276.15 garnishment action with respect to which the employer was served 276.16 prior to being served with the notice of delinquency and any 276.17 amounts covered by any irrevocable and previously effective 276.18 assignment of wages; the employer shall give notice to the 276.19 department of the amounts and the facts relating to such 276.20 assignments within ten days after the service of the notice of 276.21 delinquency on the form provided by the department of revenue as 276.22 noted in this subdivision. 276.23 (2) If the employee ceases to be employed by the employer 276.24 before the full amount set forth in a notice of delinquency plus 276.25 accrued interest has been withheld, the employer shall 276.26 immediately notify the commissioner in writing of the 276.27 termination date of the employee and the total amount withheld. 276.28 No employer may discharge any employee by reason of the fact 276.29 that the commissioner has proceeded under this subdivision. If 276.30 an employer discharges an employee in violation of this 276.31 provision, the employee shall have the same remedy as provided 276.32 in section 571.927, subdivision 2. 276.33 (3) Within ten days after the expiration of such pay 276.34 period, the employer shall remit to the commissioner, on a form 276.35 and in the manner prescribed by the commissioner, the amount 276.36 withheld during each pay period under this subdivision. 277.1 (4) Clauses (1), (2), and (3), except provisions imposing a 277.2 liability on the employer for failure to withhold or remit, 277.3 shall apply to cases in which the employer is the United States 277.4 or any instrumentality thereof or this state or any municipality 277.5 or other subordinate unit thereof. 277.6 (5) The commissioner shall refund to the employee excess 277.7 amounts withheld from the employee under this subdivision. If 277.8 any excess results from payments by the employer because of 277.9 willful failure to withhold or remit as prescribed in clause 277.10 (3), the excess attributable to the employer's payment shall be 277.11 refunded to the employer. 277.12 (6) Employers required to withhold delinquent taxes, 277.13 penalties, interest, and costs under this subdivision shall not 277.14 be required to compute any additional interest, costs or other 277.15 charges to be withheld. 277.16 (7) The collection remedy provided to the commissioner by 277.17 this subdivision shall have the same legal effect as if it were 277.18 a levy made pursuant to section 270.70. 277.19 [EFFECTIVE DATE.] This section is effective for notices of 277.20 intent mailed on or after the day following final enactment. 277.21 Sec. 44. Minnesota Statutes 2000, section 290A.03, 277.22 subdivision 12, is amended to read: 277.23 Subd. 12. [GROSS RENT.] (a) "Gross rent" means rental paid 277.24 for the right of occupancy, at arms-length, of a homestead, 277.25 exclusive of charges for any medical services furnished by the 277.26 landlord as a part of the rental agreement, whether expressly 277.27 set out in the rental agreement or not. 277.28 (b) The gross rent of a resident of a nursing home or 277.29 intermediate care facility is $350 per month. The gross rent of 277.30 a resident of an adult foster care home is $550 per month. 277.31 Beginning for rent paid in 2002, the commissioner shall annually 277.32 adjust for inflation the gross rent amounts stated in this 277.33 paragraph. The adjustment must be made in accordance with 277.34 section 1f of the Internal Revenue Code, except that for 277.35 purposes of this paragraph the percentage increase shall be 277.36 determined from the year ending on June 30, 2001, to the year 278.1 ending on June 30 of the year in which the rent is paid. The 278.2 commissioner shall round the gross rents to the nearest $10 278.3 amount. If the amount ends in $5, the commissioner shall round 278.4 it up to the next $10 amount. The determination of the 278.5 commissioner under this paragraph is not a rule under the 278.6 Administrative Procedure Act. 278.7 (c) If the landlord and tenant have not dealt with each 278.8 other at arms-length and the commissioner determines that the 278.9 gross rent charged was excessive, the commissioner may adjust 278.10 the gross rent to a reasonable amount for purposes of this 278.11 chapter. 278.12 (d) Any amount paid by a claimant residing in property 278.13 assessed pursuant to section 273.124, subdivision 3, 4, 5, or 6 278.14 for occupancy in that property shall be excluded from gross rent 278.15 for purposes of this chapter. However, property taxes imputed 278.16 to the homestead of the claimant or the dwelling unit occupied 278.17 by the claimant that qualifies for homestead treatment pursuant 278.18 to section 273.124, subdivision 3, 4, 5, or 6 shall be included 278.19 within the term "property taxes payable" as defined in 278.20 subdivision 13, notwithstanding the fact that ownership is not 278.21 in the name of the claimant. 278.22 [EFFECTIVE DATE.] This section is effective for refunds 278.23 based on rent paid after December 31, 2000. 278.24 Sec. 45. Minnesota Statutes 2000, section 290A.15, is 278.25 amended to read: 278.26 290A.15 [CLAIM APPLIED AGAINST OUTSTANDING LIABILITY.] 278.27 The amount of any claim otherwise payable under this 278.28 chapter may be applied by the commissioner against any 278.29 delinquent tax liability ofthe claimant or spouse of the278.30claimant payable to the department of revenueany member of the 278.31 household. If there are two members of the household, the 278.32 commissioner may apply only one-half of a refund to the separate 278.33 liability of either member of the household. 278.34 [EFFECTIVE DATE.] This section is effective beginning with 278.35 refunds paid on or after August 1, 2001. 278.36 Sec. 46. Minnesota Statutes 2000, section 296A.16, 279.1 subdivision 2, is amended to read: 279.2 Subd. 2. [FUEL USED IN OTHER VEHICLE; CLAIM FOR REFUND.] 279.3 Any person whoshall buybuys anduseuses gasoline for a 279.4 qualifying purpose other than use in motor vehicles, snowmobiles 279.5 except as provided in clause (2), or motorboats, or special fuel 279.6 for a qualifying purpose other than use in licensed motor 279.7 vehicles, and whoshall havepaid the tax directly or indirectly 279.8 through the amount of the tax being included in the price of the 279.9 gasoline or special fuel, or otherwise, shall be reimbursed and 279.10 repaid the amount of the tax paid upon filing with the 279.11 commissioner a claim for refund in the form and manner 279.12 prescribed by the commissioner, and containing the information 279.13 the commissioner shall require. By signing any such claim which 279.14 is false or fraudulent, the applicant shall be subject to the 279.15 penalties provided in this chapter for knowingly making a false 279.16 claim. The claim shall set forth the total amount of the 279.17 gasoline so purchased and used by the applicant other than in 279.18 motor vehicles, or special fuel purchased and used by the 279.19 applicant other than in licensed motor vehicles, and shall state 279.20 when and for what purpose it was used. When a claim contains an 279.21 error in computation or preparation, the commissioner is 279.22 authorized to adjust the claim in accordance with the evidence 279.23 shown on the claim or other information available to the 279.24 commissioner. The commissioner, on being satisfied that the 279.25 claimant is entitled to the payments, shall approve the claim 279.26 and transmit it to the commissioner of finance. The words 279.27 "gasoline" or "special fuel" as used in this subdivision do not 279.28 include aviation gasoline or special fuel for aircraft. 279.29 Gasoline or special fuel bought and used for a "qualifying 279.30 purpose" means: 279.31 (1) Gasoline or special fuel used in carrying on a trade or 279.32 business, used on a farm situated in Minnesota, and used for a 279.33 farming purpose. "Farm" and "farming purpose" have the meanings 279.34 given them in section 6420(c)(2), (3), and (4) of the Internal 279.35 Revenue Code of 1986, as amended through December 31, 1997. 279.36 (2) Gasoline or special fuel used for off-highway business 280.1 use. "Off-highway business use" means any use off the public 280.2 highway by a person in that person's trade, business, or 280.3 activity for the production of income. Off-highway business use 280.4 includes: 280.5 (i) use of a passenger snowmobile off the public highways 280.6 as part of the operations of a resort as defined in section 280.7 157.15, subdivision 11; and 280.8 (ii) use of gasoline or special fuel to operate a power 280.9 takeoff unit on a vehicle, but not including fuel consumed 280.10 during idling time. 280.11 Off-highway business use does not include: 280.12 (i) use as a fuel in a motor vehicle which, at the time of 280.13 use, is registered or is required to be registered for highway 280.14 use under the laws of any state or foreign country; or 280.15 (ii) use of a licensed motor vehicle fuel tank in lieu of a 280.16 separate storage tank for storing fuel to be used for a 280.17 qualifying purpose, as defined in this section. Fuel purchased 280.18 to be used for a qualifying purpose cannot be placed in the fuel 280.19 tank of a licensed motor vehicle and must be stored in a 280.20 separate supply tank. 280.21 (3) Gasoline or special fuel placed in the fuel tanks of 280.22 new motor vehicles, manufactured in Minnesota, and shipped by 280.23 interstate carrier to destinations in other states or foreign 280.24 countries. 280.25By July 1, 1998, the commissioner shall adopt rules that280.26determine the rates and percentages necessary to develop280.27formulas for calculating the refund under clause (2), item (ii).280.28 [EFFECTIVE DATE.] This section is effective the day 280.29 following final enactment. 280.30 Sec. 47. [296A.201] [ASSESSMENTS.] 280.31 Subdivision 1. [GENERAL RULE.] The commissioner may make 280.32 determinations, corrections, and assessments with respect to any 280.33 tax or fee under this chapter, including interest, additions to 280.34 taxes and fees, and assessable penalties. 280.35 Subd. 2. [COMMISSIONER FILED RETURNS.] If a taxpayer fails 280.36 to file a required return, the commissioner, from information in 281.1 the commissioner's possession or obtainable by the commissioner, 281.2 may make a return for the taxpayer. The return is prima facie 281.3 correct and valid. The commissioner may use statistical or 281.4 other sampling techniques consistent with generally accepted 281.5 auditing standards in examining returns or records and making 281.6 assessments. 281.7 Subd. 3. [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO 281.8 TAXPAYER.] (a) If a return has been filed and the commissioner 281.9 determines that the tax or fee disclosed by the return is 281.10 different than the tax or fee determined by the examination, the 281.11 commissioner shall send an order of assessment to the taxpayer. 281.12 If no return has been filed, the commissioner may make a return 281.13 for the taxpayer under subdivision 2 or may send an order of 281.14 assessment under this subdivision. The order must explain the 281.15 basis for the assessment and must explain the taxpayer's appeal 281.16 rights. An order of assessment is final when made but may be 281.17 reconsidered by the commissioner under section 296A.25. 281.18 (b) Penalties under this chapter are not imposed and no 281.19 collection action can be taken, including the filing of liens 281.20 under section 270.69, if the amount shown on the order is paid 281.21 to the commissioner: 281.22 (1) within 60 days after notice of the amount and demand 281.23 for its payment have been mailed to the taxpayer by the 281.24 commissioner; or 281.25 (2) if an administrative appeal is filed under this 281.26 chapter, or a tax court appeal is filed under chapter 271, 281.27 within 60 days following final determination of the appeal if 281.28 the appeal is based upon a constitutional challenge to the tax 281.29 or fee, and if not, when the decision of the tax court is made. 281.30 Subd. 4. [ERRONEOUS REFUNDS.] An erroneous refund is 281.31 considered an underpayment of tax or fee on the date made. An 281.32 assessment of a deficiency arising out of an erroneous refund 281.33 may be made at any time within two years from the making of the 281.34 refund. If part of the refund was induced by fraud or 281.35 misrepresentation of a material fact, the assessment may be made 281.36 at any time. 282.1 Subd. 5. [ASSESSMENT PRESUMED VALID.] A return or 282.2 assessment of tax or fee made by the commissioner is prima facie 282.3 correct and valid. The taxpayer has the burden of establishing 282.4 its incorrectness or invalidity in any related action or 282.5 proceeding. 282.6 Subd. 6. [AGGREGATE REFUND OR ASSESSMENT.] The 282.7 commissioner, on examining returns of a taxpayer for more than 282.8 one year or period, may issue one order covering the period 282.9 under examination that reflects the aggregate refund or 282.10 additional tax or fee due. 282.11 Subd. 7. [SUFFICIENCY OF NOTICE.] An order of assessment, 282.12 sent postage prepaid by United States mail to the taxpayer at 282.13 the taxpayer's last known address, is sufficient even if the 282.14 taxpayer is deceased or is under a legal disability, or, in the 282.15 case of a corporation, even if the corporation has terminated 282.16 its existence, unless the department has been provided with a 282.17 new address by a party authorized to receive notices of 282.18 assessment. 282.19 [EFFECTIVE DATE.] This section is effective the day 282.20 following final enactment. 282.21 Sec. 48. Minnesota Statutes 2000, section 296A.21, 282.22 subdivision 1, is amended to read: 282.23 Subdivision 1. [GENERALRULERULES.] (a) The commissioner 282.24 shall make determinations, corrections,andassessments, and 282.25 refunds with respect to taxes and fees under this chapter, 282.26 including interest, additions to taxes, and assessable 282.27 penalties. Except as otherwise provided in this section, the 282.28 amount of taxes assessable must be assessed within 3-1/2 years 282.29 after the date the return is filed. 282.30 (b) A claim for a refund of an overpayment of state tax or 282.31 fees must be filed within 3-1/2 years from the date prescribed 282.32 for filing the return, plus any extension of time granted for 282.33 filing the return, but only if filed within the extended time; 282.34 or the claim must be filed within one year from the date of an 282.35 order assessing tax or fees, or from the date of a return filed 282.36 by the commissioner, upon payment in full of the tax, fees, 283.1 penalties, and interest shown on the order or return, whichever 283.2 period expires later. 283.3 [EFFECTIVE DATE.] This section is effective the day 283.4 following final enactment. 283.5 Sec. 49. Minnesota Statutes 2000, section 296A.21, 283.6 subdivision 4, is amended to read: 283.7 Subd. 4. [TIME LIMIT FORREPAYMENTCERTAIN REFUNDS.]No283.8repaymentNotwithstanding subdivision 1, paragraph (b), no 283.9 refund under section 296A.16, subdivision 2, shall be made 283.10 unless the claim for refund and invoiceshall beare filed with 283.11 the commissioner within one year from the date of purchase.The283.12postmark on the envelope in which a written claim is mailed283.13shall determine its date of filing.283.14 [EFFECTIVE DATE.] This section is effective the day 283.15 following final enactment. 283.16 Sec. 50. Minnesota Statutes 2000, section 297A.07, 283.17 subdivision 3, is amended to read: 283.18 Subd. 3. [NEW PERMITS AFTER REVOCATION.] The commissioner 283.19 shall not issue a new permit or reinstate a revoked permit after 283.20 revocation unless the taxpayer applies for a permit and provides 283.21 reasonable evidence of intention to comply with the sales and 283.22 use tax laws and rules. The commissioner may require the 283.23 applicant to supply security, in addition to that authorized by 283.24 section 297A.28, as is reasonably necessary to insure compliance 283.25 with the sales and use tax laws and rules. If the commissioner 283.26 issues or reinstates a permit not in conformance with the 283.27 requirements of this subdivision or applicable rules, the 283.28 commissioner may cancel the permit upon notice to the permit 283.29 holder. The notice must be served by first class and certified 283.30 mail at the permit holder's last known address. The 283.31 cancellation shall be effective immediately, subject to the 283.32 right of the permit holder to show that the permit was issued in 283.33 conformance with the requirements of this subdivision and 283.34 applicable rules. Upon such showing, the permit must be 283.35 reissued. 283.36 If a taxpayer has had a permit or permits revoked three 284.1 times in a five-year period, the commissioner shall not issue a 284.2 new permit or reinstate the revoked permit until 24 months have 284.3 elapsed after revocation and the taxpayer has satisfied the 284.4 conditions for reinstatement of a revoked permit or issuance of 284.5 a new permit imposed by this section and rules adopted hereunder. 284.6 For purposes of this subdivision, the term "taxpayer" means 284.7 an individual, if a revoked permit was issued to or in the name 284.8 of an individual, or a corporation or partnership, if a revoked 284.9 permit was issued to or in the name of a corporation or 284.10 partnership. Taxpayer also means an officer of a corporation, a 284.11 member of a partnership, or an individual who is liable for 284.12 delinquent sales taxes, either for the entity for which the new 284.13 or reinstated permit is at issue, or for another entity for 284.14 which a permit was previously revoked, or personally as a permit 284.15 holder. 284.16 [EFFECTIVE DATE; INSTRUCTION TO REVISOR.] (a) This section 284.17 is effective the day following final enactment. 284.18 (b) In the next edition of Minnesota Statutes, the revisor 284.19 shall codify the amendments to this section in Minnesota 284.20 Statutes, section 297A.86, subdivision 2. 284.21 Sec. 51. Minnesota Statutes 2000, section 297A.25, 284.22 subdivision 3, is amended to read: 284.23 Subd. 3. [MEDICINES; MEDICAL DEVICES.] The gross receipts 284.24 from the sale of and storage, use, or consumption of prescribed 284.25 drugs, prescribed medicine and insulin, intended for use, 284.26 internal or external, in the cure, mitigation, treatment or 284.27 prevention of illness or disease in human beings are exempt, 284.28 together with prescription glasses, fever thermometers, 284.29 therapeutic, and prosthetic devices. "Prescribed drugs" or 284.30 "prescribed medicine" includes over-the-counter drugs or 284.31 medicine prescribed by a licensedphysicianhealth care 284.32 professional. "Therapeutic devices" includes reusable finger 284.33 pricking devices for the extraction of blood, blood glucose 284.34 monitoring machines, and other diagnostic agents used in 284.35 diagnosing, monitoring, or treating diabetes. Nonprescription 284.36 analgesics consisting principally (determined by the weight of 285.1 all ingredients) of acetaminophen, acetylsalicylic acid, 285.2 ibuprofen, ketoprofen, naproxen, and other nonprescription 285.3 analgesics that are approved by the United States Food and Drug 285.4 Administration for internal use by human beings, or a 285.5 combination thereof, are exempt. 285.6 Medical supplies purchased by a licensed health care 285.7 facility or licensed health care professional to provide medical 285.8 treatment to residents or patients are exempt. The exemption 285.9 does not apply to medical equipment or components of medical 285.10 equipment, laboratory supplies, radiological supplies, and other 285.11 items used in providing medical services. For purposes of this 285.12 subdivision, "medical supplies" means adhesive and nonadhesive 285.13 bandages, gauze pads and strips, cotton applicators, 285.14 antiseptics, nonprescription drugs, eye solution, and other 285.15 similar supplies used directly on the resident or patient in 285.16 providing medical services. 285.17 [EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 285.18 effective the day following final enactment. In the next 285.19 edition of Minnesota Statutes, the revisor of statutes shall 285.20 codify the amendment in this section in Minnesota Statutes, 285.21 section 297A.67, subdivision 7. 285.22 Sec. 52. Minnesota Statutes 2000, section 297A.25, 285.23 subdivision 11, is amended to read: 285.24 Subd. 11. [SALES TO GOVERNMENT.] The gross receipts from 285.25 all sales, including sales in which title is retained by a 285.26 seller or a vendor or is assigned to a third party under an 285.27 installment sale or lease purchase agreement under section 285.28 465.71, of tangible personal property to, and all storage, use 285.29 or consumption of such property by, the United States and its 285.30 agencies and instrumentalities, the University of Minnesota, 285.31 state universities, community colleges, technical colleges, 285.32 state academies, the Perpich center for arts education, an 285.33 instrumentality of a political subdivision that is accredited as 285.34 an optional/special function school by the North Central 285.35 Association of Colleges and Schools, school districts, public 285.36 libraries, public library systems, multicounty, multitype 286.1 library systems as defined in section 134.001, county law 286.2 libraries under chapter 134A, state agency libraries, the state 286.3 library under section 480.09, and the legislative reference 286.4 library are exempt. 286.5 As used in this subdivision, "school districts" means 286.6 public school entities and districts of every kind and nature 286.7 organized under the laws of the state of Minnesota, including, 286.8 without limitation, school districts, intermediate school 286.9 districts, education districts, service cooperatives, secondary 286.10 vocational cooperative centers, special education cooperatives, 286.11 joint purchasing cooperatives, telecommunication cooperatives, 286.12 regional management information centers, and any instrumentality 286.13 of a school district, as defined in section 471.59. 286.14 Sales exempted by this subdivision include sales under 286.15 section 297A.01, subdivision 3, paragraph (f). 286.16 Sales to hospitals and nursing homes owned and operated by 286.17 political subdivisions of the state of tangible personal 286.18 property and taxable services used at or by the hospitals and 286.19 nursing homes are exempt under this subdivision. 286.20 Sales of supplies and equipment used in the operation of an 286.21 ambulance service owned and operated by a political subdivision 286.22 of the state are exempt under this subdivision provided that the 286.23 supplies and equipment are used in the course of providing 286.24 medical care. Sales to a political subdivision of repair and 286.25 replacement parts for emergency rescue vehicles and fire trucks 286.26 and apparatus are exempt under this subdivision. 286.27 Sales to a political subdivision of machinery and 286.28 equipment, except for motor vehicles, used directly for mixed 286.29 municipal solid waste management services at a solid waste 286.30 disposal facility as defined in section 115A.03, subdivision 10, 286.31 are exempt under this subdivision. 286.32 Sales to political subdivisions of chore and homemaking 286.33 services to be provided to elderly or disabled individuals are 286.34 exempt. 286.35 Sales to a town of gravel and of machinery, equipment, and 286.36 accessories, except motor vehicles, used exclusively for road 287.1 and bridge maintenance, and leases of motor vehicles exempt from 287.2 tax under section 297B.03, clause (10), are exempt. 287.3 Sales of telephone services to the department of 287.4 administration that are used to provide telecommunications 287.5 services through the intertechnologies revolving fund are exempt 287.6 under this subdivision. 287.7 This exemption shall not apply to building, construction or 287.8 reconstruction materials purchased by a contractor or a 287.9 subcontractor as a part of a lump-sum contract or similar type 287.10 of contract with a guaranteed maximum price covering both labor 287.11 and materials for use in the construction, alteration, or repair 287.12 of a building or facility. This exemption does not apply to 287.13 construction materials purchased by tax exempt entities or their 287.14 contractors to be used in constructing buildings or facilities 287.15 which will not be used principally by the tax exempt entities. 287.16 This exemption does not apply to the leasing of a motor 287.17 vehicle as defined in section 297B.01, subdivision 5, except for 287.18 leases entered into by the United States or its agencies or 287.19 instrumentalities. 287.20 The tax imposed on sales to political subdivisions of the 287.21 state under this section applies to all political subdivisions 287.22 other than those explicitly exempted under this subdivision, 287.23 notwithstanding section 115A.69, subdivision 6, 116A.25, 287.24 360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 287.25 469.127, 473.448, 473.545, or 473.608 or any other law to the 287.26 contrary enacted before 1992. 287.27 Sales exempted by this subdivision include sales made to 287.28 other states or political subdivisions of other states, if the 287.29 sale would be exempt from taxation if it occurred in that state, 287.30 but do not include sales under section 297A.01, subdivision 3, 287.31 paragraphs (c) and (e). 287.32 [EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 287.33 effective the day following final enactment. In the next 287.34 edition of Minnesota Statutes, the revisor of statutes shall 287.35 codify the amendment in this section in Minnesota Statutes, 287.36 section 297A.70, subdivision 2. 288.1 Sec. 53. Minnesota Statutes 2000, section 297A.82, 288.2 subdivision 3, is amended to read: 288.3 Subd. 3. [PAYMENT OF TAXTO COMMISSIONER.] Ifthean 288.4 aircraft is purchased from a person who is not the holder of a 288.5 valid sales and use tax permit under this chapter, the purchaser 288.6 shall pay the taxto the commissioner of revenueprior to 288.7 registering or licensing the aircraft in this state.The288.8commissioner of revenue shall issue a certificate stating that288.9the sales and use tax in respect to the transaction has been288.10paid.288.11 [EFFECTIVE DATE.] This section is effective for sales and 288.12 purchases occurring after the day following final enactment. 288.13 Sec. 54. Minnesota Statutes 2000, section 297A.82, is 288.14 amended by adding a subdivision to read: 288.15 Subd. 7. [AGREEMENT WITH COMMISSIONER OF 288.16 TRANSPORTATION.] Notwithstanding subdivisions 1 to 4, the 288.17 commissioner may enter into an agreement with the commissioner 288.18 of transportation whereby, upon approval of both commissioners, 288.19 the commissioner of transportation will collect the sales tax on 288.20 aircraft from persons required to register or license aircraft 288.21 in this state. For purposes of collecting the tax, the 288.22 commissioner of transportation shall act as agent of the 288.23 commissioner of revenue and shall be subject to all rules not 288.24 inconsistent with the provisions of this chapter, that may be 288.25 prescribed by the commissioner. 288.26 [EFFECTIVE DATE.] This section is effective the day 288.27 following final enactment. 288.28 Sec. 55. Minnesota Statutes 2000, section 297B.03, is 288.29 amended to read: 288.30 297B.03 [EXEMPTIONS.] 288.31 There is specifically exempted from the provisions of this 288.32 chapter and from computation of the amount of tax imposed by it 288.33 the following: 288.34 (1) purchase or use, including use under a lease purchase 288.35 agreement or installment sales contract made pursuant to section 288.36 465.71, of any motor vehicle by the United States and its 289.1 agencies and instrumentalities and by any person described in 289.2 and subject to the conditions provided in section 297A.25, 289.3 subdivision 18; 289.4 (2) purchase or use of any motor vehicle by any person who 289.5 was a resident of another state or country at the time of the 289.6 purchase and who subsequently becomes a resident of Minnesota, 289.7 provided the purchase occurred more than 60 days prior to the 289.8 date such person began residing in the state of Minnesota and 289.9 the motor vehicle was registered in the person's name in the 289.10 other state or country; 289.11 (3) purchase or use of any motor vehicle by any person 289.12 making a valid election to be taxed under the provisions of 289.13 section 297A.211; 289.14 (4) purchase or use of any motor vehicle previously 289.15 registered in the state of Minnesota when such transfer 289.16 constitutes a transfer within the meaning of section 118, 331, 289.17 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 289.18 1563(a) of the Internal Revenue Code of 1986, as amended through 289.19 December 31, 1999; 289.20 (5) purchase or use of any vehicle owned by a resident of 289.21 another state and leased to a Minnesota based private or for 289.22 hire carrier for regular use in the transportation of persons or 289.23 property in interstate commerce provided the vehicle is titled 289.24 in the state of the owner or secured party, and that state does 289.25 not impose a sales tax or sales tax on motor vehicles used in 289.26 interstate commerce; 289.27 (6) purchase or use of a motor vehicle by a private 289.28 nonprofit or public educational institution for use as an 289.29 instructional aid in automotive training programs operated by 289.30 the institution. "Automotive training programs" includes motor 289.31 vehicle body and mechanical repair courses but does not include 289.32 driver education programs; 289.33 (7) purchase of a motor vehicle for use as an ambulance by 289.34 an ambulance service licensed under section 144E.10; 289.35 (8) purchase of a motor vehicle by or for a public library, 289.36 as defined in section 134.001, subdivision 2, as a bookmobile or 290.1 library delivery vehicle; 290.2 (9) purchase of a ready-mixed concrete truck; 290.3 (10) purchase or use of a motor vehicle by a town for use 290.4 exclusively for road maintenance, including snowplows and dump 290.5 trucks, but not including automobiles, vans, or pickup trucks; 290.6 (11) purchase or use of a motor vehicle by a corporation, 290.7 society, association, foundation, or institution organized and 290.8 operated exclusively for charitable, religious, or educational 290.9 purposes, except a public school, university, or library, but 290.10 only if the vehicle is: 290.11 (i) a truck, as defined in section 168.011, a bus, as 290.12 defined in section 168.011, or a passenger automobile, as 290.13 defined in section 168.011, if the automobile is designed and 290.14 used for carrying more than nine persons including the driver; 290.15 and 290.16 (ii) intended to be used primarily to transport tangible 290.17 personal property or individuals, other than employees, to whom 290.18 the organization provides service in performing its charitable, 290.19 religious, or educational purpose. 290.20 [EFFECTIVE DATE.] This section is effective the day 290.21 following final enactment, except that the change to paragraph 290.22 (11) is effective for sales and purchases occurring after June 290.23 30, 2000. 290.24 Sec. 56. Minnesota Statutes 2000, section 297F.16, 290.25 subdivision 4, is amended to read: 290.26 Subd. 4. [ERRONEOUS REFUNDSOR CREDITS.] An erroneous 290.27 refundor creditis considered an underpayment of tax on the 290.28 date made. An assessment of a deficiency arising out of an 290.29 erroneous refundor creditmust be made within3-1/2 years from290.30the date prescribed for filing the return, plus any extension of290.31time granted for filing the return, but only if filed within the290.32extended time, or two years from the time the tax is paid in290.33full, whichever period expires latertwo years from the making 290.34 of the refund. If part of the refund was induced by fraud or 290.35 misrepresentation of a material fact, the assessment may be made 290.36 at any time. 291.1 [EFFECTIVE DATE.] This section is effective the day 291.2 following final enactment. 291.3 Sec. 57. Minnesota Statutes 2000, section 297G.15, 291.4 subdivision 4, is amended to read: 291.5 Subd. 4. [ERRONEOUS REFUNDSOR CREDITS.] An erroneous 291.6 refundor creditis considered an underpayment of tax on the 291.7 date made. An assessment of a deficiency arising out of an 291.8 erroneous refundor creditmust be made within3-1/2 years from291.9the date prescribed for filing the return, plus any extension of291.10time granted for filing the return, but only if filed within the291.11extended time, or two years from the time the tax is paid in291.12full, whichever period expires latertwo years from the making 291.13 of the refund. If part of the refund was induced by fraud or 291.14 misrepresentation of a material fact, the assessment may be made 291.15 at any time. 291.16 [EFFECTIVE DATE.] This section is effective the day 291.17 following final enactment. 291.18 Sec. 58. Minnesota Statutes 2000, section 297G.16, 291.19 subdivision 5, is amended to read: 291.20 Subd. 5. [TIME LIMIT FOR REFUNDS.] Unless otherwise 291.21 provided in this chapter, a claim for a refund of an overpayment 291.22 of tax must be filed within 3-1/2 years from the date prescribed 291.23 for filing the return, plus any extension of time granted for 291.24 filing the return, but only if filed within the extended time, 291.25or two years from the time the tax is paid in full, whichever291.26period expires later. Claimants under this section are subject291.27to the notice requirements of section 289A.38, subdivision 7or 291.28 within one year from the date of an order assessing tax or from 291.29 the date of a return filed by the commissioner, upon payment in 291.30 full of the tax, penalties, and interest shown on the order or 291.31 return made by the commissioner, whichever period expires later. 291.32 [EFFECTIVE DATE.] This section is effective for returns 291.33 becoming due or orders assessing tax issued on or after the day 291.34 following final enactment. 291.35 Sec. 59. Minnesota Statutes 2000, section 297G.16, 291.36 subdivision 7, is amended to read: 292.1 Subd. 7. [TIME LIMIT FOR A BAD DEBT DEDUCTION.] Claims for 292.2 refund must be filed with the commissioner within one year of 292.3 the filing of the taxpayer's income tax return containing the 292.4 bad debt deduction that is being claimed. Claimants under this 292.5 subdivision are subject to the notice requirements of section 292.6 289A.38, subdivision 7. 292.7 [EFFECTIVE DATE.] This section is effective the day 292.8 following final enactment. 292.9 Sec. 60. [297H.115] [USE TAX.] 292.10 Subdivision 1. [IMPOSITION; LIABILITY OF GENERATORS AND 292.11 SELF-HAULERS.] (a) A use tax is imposed on the sales price of 292.12 mixed municipal solid waste management services received by a 292.13 residential generator at the rate imposed under section 297H.02, 292.14 unless the tax imposed under section 297H.02 was paid. The 292.15 residential generator is liable. 292.16 (b) A use tax is imposed on the sales price of mixed 292.17 municipal solid waste management services received by a 292.18 commercial generator at the rate imposed under section 297H.03, 292.19 unless the tax imposed under section 297H.03 was paid. The 292.20 commercial generator is liable. 292.21 (c) A use tax is imposed on the volume of nonmixed 292.22 municipal solid waste that is managed at the rate imposed under 292.23 section 297H.04, unless the tax imposed under section 297H.04 292.24 was paid. The generator is liable. 292.25 (d) A use tax is imposed on the sales price of mixed 292.26 municipal solid waste management services received by a 292.27 self-hauler at the rate imposed under section 297H.05, paragraph 292.28 (a), unless the tax imposed under section 297H.05, paragraph 292.29 (a), was paid. The self-hauler is liable. 292.30 (e) A use tax is imposed on the volume of nonmixed 292.31 municipal solid waste managed at the rate imposed under section 292.32 297H.05, paragraph (b), unless the tax imposed under section 292.33 297H.05, paragraph (b), was paid. The self-hauler is liable. 292.34 Subd. 2. [PAYMENT; REPORTING.] A generator or self-hauler 292.35 that is liable under subdivision 1 shall report the use tax on a 292.36 return prescribed by the commissioner of revenue, and shall 293.1 remit the tax with the return. The return and the tax must be 293.2 filed using the filing cycle and due dates provided for taxes 293.3 imposed under chapter 297A. 293.4 Subd. 3. [COMMISSIONER ASSESSMENT.] (a) The commissioner 293.5 of revenue may not assess the generator or self-hauler a use tax 293.6 on a transaction for which the waste management service provider 293.7 has paid the solid waste management tax, except as provided in 293.8 paragraph (b). 293.9 (b) If the waste management service provider who is an 293.10 accrual basis taxpayer remits a payment and thereafter offsets 293.11 the amount as a bad debt under section 297H.09, the commissioner 293.12 of revenue may assess the generator or self-hauler a use tax for 293.13 the offset amount. 293.14 [EFFECTIVE DATE.] This section is effective for services 293.15 received on or after August 1, 2001. 293.16 Sec. 61. Minnesota Statutes 2000, section 383A.80, 293.17 subdivision 1, is amended to read: 293.18 Subdivision 1. [AUTHORITY TO IMPOSE; RATE.] (a) The 293.19 governing body of Ramsey county may impose a mortgage registry 293.20 and deed tax. 293.21 (b) The rate of the mortgage registry tax equalsone cent293.22for each $100 or fraction.0001 of the principal. 293.23 (c) The rate of the deed tax equalsfive cents for each293.24$500 or fraction.0001 of the amount. 293.25 [EFFECTIVE DATE.] This section is effective for documents 293.26 acknowledged and recorded after July 31, 2001. 293.27 Sec. 62. Minnesota Statutes 2000, section 383B.80, 293.28 subdivision 1, is amended to read: 293.29 Subdivision 1. [AUTHORITY TO IMPOSE; RATE.] (a) The 293.30 governing body of Hennepin county may impose a mortgage registry 293.31 and deed tax. 293.32 (b) The rate of the mortgage registry tax equalsone cent293.33for each $100 or fraction.0001 of the principal. 293.34 (c) The rate of the deed tax equalsfive cents for each293.35$500 or fraction.0001 of the amount. 293.36 [EFFECTIVE DATE.] This section is effective for documents 294.1 acknowledged and recorded after July 31, 2001. 294.2 Sec. 63. Minnesota Statutes 2000, section 461.12, is 294.3 amended by adding a subdivision to read: 294.4 Subd. 8. [NOTICE TO COMMISSIONER.] The licensing authority 294.5 under this section shall, within 30 days of the issuance of a 294.6 license, inform the commissioner of revenue of the licensee's 294.7 name, address, trade name, and the effective and expiration 294.8 dates of the license. The commissioner of revenue must also be 294.9 informed of a license renewal, transfer, cancellation, 294.10 suspension, or revocation during the license period. 294.11 [EFFECTIVE DATE.] This section is effective for licenses 294.12 issued, renewed, transferred, canceled, suspended, or revoked on 294.13 or after January 1, 2002. 294.14 Sec. 64. [REPORT ON INCOME TAX RECIPROCITY WITH 294.15 WISCONSIN.] 294.16 By March 1, 2002, the commissioner of revenue must report 294.17 to house and senate committees dealing with taxes on the 294.18 advisability of terminating individual income tax reciprocity 294.19 with the state of Wisconsin under Minnesota Statutes, section 294.20 290.081. 294.21 [EFFECTIVE DATE.] This section is effective the day 294.22 following final enactment. 294.23 Sec. 65. [APPROPRIATIONS.] 294.24 $462,000 is appropriated in each of fiscal years 2002 and 294.25 2003 from the general fund to the commissioner of revenue to 294.26 administer this article. In addition, there is a one-time 294.27 appropriation of $41,000 in fiscal year 2002, and a one-time 294.28 appropriation of $43,000 in fiscal year 2003, from the general 294.29 fund to the commissioner of revenue to administer this article. 294.30 Sec. 66. [REPEALER.] 294.31 (a) Minnesota Statutes 2000, section 296A.16, subdivision 294.32 6, is repealed effective the day following final enactment. 294.33 (b) Minnesota Statutes 2000, sections 290.095, subdivision 294.34 7; 290.23; 290.25; and 290.31, subdivisions 2, 2a, 3, 4, 5, and 294.35 19, are repealed effective for tax years beginning after 294.36 December 31, 2000. 295.1 (c) Minnesota Statutes 2000, section 297B.032, is repealed 295.2 effective the day following final enactment. 295.3 (d) Minnesota Statutes 2000, sections 290.06, subdivision 295.4 25, and 290A.04, subdivision 2j, are repealed effective for 295.5 taxable years beginning after December 31, 2001. 295.6 (e) Minnesota Rules, parts 8120.0200; 8120.0500; 295.7 8120.0700; 8120.0900; 8120.1300; 8120.1600; 8120.2000; 295.8 8120.2100; 8120.2200; 8120.2300; 8120.2500; 8120.2700; 295.9 8120.2800; 8120.3000; 8120.3200; 8120.4300; 8120.4400; 295.10 8120.4500; 8120.4600; 8120.4900; 8120.5000; 8120.5100; and 295.11 8120.5300, are repealed effective the day following final 295.12 enactment. 295.13 ARTICLE 8 295.14 SUSTAINABLE FOREST INCENTIVE ACT 295.15 Section 1. Minnesota Statutes 2000, section 88.49, 295.16 subdivision 5, is amended to read: 295.17 Subd. 5. [CANCELLATION.] Upon the failure of the owner 295.18 faithfully to fulfill and perform such contract or any provision 295.19 thereof, or any requirement of sections 88.47 to 88.53, or any 295.20 rule adopted by the commissioner thereunder, the commissioner 295.21 may cancel the contract in the manner herein provided. The 295.22 commissioner shall give to the owner, in the manner prescribed 295.23 in section 88.48, subdivision 4, 60 days' notice of a hearing 295.24 thereon at which the owner may appear and show cause, if any, 295.25 why the contract should not be canceled. The commissioner shall 295.26 thereupon determine whether the contract should be canceled and 295.27 make an order to that effect. Notice of the commissioner's 295.28 determination and the making of the order shall be given to the 295.29 owner in the manner provided in section 88.48, subdivision 4. 295.30 On determining that the contract should be canceled and no 295.31 appeal therefrom be taken, the commissioner shall send notice 295.32 thereof to the auditor of the county and to the town clerk of 295.33 the town affected and file with the recorder a certified copy of 295.34 the order, who shall forthwith note the cancellation upon the 295.35 record thereof, and thereupon the land therein described shall 295.36 cease to be an auxiliary forest and, together with the timber 296.1 thereon, become liable to all taxes and assessments that 296.2 otherwise would have been levied against it had it never been an 296.3 auxiliary forest from the time of the making of the contract, 296.4 any provisions of the statutes of limitation to the contrary 296.5 notwithstanding, less the amount of taxes paid under the 296.6 provisions of section 88.51, subdivision 1, together with 296.7 interest on such taxes and assessments at six percent per annum, 296.8 but without penalties. 296.9 The commissioner may in like manner and with like effect 296.10 cancel the contract upon written application of the owner. 296.11 The commissioner shall cancel any contract if the owner has 296.12 made successful application under sections270.31 to 270.39296.13inclusive290C.01 to 290C.11, theMinnesota Tree Growth Tax Law296.14 Sustainable Forest Incentive Act, and has paid to the county 296.15 treasurer the difference between the amount which would have 296.16 been paid had the land under contract been subject to the 296.17 Minnesota Tree Growth Tax Law and the Sustainable Forest 296.18 Incentive Act from the date of the filing of the contract and 296.19 the amount actually paid under section 88.51, subdivisions 1 and 296.20 2. This tax difference must be calculated based on the years 296.21 the lands would have been taxed under the Tree Growth Tax Law 296.22 and the Sustainable Forest Incentive Act. The sustainable 296.23 forest tax difference is net of the incentive payment of section 296.24 290C.07. If the amount which would have been paid, had the land 296.25 under contract been under the Minnesota Tree Growth Tax Law and 296.26 the Sustainable Forest Incentive Act from the date of the filing 296.27 of the contract, is less than the amount actually paid under the 296.28 contract, the cancellation shall be made without further payment 296.29 by the owner. 296.30 When the execution of any contract creating an auxiliary 296.31 forest shall have been procured through fraud or deception 296.32 practiced upon the county board or the commissioner or any other 296.33 person or body representing the state, it may be canceled upon 296.34 suit brought by the attorney general at the direction of the 296.35 commissioner. This cancellation shall have the same effect as 296.36 the cancellation of a contract by the commissioner. 297.1 [EFFECTIVE DATE.] This section is effective for taxes 297.2 levied in 2002, payable in 2003, and thereafter. 297.3 Sec. 2. Minnesota Statutes 2000, section 88.49, 297.4 subdivision 9a, is amended to read: 297.5 Subd. 9a. [LAND TRADES WITH GOVERNMENTAL UNITS.] 297.6 Notwithstanding subdivisions 6 and 9, or section 88.491, 297.7 subdivision 2, if an owner trades land under auxiliary forest 297.8 contract for land owned by a governmental unit and the owner 297.9 agrees to use the land received in trade from the governmental 297.10 unit for the production of forest products, upon resolution of 297.11 the county board, no taxes and assessments shall be levied 297.12 against the land traded, except that any current or delinquent 297.13 annual taxes or yield taxes due on that land while it was under 297.14 the auxiliary forest provision must be paid prior to the land 297.15 exchange. The land received from the governmental unit in the 297.16 land trade automatically qualifies for inclusion in theTree297.17Growth Tax LawSustainable Forest Incentive Act. 297.18 [EFFECTIVE DATE.] This section is effective for taxes 297.19 levied in 2002, payable in 2003, and thereafter. 297.20 Sec. 3. Minnesota Statutes 2000, section 88.491, 297.21 subdivision 2, is amended to read: 297.22 Subd. 2. [EFFECT OF EXPIRED CONTRACT.] When auxiliary 297.23 forest contracts expire, or prior to expiration by mutual 297.24 agreement between the land owner and the appropriate county 297.25 office, the lands previously covered by an auxiliary forest 297.26 contract automatically qualify for inclusionin the Tree Growth297.27Tax Lawunder the provisions of the Sustainable Forest Incentive 297.28 Act; provided that when such lands are included in theTree297.29Growth Tax LawSustainable Forest Incentive Act prior to 297.30 expiration of the auxiliary forest contract they will be 297.31 transferred and a tax paid as provided inaccordance with the297.32provisions ofsection 88.49, subdivision 5, upon application and 297.33 inclusion in the sustainable forest incentive program. The land 297.34 owner shall pay taxes in an amount equal to the difference 297.35 between: 297.36 (1) the sum of: 298.1 (i) the amount which would have been paid from the date of 298.2 the filing of the contract had the land under contract been 298.3 subject to the Minnesota Tree Growth Tax Lawfrom the date of298.4the filing of the contract and; plus 298.5 (ii) beginning with taxes payable in 2003, the taxes that 298.6 would have been paid if the land had been enrolled in the 298.7 sustainable forest incentive program; and 298.8 (2) the amount actually paid under section 88.51, 298.9 subdivisions 1 and 2. 298.10 [EFFECTIVE DATE.] This section is effective for taxes 298.11 levied in 2002, payable in 2003, and thereafter. 298.12 Sec. 4. Minnesota Statutes 2000, section 270A.03, 298.13 subdivision 7, is amended to read: 298.14 Subd. 7. [REFUND.] "Refund" means an individual income tax 298.15 refund or political contribution refund, pursuant to chapter 298.16 290, or a property tax credit or refund, pursuant to chapter 298.17 290A, or a sustainable forest tax payment to a claimant under 298.18 chapter 290C. 298.19 For purposes of this chapter, lottery prizes, as set forth 298.20 in section 349A.08, subdivision 8, and amounts granted to 298.21 persons by the legislature on the recommendation of the joint 298.22 senate-house of representatives subcommittee on claims shall be 298.23 treated as refunds. 298.24 In the case of a joint property tax refund payable to 298.25 spouses under chapter 290A, the refund shall be considered as 298.26 belonging to each spouse in the proportion of the total refund 298.27 that equals each spouse's proportion of the total income 298.28 determined under section 290A.03, subdivision 3. In the case of 298.29 a joint income tax refund under chapter 289A, the refund shall 298.30 be considered as belonging to each spouse in the proportion of 298.31 the total refund that equals each spouse's proportion of the 298.32 total taxable income determined under section 290.01, 298.33 subdivision 29. The commissioner shall remit the entire refund 298.34 to the claimant agency, which shall, upon the request of the 298.35 spouse who does not owe the debt, determine the amount of the 298.36 refund belonging to that spouse and refund the amount to that 299.1 spouse. For court fines, fees, and surcharges and court-ordered 299.2 restitution under section 611A.04, subdivision 2, the notice 299.3 provided by the commissioner of revenue under section 270A.07, 299.4 subdivision 2, paragraph (b), serves as the appropriate legal 299.5 notice to the spouse who does not owe the debt. 299.6 [EFFECTIVE DATE.] This section is effective for refunds in 299.7 2003 and thereafter. 299.8 Sec. 5. [290C.01] [PURPOSE.] 299.9 It is the policy of this state to promote sustainable 299.10 forest resource management on the state's public and private 299.11 lands. Recognizing that private forests comprise approximately 299.12 one-half of the state forest land resources, that healthy and 299.13 robust forest land provides significant benefits to the state of 299.14 Minnesota, and that ad valorem property taxes represent a 299.15 significant annual cost that can discourage long-term forest 299.16 management investments, this chapter, hereafter referred to as 299.17 the "Sustainable Forest Incentive Act," is enacted to encourage 299.18 the state's private forest landowners to make a long-term 299.19 commitment to sustainable forest management. 299.20 [EFFECTIVE DATE.] This section is effective for taxes 299.21 levied in 2002, payable in 2003, and thereafter. 299.22 Sec. 6. [290C.02] [DEFINITIONS.] 299.23 Subdivision 1. [APPLICATION.] When used in sections 299.24 290C.01 to 290C.11, the terms in this section have the meanings 299.25 given them. 299.26 Subd. 2. [APPROVED PLAN WRITERS.] "Approved plan writers" 299.27 are natural resource professionals who are self-employed, 299.28 employed by private companies or individuals, nonprofit 299.29 organizations, local units of government, or public agencies, 299.30 and who are approved by the commissioner of natural resources. 299.31 Persons determined to be certified foresters by the Society of 299.32 American Foresters shall be deemed to meet the standards 299.33 required under this subdivision. The commissioner of natural 299.34 resources shall issue a unique identification number to each 299.35 approved planner. 299.36 Subd. 3. [CLAIMANT.] "Claimant" means a person, as that 300.1 term is defined in section 290.01, subdivision 2, who owns 300.2 forest land in Minnesota and files an application authorized by 300.3 the Sustainable Forest Incentive Act. No more than one claimant 300.4 is entitled to a payment under this chapter with respect to any 300.5 tract, parcel, or piece of land enrolled under this chapter. 300.6 When enrolled forest land is owned by two or more persons, the 300.7 owners must determine between them which person may claim the 300.8 payments provided under sections 290C.01 to 290C.11. 300.9 Subd. 4. [COMMISSIONER.] "Commissioner" means the 300.10 commissioner of revenue. 300.11 Subd. 5. [CURRENT USE VALUE.] "Current use value" means 300.12 the statewide average annual income per acre, multiplied by 90 300.13 percent and divided by the capitalization rate determined under 300.14 subdivision 9. The statewide net annual income shall be a 300.15 weighted average based on the most recent data as of July 1 of 300.16 the computation year on stumpage prices and annual tree growth 300.17 rates and acreage by cover type provided by the department of 300.18 natural resources and the United States Department of 300.19 Agriculture Forest Service North Central Research Station. 300.20 Subd. 6. [FOREST LAND.] "Forest land" means land 300.21 containing a minimum of 20 contiguous acres for which the owner 300.22 has implemented a forest management plan that was prepared or 300.23 updated within the past ten years by an approved plan writer. 300.24 For purposes of this subdivision, acres are considered to be 300.25 contiguous even if they are separated by a road, waterway, 300.26 railroad track, or other similar intervening property. At least 300.27 50 percent of the contiguous acreage must meet the definition of 300.28 forest land in section 88.01, subdivision 7. For the purposes 300.29 of sections 290C.01 to 209C.11, forest land does not include (i) 300.30 land used for residential or agricultural purposes, (ii) land 300.31 enrolled in the reinvest in Minnesota program, a state or 300.32 federal conservation reserve or easement reserve program under 300.33 sections 103F.501 to 103F.531, the Minnesota agricultural 300.34 property tax law under section 273.111, or land subject to 300.35 agricultural land preservation controls or restrictions as 300.36 defined in section 40A.02 or under the Metropolitan Agricultural 301.1 Preserves Act under chapter 473H, or (iii) land improved with a 301.2 structure, pavement, sewer, campsite, or any road, other than a 301.3 township road, used for purposes not prescribed in the forest 301.4 management plan. 301.5 Subd. 7. [FOREST MANAGEMENT PLAN.] "Forest management plan" 301.6 means a written document providing a framework for site-specific 301.7 healthy, productive, and sustainable forest resources. A forest 301.8 management plan must include at least the following: (i) 301.9 owner-specific forest management goals for the property; (ii) a 301.10 reliable field inventory of the individual forest cover types, 301.11 their age, and density; (iii) a description of the soil type and 301.12 quality; (iv) an aerial photo and/or map of the vegetation and 301.13 other natural features of the property clearly indicating the 301.14 boundaries of the property and of the forest land; (v) the 301.15 proposed future conditions of the property; (vi) prescriptions 301.16 to meet proposed future conditions of the property; (vii) a 301.17 recommended timetable for implementing the prescribed 301.18 activities; and (viii) a legal description of the parcels 301.19 encompassing the parcels included in the plan. All management 301.20 activities prescribed in a plan must be in accordance with the 301.21 recommended timber harvesting and forest management guidelines. 301.22 The commissioner of natural resources shall provide a framework 301.23 for plan content and updating and revising plans. 301.24 Subd. 8. [TIMBER HARVESTING AND FOREST MANAGEMENT 301.25 GUIDELINES.] "Timber harvesting and forest management guidelines" 301.26 means guidelines developed under section 89A.05 and adopted by 301.27 the Minnesota forest resources council in 1998. 301.28 Subd. 9. [CAPITALIZATION RATE.] By July 1 of each year, 301.29 the commissioner shall determine a statewide capitalization rate 301.30 for use under this chapter. The rate shall be the average 301.31 annual effective interest rate for St. Paul on new loans under 301.32 the Farm Credit Bank system calculated under section 301.33 2032A(e)(7)(A) of the Internal Revenue Code. 301.34 [EFFECTIVE DATE.] This section is effective for taxes 301.35 levied in 2002, payable in 2003, and thereafter. 301.36 Sec. 7. [290C.03] [ELIGIBILITY REQUIREMENTS.] 302.1 (a) Property may be enrolled in the sustainable forest 302.2 incentive program under this chapter if all of the following 302.3 conditions are met: 302.4 (1) property consists of at least 20 contiguous acres and 302.5 at least 50 percent of the land must meet the definition of 302.6 forest land in section 88.01, subdivision 7, during the 302.7 enrollment; 302.8 (2) a forest management plan for the property must be 302.9 prepared by an approved plan writer and implemented during the 302.10 period in which the land is enrolled; 302.11 (3) timber harvesting and forest management guidelines must 302.12 be used in conjunction with any timber harvesting or forest 302.13 management activities conducted on the land during the period in 302.14 which the land is enrolled; 302.15 (4) the property must be enrolled for a minimum of eight 302.16 years; 302.17 (5) there are no delinquent property taxes on the property; 302.18 and 302.19 (6) claimants enrolling more than 1,920 acres in the 302.20 sustainable forest incentive program must allow year-round, 302.21 nonmotorized access to fish and wildlife resources on enrolled 302.22 land except within one-fourth mile of a permanent dwelling or 302.23 during periods of high fire hazard as determined by the 302.24 commissioner of natural resources. 302.25 (b) Claimants required to allow access under paragraph (a), 302.26 clause (6), do not by that action: 302.27 (1) extend any assurance that the land is safe for any 302.28 purpose; 302.29 (2) confer upon the person the legal status of an invitee 302.30 or licensee to whom a duty of care is owed; or 302.31 (3) assume responsibility for or incur liability for any 302.32 injury to the person or property caused by an act or omission of 302.33 the person. 302.34 [EFFECTIVE DATE.] This section is effective for taxes 302.35 levied in 2002, payable in 2003, and thereafter. 302.36 Sec. 8. [290C.04] [APPLICATIONS.] 303.1 (a) A landowner may apply to enroll forest land for the 303.2 sustainable forest incentive program under this chapter. The 303.3 claimant must complete, sign, and submit an application to the 303.4 commissioner by September 30 in order for the land to become 303.5 eligible beginning in the next year. The application shall be 303.6 on a form prescribed by the commissioner and must include the 303.7 information the commissioner deems necessary. At a minimum, the 303.8 application must show the following information for the land and 303.9 the claimant: (i) the claimant's social security number or 303.10 state or federal business tax registration number and date of 303.11 birth, (ii) the claimant's address, (iii) the claimant's 303.12 signature, (iv) the county's parcel identification numbers for 303.13 the tax parcels that completely contain the claimant's forest 303.14 land that is sought to be enrolled, (v) the number of acres 303.15 eligible for enrollment in the program, (vi) the approved plan 303.16 writer's signature and identification number, and (vii) proof, 303.17 in a form specified by the commissioner, that the claimant has 303.18 executed and acknowledged in the manner required by law for a 303.19 deed, and recorded, a covenant that the land is not and shall 303.20 not be developed in a manner inconsistent with the requirements 303.21 and conditions of this chapter. The covenant shall state in 303.22 writing that the covenant is binding on the claimant and the 303.23 claimant's successor or assignee, and that it runs with the land 303.24 for a period of not less than eight years. The commissioner 303.25 shall specify the form of the covenant and provide copies upon 303.26 request. The covenant must include a legal description that 303.27 encompasses all the forest land that the claimant wishes to 303.28 enroll under this section or the certificate of title number for 303.29 that land if it is registered land. 303.30 (b) In all cases, the commissioner shall notify the 303.31 claimant within 90 days after receipt of a completed application 303.32 that either the land has or has not been approved for enrollment. 303.33 A claimant whose application is denied may appeal the denial as 303.34 provided in section 290C.11, paragraph (a). 303.35 (c) Within 90 days after the denial of an application, or 303.36 within 90 days after the final resolution of any appeal related 304.1 to the denial, the commissioner shall execute and acknowledge a 304.2 document releasing the land from the covenant required under 304.3 this chapter. The document must be mailed to the claimant and 304.4 is entitled to be recorded. 304.5 (d) The social security numbers collected from individuals 304.6 under this section are private data as provided in section 13.49. 304.7 The state or federal business tax registration number and date 304.8 of birth data collected under this section are also private data 304.9 but may be shared with county assessors for purposes of tax 304.10 administration and with county treasurers for purposes of the 304.11 revenue recapture under chapter 270A. 304.12 [EFFECTIVE DATE.] This section is effective for taxes 304.13 levied in 2002, payable in 2003, and thereafter. 304.14 Sec. 9. [290C.05] [ANNUAL CERTIFICATION.] 304.15 On or before July 1 of each year, beginning with the year 304.16 after the claimant has received an approved application, the 304.17 commissioner shall send each claimant enrolled under the 304.18 sustainable forest incentive program a certification form. The 304.19 claimant must sign the certification, attesting that the 304.20 requirements and conditions for continued enrollment in the 304.21 program are currently being met, and must return the signed 304.22 certification form to the commissioner by August 15 of that same 304.23 year. Failure to return an annual certification form by the due 304.24 date shall result in removal of the lands from the provisions of 304.25 the sustainable forest incentive program, and the imposition of 304.26 any applicable removal penalty. The claimant may appeal the 304.27 removal and any associated penalty according to the procedures 304.28 and within the time allowed under this chapter. 304.29 [EFFECTIVE DATE.] This section is effective for taxes 304.30 levied in 2002, payable in 2003, and thereafter. 304.31 Sec. 10. [290C.06] [CALCULATION OF AVERAGE ESTIMATED 304.32 MARKET VALUE; TIMBERLAND.] 304.33 The commissioner shall annually calculate a statewide 304.34 average estimated market value per acre for class 2b timberland 304.35 under section 273.13, subdivision 23, paragraph (b). 304.36 [EFFECTIVE DATE.] This section is effective for taxes 305.1 levied in 2002, payable in 2003, and thereafter. 305.2 Sec. 11. [290C.07] [CALCULATION OF INCENTIVE PAYMENT.] 305.3 An approved claimant under the sustainable forest incentive 305.4 program is eligible to receive an annual payment. The payment 305.5 shall equal the greater of: 305.6 (1) the difference between the property tax that would be 305.7 paid on the property using the previous year's statewide average 305.8 total township tax rate and the class rate for class 2b 305.9 timberland under section 273.13, subdivision 23, paragraph (b), 305.10 if the property were valued at (i) the average statewide 305.11 timberland market value per acre calculated under section 305.12 290C.06, and (ii) the average statewide timberland current use 305.13 value per acre calculated under section 290C.02, subdivision 5; 305.14 (2) two-thirds of the property tax amount determined by 305.15 using the previous year's statewide average total township tax 305.16 rate, the estimated market value per acre as calculated in 305.17 section 290C.06, and the class rate for 2b timberland under 305.18 section 273.13, subdivision 23, paragraph (b); or 305.19 (3) $1.50 per acre for each acre enrolled in the 305.20 sustainable forest incentive program. 305.21 [EFFECTIVE DATE.] This section is effective for taxes 305.22 levied in 2002, payable in 2003, and thereafter. 305.23 Sec. 12. [290C.08] [ANNUAL INCENTIVE PAYMENT; 305.24 APPROPRIATION.] 305.25 Subdivision 1. [ANNUAL PAYMENT.] An incentive payment for 305.26 each acre of enrolled land will be made annually to each 305.27 claimant in the amount determined under section 290C.07. The 305.28 incentive payment shall be paid on or before October 1 each year 305.29 based on the certifications due August 15 of that year. 305.30 Interest at the annual rate determined under section 270.75 305.31 shall be included with any incentive payment not paid by the 305.32 later of October 1 of the year the certification was due, or 45 305.33 days after the completed certification was returned or filed if 305.34 the commissioner accepts a certification filed after August 15 305.35 of the taxes payable year as the resolution of an appeal. 305.36 Subd. 2. [APPROPRIATION.] The amount necessary to make the 306.1 payments under this section is annually appropriated to the 306.2 commissioner from the general fund. 306.3 [EFFECTIVE DATE.] This section is effective for taxes 306.4 levied in 2002, payable in 2003, and thereafter. 306.5 Sec. 13. [290C.09] [REMOVAL FOR PROPERTY TAX DELINQUENCY.] 306.6 The commissioner shall immediately remove any property 306.7 enrolled in the sustainable forest incentive program for which 306.8 taxes are determined to be delinquent as provided in chapter 279 306.9 and shall notify the claimant of such action. Lands terminated 306.10 from the sustainable forest incentive program under this section 306.11 are not entitled to any payments provided in this chapter and 306.12 are subject to removal penalties prescribed in section 290C.11. 306.13 The claimant has 60 days from the receipt of notice from the 306.14 commissioner under this section to pay the delinquent taxes. If 306.15 the delinquent taxes are paid within this 60-day period, the 306.16 lands shall be reinstated in the program as if they had not been 306.17 withdrawn and without the payment of a penalty. 306.18 [EFFECTIVE DATE.] This section is effective for taxes 306.19 levied in 2002, payable in 2003, and thereafter. 306.20 Sec. 14. [290C.10] [WITHDRAWAL PROCEDURES.] 306.21 An approved claimant under the sustainable forest incentive 306.22 program for a minimum of four years may notify the commissioner 306.23 of the intent to terminate enrollment. Within 90 days of 306.24 receipt of notice to terminate enrollment, the commissioner 306.25 shall inform the claimant in writing, acknowledging receipt of 306.26 this notice and indicating the effective date of termination 306.27 from the sustainable forest incentive program. Termination of 306.28 enrollment in the sustainable forest incentive program occurs on 306.29 January 1 of the fifth calendar year that begins after receipt 306.30 by the commissioner of the termination notice. After the 306.31 commissioner issues an effective date of termination, a claimant 306.32 wishing to continue the property's enrollment in the sustainable 306.33 forest incentive program beyond the termination date must apply 306.34 for enrollment as prescribed in section 290C.04. A claimant who 306.35 withdraws a parcel of land from this program may not reenroll 306.36 the parcel for a period of three years. Within 90 days after 307.1 the termination date, the commissioner shall execute and 307.2 acknowledge a document releasing the land from the covenant 307.3 required under this chapter. The document must be mailed to the 307.4 claimant and is entitled to be recorded. The commissioner may 307.5 allow early withdrawal from the Sustainable Forest Incentive Act 307.6 without penalty in cases of condemnation for a public purpose 307.7 notwithstanding the provisions of this section. 307.8 [EFFECTIVE DATE.] This section is effective for taxes 307.9 levied in 2002, payable in 2003, and thereafter. 307.10 Sec. 15. [290C.11] [PENALTIES FOR REMOVAL.] 307.11 (a) If the commissioner determines that property enrolled 307.12 in the sustainable forest incentive program is in violation of 307.13 the conditions for enrollment as specified in section 290C.03, 307.14 the commissioner shall notify the claimant of the intent to 307.15 remove all enrolled land from the sustainable forest incentive 307.16 program. The claimant has 60 days to appeal this determination. 307.17 The appeal must be made in writing to the commissioner, who 307.18 shall, within 60 days, notify the claimant as to the outcome of 307.19 the appeal. Within 60 days after the commissioner denies an 307.20 appeal, or within 120 days after the commissioner received a 307.21 written appeal if the commissioner has not made a determination 307.22 in that time, the owner may appeal to tax court under chapter 307.23 271 as if the appeal is from an order of the commissioner. 307.24 (b) If the commissioner determines the property is to be 307.25 removed from the sustainable forest incentive program, the 307.26 claimant is liable for payment to the commissioner in the amount 307.27 equal to the payments received under this chapter for the 307.28 previous four-year period, plus interest. The claimant has 90 307.29 days to satisfy the payment for removal of land from the 307.30 sustainable forest incentive program under this section. If the 307.31 penalty is not paid within the 90-day period under this 307.32 paragraph, the commissioner shall certify the amount to the 307.33 county auditor for collection as a part of the general ad 307.34 valorem real property taxes on the land in the following taxes 307.35 payable year. 307.36 [EFFECTIVE DATE.] This section is effective for taxes 308.1 levied in 2002, payable in 2003, and thereafter. 308.2 Sec. 16. [APPROPRIATIONS.] 308.3 $194,000 is appropriated in fiscal year 2003 from the 308.4 general fund to the commissioner of revenue to administer this 308.5 article. This is a one-time appropriation. If the commissioner 308.6 determines that an appropriation is needed for this purpose in 308.7 fiscal year 2004 and beyond, it must be presented as a change 308.8 request. 308.9 Sec. 17. [REPEALER.] 308.10 Minnesota Statutes 2000, sections 270.31; 270.32; 270.33; 308.11 270.34; 270.35; 270.36; 270.37; 270.38; and 270.39, are repealed. 308.12 [EFFECTIVE DATE.] This section is effective for taxes 308.13 levied in 2002, payable in 2003, and thereafter. 308.14 ARTICLE 9 308.15 INCOME AND CORPORATE FRANCHISE TAX 308.16 Section 1. Minnesota Statutes 2000, section 290.01, is 308.17 amended by adding a subdivision to read: 308.18 Subd. 5b. [INSURANCE COMPANY.] The terms "insurance 308.19 company," "life insurance company," and "insurance company other 308.20 than life," have the meanings given in the Internal Revenue Code. 308.21 [EFFECTIVE DATE.] This section is effective for tax years 308.22 beginning after December 31, 2000. 308.23 Sec. 2. Minnesota Statutes 2000, section 290.01, 308.24 subdivision 7, is amended to read: 308.25 Subd. 7. [RESIDENT.] The term "resident" means(1)any 308.26 individual domiciled in Minnesota, except that an individual is 308.27 not a "resident" for the period of time that the individual 308.28 is either: 308.29 (1) on active duty stationed outside of Minnesota while in 308.30 the armed forces of the United States or the United Nations; or 308.31 (2) a "qualified individual" as defined in section 308.32 911(d)(1) of the Internal Revenue Code, if the qualified 308.33 individual notifies the county within three months of moving out 308.34 of the country that homestead status be revoked for the 308.35 Minnesota residence of the qualified individual, and the 308.36 property is not classified as a homestead while the individual 309.1 remains a qualified individual; and (2). 309.2 "Resident" also means any individual domiciled outside the 309.3 state who maintains a place of abode in the state and spends in 309.4 the aggregate more than one-half of the tax year in Minnesota, 309.5 unless: 309.6 (1) the individual or the spouse of the individual is in 309.7 the armed forces of the United States,; or 309.8 (2) the individual is covered under the reciprocity 309.9 provisions in section 290.081. 309.10 For purposes of this subdivision, presence within the state 309.11 for any part of a calendar day constitutes a day spent in the 309.12 state. Individuals shall keep adequate records to substantiate 309.13 the days spent outside the state. 309.14 The term "abode" means a dwelling maintained by an 309.15 individual, whether or not owned by the individual and whether 309.16 or not occupied by the individual, and includes a dwelling place 309.17 owned or leased by the individual's spouse. 309.18 Neither the commissioner nor any court shall consider 309.19 charitable contributions made by an individual within or without 309.20 the state in determining if the individual is domiciled in 309.21 Minnesota. 309.22 [EFFECTIVE DATE.] This section is effective for tax years 309.23 beginning after December 31, 2000. 309.24 Sec. 3. Minnesota Statutes 2000, section 290.01, 309.25 subdivision 19b, is amended to read: 309.26 Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 309.27 individuals, estates, and trusts, there shall be subtracted from 309.28 federal taxable income: 309.29 (1) interest income on obligations of any authority, 309.30 commission, or instrumentality of the United States to the 309.31 extent includable in taxable income for federal income tax 309.32 purposes but exempt from state income tax under the laws of the 309.33 United States; 309.34 (2) if included in federal taxable income, the amount of 309.35 any overpayment of income tax to Minnesota or to any other 309.36 state, for any previous taxable year, whether the amount is 310.1 received as a refund or as a credit to another taxable year's 310.2 income tax liability; 310.3 (3) the amount paid to others, less the amount used to 310.4 claim the credit allowed under section 290.0674, not to exceed 310.5 $1,625 for each qualifying child in grades kindergarten to 6 and 310.6 $2,500 for each qualifying child in grades 7 to 12, for tuition, 310.7 textbooks, and transportation of each qualifying child in 310.8 attending an elementary or secondary school situated in 310.9 Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 310.10 wherein a resident of this state may legally fulfill the state's 310.11 compulsory attendance laws, which is not operated for profit, 310.12 and which adheres to the provisions of the Civil Rights Act of 310.13 1964 and chapter 363. For the purposes of this clause, 310.14 "tuition" includes fees or tuition as defined in section 310.15 290.0674, subdivision 1, clause (1). As used in this clause, 310.16 "textbooks" includes books and other instructional materials and 310.17 equipmentusedpurchased or leased for use in elementary and 310.18 secondary schools in teaching only those subjects legally and 310.19 commonly taught in public elementary and secondary schools in 310.20 this state. Equipment expenses qualifying for deduction 310.21 includes expenses as defined and limited in section 290.0674, 310.22 subdivision 1, clause (3). "Textbooks" does not include 310.23 instructional books and materials used in the teaching of 310.24 religious tenets, doctrines, or worship, the purpose of which is 310.25 to instill such tenets, doctrines, or worship, nor does it 310.26 include books or materials for, or transportation to, 310.27 extracurricular activities including sporting events, musical or 310.28 dramatic events, speech activities, driver's education, or 310.29 similar programs. For purposes of the subtraction provided by 310.30 this clause, "qualifying child" has the meaning given in section 310.31 32(c)(3) of the Internal Revenue Code; 310.32 (4) contributions made in taxable years beginning after 310.33 December 31, 1981, and before January 1, 1985, to a qualified 310.34 governmental pension plan, an individual retirement account, 310.35 simplified employee pension, or qualified plan covering a 310.36 self-employed person that were included in Minnesota gross 311.1 income in the taxable year for which the contributions were made 311.2 but were deducted or were not included in the computation of 311.3 federal adjusted gross income, less any amount allowed to be 311.4 subtracted as a distribution under this subdivision or a 311.5 predecessor provision in taxable years that began before January 311.6 1, 2000. This subtraction applies only for taxable years 311.7 beginning after December 31, 1999, and before January 1, 2001. 311.8 If an individual's subtraction under this clause exceeds the 311.9 individual's taxable income, the excess may be carried forward 311.10 to taxable years beginning after December 31, 2000, and before 311.11 January 1, 2002; 311.12 (5) income as provided under section 290.0802; 311.13 (6)the amount of unrecovered accelerated cost recovery311.14system deductions allowed under subdivision 19g;311.15(7)to the extent included in federal adjusted gross 311.16 income, income realized on disposition of property exempt from 311.17 tax under section 290.491; 311.18(8)(7) to the extent not deducted in determining federal 311.19 taxable income or used to claim the long-term care insurance 311.20 credit under section 290.0672, the amount paid for health 311.21 insurance of self-employed individuals as determined under 311.22 section 162(l) of the Internal Revenue Code, except that the 311.23 percent limit does not apply. If the individual deducted 311.24 insurance payments under section 213 of the Internal Revenue 311.25 Code of 1986, the subtraction under this clause must be reduced 311.26 by the lesser of: 311.27 (i) the total itemized deductions allowed under section 311.28 63(d) of the Internal Revenue Code, less state, local, and 311.29 foreign income taxes deductible under section 164 of the 311.30 Internal Revenue Code and the standard deduction under section 311.31 63(c) of the Internal Revenue Code; or 311.32 (ii) the lesser of (A) the amount of insurance qualifying 311.33 as "medical care" under section 213(d) of the Internal Revenue 311.34 Code to the extent not deducted under section 162(1) of the 311.35 Internal Revenue Code or excluded from income or (B) the total 311.36 amount deductible for medical care under section 213(a); 312.1(9)(8) the exemption amount allowed under Laws 1995, 312.2 chapter 255, article 3, section 2, subdivision 3; 312.3(10)(9) to the extent included in federal taxable income, 312.4 postservice benefits for youth community service under section 312.5 124D.42 for volunteer service under United States Code, title 312.6 42, sections 12601 to 12604; 312.7(11)(10) to the extent not deducted in determining federal 312.8 taxable income by an individual who does not itemize deductions 312.9 for federal income tax purposes for the taxable year, an amount 312.10 equal to 50 percent of the excess of charitable contributions 312.11 allowable as a deduction for the taxable year under section 312.12 170(a) of the Internal Revenue Code over $500; 312.13(12) to the extent included in federal taxable income,312.14holocaust victims' settlement payments for any injury incurred312.15as a result of the holocaust, if received by an individual who312.16was persecuted for racial or religious reasons by Nazi Germany312.17or any other Axis regime or an heir of such a person; and312.18(13)(11) for taxable years beginning before January 1, 312.19 2008, the amount of the federal small ethanol producer credit 312.20 allowed under section 40(a)(3) of the Internal Revenue Code 312.21 which is included in gross income under section 87 of the 312.22 Internal Revenue Code; and 312.23 (12) for individuals who are allowed a federal foreign tax 312.24 credit for taxes that do not qualify for a credit under section 312.25 290.06, subdivision 22, an amount equal to the carryover of 312.26 subnational foreign taxes for the taxable year, but not to 312.27 exceed the total subnational foreign taxes reported in claiming 312.28 the foreign tax credit. For purposes of this clause, "federal 312.29 foreign tax credit" means the credit allowed under section 27 of 312.30 the Internal Revenue Code, and "carryover of subnational foreign 312.31 taxes" equals the carryover allowed under section 904(c) of the 312.32 Internal Revenue Code minus national level foreign taxes to the 312.33 extent they exceed the federal foreign tax credit. 312.34 [EFFECTIVE DATE.] This section is effective for tax years 312.35 beginning after December 31, 2001, except that the amendment to 312.36 clause (3) is effective for tax years beginning after December 313.1 31, 2000. 313.2 Sec. 4. Minnesota Statutes 2000, section 290.01, 313.3 subdivision 19c, is amended to read: 313.4 Subd. 19c. [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE 313.5 INCOME.] For corporations, there shall be added to federal 313.6 taxable income: 313.7 (1) the amount of any deduction taken for federal income 313.8 tax purposes for income, excise, or franchise taxes based on net 313.9 income or related minimum taxes, including but not limited to 313.10 the tax imposed under section 290.0922, paid by the corporation 313.11 to Minnesota, another state, a political subdivision of another 313.12 state, the District of Columbia, or any foreign country or 313.13 possession of the United States; 313.14 (2) interest not subject to federal tax upon obligations 313.15 of: the United States, its possessions, its agencies, or its 313.16 instrumentalities; the state of Minnesota or any other state, 313.17 any of its political or governmental subdivisions, any of its 313.18 municipalities, or any of its governmental agencies or 313.19 instrumentalities; the District of Columbia; or Indian tribal 313.20 governments; 313.21 (3) exempt-interest dividends received as defined in 313.22 section 852(b)(5) of the Internal Revenue Code; 313.23 (4) the amount of any net operating loss deduction taken 313.24 for federal income tax purposes under section 172 or 832(c)(10) 313.25 of the Internal Revenue Code or operations loss deduction under 313.26 section 810 of the Internal Revenue Code; 313.27 (5) the amount of any special deductions taken for federal 313.28 income tax purposes under sections 241 to 247 of the Internal 313.29 Revenue Code; 313.30 (6) losses from the business of mining, as defined in 313.31 section 290.05, subdivision 1, clause (a), that are not subject 313.32 to Minnesota income tax; 313.33 (7) the amount of any capital losses deducted for federal 313.34 income tax purposes under sections 1211 and 1212 of the Internal 313.35 Revenue Code; 313.36(8) the amount of any charitable contributions deducted for314.1federal income tax purposes under section 170 of the Internal314.2Revenue Code;314.3(9)(8) the exempt foreign trade income of a foreign sales 314.4 corporation under sections 921(a) and 291 of the Internal 314.5 Revenue Code; 314.6(10)(9) the amount of percentage depletion deducted under 314.7 sections 611 through 614 and 291 of the Internal Revenue Code; 314.8(11)(10) for certified pollution control facilities placed 314.9 in service in a taxable year beginning before December 31, 1986, 314.10 and for which amortization deductions were elected under section 314.11 169 of the Internal Revenue Code of 1954, as amended through 314.12 December 31, 1985, the amount of the amortization deduction 314.13 allowed in computing federal taxable income for those 314.14 facilities; 314.15(12)(11) the amount of any deemed dividend from a foreign 314.16 operating corporation determined pursuant to section 290.17, 314.17 subdivision 4, paragraph (g); 314.18(13)(12) the amount of any environmental tax paid under 314.19 section 59(a) of the Internal Revenue Code; and 314.20(14)(13) the amount of a partner's pro rata share of net 314.21 income which does not flow through to the partner because the 314.22 partnership elected to pay the tax on the income under section 314.23 6242(a)(2) of the Internal Revenue Code. 314.24 [EFFECTIVE DATE.] This section is effective for taxable 314.25 years beginning after December 31, 2000. 314.26 Sec. 5. Minnesota Statutes 2000, section 290.01, 314.27 subdivision 19d, is amended to read: 314.28 Subd. 19d. [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 314.29 TAXABLE INCOME.] For corporations, there shall be subtracted 314.30 from federal taxable income after the increases provided in 314.31 subdivision 19c: 314.32 (1) the amount of foreign dividend gross-up added to gross 314.33 income for federal income tax purposes under section 78 of the 314.34 Internal Revenue Code; 314.35 (2) the amount of salary expense not allowed for federal 314.36 income tax purposes due to claiming the federal jobs credit 315.1 under section 51 of the Internal Revenue Code; 315.2 (3) any dividend (not including any distribution in 315.3 liquidation) paid within the taxable year by a national or state 315.4 bank to the United States, or to any instrumentality of the 315.5 United States exempt from federal income taxes, on the preferred 315.6 stock of the bank owned by the United States or the 315.7 instrumentality; 315.8 (4) amounts disallowed for intangible drilling costs due to 315.9 differences between this chapter and the Internal Revenue Code 315.10 in taxable years beginning before January 1, 1987, as follows: 315.11 (i) to the extent the disallowed costs are represented by 315.12 physical property, an amount equal to the allowance for 315.13 depreciation under Minnesota Statutes 1986, section 290.09, 315.14 subdivision 7, subject to the modifications contained in 315.15 subdivision 19e; and 315.16 (ii) to the extent the disallowed costs are not represented 315.17 by physical property, an amount equal to the allowance for cost 315.18 depletion under Minnesota Statutes 1986, section 290.09, 315.19 subdivision 8; 315.20 (5) the deduction for capital losses pursuant to sections 315.21 1211 and 1212 of the Internal Revenue Code, except that: 315.22 (i) for capital losses incurred in taxable years beginning 315.23 after December 31, 1986, capital loss carrybacks shall not be 315.24 allowed; 315.25 (ii) for capital losses incurred in taxable years beginning 315.26 after December 31, 1986, a capital loss carryover to each of the 315.27 15 taxable years succeeding the loss year shall be allowed; 315.28 (iii) for capital losses incurred in taxable years 315.29 beginning before January 1, 1987, a capital loss carryback to 315.30 each of the three taxable years preceding the loss year, subject 315.31 to the provisions of Minnesota Statutes 1986, section 290.16, 315.32 shall be allowed; and 315.33 (iv) for capital losses incurred in taxable years beginning 315.34 before January 1, 1987, a capital loss carryover to each of the 315.35 five taxable years succeeding the loss year to the extent such 315.36 loss was not used in a prior taxable year and subject to the 316.1 provisions of Minnesota Statutes 1986, section 290.16, shall be 316.2 allowed; 316.3 (6) an amount for interest and expenses relating to income 316.4 not taxable for federal income tax purposes, if (i) the income 316.5 is taxable under this chapter and (ii) the interest and expenses 316.6 were disallowed as deductions under the provisions of section 316.7 171(a)(2), 265 or 291 of the Internal Revenue Code in computing 316.8 federal taxable income; 316.9 (7) in the case of mines, oil and gas wells, other natural 316.10 deposits, and timber for which percentage depletion was 316.11 disallowed pursuant to subdivision 19c, clause (11), a 316.12 reasonable allowance for depletion based on actual cost. In the 316.13 case of leases the deduction must be apportioned between the 316.14 lessor and lessee in accordance with rules prescribed by the 316.15 commissioner. In the case of property held in trust, the 316.16 allowable deduction must be apportioned between the income 316.17 beneficiaries and the trustee in accordance with the pertinent 316.18 provisions of the trust, or if there is no provision in the 316.19 instrument, on the basis of the trust's income allocable to 316.20 each; 316.21 (8) for certified pollution control facilities placed in 316.22 service in a taxable year beginning before December 31, 1986, 316.23 and for which amortization deductions were elected under section 316.24 169 of the Internal Revenue Code of 1954, as amended through 316.25 December 31, 1985, an amount equal to the allowance for 316.26 depreciation under Minnesota Statutes 1986, section 290.09, 316.27 subdivision 7; 316.28(9) the amount included in federal taxable income316.29attributable to the credits provided in Minnesota Statutes 1986,316.30section 273.1314, subdivision 9, or Minnesota Statutes, section316.31469.171, subdivision 6;316.32(10)(9) amounts included in federal taxable income that 316.33 are due to refunds of income, excise, or franchise taxes based 316.34 on net income or related minimum taxes paid by the corporation 316.35 to Minnesota, another state, a political subdivision of another 316.36 state, the District of Columbia, or a foreign country or 317.1 possession of the United States to the extent that the taxes 317.2 were added to federal taxable income under section 290.01, 317.3 subdivision 19c, clause (1), in a prior taxable year; 317.4(11)(10) 80 percent of royalties, fees, or other like 317.5 income accrued or received from a foreign operating corporation 317.6 or a foreign corporation which is part of the same unitary 317.7 business as the receiving corporation; 317.8(12)(11) income or gains from the business of mining as 317.9 defined in section 290.05, subdivision 1, clause (a), that are 317.10 not subject to Minnesota franchise tax; 317.11(13)(12) the amount of handicap access expenditures in the 317.12 taxable year which are not allowed to be deducted or capitalized 317.13 under section 44(d)(7) of the Internal Revenue Code; 317.14(14)(13) the amount of qualified research expenses not 317.15 allowed for federal income tax purposes under section 280C(c) of 317.16 the Internal Revenue Code, but only to the extent that the 317.17 amount exceeds the amount of the credit allowed under section 317.18 290.068; 317.19(15)(14) the amount of salary expenses not allowed for 317.20 federal income tax purposes due to claiming the Indian 317.21 employment credit under section 45A(a) of the Internal Revenue 317.22 Code; 317.23(16)(15) the amount of any refund of environmental taxes 317.24 paid under section 59A of the Internal Revenue Code; and 317.25(17)(16) for taxable years beginning before January 1, 317.26 2008, the amount of the federal small ethanol producer credit 317.27 allowed under section 40(a)(3) of the Internal Revenue Code 317.28 which is included in gross income under section 87 of the 317.29 Internal Revenue Code. 317.30 [EFFECTIVE DATE.] This section is effective for taxable 317.31 years beginning after December 31, 2000. 317.32 Sec. 6. Minnesota Statutes 2000, section 290.01, 317.33 subdivision 22, is amended to read: 317.34 Subd. 22. [TAXABLE NET INCOME.] For tax years beginning 317.35 after December 31, 1986, the term "taxable net income" means: 317.36 (1) for resident individuals the same as net income; 318.1 (2) for individuals who were not residents of Minnesota for 318.2 the entire year, the same as net income except that the tax is 318.3 imposed only on the Minnesota apportioned share of that income 318.4 as determined pursuant to section 290.06, subdivision 2c, 318.5 paragraph (e); 318.6 (3) for all other taxpayers, the part of net income that is 318.7 allocable to Minnesota by assignment or apportionment under one 318.8 or more of sections 290.17, 290.191, 290.20,290.35,and 290.36. 318.9 For tax years beginning before January 1, 1987, the term 318.10 "taxable net income" means the net income assignable to this 318.11 state pursuant to sections 290.17 to 290.20. For corporations, 318.12 taxable net income is then reduced by the deductions contained 318.13 in section 290.21. 318.14 [EFFECTIVE DATE.] This section is effective for taxable 318.15 years beginning after December 31, 2000. 318.16 Sec. 7. Minnesota Statutes 2000, section 290.01, 318.17 subdivision 29, is amended to read: 318.18 Subd. 29. [TAXABLE INCOME.]For tax years beginning after318.19December 31, 1986,The term "taxable income" means: 318.20 (1) for individuals, estates, and trusts, the same as 318.21 taxable net income; 318.22 (2) for corporations,including insurance companies,the 318.23 taxable net income less 318.24 (i) the net operating loss deduction under section 290.095; 318.25 and 318.26 (ii) the dividends received deduction under section 290.21, 318.27 subdivision 4; and318.28(iii) the charitable contribution deduction under section318.29290.21, subdivision 3. 318.30 [EFFECTIVE DATE.] This section is effective for taxable 318.31 years beginning after December 31, 2000. 318.32 Sec. 8. Minnesota Statutes 2000, section 290.014, 318.33 subdivision 5, is amended to read: 318.34 Subd. 5. [CORPORATIONS.] Except as provided in section 318.35 290.015, corporations are subject to the return filing 318.36 requirements and to tax as provided in this chapter if the 319.1 corporation so exercises its franchise as to engage in such 319.2 contacts with this state as to cause part of the income of the 319.3 corporation to be: 319.4 (1) allocable to this state under section 290.17, 290.191, 319.5 290.20,290.35,or 290.36; 319.6 (2) taxed to the corporation under the Internal Revenue 319.7 Code (or not taxed under the Internal Revenue Code by reason of 319.8 its character but of a character which is taxable under this 319.9 chapter) in its capacity as a beneficiary of an estate with 319.10 income allocable to this state under section 290.17, 290.191, or 319.11 290.20 and the income, taking into account the income character 319.12 provisions of section 662(b) of the Internal Revenue Code, would 319.13 be allocable to this state under section 290.17, 290.191, or 319.14 290.20 if realized by the corporation directly from the source 319.15 from which realized by the estate; 319.16 (3) taxed to the corporation under the Internal Revenue 319.17 Code (or not taxed under the Internal Revenue Code by reason of 319.18 its character but of a character which is taxable under this 319.19 chapter) in its capacity as a beneficiary or grantor or other 319.20 person treated as a substantial owner of a trust with income 319.21 allocable to this state under section 290.17, 290.191, or 290.20 319.22 and the income, taking into account the income character 319.23 provisions of section 652(b), 662(b), or 664(b) of the Internal 319.24 Revenue Code, would be allocable to this state under section 319.25 290.17, 290.191, or 290.20 if realized by the corporation 319.26 directly from the source from which realized by the trust; or 319.27 (4) taxed to the corporation under the Internal Revenue 319.28 Code (or not taxed under the Internal Revenue Code by reason of 319.29 its character but of a character which is taxable under this 319.30 chapter) in its capacity as a limited or general partner in a 319.31 partnership with income allocable to this state under section 319.32 290.17, 290.191, or 290.20 and the income, taking into account 319.33 the income character provisions of section 702(b) of the 319.34 Internal Revenue Code, would be allocable to this state under 319.35 section 290.17, 290.191, or 290.20 if realized by the 319.36 corporation directly from the source from which realized by the 320.1 partnership. 320.2 [EFFECTIVE DATE.] This section is effective for taxable 320.3 years beginning after December 31, 2000. 320.4 Sec. 9. Minnesota Statutes 2000, section 290.05, 320.5 subdivision 1, is amended to read: 320.6 Subdivision 1. [EXEMPT ENTITIES.] The following 320.7 corporations, individuals, estates, trusts, and organizations 320.8 shall be exempted from taxation under this chapter, provided 320.9 that every such person or corporation claiming exemption under 320.10 this chapter, in whole or in part, must establish to the 320.11 satisfaction of the commissioner the taxable status of any 320.12 income or activity: 320.13 (a) corporations, individuals, estates, and trusts engaged 320.14 in the business of mining or producing iron ore and other ores 320.15 the mining or production of which is subject to the occupation 320.16 tax imposed by section 298.01; but if any such corporation, 320.17 individual, estate, or trust engages in any other business or 320.18 activity or has income from any property not used in such 320.19 business it shall be subject to this tax computed on the net 320.20 income from such property or such other business or activity. 320.21 Royalty shall not be considered as income from the business of 320.22 mining or producing iron ore within the meaning of this section; 320.23 (b) the United States of America, the state of Minnesota or 320.24 any political subdivision of either agencies or 320.25 instrumentalities, whether engaged in the discharge of 320.26 governmental or proprietary functions; and 320.27 (c) any insurance companythat is domiciled in a state or320.28country other than Minnesota that imposes retaliatory taxes,320.29fines, deposits, penalties, licenses, or fees and that does not320.30grant, on a reciprocal basis, exemption from such retaliatory320.31taxes to insurance companies or their agents domiciled in320.32Minnesota. "Retaliatory taxes" means taxes imposed on insurance320.33companies organized in another state or country that result from320.34the fact that an insurance company organized in the taxing320.35jurisdiction and doing business in the other jurisdiction is320.36subject to taxes, fines, deposits, penalties, licenses, or fees321.1in an amount exceeding that imposed by the taxing jurisdiction321.2upon an insurance company organized in the other state or321.3country and doing business to the same extent in the taxing321.4jurisdiction; and321.5(d) town and farmers' mutual insurance companies and mutual321.6property and casualty insurance companies, other than those (1)321.7writing life insurance or (2) whose total assets on December 31,321.81989, exceeded $1,600,000,000. 321.9 [EFFECTIVE DATE.] This section is effective for taxable 321.10 years beginning after December 31, 2000. 321.11 Sec. 10. Minnesota Statutes 2000, section 290.06, 321.12 subdivision 22, is amended to read: 321.13 Subd. 22. [CREDIT FOR TAXES PAID TO ANOTHER STATE.] (a) A 321.14 taxpayer who is liable for taxes on or measured by net income to 321.15 another stateor province or territory of Canada, as provided in 321.16 paragraphs (b) through (f), upon income allocated or apportioned 321.17 to Minnesota, is entitled to a credit for the tax paid to 321.18 another stateor province or territory of Canadaif the tax is 321.19 actually paid in the taxable year or a subsequent taxable year. 321.20 A taxpayer who is a resident of this state pursuant to section 321.21 290.01, subdivision 7, clause (2), and who is subject to income 321.22 tax as a resident in the state of the individual's domicile is 321.23 not allowed this credit unless the state of domicile does not 321.24 allow a similar credit. 321.25 (b) For an individual, estate, or trust, the credit is 321.26 determined by multiplying the tax payable under this chapter by 321.27 the ratio derived by dividing the income subject to tax in the 321.28 other stateor province or territory of Canadathat is also 321.29 subject to tax in Minnesota while a resident of Minnesota by the 321.30 taxpayer's federal adjusted gross income, as defined in section 321.31 62 of the Internal Revenue Code, modified by the addition 321.32 required by section 290.01, subdivision 19a, clause (1), and the 321.33 subtraction allowed by section 290.01, subdivision 19b, clause 321.34 (1), to the extent the income is allocated or assigned to 321.35 Minnesota under sections 290.081 and 290.17. 321.36 (c) If the taxpayer is an athletic team that apportions all 322.1 of its income under section 290.17, subdivision 5, the credit is 322.2 determined by multiplying the tax payable under this chapter by 322.3 the ratio derived from dividing the total net income subject to 322.4 tax in the other stateor province or territory of Canadaby the 322.5 taxpayer's Minnesota taxable income. 322.6 (d) The credit determined under paragraph (b) or (c) shall 322.7 not exceed the amount of tax so paid to the other stateor322.8province or territory of Canadaon the gross income earned 322.9 within the other stateor province or territory of Canada322.10 subject to tax under this chapter, nor shall the allowance of 322.11 the credit reduce the taxes paid under this chapter to an amount 322.12 less than what would be assessed if such income amount was 322.13 excluded from taxable net income. 322.14 (e) In the case of the tax assessed on a lump sum 322.15 distribution under section 290.032, the credit allowed under 322.16 paragraph (a) is the tax assessed by the other stateor province322.17or territory of Canadaon the lump sum distribution that is also 322.18 subject to tax under section 290.032, and shall not exceed the 322.19 tax assessed under section 290.032. To the extent the total 322.20 lump sum distribution defined in section 290.032, subdivision 1, 322.21 includes lump sum distributions received in prior years or is 322.22 all or in part an annuity contract, the reduction to the tax on 322.23 the lump sum distribution allowed under section 290.032, 322.24 subdivision 2, includes tax paid to another state that is 322.25 properly apportioned to that distribution. 322.26 (f) If a Minnesota resident reported an item of income to 322.27 Minnesota and is assessed tax in such other stateor province or322.28territory of Canadaon that same income after the Minnesota 322.29 statute of limitations has expired, the taxpayer shall receive a 322.30 credit for that year under paragraph (a), notwithstanding any 322.31 statute of limitations to the contrary. The claim for the 322.32 credit must be submitted within one year from the date the taxes 322.33 were paid to the other stateor province or territory of322.34Canada. The taxpayer must submit sufficient proof to show 322.35 entitlement to a credit. 322.36 (g) For the purposes of this subdivision, a resident 323.1 shareholder of a corporation treated as an "S" corporation under 323.2 section 290.9725, must be considered to have paid a tax imposed 323.3 on the shareholder in an amount equal to the shareholder's pro 323.4 rata share of any net income tax paid by the S corporation to 323.5 another state. For the purposes of the preceding sentence, the 323.6 term "net income tax" means any tax imposed on or measured by a 323.7 corporation's net income. 323.8 (h) For the purposes of this subdivision, a resident 323.9 partner of an entity taxed as a partnership under the Internal 323.10 Revenue Code must be considered to have paid a tax imposed on 323.11 the partner in an amount equal to the partner's pro rata share 323.12 of any net income tax paid by the partnership to another state. 323.13 For purposes of the preceding sentence, the term "net income" 323.14 tax means any tax imposed on or measured by a partnership's net 323.15 income. 323.16 (i) For the purposes of this subdivision, "another state": 323.17 (1) includes: 323.18 (i) the District of Columbia, but does not include; and 323.19 (ii) a province or territory of Canada; but 323.20 (2) excludes Puerto Ricoorand the several territories 323.21 organized by Congress. 323.22 (j) The limitations on the credit in paragraphs (b), (c), 323.23 and (d), are imposed on a state by state basis. 323.24 (k) For a tax imposed by a province or territory of Canada, 323.25 the tax for purposes of this subdivision is the excess of the 323.26 tax over the amount of the foreign tax credit allowed under 323.27 section 27 of the Internal Revenue Code. In determining the 323.28 amount of the foreign tax credit allowed, the net income taxes 323.29 imposed by Canada on the income are deducted first. Any 323.30 remaining amount of the allowable foreign tax credit reduces the 323.31 provincial or territorial tax that qualifies for the credit 323.32 under this subdivision. 323.33 [EFFECTIVE DATE.] This section is effective for taxable 323.34 years beginning after December 31, 2000. 323.35 Sec. 11. Minnesota Statutes 2000, section 290.0674, 323.36 subdivision 1, is amended to read: 324.1 Subdivision 1. [CREDIT ALLOWED.] An individual is allowed 324.2 a credit against the tax imposed by this chapter in an amount 324.3 equal to 75 percent of the amount paid for education-related 324.4 expenses for a qualifying child in kindergarten through grade 324.5 12. For purposes of this section, "education-related expenses" 324.6 means: 324.7 (1) fees or tuition for instruction by an instructor under 324.8 section 120A.22, subdivision 10, clause (1), (2), (3), (4), or 324.9 (5), orbya member of the Minnesota music teachers association, 324.10 and who is not a lineal ancestor or sibling of the dependent for 324.11 instruction outside the regular school day or school year, 324.12 including tutoring, driver's education offered as part of school 324.13 curriculum, regardless of whether it is taken from a public or 324.14 private entity or summer camps, in grade or age appropriate 324.15 curricula that supplement curricula and instruction available 324.16 during the regular school year, that assists a dependent to 324.17 improve knowledge of core curriculum areas or to expand 324.18 knowledge and skills under the graduation rule under section 324.19 120B.02, paragraph (e), clauses (1) to (7), (9), and (10), and 324.20 that do not include the teaching of religious tenets, doctrines, 324.21 or worship, the purpose of which is to instill such tenets, 324.22 doctrines, or worship; 324.23 (2) expenses for textbooks, including books and other 324.24 instructional materials and equipmentusedpurchased or leased 324.25 for use in elementary and secondary schools in teaching only 324.26 those subjects legally and commonly taught in public elementary 324.27 and secondary schools in this state. "Textbooks" does not 324.28 include instructional books and materials used in the teaching 324.29 of religious tenets, doctrines, or worship, the purpose of which 324.30 is to instill such tenets, doctrines, or worship, nor does it 324.31 include books or materials for extracurricular activities 324.32 including sporting events, musical or dramatic events, speech 324.33 activities, driver's education, or similar programs; 324.34 (3) a maximum expense of $200 per family for personal 324.35 computer hardware, excluding single purpose processors, and 324.36 educational software that assists a dependent to improve 325.1 knowledge of core curriculum areas or to expand knowledge and 325.2 skills under the graduation rule under section 120B.02 purchased 325.3 for use in the taxpayer's home and not used in a trade or 325.4 business regardless of whether the computer is required by the 325.5 dependent's school; and 325.6 (4) the amount paid to others for transportation of a 325.7 qualifying child attending an elementary or secondary school 325.8 situated in Minnesota, North Dakota, South Dakota, Iowa, or 325.9 Wisconsin, wherein a resident of this state may legally fulfill 325.10 the state's compulsory attendance laws, which is not operated 325.11 for profit, and which adheres to the provisions of the Civil 325.12 Rights Act of 1964 and chapter 363. 325.13 For purposes of this section, "qualifying child" has the 325.14 meaning given in section 32(c)(3) of the Internal Revenue Code. 325.15 [EFFECTIVE DATE.] This section is effective for tax years 325.16 beginning after December 31, 2001, except that the amendment to 325.17 clause (2) is effective for tax years beginning after December 325.18 31, 2000. 325.19 Sec. 12. [290.0679] [ASSIGNMENT OF REFUND.] 325.20 Subdivision 1. [DEFINITIONS.] (a) "Qualifying taxpayer" 325.21 means a resident who has a child in kindergarten through grade 325.22 12 in the current tax year and who met the income requirements 325.23 under section 290.0674, subdivision 2, for receiving the 325.24 education credit in the tax year preceding the assignment of the 325.25 taxpayer's refund. 325.26 (b) "Education credit" means the credit allowed under 325.27 section 290.0674. 325.28 (c) "Refund" means an individual income tax refund. 325.29 (d) "Financial institution" means a state or federally 325.30 chartered bank, savings bank, savings association, or credit 325.31 union. 325.32 (e) "Qualifying organization" means a tax-exempt 325.33 organization under section 501(c)(3) of the Internal Revenue 325.34 Code. 325.35 (f) "Assignee" means a financial institution or qualifying 325.36 organization that is entitled to receive payment of a refund 326.1 assigned under this section. 326.2 Subd. 2. [CONDITIONS FOR ASSIGNMENT.] A qualifying 326.3 taxpayer may assign all or part of an anticipated refund for the 326.4 current and future taxable years to a financial institution or a 326.5 qualifying organization. A financial institution or qualifying 326.6 organization accepting assignment must pay the amount secured by 326.7 the assignment to a third-party vendor. The commissioner of 326.8 children, families, and learning shall provide a list of 326.9 categories of products and services that qualify for the 326.10 education credit to financial institutions and qualifying 326.11 organizations. A financial institution or qualifying 326.12 organization that accepts assignments under this section must 326.13 verify as part of the assignment documentation that the product 326.14 or service to be provided by the third-party vendor qualifies 326.15 for the education credit. The amount assigned for the current 326.16 and future taxable years may not exceed the maximum allowable 326.17 education credit for the current taxable year. Both the 326.18 taxpayer and spouse must consent to the assignment of a refund 326.19 from a joint return. 326.20 Subd. 3. [CONSENT FOR DISCLOSURE.] When the taxpayer 326.21 applies to the financial institution or the qualifying 326.22 organization for a loan to be secured by the assignment under 326.23 subdivision 2, the taxpayer must sign a written consent on a 326.24 form prescribed by the commissioner. The consent must authorize 326.25 the commissioner to disclose to the financial institution or 326.26 qualifying organization the total amount of state taxes owed or 326.27 revenue recapture claims filed under chapter 270A against the 326.28 taxpayer, and the total amount of outstanding assignments made 326.29 by the taxpayer under this section. For a refund from a joint 326.30 return, the consent must also authorize the disclosure of taxes, 326.31 revenue recapture claims, and assignments relating to the 326.32 taxpayer's spouse, and must be signed by the spouse. The 326.33 financial institution or qualifying organization may request 326.34 that the taxpayer provide a copy of the taxpayer's previous 326.35 year's income tax return, if any, and may assist the taxpayer in 326.36 requesting a copy of the previous year's return from the 327.1 commissioner. 327.2 Subd. 4. [CONSUMER DISCLOSURE.] (a) A third-party vendor 327.3 that receives payment of the amount secured by an assignment 327.4 must comply with the requirements of this subdivision. 327.5 (b) The third-party vendor must disclose to the taxpayer, 327.6 in plain language: 327.7 (1) the cost of each product or service for which the 327.8 third-party vendor separately charges the taxpayer; 327.9 (2) any fees charged to the taxpayer for tax preparation 327.10 services; and 327.11 (3) for qualifying low-income taxpayers, information on the 327.12 availability of free tax preparation services. 327.13 (c) The third-party vendor must provide to the taxpayer 327.14 executed copies of any documents signed by the taxpayer. 327.15 Subd. 5. [FILING OF ASSIGNMENT.] The commissioner shall 327.16 prescribe the form of and manner for filing an assignment of a 327.17 refund under this section. 327.18 Subd. 6. [EFFECT OF ASSIGNMENT.] The taxpayer may not 327.19 revoke an assignment after it has been filed. The assignee must 327.20 notify the commissioner if the loan secured by the assignment 327.21 has been paid in full, in which case the assignment is 327.22 canceled. An assignment is in effect until the amount assigned 327.23 is refunded in full to the assignee, or until the assignee 327.24 cancels the assignment. 327.25 Subd. 7. [PAYMENT OF REFUND.] When a refund assigned under 327.26 this section is issued by the commissioner, the proceeds of the 327.27 refund, as defined in subdivision 1, paragraph (c), must be 327.28 distributed in the following order: 327.29 (1) to satisfy any delinquent tax obligations of the 327.30 taxpayer which are owed to the commissioner; 327.31 (2) to claimant agencies to satisfy any revenue recapture 327.32 claims filed against the taxpayer, in the order of priority of 327.33 the claims set forth in section 270A.10; 327.34 (3) to assignees to satisfy assignments under this section, 327.35 based on the order in time in which the commissioner received 327.36 the assignments; and 328.1 (4) to the taxpayer. 328.2 Subd. 8. [LEGAL ACTION.] If there is a dispute between the 328.3 taxpayer and the assignee after the commissioner has remitted 328.4 the taxpayer's refund to the assignee, the taxpayer's only 328.5 remedy is to bring an action against the assignee in court to 328.6 recover the refund. The action must be brought within two years 328.7 after the commissioner remits the refund to the assignee. The 328.8 commissioner may not be a party to the proceeding. 328.9 Subd. 9. [ASSIGNMENTS PRIVATE DATA.] Information regarding 328.10 assignments under this section is classified as private data on 328.11 individuals. 328.12 [EFFECTIVE DATE.] This section is effective for assignment 328.13 of refunds filed with the commissioner after December 31, 2001. 328.14 The time period for filing assignments expires December 31, 328.15 2003, but assignments filed on or before that date remain in 328.16 effect until satisfied or canceled. 328.17 Sec. 13. Minnesota Statutes 2000, section 290.091, 328.18 subdivision 2, is amended to read: 328.19 Subd. 2. [DEFINITIONS.] For purposes of the tax imposed by 328.20 this section, the following terms have the meanings given: 328.21 (a) "Alternative minimum taxable income" means the sum of 328.22 the following for the taxable year: 328.23 (1) the taxpayer's federal alternative minimum taxable 328.24 income as defined in section 55(b)(2) of the Internal Revenue 328.25 Code; 328.26 (2) the taxpayer's itemized deductions allowed in computing 328.27 federal alternative minimum taxable income, but excluding: 328.28 (i) the Minnesota charitable contribution deduction; 328.29 (ii) the medical expense deduction; 328.30 (iii) the casualty, theft, and disaster loss deduction; 328.31 (iv) the impairment-related work expenses of a disabled 328.32 person; and 328.33 (v) holocaust victims' settlement payments to the extent 328.34 allowed under section 290.01, subdivision 19b; 328.35 (3) for depletion allowances computed under section 613A(c) 328.36 of the Internal Revenue Code, with respect to each property (as 329.1 defined in section 614 of the Internal Revenue Code), to the 329.2 extent not included in federal alternative minimum taxable 329.3 income, the excess of the deduction for depletion allowable 329.4 under section 611 of the Internal Revenue Code for the taxable 329.5 year over the adjusted basis of the property at the end of the 329.6 taxable year (determined without regard to the depletion 329.7 deduction for the taxable year); 329.8 (4) to the extent not included in federal alternative 329.9 minimum taxable income, the amount of the tax preference for 329.10 intangible drilling cost under section 57(a)(2) of the Internal 329.11 Revenue Code determined without regard to subparagraph (E); and 329.12 (5) to the extent not included in federal alternative 329.13 minimum taxable income, the amount of interest income as 329.14 provided by section 290.01, subdivision 19a, clause (1); 329.15 less the sum of the amounts determined under the following: 329.16 (1) interest income as defined in section 290.01, 329.17 subdivision 19b, clause (1); 329.18 (2) an overpayment of state income tax as provided by 329.19 section 290.01, subdivision 19b, clause (2), to the extent 329.20 included in federal alternative minimum taxable income; 329.21 (3) the amount of investment interest paid or accrued 329.22 within the taxable year on indebtedness to the extent that the 329.23 amount does not exceed net investment income, as defined in 329.24 section 163(d)(4) of the Internal Revenue Code. Interest does 329.25 not include amounts deducted in computing federal adjusted gross 329.26 income; and 329.27 (4) amounts subtracted from federal taxable income as 329.28 provided by section 290.01, subdivision 19b, 329.29clausesclause (4)and (6). 329.30 In the case of an estate or trust, alternative minimum 329.31 taxable income must be computed as provided in section 59(c) of 329.32 the Internal Revenue Code. 329.33 (b) "Investment interest" means investment interest as 329.34 defined in section 163(d)(3) of the Internal Revenue Code. 329.35 (c) "Tentative minimum tax" equals 6.4 percent of 329.36 alternative minimum taxable income after subtracting the 330.1 exemption amount determined under subdivision 3. 330.2 (d) "Regular tax" means the tax that would be imposed under 330.3 this chapter (without regard to this section and section 330.4 290.032), reduced by the sum of the nonrefundable credits 330.5 allowed under this chapter. 330.6 (e) "Net minimum tax" means the minimum tax imposed by this 330.7 section. 330.8 (f) "Minnesota charitable contribution deduction" means a 330.9 charitable contribution deduction under section 170 of the 330.10 Internal Revenue Code to or for the use of an entity described 330.11 in Minnesota Statutes 2000, section 290.21, subdivision 3, 330.12 clauses (a) to (e). When the federal deduction for charitable 330.13 contributions is limited under section 170(b) of the Internal 330.14 Revenue Code, the allowable contributions in the year of 330.15 contribution are deemed to be first contributions to entities 330.16 described in Minnesota Statutes 2000, section 290.21, 330.17 subdivision 3, clauses (a) to (e). 330.18 [EFFECTIVE DATE.] This section is effective for taxable 330.19 years beginning after December 31, 2000. 330.20 Sec. 14. Minnesota Statutes 2000, section 290.0921, 330.21 subdivision 1, is amended to read: 330.22 Subdivision 1. [TAX IMPOSED.] In addition to the taxes 330.23 computed under this chapter without regard to this section, the 330.24 franchise tax imposed on corporations includes a tax equal to 330.25 the excess, if any, for the taxable year of: 330.26 (1) 5.8 percent of Minnesota alternative minimum taxable 330.27 incomeless the credit allowed under section 290.35, subdivision330.283; over 330.29 (2) the tax imposed under section 290.06, subdivision 1, 330.30 without regard to this section. 330.31 [EFFECTIVE DATE.] This section is effective for taxable 330.32 years beginning after December 31, 2000. 330.33 Sec. 15. Minnesota Statutes 2000, section 290.0921, 330.34 subdivision 2, is amended to read: 330.35 Subd. 2. [DEFINITIONS.] (a) For purposes of this section, 330.36 the following terms have the meanings given them. 331.1 (b) "Alternative minimum taxable net income" is alternative 331.2 minimum taxable income, 331.3 (1) less the exemption amount, and 331.4 (2) apportioned or allocated to Minnesota under section 331.5 290.17, 290.191, or 290.20. 331.6 (c) The "exemption amount" is $40,000, reduced, but not 331.7 below zero, by 25 percent of the excess of alternative minimum 331.8 taxable income over $150,000. 331.9 (d) "Minnesota alternative minimum taxable income" is 331.10 alternative minimum taxable net income, less the deductions for 331.11 alternative tax net operating loss under subdivision 4; 331.12 charitable contributions under subdivision 5; and dividends 331.13 received under subdivision 6. The sum of the deductions under 331.14 this paragraph may not exceed 90 percent of alternative minimum 331.15 taxable net income. This limitation does not apply to a 331.16 deduction for dividends paid to or received from a corporation 331.17 which is subject to tax under section290.35 or290.36 and which 331.18 is a member of an affiliated group of corporations as defined by 331.19 the Internal Revenue Code. 331.20 [EFFECTIVE DATE.] This section is effective for taxable 331.21 years beginning after December 31, 2000. 331.22 Sec. 16. Minnesota Statutes 2000, section 290.0921, 331.23 subdivision 6, is amended to read: 331.24 Subd. 6. [DIVIDENDS RECEIVED.] (a) A deduction is allowed 331.25 from alternative minimum taxable net income equal to the 331.26 deduction for dividends received under section 290.21, 331.27 subdivision 4, for purposes of calculating taxable income under 331.28 section 290.01, subdivision 29. 331.29 (b) The amount of the deduction must not exceed 90 percent 331.30 of alternative minimum taxable net income. This limitation does 331.31 not apply to dividends paid to or received from a corporation 331.32 which is subject to tax under section290.35 or290.36 and which 331.33 is a member of an affiliated group of corporations as defined by 331.34 the Internal Revenue Code. 331.35 [EFFECTIVE DATE.] This section is effective for taxable 331.36 years beginning after December 31, 2000. 332.1 Sec. 17. Minnesota Statutes 2000, section 290.0922, 332.2 subdivision 2, is amended to read: 332.3 Subd. 2. [EXEMPTIONS.] The following entities are exempt 332.4 from the tax imposed by this section: 332.5 (1) corporations exempt from tax under section 290.05other332.6than insurance companies exempt under subdivision 1, paragraph332.7(d); 332.8 (2) real estate investment trusts; 332.9 (3) regulated investment companies or a fund thereof; and 332.10 (4) entities having a valid election in effect under 332.11 section 860D(b) of the Internal Revenue Code; 332.12 (5) town and farmers' mutual insurance companies; and 332.13 (6) cooperatives organized under chapter 308A that provide 332.14 housing exclusively to persons age 55 and over and are 332.15 classified as homesteads under section 273.124, subdivision 3. 332.16 Entities not specifically exempted by this subdivision are 332.17 subject to tax under this section, notwithstanding section 332.18 290.05. 332.19 [EFFECTIVE DATE.] This section is effective for taxable 332.20 years beginning after December 31, 2000. 332.21 Sec. 18. Minnesota Statutes 2000, section 290.093, is 332.22 amended to read: 332.23 290.093 [TAX COMPUTATION FOR MUTUAL SAVINGS BANKS 332.24 CONDUCTING LIFE INSURANCE BUSINESS.] 332.25 Mutual savings banks as defined in section 594 of the 332.26 Internal Revenue Code are subject to a taxconsisting of the sum332.27of the taxes determined under clauses (1) and (2):332.28(1) a taxcomputed on the taxable income determined without 332.29 regard to any items of gross income or deductions properly 332.30 allocable to the business of the life insurance department, at 332.31 the rates and in the manneras if this section did not apply;332.32and332.33(2) a tax computed on the income of the life insurance332.34department determined without regard to any items of gross332.35income or deductions not properly allocable to the department332.36computed in the manner provided in section 290.35 and at the333.1rate provided in section 290.06for a corporation not engaged in 333.2 the business of issuing life insurance contracts. 333.3 This section applies only if the life insurance department 333.4 would, if it were treated as a separate corporation, qualify as 333.5 a life insurance company under section 816 of the Internal 333.6 Revenue Code. 333.7 [EFFECTIVE DATE.] This section is effective for taxable 333.8 years beginning after December 31, 2000. 333.9 Sec. 19. Minnesota Statutes 2000, section 290.095, 333.10 subdivision 2, is amended to read: 333.11 Subd. 2. [DEFINED AND LIMITED.] (a) The term "net 333.12 operating loss" as used in this section shall mean a net 333.13 operating loss as defined in section 172(c)or 810(a), in the333.14case of life insurance companies,of the Internal Revenue Code, 333.15 with the modifications specified in subdivision 4. The 333.16 deductions provided in section 290.21 and the modification 333.17 provided in section 290.01, subdivision 19d, clause(11)(10), 333.18 cannot be used in the determination of a net operating loss. 333.19 (b) The term "net operating loss deduction" as used in this 333.20 section means the aggregate of the net operating loss carryovers 333.21 to the taxable year, computed in accordance with subdivision 3. 333.22 The provisions of section 172(b)or 810(b), in the case of life333.23insurance companies,of the Internal Revenue Code relating to 333.24 the carryback of net operating losses, do not apply. 333.25 [EFFECTIVE DATE.] This section is effective for taxable 333.26 years beginning after December 31, 2000. 333.27 Sec. 20. Minnesota Statutes 2000, section 290.17, 333.28 subdivision 1, is amended to read: 333.29 Subdivision 1. [SCOPE OF ALLOCATION RULES.] (a) The income 333.30 of resident individuals is not subject to allocation outside 333.31 this state. The allocation rules apply to nonresident 333.32 individuals, estates, trusts, nonresident partners of 333.33 partnerships, nonresident shareholders of corporations treated 333.34 as "S" corporations under section 290.9725, and all corporations 333.35 not having such an election in effect. If a partnership or 333.36 corporation would not otherwise be subject to the allocation 334.1 rules, but conducts a trade or business that is part of a 334.2 unitary business involving another legal entity that is subject 334.3 to the allocation rules, the partnership or corporation is 334.4 subject to the allocation rules. 334.5 (b) Expenses, losses, and other deductions (referred to 334.6 collectively in this paragraph as "deductions") must be 334.7 allocated along with the item or class of gross income to which 334.8 they are definitely related for purposes of assignment under 334.9 this section or apportionment under section 290.191, 290.20, 334.10290.35,or 290.36. Deductions not definitely related to any 334.11 item or class of gross income are assigned to the taxpayer's 334.12 domicile. 334.13 (c) In the case of an individual who is a resident for only 334.14 part of a taxable year, the individual's income, gains, losses, 334.15 and deductions from the distributive share of a partnership, S 334.16 corporation, trust, or estate are not subject to allocation 334.17 outside this state to the extent of the distributive share 334.18 multiplied by a ratio, the numerator of which is the number of 334.19 days the individual was a resident of this state during the tax 334.20 year of the partnership, S corporation, trust, or estate, and 334.21 the denominator of which is the number of days in the taxable 334.22 year of the partnership, S corporation, trust, or estate. 334.23 [EFFECTIVE DATE.] This section is effective for taxable 334.24 years beginning after December 31, 2000. 334.25 Sec. 21. Minnesota Statutes 2000, section 290.17, 334.26 subdivision 4, is amended to read: 334.27 Subd. 4. [UNITARY BUSINESS PRINCIPLE.] (a) If a trade or 334.28 business conducted wholly within this state or partly within and 334.29 partly without this state is part of a unitary business, the 334.30 entire income of the unitary business is subject to 334.31 apportionment pursuant to section 290.191. Notwithstanding 334.32 subdivision 2, paragraph (c), none of the income of a unitary 334.33 business is considered to be derived from any particular source 334.34 and none may be allocated to a particular place except as 334.35 provided by the applicable apportionment formula. The 334.36 provisions of this subdivision do not apply to business income 335.1 subject to subdivision 5, income of an insurance company 335.2determined under section 290.35, or income of an investment 335.3 company determined under section 290.36. 335.4 (b) The term "unitary business" means business activities 335.5 or operations which result in a flow of value between them. The 335.6 term may be applied within a single legal entity or between 335.7 multiple entities and without regard to whether each entity is a 335.8 sole proprietorship, a corporation, a partnership or a trust. 335.9 (c) Unity is presumed whenever there is unity of ownership, 335.10 operation, and use, evidenced by centralized management or 335.11 executive force, centralized purchasing, advertising, 335.12 accounting, or other controlled interaction, but the absence of 335.13 these centralized activities will not necessarily evidence a 335.14 nonunitary business. Unity is also presumed when business 335.15 activities or operations are of mutual benefit, dependent upon 335.16 or contributory to one another, either individually or as a 335.17 group. 335.18 (d) Where a business operation conducted in Minnesota is 335.19 owned by a business entity that carries on business activity 335.20 outside the state different in kind from that conducted within 335.21 this state, and the other business is conducted entirely outside 335.22 the state, it is presumed that the two business operations are 335.23 unitary in nature, interrelated, connected, and interdependent 335.24 unless it can be shown to the contrary. 335.25 (e) Unity of ownership is not deemed to exist when a 335.26 corporation is involved unless that corporation is a member of a 335.27 group of two or more business entities and more than 50 percent 335.28 of the voting stock of each member of the group is directly or 335.29 indirectly owned by a common owner or by common owners, either 335.30 corporate or noncorporate, or by one or more of the member 335.31 corporations of the group. For this purpose, the term "voting 335.32 stock" shall include membership interests of mutual insurance 335.33 holding companies formed under section 60A.077. 335.34 (f) The net income and apportionment factors under section 335.35 290.191 or 290.20 of foreign corporations and other foreign 335.36 entities which are part of a unitary business shall not be 336.1 included in the net income or the apportionment factors of the 336.2 unitary business. A foreign corporation or other foreign entity 336.3 which is required to file a return under this chapter shall file 336.4 on a separate return basis. The net income and apportionment 336.5 factors under section 290.191 or 290.20 of foreign operating 336.6 corporations shall not be included in the net income or the 336.7 apportionment factors of the unitary business except as provided 336.8 in paragraph (g). 336.9 (g) The adjusted net income of a foreign operating 336.10 corporation shall be deemed to be paid as a dividend on the last 336.11 day of its taxable year to each shareholder thereof, in 336.12 proportion to each shareholder's ownership, with which such 336.13 corporation is engaged in a unitary business. Such deemed 336.14 dividend shall be treated as a dividend under section 290.21, 336.15 subdivision 4. 336.16 Dividends actually paid by a foreign operating corporation 336.17 to a corporate shareholder which is a member of the same unitary 336.18 business as the foreign operating corporation shall be 336.19 eliminated from the net income of the unitary business in 336.20 preparing a combined report for the unitary business. The 336.21 adjusted net income of a foreign operating corporation shall be 336.22 its net income adjusted as follows: 336.23 (1) any taxes paid or accrued to a foreign country, the 336.24 commonwealth of Puerto Rico, or a United States possession or 336.25 political subdivision of any of the foregoing shall be a 336.26 deduction; and 336.27 (2) the subtraction from federal taxable income for 336.28 payments received from foreign corporations or foreign operating 336.29 corporations under section 290.01, subdivision 19d, clause 336.30(11)(10), shall not be allowed. 336.31 If a foreign operating corporation incurs a net loss, 336.32 neither income nor deduction from that corporation shall be 336.33 included in determining the net income of the unitary business. 336.34 (h) For purposes of determining the net income of a unitary 336.35 business and the factors to be used in the apportionment of net 336.36 income pursuant to section 290.191 or 290.20, there must be 337.1 included only the income and apportionment factors of domestic 337.2 corporations or other domestic entities other than foreign 337.3 operating corporations that are determined to be part of the 337.4 unitary business pursuant to this subdivision, notwithstanding 337.5 that foreign corporations or other foreign entities might be 337.6 included in the unitary business. 337.7 (i) Deductions for expenses, interest, or taxes otherwise 337.8 allowable under this chapter that are connected with or 337.9 allocable against dividends, deemed dividends described in 337.10 paragraph (g), or royalties, fees, or other like income 337.11 described in section 290.01, subdivision 19d, clause(11)(10), 337.12 shall not be disallowed. 337.13 (j) Each corporation or other entity, except a sole 337.14 proprietorship, that is part of a unitary business must file 337.15 combined reports as the commissioner determines. On the 337.16 reports, all intercompany transactions between entities included 337.17 pursuant to paragraph (h) must be eliminated and the entire net 337.18 income of the unitary business determined in accordance with 337.19 this subdivision is apportioned among the entities by using each 337.20 entity's Minnesota factors for apportionment purposes in the 337.21 numerators of the apportionment formula and the total factors 337.22 for apportionment purposes of all entities included pursuant to 337.23 paragraph (h) in the denominators of the apportionment formula. 337.24 (k) If a corporation has been divested from a unitary 337.25 business and is included in a combined report for a fractional 337.26 part of the common accounting period of the combined report: 337.27 (1) its income includable in the combined report is its 337.28 income incurred for that part of the year determined by 337.29 proration or separate accounting; and 337.30 (2) its sales, property, and payroll included in the 337.31 apportionment formula must be prorated or accounted for 337.32 separately. 337.33 [EFFECTIVE DATE.] This section is effective for taxable 337.34 years beginning after December 31, 2000. 337.35 Sec. 22. Minnesota Statutes 2000, section 290.191, 337.36 subdivision 2, is amended to read: 338.1 Subd. 2. [APPORTIONMENT FORMULA OF GENERAL APPLICATION.] 338.2 Except for those trades or businesses required to use a 338.3 different formula under subdivision 3 or section290.35 or338.4 290.36, and for those trades or businesses that receive 338.5 permission to use some other method under section 290.20 or 338.6 under subdivision 4, a trade or business required to apportion 338.7 its net income must apportion its income to this state on the 338.8 basis of the percentage obtained by taking the sum of: 338.9 (1) 75 percent of the percentage which the sales made 338.10 within this state in connection with the trade or business 338.11 during the tax period are of the total sales wherever made in 338.12 connection with the trade or business during the tax period; 338.13 (2) 12.5 percent of the percentage which the total tangible 338.14 property used by the taxpayer in this state in connection with 338.15 the trade or business during the tax period is of the total 338.16 tangible property, wherever located, used by the taxpayer in 338.17 connection with the trade or business during the tax period; and 338.18 (3) 12.5 percent of the percentage which the taxpayer's 338.19 total payrolls paid or incurred in this state or paid in respect 338.20 to labor performed in this state in connection with the trade or 338.21 business during the tax period are of the taxpayer's total 338.22 payrolls paid or incurred in connection with the trade or 338.23 business during the tax period. 338.24 [EFFECTIVE DATE.] This section is effective for taxable 338.25 years beginning after December 31, 2000. 338.26 Sec. 23. Minnesota Statutes 2000, section 290.21, 338.27 subdivision 4, is amended to read: 338.28 Subd. 4. (a)(1) Eighty percent of dividends received by a 338.29 corporation during the taxable year from another corporation, in 338.30 which the recipient owns 20 percent or more of the stock, by 338.31 vote and value, not including stock described in section 338.32 1504(a)(4) of the Internal Revenue Code when the corporate stock 338.33 with respect to which dividends are paid does not constitute the 338.34 stock in trade of the taxpayer or would not be included in the 338.35 inventory of the taxpayer, or does not constitute property held 338.36 by the taxpayer primarily for sale to customers in the ordinary 339.1 course of the taxpayer's trade or business, or when the trade or 339.2 business of the taxpayer does not consist principally of the 339.3 holding of the stocks and the collection of the income and gains 339.4 therefrom; and 339.5 (2)(i) The remaining 20 percent of dividends if the 339.6 dividends received are the stock in an affiliated company 339.7 transferred in an overall plan of reorganization and the 339.8 dividend is eliminated in consolidation under Treasury 339.9 Department Regulation 1.1502-14(a), as amended through December 339.10 31, 1989; or 339.11 (ii) The remaining 20 percent of dividends if the dividends 339.12 are received from a corporation which is subject to tax under 339.13 section290.35 or290.36 and which is a member of an affiliated 339.14 group of corporations as defined by the Internal Revenue Code 339.15 and the dividend is eliminated in consolidation under Treasury 339.16 Department Regulation 1.1502-14(a), as amended through December 339.17 31, 1989, or is deducted under an election under section 243(b) 339.18 of the Internal Revenue Code. 339.19 (b) Seventy percent of dividends received by a corporation 339.20 during the taxable year from another corporation in which the 339.21 recipient owns less than 20 percent of the stock, by vote or 339.22 value, not including stock described in section 1504(a)(4) of 339.23 the Internal Revenue Code when the corporate stock with respect 339.24 to which dividends are paid does not constitute the stock in 339.25 trade of the taxpayer, or does not constitute property held by 339.26 the taxpayer primarily for sale to customers in the ordinary 339.27 course of the taxpayer's trade or business, or when the trade or 339.28 business of the taxpayer does not consist principally of the 339.29 holding of the stocks and the collection of income and gain 339.30 therefrom. 339.31 (c) The dividend deduction provided in this subdivision 339.32 shall be allowed only with respect to dividends that are 339.33 included in a corporation's Minnesota taxable net income for the 339.34 taxable year. 339.35 The dividend deduction provided in this subdivision does 339.36 not apply to a dividend from a corporation which, for the 340.1 taxable year of the corporation in which the distribution is 340.2 made or for the next preceding taxable year of the corporation, 340.3 is a corporation exempt from tax under section 501 of the 340.4 Internal Revenue Code. 340.5 The dividend deduction provided in this subdivision applies 340.6 to the amount of regulated investment company dividends only to 340.7 the extent determined under section 854(b) of the Internal 340.8 Revenue Code. 340.9 The dividend deduction provided in this subdivision shall 340.10 not be allowed with respect to any dividend for which a 340.11 deduction is not allowed under the provisions of section 246(c) 340.12 of the Internal Revenue Code. 340.13 (d) If dividends received by a corporation that does not 340.14 have nexus with Minnesota under the provisions of Public Law 340.15 Number 86-272 are included as income on the return of an 340.16 affiliated corporation permitted or required to file a combined 340.17 report under section 290.34, subdivision 2, then for purposes of 340.18 this subdivision the determination as to whether the trade or 340.19 business of the corporation consists principally of the holding 340.20 of stocks and the collection of income and gains therefrom shall 340.21 be made with reference to the trade or business of the 340.22 affiliated corporation having a nexus with Minnesota. 340.23 (e) The deduction provided by this subdivision does not 340.24 apply if the dividends are paid by a FSC as defined in section 340.25 922 of the Internal Revenue Code. 340.26 (f) If one or more of the members of the unitary group 340.27 whose income is included on the combined report received a 340.28 dividend, the deduction under this subdivision for each member 340.29 of the unitary business required to file a return under this 340.30 chapter is the product of: (1) 100 percent of the dividends 340.31 received by members of the group; (2) the percentage allowed 340.32 pursuant to paragraph (a) or (b); and (3) the percentage of the 340.33 taxpayer's business income apportionable to this state for the 340.34 taxable year under section 290.191 or 290.20. 340.35 [EFFECTIVE DATE.] This section is effective for taxable 340.36 years beginning after December 31, 2000. 341.1 Sec. 24. Minnesota Statutes 2000, section 290.9725, is 341.2 amended to read: 341.3 290.9725 [S CORPORATION.] 341.4 For purposes of this chapter, the term "S corporation" 341.5 means any corporation having a valid election in effect for the 341.6 taxable year under section 1362 of the Internal Revenue Code. 341.7 An S corporation shall not be subject to the taxes imposed by 341.8 this chapter, except:341.9(1)the taxes imposed under sections 290.0922, 290.92, 341.10 290.9727, 290.9728, and 290.9729; and341.11(2) the tax under sections 290.06, subdivision 1, and341.12290.0921 apply to a financial institution to which either341.13section 585 or 593 of the Internal Revenue Code applies or that341.14has a wholly owned subsidiary as described in section341.151361(b)(3)(B) of the Internal Revenue Code which is a financial341.16institution under section 585 or 593 of the Internal Revenue341.17Code. 341.18 [EFFECTIVE DATE.] This section is effective for taxable 341.19 years beginning after December 31, 2000. 341.20 Sec. 25. Minnesota Statutes 2000, section 297I.20, is 341.21 amended to read: 341.22 297I.20 [GUARANTY ASSOCIATION ASSESSMENT OFFSET.] 341.23 (a) An insurance company may offset against its premium tax 341.24 liability to this state any amount paid for assessments made for 341.25 insolvencies which occur after July 31, 1994, under sections 341.26 60C.01 to 60C.22; and any amount paid for assessments made after 341.27 July 31, 1994, under Minnesota Statutes 1992, sections 61B.01 to 341.28 61B.16, or under sections 61B.18 to 61B.32 as follows: 341.29 (1) Each such assessment shall give rise to an amount of 341.30 offset equal to 20 percent of the amount of the assessment for 341.31 each of the five calendar years following the year in which the 341.32 assessment was paid. 341.33 (2) The amount of offset initially determined for each 341.34 taxable year is the sum of the amounts determined under clause 341.35 (1) for that taxable year. 341.36 (b)(1) Each year the commissioner shall compare total 342.1 guaranty association assessments levied over the preceding five 342.2 calendar years to the sum of all premium tax and corporate 342.3 franchise tax revenues collected from insurance companies, 342.4 without reduction for any guaranty association assessment offset 342.5 in the preceding calendar year, referred to in this subdivision 342.6 as "preceding year insurance tax revenues." 342.7 (2) If total guaranty association assessments levied over 342.8 the preceding five years exceed the preceding year insurance tax 342.9 revenues, insurance companies must be allowed only a 342.10 proportionate part of the premium tax offset calculated under 342.11 paragraph (a) for the current calendar year. 342.12 (3) The proportionate part of the premium tax offset 342.13 allowed in the current calendar year is determined by 342.14 multiplying the amount calculated under paragraph (a) by a 342.15 fraction. The numerator of the fraction equals the preceding 342.16 year insurance tax revenues, and its denominator equals total 342.17 guaranty association assessments levied over the preceding 342.18 five-year period. 342.19 (4) The proportionate part of the premium tax offset that 342.20 is not allowed must be carried forward to subsequent tax years 342.21 and added to the amount of premium tax offset calculated under 342.22 paragraph (a) prior to application of the limitation imposed by 342.23 this paragraph. 342.24 (5) Any amount carried forward from prior years must be 342.25 allowed before allowance of the offset for the current year 342.26 calculated under paragraph (a). 342.27 (6) The premium tax offset limitation must be calculated 342.28 separately for (i) insurance companies subject to assessment 342.29 under sections 60C.01 to 60C.22, and (ii) insurance companies 342.30 subject to assessment under Minnesota Statutes 1992, sections 342.31 61B.01 to 61B.16, or 61B.18 to 61B.32. 342.32 (7) When the premium tax offset is limited by this 342.33 provision, the commissioner shall notify affected insurance 342.34 companies on a timely basis for purposes of completing premium 342.35 and corporate franchise tax returns. 342.36 (8) The guaranty associations created under sections 60C.01 343.1 to 60C.22, Minnesota Statutes 1992, sections 61B.01 to 61B.16, 343.2 and 61B.18 to 61B.32, shall provide the commissioner with the 343.3 necessary information on guaranty association assessments. 343.4 (c)(1) If the offset determined by the application of 343.5 paragraphs (a) and (b) exceeds thegreater of theinsurance 343.6 company's premium tax liability under this sectionor its343.7corporate franchise tax liability under chapter 290prior to 343.8 allowance of the credit for premium taxes, then the insurance 343.9 company may carry forward the excess, referred to in this 343.10 subdivision as the "carryforward credit" to subsequent taxable 343.11 years. 343.12 (2) The carryforward credit is allowed as an offset against 343.13 premium tax liability for the first succeeding year to the 343.14 extent that the premium tax liability for that year exceeds the 343.15 amount of the allowable offset for the year determined under 343.16 paragraphs (a) and (b). 343.17 (3) The carryforward credit must be reduced, but not below 343.18 zero, by thegreater of theamount of the carryforward credit 343.19 allowed as an offset against the premium tax under this 343.20 paragraphor the amount of the carryforward credit allowed as an343.21offset against the insurance company's corporate franchise tax343.22liability under section 290.35, subdivision 6, paragraph (d). 343.23 The remainder, if any, of the carryforward credit must be 343.24 carried forward to succeeding taxable years until the entire 343.25 carryforward credit has been credited against the insurance 343.26 company's liability for premium tax under this chapterand343.27corporate franchise tax under chapter 290if applicable for that 343.28 taxable year. 343.29 (d) When an insurer has offset against taxes its payment of 343.30 an assessment of the Minnesota life and health guaranty 343.31 association, and the association pays the insurer a refund with 343.32 respect to the assessment under Minnesota Statutes 1992, section 343.33 61B.07, subdivision 6, or 61B.24, subdivision 6, then the refund 343.34 reduces the insurer's carryforward credit under paragraph (c). 343.35 If the refund exceeds the amount of the carryforward credit, the 343.36 excess amount must be repaid to the state by the insurers to the 344.1 extent of the offset in the manner the commissioner requires. 344.2 [EFFECTIVE DATE.] This section is effective for taxable 344.3 years beginning after December 31, 2000. 344.4 Sec. 26. Minnesota Statutes 2000, section 298.01, 344.5 subdivision 3b, is amended to read: 344.6 Subd. 3b. [DEDUCTIONS.] (a) For purposes of determining 344.7 taxable income under subdivision 3, the deductions from gross 344.8 income include only those expenses necessary to convert raw ores 344.9 to marketable quality. Such expenses include costs associated 344.10 with refinement but do not include expenses such as 344.11 transportation, stockpiling, marketing, or marine insurance that 344.12 are incurred after marketable ores are produced, unless the 344.13 expenses are included in gross income. 344.14 (b) The provisions of section 290.01, subdivisions 19c, 344.15 clauses(7)(6) and(11)(10), and 19d, clauses (7) and 344.16(12)(11), are not used to determine taxable income. 344.17 [EFFECTIVE DATE.] This section is effective for taxable 344.18 years beginning after December 31, 2000. 344.19 Sec. 27. Minnesota Statutes 2000, section 298.01, 344.20 subdivision 4c, is amended to read: 344.21 Subd. 4c. [SPECIAL DEDUCTIONS.] (a) For purposes of 344.22 determining taxable income under subdivision 4, the following 344.23 modifications are allowed: 344.24 (1) the provisions of section 290.01, subdivisions 19c, 344.25 clauses(7)(6) and(11)(10), and 19d, clauses (7) and 344.26(12)(11), are not used to determine taxable income; and 344.27 (2) for assets placed in service before January 1, 1990, 344.28 the deduction for depreciation will be the same amount allowed 344.29 under chapter 290, except that after an asset has been fully 344.30 depreciated for federal income tax purposes any remaining 344.31 depreciable basis is allowed as a deduction using the 344.32 straight-line method over the following number of years: 344.33 (i) three-year property, one year; 344.34 (ii) five- and seven-year property, two years; 344.35 (iii) ten-year property, five years; and 344.36 (iv) all other property, seven years. 345.1 No deduction is allowed if an asset is fully depreciated 345.2 for occupation tax purposes before January 1990. 345.3 (b) For purposes of determining the deduction allowed under 345.4 paragraph (a), clause (2), the remaining depreciable basis of 345.5 property placed in service before January 1, 1990, is calculated 345.6 as follows: 345.7 (1) the adjusted basis of the property on December 31, 345.8 1989, which was used to calculate the hypothetical corporate 345.9 franchise tax under Minnesota Statutes 1988, section 298.40, 345.10 including salvage value; less 345.11 (2) deductions for depreciation allowed under section 345.12 290.01, subdivision 19e. 345.13 (c) The basis for determining gain or loss on sale or 345.14 disposition of assets placed in service before January 1, 1990, 345.15 is the basis determined under paragraph (b), less the deductions 345.16 allowed under paragraph (a), clause (2). 345.17 (d) The amount of net operating loss incurred in a taxable 345.18 year beginning before January 1, 1990, that may be carried over 345.19 to a taxable year beginning after December 31, 1989, is the 345.20 amount of net operating loss carryover determined in the 345.21 calculation of the hypothetical corporate franchise tax under 345.22 Minnesota Statutes 1988, sections 298.40 and 298.402. 345.23 [EFFECTIVE DATE.] This section is effective for taxable 345.24 years beginning after December 31, 2000. 345.25 Sec. 28. Minnesota Statutes 2000, section 469.1732, 345.26 subdivision 1, is amended to read: 345.27 Subdivision 1. [AUTHORITY.] A business that conducts 345.28 business activity within a border city development zone 345.29 designated under section 469.1731 may qualify for the property 345.30 tax exemption under section 272.0212, the corporate franchise345.31tax credit under subdivision 2,and the sales tax exemption 345.32 under section 469.1734, subdivision 6. 345.33 [EFFECTIVE DATE.] This section is effective the day 345.34 following final enactment. 345.35 Sec. 29. [APPROPRIATION; TAXPAYER ASSISTANCE.] 345.36 (a) $200,000 is appropriated for fiscal year 2002 from the 346.1 general fund to the commissioner of revenue to make grants to 346.2 one or more nonprofit organizations, qualifying under section 346.3 501(c)(3) of the Internal Revenue Code of 1986, to coordinate, 346.4 facilitate, encourage, and aid in the provision of taxpayer 346.5 assistance services. This appropriation is available for fiscal 346.6 years 2002 and 2003 and does not become a part of the base. 346.7 (b) For purposes of this section, "taxpayer assistance 346.8 services" means accounting and tax preparation services provided 346.9 by volunteers to low-income and disadvantaged Minnesota 346.10 residents to help them file federal and state income tax returns 346.11 and Minnesota property tax refund claims and to provide personal 346.12 representation before the department of revenue and Internal 346.13 Revenue Service. 346.14 Sec. 30. [REPEALER.] 346.15 (a) Minnesota Statutes 2000, section 290.0673, is repealed 346.16 effective for tax years beginning after December 31, 2001. 346.17 (b) Minnesota Statutes 2000, sections 290.06, subdivision 346.18 26; 290.095, subdivision 1a; 290.21, subdivision 3; 290.35; and 346.19 290.9726, subdivision 7, are repealed effective for tax years 346.20 beginning after December 31, 2000. 346.21 (c) Minnesota Statutes 2000, sections 469.1732, subdivision 346.22 2; and 469.1734, subdivision 4, are repealed effective the day 346.23 following final enactment. 346.24 ARTICLE 10 346.25 FEDERAL UPDATE 346.26 Section 1. Minnesota Statutes 2000, section 289A.02, 346.27 subdivision 7, is amended to read: 346.28 Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically 346.29 defined otherwise, "Internal Revenue Code" means the Internal 346.30 Revenue Code of 1986, as amended throughDecember 31, 1999June 346.31 15, 2001. 346.32 [EFFECTIVE DATE.] This section is effective the day 346.33 following final enactment. 346.34 Sec. 2. Minnesota Statutes 2000, section 290.01, 346.35 subdivision 6b, is amended to read: 346.36 Subd. 6b. [FOREIGN OPERATING CORPORATION.] The term 347.1 "foreign operating corporation," when applied to a corporation, 347.2 means a domestic corporation with the following characteristics: 347.3 (1) it is part of a unitary business at least one member of 347.4 which is taxable in this state;and347.5 (2) it is not a foreign sales corporation under section 922 347.6 of the Internal Revenue Code, as amended through December 31, 347.7 1999, for the taxable year; and 347.8 (3) either (i) the average of the percentages of its 347.9 property and payrolls assigned to locations inside the United 347.10 States and the District of Columbia, excluding the commonwealth 347.11 of Puerto Rico and possessions of the United States, as 347.12 determined under section 290.191 or 290.20, is 20 percent or 347.13 less; or (ii) it has in effect a valid election under section 347.14 936 of the Internal Revenue Code. 347.15 [EFFECTIVE DATE.] This section is effective for taxable 347.16 years beginning after December 31, 2001. 347.17 Sec. 3. Minnesota Statutes 2000, section 290.01, 347.18 subdivision 19, is amended to read: 347.19 Subd. 19. [NET INCOME.] The term "net income" means the 347.20 federal taxable income, as defined in section 63 of the Internal 347.21 Revenue Code of 1986, as amended through the date named in this 347.22 subdivision, incorporating any elections made by the taxpayer in 347.23 accordance with the Internal Revenue Code in determining federal 347.24 taxable income for federal income tax purposes, and with the 347.25 modifications provided in subdivisions 19a to 19f. 347.26 In the case of a regulated investment company or a fund 347.27 thereof, as defined in section 851(a) or 851(g) of the Internal 347.28 Revenue Code, federal taxable income means investment company 347.29 taxable income as defined in section 852(b)(2) of the Internal 347.30 Revenue Code, except that: 347.31 (1) the exclusion of net capital gain provided in section 347.32 852(b)(2)(A) of the Internal Revenue Code does not apply; 347.33 (2) the deduction for dividends paid under section 347.34 852(b)(2)(D) of the Internal Revenue Code must be applied by 347.35 allowing a deduction for capital gain dividends and 347.36 exempt-interest dividends as defined in sections 852(b)(3)(C) 348.1 and 852(b)(5) of the Internal Revenue Code; and 348.2 (3) the deduction for dividends paid must also be applied 348.3 in the amount of any undistributed capital gains which the 348.4 regulated investment company elects to have treated as provided 348.5 in section 852(b)(3)(D) of the Internal Revenue Code. 348.6 The net income of a real estate investment trust as defined 348.7 and limited by section 856(a), (b), and (c) of the Internal 348.8 Revenue Code means the real estate investment trust taxable 348.9 income as defined in section 857(b)(2) of the Internal Revenue 348.10 Code. 348.11 The net income of a designated settlement fund as defined 348.12 in section 468B(d) of the Internal Revenue Code means the gross 348.13 income as defined in section 468B(b) of the Internal Revenue 348.14 Code. 348.15 The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 348.16 1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 348.17 1616, 1617, 1704(l), and 1704(m) of the Small Business Job 348.18 Protection Act, Public Law Number 104-188, the provisions of 348.19 Public Law Number 104-117, the provisions of sections 313(a) and 348.20 (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 348.21 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 348.22 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 348.23 and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 348.24 Public Law Number 105-34, the provisions of section 6010 of the 348.25 Internal Revenue Service Restructuring and Reform Act of 1998, 348.26 Public Law Number 105-206,andthe provisions of section 4003 of 348.27 the Omnibus Consolidated and Emergency Supplemental 348.28 Appropriations Act, 1999, Public Law Number 105-277, and the 348.29 provisions of section 318 of the Consolidated Appropriation Act 348.30 of 2001, Public Law Number 106-554, shall become effective at 348.31 the time they become effective for federal purposes. 348.32 The Internal Revenue Code of 1986, as amended through 348.33 December 31, 1996, shall be in effect for taxable years 348.34 beginning after December 31, 1996. 348.35 The provisions of sections 202(a) and (b), 221(a), 225, 348.36 312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 349.1 (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 349.2 1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 349.3 1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 349.4 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 349.5 the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 349.6 7002, and 7003 of the Internal Revenue Service Restructuring and 349.7 Reform Act of 1998, Public Law Number 105-206, the provisions of 349.8 section 3001 of the Omnibus Consolidated and Emergency 349.9 Supplemental Appropriations Act, 1999, Public Law Number 349.10 105-277,andthe provisions of section 3001 of the Miscellaneous 349.11 Trade and Technical Corrections Act of 1999, Public Law Number 349.12 106-36, and the provisions of section 316 of the Consolidated 349.13 Appropriation Act of 2001, Public Law Number 106-554, shall 349.14 become effective at the time they become effective for federal 349.15 purposes. 349.16 The Internal Revenue Code of 1986, as amended through 349.17 December 31, 1997, shall be in effect for taxable years 349.18 beginning after December 31, 1997. 349.19 The provisions of sections 5002, 6009, 6011, and 7001 of 349.20 the Internal Revenue Service Restructuring and Reform Act of 349.21 1998, Public Law Number 105-206, the provisions of section 9010 349.22 of the Transportation Equity Act for the 21st Century, Public 349.23 Law Number 105-178, the provisions of sections 1004, 4002, and 349.24 5301 of the Omnibus Consolidation and Emergency Supplemental 349.25 Appropriations Act, 1999, Public Law Number 105-277, the 349.26 provision of section 303 of the Ricky Ray Hemophilia Relief Fund 349.27 Act of 1998, Public Law Number 105-369,andthe provisions of 349.28 sections 532, 534, 536, 537, and 538 of the Ticket to Work and 349.29 Work Incentives Improvement Act of 1999, Public Law Number 349.30 106-170, the provisions of the Installment Tax Correction Act of 349.31 2000, Public Law Number 106-573, and the provisions of section 349.32 309 of the Consolidated Appropriation Act of 2001, Public Law 349.33 Number 106-554, shall become effective at the time they become 349.34 effective for federal purposes. 349.35 The Internal Revenue Code of 1986, as amended through 349.36 December 31, 1998, shall be in effect for taxable years 350.1 beginning after December 31, 1998. 350.2 The provisions of the FSC Repeal and Extraterritorial 350.3 Income Exclusion Act of 2000, Public Law Number 106-519, shall 350.4 become effective at the time it became effective for federal 350.5 purposes. 350.6 The Internal Revenue Code of 1986, as amended through 350.7 December 31, 1999, shall be in effect for taxable years 350.8 beginning after December 31, 1999. The provisions of sections 350.9 306 and 401 of the Consolidated Appropriation Act of 2001, 350.10 Public Law Number 106-554, and the provision of section 350.11 632(b)(2)(A) of the Economic Growth and Tax Relief 350.12 Reconciliation Act of 2001, Public Law Number 107-16, shall 350.13 become effective at the same time it became effective for 350.14 federal purposes. 350.15 The Internal Revenue Code of 1986, as amended through 350.16 December 31, 2000, shall be in effect for taxable years 350.17 beginning after December 31, 2000. The provisions of sections 350.18 659a and 671 of the Economic Growth and Tax Relief 350.19 Reconciliation Act of 2001, Public Law Number 107-16, shall 350.20 become effective at the same time it became effective for 350.21 federal purposes. 350.22 The Internal Revenue Code of 1986, as amended through June 350.23 15, 2001, shall be in effect for taxable years beginning after 350.24 December 31, 2001. 350.25 Except as otherwise provided, references to the Internal 350.26 Revenue Code in subdivisions 19a to 19g mean the code in effect 350.27 for purposes of determining net income for the applicable year. 350.28 [EFFECTIVE DATE.] This section is effective the day 350.29 following final enactment. 350.30 Sec. 4. Minnesota Statutes 2000, section 290.01, 350.31 subdivision 19c, is amended to read: 350.32 Subd. 19c. [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE 350.33 INCOME.] For corporations, there shall be added to federal 350.34 taxable income: 350.35 (1) the amount of any deduction taken for federal income 350.36 tax purposes for income, excise, or franchise taxes based on net 351.1 income or related minimum taxes, including but not limited to 351.2 the tax imposed under section 290.0922, paid by the corporation 351.3 to Minnesota, another state, a political subdivision of another 351.4 state, the District of Columbia, or any foreign country or 351.5 possession of the United States; 351.6 (2) interest not subject to federal tax upon obligations 351.7 of: the United States, its possessions, its agencies, or its 351.8 instrumentalities; the state of Minnesota or any other state, 351.9 any of its political or governmental subdivisions, any of its 351.10 municipalities, or any of its governmental agencies or 351.11 instrumentalities; the District of Columbia; or Indian tribal 351.12 governments; 351.13 (3) exempt-interest dividends received as defined in 351.14 section 852(b)(5) of the Internal Revenue Code; 351.15 (4) the amount of any net operating loss deduction taken 351.16 for federal income tax purposes under section 172 or 832(c)(10) 351.17 of the Internal Revenue Code or operations loss deduction under 351.18 section 810 of the Internal Revenue Code; 351.19 (5) the amount of any special deductions taken for federal 351.20 income tax purposes under sections 241 to 247 of the Internal 351.21 Revenue Code; 351.22 (6) losses from the business of mining, as defined in 351.23 section 290.05, subdivision 1, clause (a), that are not subject 351.24 to Minnesota income tax; 351.25 (7) the amount of any capital losses deducted for federal 351.26 income tax purposes under sections 1211 and 1212 of the Internal 351.27 Revenue Code; 351.28 (8) the amount of any charitable contributions deducted for 351.29 federal income tax purposes under section 170 of the Internal 351.30 Revenue Code; 351.31 (9) the exempt foreign trade income of a foreign sales 351.32 corporation under sections 921(a) and 291 of the Internal 351.33 Revenue Code; 351.34 (10) the amount of percentage depletion deducted under 351.35 sections 611 through 614 and 291 of the Internal Revenue Code; 351.36 (11) for certified pollution control facilities placed in 352.1 service in a taxable year beginning before December 31, 1986, 352.2 and for which amortization deductions were elected under section 352.3 169 of the Internal Revenue Code of 1954, as amended through 352.4 December 31, 1985, the amount of the amortization deduction 352.5 allowed in computing federal taxable income for those 352.6 facilities; 352.7 (12) the amount of any deemed dividend from a foreign 352.8 operating corporation determined pursuant to section 290.17, 352.9 subdivision 4, paragraph (g); 352.10 (13) the amount of any environmental tax paid under section 352.11 59(a) of the Internal Revenue Code;and352.12 (14) the amount of a partner's pro rata share of net income 352.13 which does not flow through to the partner because the 352.14 partnership elected to pay the tax on the income under section 352.15 6242(a)(2) of the Internal Revenue Code; and 352.16 (15) the amount of net income excluded under section 114 of 352.17 the Internal Revenue Code. 352.18 [EFFECTIVE DATE.] This section is effective for taxable 352.19 years beginning after December 31, 2000. 352.20 Sec. 5. Minnesota Statutes 2000, section 290.01, 352.21 subdivision 19d, is amended to read: 352.22 Subd. 19d. [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 352.23 TAXABLE INCOME.] For corporations, there shall be subtracted 352.24 from federal taxable income after the increases provided in 352.25 subdivision 19c: 352.26 (1) the amount of foreign dividend gross-up added to gross 352.27 income for federal income tax purposes under section 78 of the 352.28 Internal Revenue Code; 352.29 (2) the amount of salary expense not allowed for federal 352.30 income tax purposes due to claiming the federal jobs credit 352.31 under section 51 of the Internal Revenue Code; 352.32 (3) any dividend (not including any distribution in 352.33 liquidation) paid within the taxable year by a national or state 352.34 bank to the United States, or to any instrumentality of the 352.35 United States exempt from federal income taxes, on the preferred 352.36 stock of the bank owned by the United States or the 353.1 instrumentality; 353.2 (4) amounts disallowed for intangible drilling costs due to 353.3 differences between this chapter and the Internal Revenue Code 353.4 in taxable years beginning before January 1, 1987, as follows: 353.5 (i) to the extent the disallowed costs are represented by 353.6 physical property, an amount equal to the allowance for 353.7 depreciation under Minnesota Statutes 1986, section 290.09, 353.8 subdivision 7, subject to the modifications contained in 353.9 subdivision 19e; and 353.10 (ii) to the extent the disallowed costs are not represented 353.11 by physical property, an amount equal to the allowance for cost 353.12 depletion under Minnesota Statutes 1986, section 290.09, 353.13 subdivision 8; 353.14 (5) the deduction for capital losses pursuant to sections 353.15 1211 and 1212 of the Internal Revenue Code, except that: 353.16 (i) for capital losses incurred in taxable years beginning 353.17 after December 31, 1986, capital loss carrybacks shall not be 353.18 allowed; 353.19 (ii) for capital losses incurred in taxable years beginning 353.20 after December 31, 1986, a capital loss carryover to each of the 353.21 15 taxable years succeeding the loss year shall be allowed; 353.22 (iii) for capital losses incurred in taxable years 353.23 beginning before January 1, 1987, a capital loss carryback to 353.24 each of the three taxable years preceding the loss year, subject 353.25 to the provisions of Minnesota Statutes 1986, section 290.16, 353.26 shall be allowed; and 353.27 (iv) for capital losses incurred in taxable years beginning 353.28 before January 1, 1987, a capital loss carryover to each of the 353.29 five taxable years succeeding the loss year to the extent such 353.30 loss was not used in a prior taxable year and subject to the 353.31 provisions of Minnesota Statutes 1986, section 290.16, shall be 353.32 allowed; 353.33 (6) an amount for interest and expenses relating to income 353.34 not taxable for federal income tax purposes, if (i) the income 353.35 is taxable under this chapter and (ii) the interest and expenses 353.36 were disallowed as deductions under the provisions of section 354.1 171(a)(2), 265 or 291 of the Internal Revenue Code in computing 354.2 federal taxable income; 354.3 (7) in the case of mines, oil and gas wells, other natural 354.4 deposits, and timber for which percentage depletion was 354.5 disallowed pursuant to subdivision 19c, clause (11), a 354.6 reasonable allowance for depletion based on actual cost. In the 354.7 case of leases the deduction must be apportioned between the 354.8 lessor and lessee in accordance with rules prescribed by the 354.9 commissioner. In the case of property held in trust, the 354.10 allowable deduction must be apportioned between the income 354.11 beneficiaries and the trustee in accordance with the pertinent 354.12 provisions of the trust, or if there is no provision in the 354.13 instrument, on the basis of the trust's income allocable to 354.14 each; 354.15 (8) for certified pollution control facilities placed in 354.16 service in a taxable year beginning before December 31, 1986, 354.17 and for which amortization deductions were elected under section 354.18 169 of the Internal Revenue Code of 1954, as amended through 354.19 December 31, 1985, an amount equal to the allowance for 354.20 depreciation under Minnesota Statutes 1986, section 290.09, 354.21 subdivision 7; 354.22 (9) the amount included in federal taxable income 354.23 attributable to the credits provided in Minnesota Statutes 1986, 354.24 section 273.1314, subdivision 9, or Minnesota Statutes, section 354.25 469.171, subdivision 6; 354.26 (10) amounts included in federal taxable income that are 354.27 due to refunds of income, excise, or franchise taxes based on 354.28 net income or related minimum taxes paid by the corporation to 354.29 Minnesota, another state, a political subdivision of another 354.30 state, the District of Columbia, or a foreign country or 354.31 possession of the United States to the extent that the taxes 354.32 were added to federal taxable income under section 290.01, 354.33 subdivision 19c, clause (1), in a prior taxable year; 354.34 (11) 80 percent of royalties, fees, or other like income 354.35 accrued or received from a foreign operating corporation or a 354.36 foreign corporation which is part of the same unitary business 355.1 as the receiving corporation; 355.2 (12) income or gains from the business of mining as defined 355.3 in section 290.05, subdivision 1, clause (a), that are not 355.4 subject to Minnesota franchise tax; 355.5 (13) the amount of handicap access expenditures in the 355.6 taxable year which are not allowed to be deducted or capitalized 355.7 under section 44(d)(7) of the Internal Revenue Code; 355.8 (14) the amount of qualified research expenses not allowed 355.9 for federal income tax purposes under section 280C(c) of the 355.10 Internal Revenue Code, but only to the extent that the amount 355.11 exceeds the amount of the credit allowed under section 290.068; 355.12 (15) the amount of salary expenses not allowed for federal 355.13 income tax purposes due to claiming the Indian employment credit 355.14 under section 45A(a) of the Internal Revenue Code; 355.15 (16) the amount of any refund of environmental taxes paid 355.16 under section 59A of the Internal Revenue Code;and355.17 (17) for taxable years beginning before January 1, 2008, 355.18 the amount of the federal small ethanol producer credit allowed 355.19 under section 40(a)(3) of the Internal Revenue Code which is 355.20 included in gross income under section 87 of the Internal 355.21 Revenue Code; and 355.22 (18) for a corporation whose foreign sales corporation, as 355.23 defined in section 922 of the Internal Revenue Code, constituted 355.24 a foreign operating corporation during the taxable years ending 355.25 during calendar year 1992 and a return was filed by August 15, 355.26 1996, claiming the deduction under this subdivision for income 355.27 received from the foreign operating corporation, an amount equal 355.28 to 1.23 multiplied by the amount of income excluded under 355.29 section 114 of the Internal Revenue Code, provided the income is 355.30 not income of a foreign operating company. 355.31 [EFFECTIVE DATE.] This section is effective for taxable 355.32 years beginning after December 31, 2000. 355.33 Sec. 6. Minnesota Statutes 2000, section 290.01, 355.34 subdivision 31, is amended to read: 355.35 Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically 355.36 defined otherwise, "Internal Revenue Code" means the Internal 356.1 Revenue Code of 1986, as amended throughDecember 31, 1999June 356.2 15, 2001. 356.3 [EFFECTIVE DATE.] This section is effective at the same 356.4 time and in the same manner as the federal changes made by the 356.5 FSC Repeal and Extraterritorial Income Exclusion Act of 2000, 356.6 Public Law Number 106-519, and the Consolidated Appropriation 356.7 Act of 2001, Public Law Number 106-554, becomes effective. 356.8 Sec. 7. Minnesota Statutes 2000, section 290.0671, 356.9 subdivision 1, is amended to read: 356.10 Subdivision 1. [CREDIT ALLOWED.] (a) An individual is 356.11 allowed a credit against the tax imposed by this chapter equal 356.12 to a percentage of earned income. To receive a credit, a 356.13 taxpayer must be eligible for a credit under section 32 of the 356.14 Internal Revenue Code. 356.15 (b) For individuals with no qualifying children, the credit 356.16 equals 1.9125 percent of the first $4,460 of earned income. The 356.17 credit is reduced by 1.9125 percent of earned income or modified 356.18 adjusted gross income, whichever is greater, in excess of 356.19 $5,570, but in no case is the credit less than zero. 356.20 (c) For individuals with one qualifying child, the credit 356.21 equals 8.5 percent of the first $6,680 of earned income and 8.5 356.22 percent of earned income over $11,650 but less than $12,990. The 356.23 credit is reduced by 5.73 percent of earned income or modified 356.24 adjusted gross income, whichever is greater, in excess of 356.25 $14,560, but in no case is the credit less than zero. 356.26 (d) For individuals with two or more qualifying children, 356.27 the credit equals ten percent of the first $9,390 of earned 356.28 income and 20 percent of earned income over $14,350 but less 356.29 than $16,230. The credit is reduced by 10.3 percent of earned 356.30 income or modified adjusted gross income, whichever is greater, 356.31 in excess of $17,280, but in no case is the credit less than 356.32 zero. 356.33 (e) For a nonresident or part-year resident, the credit 356.34 must be allocated based on the percentage calculated under 356.35 section 290.06, subdivision 2c, paragraph (e). 356.36 (f) For a person who was a resident for the entire tax year 357.1 and has earned income not subject to tax under this chapter, the 357.2 credit must be allocated based on the ratio of federal adjusted 357.3 gross income reduced by the earned income not subject to tax 357.4 under this chapter over federal adjusted gross income. 357.5 (g) For tax years beginning after December 31, 2001, and 357.6 before December 31, 2004, the $5,770 in paragraph (b) is 357.7 increased to $6,770, the $15,080 in paragraph (c) is increased 357.8 to $16,080, and the $17,890 in paragraph (d) is increased to 357.9 $18,890 for married taxpayers filing joint returns. 357.10 (h) For tax years beginning after December 31, 2004, and 357.11 before December 31, 2007, the $5,770 in paragraph (b) is 357.12 increased to $7,770, the $15,080 in paragraph (c) is increased 357.13 to $17,080, and the $17,890 in paragraph (d) is increased to 357.14 $19,890 for married taxpayers filing joint returns. 357.15 (i) For tax years beginning after December 31, 2007, and 357.16 before December 31, 2010, the $5,770 in paragraph (b) is 357.17 increased to $8,770, the $15,080 in paragraph (c) is increased 357.18 to $18,080 and the $17,890 in paragraph (d) is increased to 357.19 $20,890 for married taxpayers filing joint returns. 357.20 (j) The commissioner shall construct tables showing the 357.21 amount of the credit at various income levels and make them 357.22 available to taxpayers. The tables shall follow the schedule 357.23 contained in this subdivision, except that the commissioner may 357.24 graduate the transition between income brackets. 357.25 [EFFECTIVE DATE.] This section is effective for tax years 357.26 beginning after December 31, 2001. 357.27 Sec. 8. Minnesota Statutes 2000, section 290.0671, 357.28 subdivision 1a, is amended to read: 357.29 Subd. 1a. [DEFINITIONS.] For purposes of this section, the 357.30 terms "qualifying child," "earned income," and "modified357.31 adjusted gross income" have the meanings given in section 32(c) 357.32 of the Internal Revenue Code. 357.33 [EFFECTIVE DATE.] This section is effective for tax years 357.34 beginning after December 31, 2001. 357.35 Sec. 9. Minnesota Statutes 2000, section 290A.03, 357.36 subdivision 15, is amended to read: 358.1 Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 358.2 means the Internal Revenue Code of 1986, as amended through 358.3December 31, 1999June 15, 2001. 358.4 [EFFECTIVE DATE.] This section is effective the day 358.5 following final enactment. 358.6 Sec. 10. Minnesota Statutes 2000, section 291.005, 358.7 subdivision 1, is amended to read: 358.8 Subdivision 1. Unless the context otherwise clearly 358.9 requires, the following terms used in this chapter shall have 358.10 the following meanings: 358.11 (1) "Federal gross estate" means the gross estate of a 358.12 decedent as valued and otherwise determined for federal estate 358.13 tax purposes by federal taxing authorities pursuant to the 358.14 provisions of the Internal Revenue Code. 358.15 (2) "Minnesota gross estate" means the federal gross estate 358.16 of a decedent after (a) excluding therefrom any property 358.17 included therein which has its situs outside Minnesota and (b) 358.18 including therein any property omitted from the federal gross 358.19 estate which is includable therein, has its situs in Minnesota, 358.20 and was not disclosed to federal taxing authorities. 358.21 (3) "Personal representative" means the executor, 358.22 administrator or other person appointed by the court to 358.23 administer and dispose of the property of the decedent. If 358.24 there is no executor, administrator or other person appointed, 358.25 qualified, and acting within this state, then any person in 358.26 actual or constructive possession of any property having a situs 358.27 in this state which is included in the federal gross estate of 358.28 the decedent shall be deemed to be a personal representative to 358.29 the extent of the property and the Minnesota estate tax due with 358.30 respect to the property. 358.31 (4) "Resident decedent" means an individual whose domicile 358.32 at the time of death was in Minnesota. 358.33 (5) "Nonresident decedent" means an individual whose 358.34 domicile at the time of death was not in Minnesota. 358.35 (6) "Situs of property" means, with respect to real 358.36 property, the state or country in which it is located; with 359.1 respect to tangible personal property, the state or country in 359.2 which it was normally kept or located at the time of the 359.3 decedent's death; and with respect to intangible personal 359.4 property, the state or country in which the decedent was 359.5 domiciled at death. 359.6 (7) "Commissioner" means the commissioner of revenue or any 359.7 person to whom the commissioner has delegated functions under 359.8 this chapter. 359.9 (8) "Internal Revenue Code" means the United States 359.10 Internal Revenue Code of 1986, as amended through December 31, 359.1119992000. 359.12 [EFFECTIVE DATE.] This section is effective the day 359.13 following final enactment. 359.14 ARTICLE 11 359.15 CIVIL AND CRIMINAL PENALTIES 359.16 Section 1. Minnesota Statutes 2000, section 289A.55, 359.17 subdivision 9, is amended to read: 359.18 Subd. 9. [INTEREST ON PENALTIES.] (a) A penalty imposed 359.19 under section 289A.60, subdivision 1, 2,3,2a, 4, 5, 6, or 21 359.20 bears interest from the date the return or payment was required 359.21 to be filed or paid, including any extensions, to the date of 359.22 payment of the penalty. 359.23 (b) A penalty not included in paragraph (a) bears interest 359.24 only if it is not paid within 60 days from the date of notice. 359.25 In that case interest is imposed from the date of notice to the 359.26 date of payment. 359.27 [EFFECTIVE DATE.] This section is effective for tax years 359.28 beginning after December 31, 2000, and for estate tax returns 359.29 due after January 1, 2002. 359.30 Sec. 2. Minnesota Statutes 2000, section 289A.60, 359.31 subdivision 1, is amended to read: 359.32 Subdivision 1. [PENALTY FOR FAILURE TO PAY TAX.] (a)If a359.33tax other than a withholding or sales or use tax is not paid359.34within the time specified for payment, a penalty must be added359.35to the amount required to be shown as tax. The penalty is three359.36percent of the tax not paid on or before the date specified for360.1payment of the tax if the failure is for not more than 30 days,360.2with an additional penalty of three percent of the amount of tax360.3remaining unpaid during each additional 30 days or fraction of360.430 days during which the failure continues, not exceeding 24360.5percent in the aggregate.If a corporate franchise, fiduciary 360.6 income, mining company, estate, partnership, S corporation, or 360.7 nonresident entertainer tax is not paid within the time 360.8 specified for payment, a penalty of six percent is added to the 360.9 unpaid tax, except that if a corporation or mining company meets 360.10 the requirements of section 289A.19, subdivision 2, the penalty 360.11 is not imposed. 360.12 (b) For the taxes listed in paragraph (a), in addition to 360.13 the penalty in that paragraph, whether imposed or not, if a 360.14 return or amended return is filed after the due date, without 360.15 regard to extensions, and any tax reported as remaining due is 360.16 not remitted with the return or amended return, a penalty of 360.17 five percent of the tax not paid is added to the tax. If the 360.18 commissioner issues an order assessing additional tax for a tax 360.19 listed in paragraph (a), and the tax is not paid within 60 days 360.20 after the mailing of the order or, if appealed, within 60 days 360.21 after final resolution of the appeal, a penalty of five percent 360.22 of the unpaid tax is added to the tax. 360.23 (c)If an individual files a state individual income tax360.24return and pays all of the state individual income tax with the360.25filing of a return within six months of the date the return is360.26due and the amount paid by the due date of the return is at360.27least 90 percent of the amount of tax due, as shown on the360.28return, the individual is presumed to have reasonable cause for360.29the late payment.If an individual income tax is not paid 360.30 within the time specified for payment, a penalty of four percent 360.31 is added to the unpaid tax. There is a presumption of 360.32 reasonable cause for the late payment if the individual: (i) 360.33 pays by the due date of the return at least 90 percent of the 360.34 amount of tax, after credits other than withholding and 360.35 estimated payments, shown owing on the return; (ii) files the 360.36 return within six months after the due date; and (iii) pays the 361.1 remaining balance of the reported tax when the return is filed. 361.2 (d) If the commissioner issues an order assessing 361.3 additional individual income tax, and the tax is not paid within 361.4 60 days after the mailing of the order or, if appealed, within 361.5 60 days after final resolution of the appeal, a penalty of four 361.6 percent of the unpaid tax is added to the tax. 361.7(b)(e) If a withholding or sales or use tax is not paid 361.8 within the time specified for payment, a penalty must be added 361.9 to the amount required to be shown as tax. The penalty is five 361.10 percent of the tax not paid on or before the date specified for 361.11 payment of the tax if the failure is for not more than 30 days, 361.12 with an additional penalty of five percent of the amount of tax 361.13 remaining unpaid during each additional 30 days or fraction of 361.14 30 days during which the failure continues, not exceeding 15 361.15 percent in the aggregate. 361.16 [EFFECTIVE DATE.] This section is effective for tax years 361.17 beginning after December 31, 2000, and for estate tax returns 361.18 due after January 1, 2002. 361.19 Sec. 3. Minnesota Statutes 2000, section 289A.60, 361.20 subdivision 2, is amended to read: 361.21 Subd. 2. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 361.22 a taxpayer fails to make and file areturn other than an income361.23tax return of an individual, a withholding return, or sales or361.24use tax return, within the time prescribed or an extension, a361.25penalty is added to the tax. The penalty is three percent of361.26the amount of tax not paid on or before the date prescribed for361.27payment of the tax including any extensions if the failure is361.28for not more than 30 days, with an additional five percent of361.29the amount of tax remaining unpaid during each additional 30361.30days or fraction of 30 days, during which the failure continues,361.31not exceeding 23 percent in the aggregate.361.32If a taxpayer fails to file an individual income tax return361.33within six months after the date prescribed for filing of the361.34return, a penalty of ten percent of the amount of tax not paid361.35by the end of that six-month period is added to the tax.361.36If a taxpayer fails to file a withholding or sales or use362.1 tax return within the time prescribed, including an extension, a 362.2 penalty of five percent of the amount of tax nottimelypaid by 362.3 the end of that period is added to the tax. 362.4 [EFFECTIVE DATE.] This section is effective for tax years 362.5 beginning after December 31, 2000, and for estate tax returns 362.6 due after January 1, 2002. 362.7 Sec. 4. Minnesota Statutes 2000, section 289A.60, is 362.8 amended by adding a subdivision to read: 362.9 Subd. 2a. [PENALTIES FOR EXTENDED DELINQUENCY.] (a) If an 362.10 individual income tax is not paid within 180 days after the date 362.11 of filing of a return or, in the case of taxes assessed by the 362.12 commissioner, within 180 days after the assessment date or, if 362.13 appealed, within 180 days after final resolution of the appeal, 362.14 an extended delinquency penalty of five percent of the tax 362.15 remaining unpaid is added to the amount due. 362.16 (b) If a corporate franchise, fiduciary income, mining 362.17 company, estate, partnership, S corporation, or nonresident 362.18 entertainer tax return is not filed within 30 days after written 362.19 demand for the filing of a delinquent return, an extended 362.20 delinquency penalty of five percent of the tax not paid prior to 362.21 the demand is added to the tax, or in the case of an individual 362.22 income tax return, a minimum penalty of $100 or the five percent 362.23 penalty is imposed, whichever amount is greater. 362.24 [EFFECTIVE DATE.] This section is effective for tax years 362.25 beginning after December 31, 2000, and for estate tax returns 362.26 due after January 1, 2002. 362.27 Sec. 5. Minnesota Statutes 2000, section 289A.60, 362.28 subdivision 7, is amended to read: 362.29 Subd. 7. [PENALTY FOR FRIVOLOUS RETURN.] Ifan individual362.30 a taxpayer files what purports to be a tax returnrequired by362.31chapter 290or a claim for refund but which does not contain 362.32 information on which the substantial correctness of 362.33 theassessmentpurported return or claim for refund may be 362.34 judged or contains information that on its face shows that the 362.35assessmentpurported return or claim for refund is substantially 362.36 incorrect and the conduct is due to a position that is frivolous 363.1 or a desire that appears on the purported return or claim for 363.2 refund to delay or impede the administration of Minnesota tax 363.3 laws, then the individual shall pay a penalty of $500. In a 363.4 proceeding involving the issue of whether or not a person is 363.5 liable for this penalty, the burden of proof is on the 363.6 commissioner. 363.7 [EFFECTIVE DATE.] This section is effective for returns or 363.8 claims for refunds filed on or after the day following final 363.9 enactment. 363.10 Sec. 6. Minnesota Statutes 2000, section 297F.20, 363.11 subdivision 3, is amended to read: 363.12 Subd. 3. [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 363.13 person who files with the commissioner a return, report, or 363.14 other document, or who maintains or provides invoices subject to 363.15 review by the commissioner under this chapter, known by the 363.16 person to be fraudulent or false concerning a material matter, 363.17 is guilty of a felony. 363.18 (b) A person who knowingly aids or assists in, or advises 363.19 in the preparation or presentation of a return, report, invoice, 363.20 or other document that is fraudulent or false concerning a 363.21 material matter, whether or not the falsity or fraud is 363.22 committed with the knowledge or consent of the person authorized 363.23 or required to present the return, report, invoice, or other 363.24 document, is guilty of a felony. 363.25 [EFFECTIVE DATE.] This section is effective for crimes 363.26 occurring on or after August 1, 2001. 363.27 Sec. 7. [APPROPRIATION.] 363.28 $545,000 in fiscal year 2003 is appropriated from the 363.29 general fund to the commissioner of revenue to implement 363.30 sections 2 to 4. $520,000 of the appropriation is for a 363.31 one-time expenditure related to system programming costs. 363.32 [EFFECTIVE DATE.] This section is effective July 1, 2001. 363.33 Sec. 8. [REPEALER.] 363.34 Minnesota Statutes 2000, section 289A.60, subdivision 3, is 363.35 repealed. 363.36 [EFFECTIVE DATE.] This section is effective for tax years 364.1 beginning after December 31, 2000, and for estate tax returns 364.2 due after January 1, 2002. 364.3 ARTICLE 12 364.4 SALES AND USE TAXES 364.5 Section 1. Minnesota Statutes 2000, section 289A.20, 364.6 subdivision 4, is amended to read: 364.7 Subd. 4. [SALES AND USE TAX.] (a) The taxes imposed by 364.8 chapter 297A are due and payable to the commissioner monthly on 364.9 or before the 20th day of the month following the month in which 364.10 the taxable event occurred, or following another reporting 364.11 period as the commissioner prescribes or as allowed under 364.12 section 289A.18, subdivision 4, paragraph (f), except that use 364.13 taxes due on an annual use tax return as provided under section 364.14 289A.11, subdivision 1, are payable by April 15 following the 364.15 close of the calendar year. 364.16 (b) For a fiscal year ending before July 1, 2002, a vendor 364.17 having a liability of $120,000 or more during a fiscal year 364.18 ending June 30 must remit the June liability for the next year 364.19 in the following manner: 364.20 (1) Two business days before June 30 of the year, the 364.21 vendor must remit 62 percent of the estimated June liability to 364.22 the commissioner. 364.23 (2) On or before August 14 of the year, the vendor must pay 364.24 any additional amount of tax not remitted in June. 364.25 (c) A vendor having a liability of $120,000 or more during 364.26 a fiscal year ending June 30 must remit all liabilities on 364.27 returns due for periods beginning in the subsequent calendar 364.28 year by means of a funds transfer as defined in section 364.29 336.4A-104, paragraph (a). The funds transfer payment date, as 364.30 defined in section 336.4A-401, must be on or before the 14th day 364.31 of the month following the month in which the taxable event 364.32 occurred, or on or before the 14th day of the month following 364.33 the month in which the sale is reported under section 289A.18, 364.34 subdivision 4, except for 62 percent of the estimated June 364.35 liability, which is due two business days before June 30. The 364.36 remaining amount of the June liability is due on August 14. If 365.1 the date the tax is due is not a funds transfer business day, as 365.2 defined in section 336.4A-105, paragraph (a), clause (4), the 365.3 payment date must be on or before the funds transfer business 365.4 day next following the date the tax is due. 365.5 (d) If the vendor required to remit by electronic funds 365.6 transfer as provided in paragraph (c) is unable due to 365.7 reasonable cause to determine the actual sales and use tax due 365.8 on or before the due date for payment, the vendor may remit an 365.9 estimate of the tax owed using one of the following options: 365.10 (1) 100 percent of the tax reported on the previous month's 365.11 sales and use tax return; 365.12 (2) 100 percent of the tax reported on the sales and use 365.13 tax return for the same month in the previous calendar year; or 365.14 (3) 95 percent of the actual tax due. 365.15 Any additional amount of tax that is not remitted on or 365.16 before the due date for payment, must be remitted with the 365.17 return. If a vendor fails to remit the actual liability or does 365.18 not remit using one of the estimate options by the due date for 365.19 payment, the vendor must remit actual liability as provided in 365.20 paragraph (c) in all subsequent periods. This paragraph does 365.21 not apply to the June sales and use tax liability. 365.22 Sec. 2. Minnesota Statutes 2000, section 289A.31, 365.23 subdivision 7, is amended to read: 365.24 Subd. 7. [SALES AND USE TAX.] (a) The sales and use tax 365.25 required to be collected by the retailer under chapter 297A 365.26 constitutes a debt owed by the retailer to Minnesota, and the 365.27 sums collected must be held as a special fund in trust for the 365.28 state of Minnesota. 365.29 A retailer who does not maintain a place of business within 365.30 this state as defined by section 297A.21, subdivision 1, shall 365.31 not be indebted to Minnesota for amounts of tax that it was 365.32 required to collect but did not collect unless the retailer knew 365.33 or had been advised by the commissioner of its obligation to 365.34 collect the tax. 365.35 (b) The use tax required to be paid by a purchaser is a 365.36 debt owed by the purchaser to Minnesota. 366.1 (c) The tax imposed by chapter 297A, and interest and 366.2 penalties, is a personal debt of the individual required to file 366.3 a return from the time the liability arises, irrespective of 366.4 when the time for payment of that liability occurs. The debt 366.5 is, in the case of the executor or administrator of the estate 366.6 of a decedent and in the case of a fiduciary, that of the 366.7 individual in an official or fiduciary capacity unless the 366.8 individual has voluntarily distributed the assets held in that 366.9 capacity without reserving sufficient assets to pay the tax, 366.10 interest, and penalties, in which case the individual is 366.11 personally liable for the deficiency. 366.12 (d) Liability for payment of sales and use taxes includes 366.13 any responsible person or entity described in the personal 366.14 liability provisions of section 270.101. 366.15 (e) Any amounts collected, even if erroneously or illegally 366.16 collected, from a purchaser under a representation that they are 366.17 taxes imposed under chapter 297A are state funds from the time 366.18 of collection and must be reported on a return filed with the 366.19 commissioner.The amounts collected are not subject to refund366.20unless the seller submits written evidence to the commissioner366.21that the tax and any interest earned on the tax has been or will366.22be refunded or credited to the purchaser by the seller.366.23 (f) The tax imposed under chapter 297A on sales of tickets 366.24 to the premises of or events sponsored by the state agricultural 366.25 society and conducted on the state fairgrounds during the period 366.26 of the annual state fair may be retained by the state 366.27 agricultural society if the funds are used and matched as 366.28 required under section 37.13, subdivision 2. 366.29 [EFFECTIVE DATE.] This section is effective for amounts 366.30 collected after June 30, 2001. 366.31 Sec. 3. Minnesota Statutes 2000, section 289A.50, 366.32 subdivision 2, is amended to read: 366.33 Subd. 2. [REFUND OF SALES TAX TO VENDORS; LIMITATION.] If 366.34 a vendor has collected from a purchaser and remitted to the 366.35 state a tax on a transaction that is not subject to the tax 366.36 imposed by chapter 297A, the tax is refundable to the vendor 367.1 only if and to the extent thatitthe tax and any interest 367.2 earned on the tax is credited to amounts due to the vendor by 367.3 the purchaser or returned to the purchaser by the vendor. In 367.4 addition to the requirements of subdivision 1, a claim for 367.5 refund under this subdivision must state in writing that the tax 367.6 and interest earned on the tax has been or will be refunded or 367.7 credited to the purchaser by the vendor. 367.8 [EFFECTIVE DATE.] This section is effective for claims for 367.9 refunds after June 30, 2001. 367.10 Sec. 4. [295.60] [SPECIAL FUR CLOTHING TAX.] 367.11 Subdivision 1. [IMPOSITION.] If clothing made of fur is 367.12 not subject to the sales tax under chapter 297A, a tax is 367.13 imposed on each furrier equal to 6.5 percent of gross revenues 367.14 from retail sales in Minnesota of clothing made from fur. 367.15 Subd. 2. [DEFINITIONS.] (a) For purposes of this section, 367.16 the following terms have the meanings given. 367.17 (b) "Commissioner" means the commissioner of revenue. 367.18 (c) "Furrier" means a retailer that sells clothing made of 367.19 fur. 367.20 (d) "Clothing made of fur" means articles of clothing made 367.21 of fur on the hide or pelt, and articles of clothing of which 367.22 such fur is the component material of chief value, but only if 367.23 such value is more than three times the value of the next most 367.24 valuable material. 367.25 (e) "Retail sale" has the meaning given in section 297A.61, 367.26 subdivision 4. 367.27 Subd. 3. [PAYMENT.] (a) Each furrier shall make estimated 367.28 payments of the taxes for the calendar year in quarterly 367.29 installments to the commissioner by April 15, July 15, October 367.30 15, and January 15 of the following calendar year. 367.31 (b) Estimated tax payments are not required if: 367.32 (1) the tax for the current calendar year is less than 367.33 $500; or 367.34 (2) the tax for the previous calendar year is less than 367.35 $500, if the taxpayer had a tax liability and was doing business 367.36 the entire year. 368.1 (c) Underpayment of estimated installments bear interest at 368.2 the rate specified in section 270.75, from the due date of the 368.3 payment until paid or until the due date of the annual return, 368.4 whichever comes first. An underpayment of an estimated 368.5 installment is the difference between the amount paid and the 368.6 lesser of (1) 90 percent of one-quarter of the tax for the 368.7 calendar year or (2) one-quarter of the total tax for the 368.8 previous calendar year if the taxpayer had a tax liability and 368.9 was doing business the entire year. 368.10 Subd. 4. [ELECTRONIC FUNDS TRANSFER PAYMENTS.] A taxpayer 368.11 with an aggregate tax liability of $120,000 or more during a 368.12 fiscal year ending June 30 must remit all liabilities by 368.13 electronic means. 368.14 Subd. 5. [ANNUAL RETURN.] The taxpayer must file an annual 368.15 return reconciling the estimated payments by March 15 of the 368.16 following calendar year. 368.17 Subd. 6. [FORM OF RETURNS.] The estimated payments and 368.18 annual return must contain the information and be in the form 368.19 prescribed by the commissioner. 368.20 Subd. 7. [APPLICATION OF OTHER CHAPTERS.] Unless 368.21 specifically provided otherwise by this section, the 368.22 enforcement, interest, and penalty provisions under chapter 294, 368.23 appeal provisions in sections 289A.43 and 289A.65, criminal 368.24 penalties in section 289A.63, refunds provisions in section 368.25 289A.50, and collection and rulemaking provisions under chapter 368.26 270, apply to a liability for the taxes imposed under this 368.27 section. 368.28 Subd. 8. [INTEREST ON OVERPAYMENTS.] Interest must be paid 368.29 on an overpayment refunded or credited to the taxpayer from the 368.30 date of payment of the tax until the date the refund is paid or 368.31 credited. For purposes of this subdivision, the date of payment 368.32 is the due date of the return or the date of actual payment of 368.33 the tax, whichever is later. 368.34 Subd. 9. [DEPOSIT OF REVENUES.] The commissioner shall 368.35 deposit all revenues, including penalties and interest, derived 368.36 from the tax imposed by this section in the general fund. 369.1 [EFFECTIVE DATE.] This section is effective for sales and 369.2 purchases made after December 31, 2001. 369.3 Sec. 5. Minnesota Statutes 2000, section 297A.01, 369.4 subdivision 5, is amended to read: 369.5 Subd. 5. "Storage" includes any keeping or retention in 369.6 Minnesota for any purpose except sale in the regular course of 369.7 businessor subsequent use solely outside Minnesota of tangible369.8personal property. 369.9 [EFFECTIVE DATE; INSTRUCTIONS TO REVISOR.] (a) This section 369.10 is effective for storage, use, or consumption occurring after 369.11 June 30, 2001, but refunds, based on claims that meet the 369.12 requirements of all other applicable provisions of law, shall be 369.13 issued for and tax not imposed on tangible personal property 369.14 stored in Minnesota after June 30, 1997, and before July 1, 369.15 2001, if (1) the property was kept or retained in a public 369.16 warehouse or in a common carrier's or for-hire carrier's storage 369.17 facility, (2) the property was shipped or brought into Minnesota 369.18 by common carrier or for-hire carrier for the purpose of 369.19 subsequently being transported outside Minnesota, and (3) the 369.20 property is thereafter used solely outside Minnesota or in the 369.21 course of interstate commerce. 369.22 (b) In the next edition of Minnesota Statutes, the revisor 369.23 shall codify the amendment to this section in Minnesota 369.24 Statutes, section 297A.61, subdivision 5. 369.25 Sec. 6. Minnesota Statutes 2000, section 297A.25, 369.26 subdivision 28, is amended to read: 369.27 Subd. 28. [WASTE PROCESSING EQUIPMENT.] The gross receipts 369.28 from the sale of and storage, use, or consumption of equipment 369.29 used for processing solid or hazardous waste at a resource 369.30 recovery facility, as defined in section 115A.03, subdivision 369.31 28, are exempt, including pollution control equipment at a 369.32 resource recovery facility that burns refuse-derived fuel or 369.33 mixed municipal solid waste as its primary fuel. An electric 369.34 generation facility that processes and utilizes waste tires as 369.35 its primary fuel is a resource recovery facility for the 369.36 purposes of this section. 370.1 [EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 370.2 effective for purchases and sales made after the date of final 370.3 enactment. In the next edition of Minnesota Statutes, the 370.4 revisor of statutes shall codify the amendment to this section 370.5 in section 297A.68, subdivision 24. 370.6 Sec. 7. Minnesota Statutes 2000, section 297A.61, 370.7 subdivision 2, is amended to read: 370.8 Subd. 2. [PERSON.] (a) "Person" includes any individual,370.9and anyor grouporand any combination of individuals, 370.10 groups, or individuals and groups acting as a unit, and the370.11plural as well as the singular number. 370.12 (b) Person includes a firm, partnership, joint venture, 370.13 limited liability company, association, cooperative, social 370.14 club, fraternal organization, municipal or private corporation 370.15 whether or not organized for profit,estates, trusts, business370.16trustsestate, trust, business trust, receiver, trustee, 370.17 syndicate, the United States, and a state and its political 370.18 subdivisions. 370.19 (c) Person includes, but is not limited to, directors and 370.20 officers of corporations, governors and managers of a limited 370.21 liability company, or members of partnerships who, either 370.22 individually or jointly with others, have the control, 370.23 supervision, or responsibility of filing returns and making 370.24 payment of the amount of tax imposed by this chapter. 370.25 (d) Personalsoincludes any agent or consignee of any 370.26 individual or organizationenumeratedlisted in this subdivision. 370.27 [EFFECTIVE DATE.] This section is effective for sales and 370.28 purchases made after June 30, 2001. 370.29 Sec. 8. Minnesota Statutes 2000, section 297A.61, 370.30 subdivision 3, is amended to read: 370.31 Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase" 370.32 include, but are not limited to, each of the transactions listed 370.33 in this subdivision. 370.34 (b) Sale and purchase include: 370.35 (1) any transfer of title or possession, or both, of 370.36 tangible personal property, whether absolutely or conditionally, 371.1 for a consideration in money or by exchange or barter; and 371.2 (2) the leasing of or the granting of a license to use or 371.3 consume, for a consideration in money or by exchange or barter, 371.4 tangible personal property, other than a manufactured home used 371.5 for residential purposes for a continuous period of 30 days or 371.6 more. 371.7 (c) Sale and purchase include the production, fabrication, 371.8 printing, or processing of tangible personal property for a 371.9 consideration for consumers who furnish either directly or 371.10 indirectly the materials used in the production, fabrication, 371.11 printing, or processing. 371.12 (d) Sale and purchase include thefurnishing,preparing, or371.13servingfor a consideration of foodor drinks. Notwithstanding 371.14 section 297A.67, subdivision 2, taxable foodor drinks371.15includeincludes, butareis not limited to, the following: 371.16 (1) prepared foodor drinkssold by the retailerfor371.17immediate consumption on the retailer's premises. Food and371.18drinks sold within a building or grounds that require an371.19admission charge for entrance are presumed to be sold for371.20consumption on the premises; 371.21(2) food or drinks prepared by the retailer for immediate371.22consumption either on or off the retailer's premises. For371.23purposes of this subdivision, "food or drinks prepared for371.24immediate consumption" means any food product upon which an act371.25of preparation including, but not limited to, cooking, mixing,371.26sandwich making, blending, heating, or pouring has been371.27performed by the retailer so the food product may be immediately371.28consumed by the purchaser;371.29(3) ice cream, ice milk, frozen yogurt products, or frozen371.30novelties sold in single or individual servings including, but371.31not limited to, cones, sundaes, and snow cones;371.32(4)(2) soft drinksand other beverages, including all371.33carbonated and noncarbonated beverages or drinks sold in liquid371.34form, but not including beverages or drinks which contain milk371.35or milk products, beverages or drinks containing 15 or more371.36percent fruit juice, and noncarbonated and noneffervescent372.1bottled water sold in individual containers of one-half gallon372.2or more in size; 372.3(5) gum,(3) candy, and candy products; and 372.4(6) ice;372.5(7)(4) all food soldfromthrough vending machines;. 372.6(8) all food for immediate consumption sold from concession372.7stands and vehicles;372.8(9) party trays;372.9(10) all meals and single servings of packaged snack food372.10sold in restaurants and bars; and372.11(11) bakery products that are:372.12(i) prepared by the retailer for consumption on the372.13retailer's premises;372.14(ii) sold at a place that charges admission;372.15(iii) sold from vending machines; or372.16(iv) sold in single or individual servings from concession372.17stands, vehicles, bars, and restaurants.372.18For purposes of this paragraph, "single or individual372.19servings" does not include products when sold in bulk containers372.20or bulk packaging.372.21For purposes of this paragraph, "premises" means the total372.22space and facilities, including buildings, grounds, and parking372.23lots that are made available or that are available for use by372.24the retailer or customer for the purpose of sale or consumption372.25of prepared food and drinks. The premises of a caterer is the372.26place where the catered food or drinks are served.372.27 (e) A sale and a purchase includes the furnishing for a 372.28 consideration of electricity, gas, water, or steam for use or 372.29 consumption within this stateor local exchange telephone372.30service, intrastate toll service, and interstate toll service,372.31if that service originates from and is charged to a telephone372.32located in this state. Telephone service includes (1) paging372.33services, and (2) private communication service, as defined in372.34United States Code, title 26, section 4252(d), except for372.35private communication service purchased by an agent acting on372.36behalf of the state lottery. Telephone service does not include373.1services purchased with a prepaid telephone calling card. The373.2furnishing for a consideration of access to telephone services373.3by a hotel to its guests is a sale. The furnishing for a373.4consideration of items listed in this paragraph by a municipal373.5corporation is a sale. 373.6 (f) A sale and a purchase includes the transfer for a 373.7 consideration of computer software. 373.8 (g) A sale and a purchase includes the furnishing for a 373.9 consideration oftaxable services as defined in subdivision373.1016.the following services: 373.11 (1) the privilege of admission to places of amusement, 373.12 recreational areas, or athletic events, and the making available 373.13 of amusement devices, tanning facilities, reducing salons, steam 373.14 baths, turkish baths, health clubs, and spas or athletic 373.15 facilities; 373.16 (2) lodging and related services by a hotel, rooming house, 373.17 resort, campground, motel, or trailer camp and the granting of 373.18 any similar license to use real property other than the renting 373.19 or leasing of it for a continuous period of 30 days or more; 373.20 (3) parking services, whether on a contractual, hourly, or 373.21 other periodic basis, except for parking at a meter; 373.22 (4) the granting of membership in a club, association, or 373.23 other organization if: 373.24 (i) the club, association, or other organization makes 373.25 available for the use of its members sports and athletic 373.26 facilities, without regard to whether a separate charge is 373.27 assessed for use of the facilities; and 373.28 (ii) use of the sports and athletic facility is not made 373.29 available to the general public on the same basis as it is made 373.30 available to members. 373.31 Granting of membership means both one-time initiation fees and 373.32 periodic membership dues. Sports and athletic facilities 373.33 include golf courses; tennis, racquetball, handball, and squash 373.34 courts; basketball and volleyball facilities; running tracks; 373.35 exercise equipment; swimming pools; and other similar athletic 373.36 or sports facilities; and 374.1 (5) services as provided in this clause: 374.2 (i) laundry and dry cleaning services including cleaning, 374.3 pressing, repairing, altering, and storing clothes, linen 374.4 services and supply, cleaning and blocking hats, and carpet, 374.5 drapery, upholstery, and industrial cleaning. Laundry and dry 374.6 cleaning services do not include services provided by coin 374.7 operated facilities operated by the customer; 374.8 (ii) motor vehicle washing, waxing, and cleaning services, 374.9 including services provided by coin operated facilities operated 374.10 by the customer, and rustproofing, undercoating, and towing of 374.11 motor vehicles; 374.12 (iii) building and residential cleaning, maintenance, and 374.13 disinfecting and exterminating services; 374.14 (iv) detective, security, burglar, fire alarm, and armored 374.15 car services; but not including services performed within the 374.16 jurisdiction they serve by off-duty licensed peace officers as 374.17 defined in section 626.84, subdivision 1, or services provided 374.18 by a nonprofit organization for monitoring and electronic 374.19 surveillance of persons placed on in-home detention pursuant to 374.20 court order or under the direction of the Minnesota department 374.21 of corrections; 374.22 (v) pet grooming services; 374.23 (vi) lawn care, fertilizing, mowing, spraying and sprigging 374.24 services; garden planting and maintenance; tree, bush, and shrub 374.25 pruning, bracing, spraying, and surgery; indoor plant care; 374.26 tree, bush, shrub, and stump removal; and tree trimming for 374.27 public utility lines. Services performed under a construction 374.28 contract for the installation of shrubbery, plants, sod, trees, 374.29 bushes, and similar items are not taxable; 374.30 (vii) massages, except when provided by a licensed health 374.31 care facility or professional or upon written referral from a 374.32 licensed health care facility or professional for treatment of 374.33 illness, injury, or disease; and 374.34 (viii) the furnishing of lodging, board, and care services 374.35 for animals in kennels and other similar arrangements, but 374.36 excluding veterinary and horse boarding services. 375.1 In applying the provisions of this chapter, the terms 375.2 "tangible personal property" and "sales at retail" include 375.3 taxable services and the provision of taxable services, unless 375.4 specifically provided otherwise. Services performed by an 375.5 employee for an employer are not taxable. Services performed by 375.6 a partnership or association for another partnership or 375.7 association are not taxable if one of the entities owns or 375.8 controls more than 80 percent of the voting power of the equity 375.9 interest in the other entity. Services performed between 375.10 members of an affiliated group of corporations are not taxable. 375.11 For purposes of this section, "affiliated group of corporations" 375.12 includes those entities that would be classified as members of 375.13 an affiliated group under United States Code, title 26, section 375.14 1504, and that are eligible to file a consolidated tax return 375.15 for federal income tax purposes. 375.16 (h) A sale and a purchase includes the furnishing for a 375.17 consideration of tangible personal property or taxable services 375.18 by the United States or any of its agencies or 375.19 instrumentalities, or the state of Minnesota, its agencies, 375.20 instrumentalities, or political subdivisions. 375.21 (i) A sale and a purchase includes the furnishing for a 375.22 consideration of telecommunications services, including cable 375.23 television services and direct satellite services. 375.24 Telecommunications services are taxed to the extent allowed 375.25 under federal law if those services: 375.26 (1) either (i) originate and terminate in this state; or 375.27 (ii) originate in this state and terminate outside the state and 375.28 the service is charged to a telephone number customer located in 375.29 this state or to the account of any transmission instrument in 375.30 this state; or (iii) originate outside this state and terminate 375.31 in this state and the service is charged to a telephone number 375.32 customer located in this state or to the account of any 375.33 transmission instrument in this state; or 375.34 (2) are rendered by providing a private communications 375.35 service for which the customer has one or more locations within 375.36 Minnesota connected to the service and the service is charged to 376.1 a telephone number customer located in this state or to the 376.2 account of any transmission instrument in this state. 376.3 All charges for mobile telecommunications services, as 376.4 defined in United States Code, title 4, section 124, are deemed 376.5 to be provided by the customer's home service provider and 376.6 sourced to the customer's place of primary use and are subject 376.7 to tax based upon the customer's place of primary use in 376.8 accordance with the Mobile Telecommunications Sourcing Act, 376.9 United States Code, title 4, sections 116 to 126. All other 376.10 definitions and provisions of the Mobile Telecommunications 376.11 Sourcing Act as provided in United States Code, title 4, are 376.12 hereby adopted. 376.13 [EFFECTIVE DATE.] This section is effective for sales and 376.14 purchases made after June 30, 2001, except that paragraph (d) is 376.15 effective for sales and purchases occurring after December 31, 376.16 2001, and paragraph (i) and the amendments to paragraph (e) are 376.17 effective for sales and purchases made after July 31, 2001. 376.18 Sec. 9. Minnesota Statutes 2000, section 297A.61, 376.19 subdivision 4, is amended to read: 376.20 Subd. 4. [RETAIL SALE.] (a) A "retail sale" meansaany 376.21 sale, lease, or rental for any purpose other than resalein the376.22regular course of business, sublease, or subrent. 376.23 (b) A sale of property used by the owner only by leasing it 376.24 to others or by holding it in an effort to lease it, and put to 376.25 no use by the owner other than resale after the lease or effort 376.26 to lease, is a sale of property for resale. 376.27 (c) A sale of master computer software that is purchased 376.28 and used to make copies for sale or lease is a sale of property 376.29 for resale. 376.30 (d) A sale of building materials, supplies, and equipment 376.31 to owners, contractors, subcontractors, or builders for the 376.32 erection of buildings or the alteration, repair, or improvement 376.33 of real property is a retail sale in whatever quantity sold, 376.34 whether the sale is for purposes of resale in the form of real 376.35 property or otherwise. 376.36 (e) A sale of carpeting, linoleum, or similar floor 377.1 covering to a person who provides for installation of the floor 377.2 covering is a retail sale and not a sale for resale since a sale 377.3 of floor covering which includes installation is a contract for 377.4 the improvement of real property. 377.5 (f) A sale of shrubbery, plants, sod, trees, and similar 377.6 items to a person who provides for installation of the items is 377.7 a retail sale and not a sale for resale since a sale of 377.8 shrubbery, plants, sod, trees, and similar items that includes 377.9 installation is a contract for the improvement of real property. 377.10 (g) A sale of tangible personal property that is awarded as 377.11 prizes is a retail sale and is not considered a sale of property 377.12 for resale. 377.13 (h) A sale of tangible personal property utilized or 377.14 employed in the furnishing or providing of services under 377.15 subdivision163, paragraph(b)(g), clause (1), including, but 377.16 not limited to, property given as promotional items, is a retail 377.17 sale and is not considered a sale of property for resale. 377.18 (i) A sale of tangible personal property used in conducting 377.19 lawful gambling under chapter 349 or the state lottery under 377.20 chapter 349A, including, but not limited to, property given as 377.21 promotional items, is a retail sale and is not considered a sale 377.22 of property for resale. 377.23 (j) A sale of machines, equipment, or devices that are used 377.24 to furnish, provide, or dispense goods or services, including, 377.25 but not limited to, coin-operated devices, is a retail sale and 377.26 is not considered a sale of property for resale. 377.27 (k) In the case of a lease, a retail sale occurs when an 377.28 obligation to make a lease payment becomes due under the terms 377.29 of the agreement or the trade practices of the lessor. 377.30 (l) In the case of a conditional sales contract, a retail 377.31 sale occurs upon the transfer of title or possession of the 377.32 tangible personal property. 377.33 [EFFECTIVE DATE.] This section is effective for sales and 377.34 purchases made after June 30, 2001, except that paragraph (a) is 377.35 effective January 1, 2002. 377.36 Sec. 10. Minnesota Statutes 2000, section 297A.61, 378.1 subdivision 6, is amended to read: 378.2 Subd. 6. [USE.] (a) "Use" includes the exercise of a right 378.3 or power incident to the ownership of any interest in tangible 378.4 personal property, ortaxableservices, purchased from a 378.5 retailer, other than the sale of that property in the regular 378.6 course of business. 378.7 (b) Use includes the consumption of printed materials in 378.8 the creation of nontaxable advertising that is distributed, 378.9 either directly or indirectly, within Minnesota. 378.10 [EFFECTIVE DATE.] This section is effective for sales and 378.11 purchases made after June 30, 2001. 378.12 Sec. 11. Minnesota Statutes 2000, section 297A.61, 378.13 subdivision 7, is amended to read: 378.14 Subd. 7. [SALES PRICE.] (a) "Sales price" meansthe total378.15consideration for a retail sale, valued in money, whether paid378.16in money or by barter or exchange.the measure subject to sales 378.17 tax, and means the total amount of consideration, including 378.18 cash, credit, property, and services, for which personal 378.19 property or services are sold, leased, or rented, valued in 378.20 money, whether received in money or otherwise, without any 378.21 deduction for the following: 378.22 (1) the seller's cost of the property sold; 378.23 (2) the cost of materials used, labor or service cost, 378.24 interest, losses, all costs of transportation to the seller, all 378.25 taxes imposed on the seller, and any other expenses of the 378.26 seller; 378.27 (3) charges by the seller for any services necessary to 378.28 complete the sale, other than delivery and installation charges; 378.29 (4) delivery charges; 378.30 (5) installation charges; and 378.31 (6) the value of exempt property given to the purchaser 378.32 when taxable and exempt personal property have been bundled 378.33 together and sold by the seller as a single product or piece of 378.34 merchandise. 378.35(b) Sales price includes:378.36(1) the cost of the property sold, cost of materials used,379.1labor or service cost, interest, or discount allowed after the379.2sale is consummated;379.3(2) the cost of transportation incurred prior to the time379.4of sale;379.5(3) any amount for which credit is given by the seller to379.6the purchaser;379.7(4) charges for services that are part of a sale; or379.8(5) any other expense whatsoever.379.9(c)(b) Sales price does not includethe following: 379.10 (1)an amount allowed as credit for tangible personal379.11property taken in trade for resalediscounts, including cash, 379.12 terms, or coupons that are not reimbursed by a third party and 379.13 that are allowed by the seller and taken by a purchaser on a 379.14 sale; 379.15 (2)charges of up to 15 percent in lieu of tips if the379.16charges are separately statedinterest, financing, and carrying 379.17 charges from credit extended on the sale of personal property or 379.18 services, if the amount is separately stated on the invoice, 379.19 bill of sale, or similar document given to the purchaser; and 379.20 (3)interest, financing, or carrying charges if the charges379.21are separately stated;any taxes legally imposed directly on the 379.22 consumer that are separately stated on the invoice, bill of 379.23 sale, or similar document given to the purchaser. 379.24(4) charges for labor or services used in installing or379.25applying the property sold if the charges are separately stated;379.26(5) transportation charges if the transportation occurs379.27after the retail sale of the property if the charges are379.28separately stated;379.29(6) cash discounts allowed and taken on sales or the amount379.30refunded either in cash or in credit for property returned by379.31purchasers;379.32(7) the rental motor vehicle tax imposed under section379.33297A.64; or379.34(8) the amount of any tax imposed by the United States on379.35communications services under United States Code, title 26,379.36section 4251(a).380.1(d) Notwithstanding paragraph (c), "sales price," for380.2purposes of sales of ready-mixed concrete sold from a380.3ready-mixed concrete truck, includes any transportation,380.4delivery, or other service charges, and no deduction is allowed380.5for those charges, whether or not the charges are separately380.6stated.380.7 [EFFECTIVE DATE.] This section is effective January 1, 2002. 380.8 Sec. 12. Minnesota Statutes 2000, section 297A.61, 380.9 subdivision 9, is amended to read: 380.10 Subd. 9. [RETAILER AND SELLER.] "Retailer" and "seller" 380.11 meanseveryany personengaged inmakingretailsales, leases, 380.12 or rentals of personal property or services. 380.13 [EFFECTIVE DATE.] This section is effective January 1, 2002. 380.14 Sec. 13. Minnesota Statutes 2000, section 297A.61, 380.15 subdivision 10, is amended to read: 380.16 Subd. 10. [TANGIBLE PERSONAL PROPERTY.] (a) "Tangible 380.17 personal property" means corporeal personal property of any 380.18 kind, including property that is to become real property as a 380.19 result of incorporation, attachment, or installation following 380.20 its acquisition. 380.21 (b) Tangible personal property includes, but is not limited 380.22 to: 380.23 (1) computer software, whether contained on tape, discs, 380.24 cards, or other devices; and 380.25 (2) prepaid telephone calling cards. 380.26 (c) Tangible personal property does not include: 380.27 (1) large ponderous machinery and equipment used in a 380.28 business or production activity which at common law would be 380.29 considered to be real property; 380.30 (2) property which is subject to an ad valorem property 380.31 tax; 380.32 (3) property described in section 272.02, subdivision 9, 380.33 clauses (a) to (d); and 380.34 (4) property described in section 272.03, subdivision 2, 380.35 clauses (3) and (5). 380.36 [EFFECTIVE DATE.] This section is effective for sales and 381.1 purchases made after June 30, 2001. 381.2 Sec. 14. Minnesota Statutes 2000, section 297A.61, 381.3 subdivision 12, is amended to read: 381.4 Subd. 12. [FARM MACHINERY.] (a) "Farm machinery" means new 381.5 or used machinery, equipment, implements, accessories, and 381.6 contrivances used directly and principally in the production for 381.7 sale, but not including the processing, of livestock, dairy 381.8 animals, dairy products, poultry and poultry products, fruits, 381.9 vegetables, trees and shrubs, plants, forage, grains, and bees 381.10 and apiary products. 381.11 (b) Farm machinery includes: 381.12 (1) machinery for the preparation, seeding, or cultivation 381.13 of soil for growing agricultural crops and sod, for the 381.14 harvesting and threshing of agricultural products, or for the 381.15 harvesting or mowing of sod; 381.16 (2) barn cleaners, milking systems, grain dryers,automatic381.17 feeding systems including stationary feed bunks, and similar 381.18 installations, whether or not the equipment is installed by the 381.19 seller and becomes part of the real property; 381.20 (3) irrigation equipment sold for exclusively agricultural 381.21 use, including pumps, pipe fittings, valves, sprinklers, and 381.22 other equipment necessary to the operation of an irrigation 381.23 system when sold as part of an irrigation system, whether or not 381.24 the equipment is installed by the seller and becomes part of the 381.25 real property; 381.26 (4) logging equipment, including chain saws used for 381.27 commercial logging; 381.28 (5) fencing used for the containment of farmed cervidae, as 381.29 defined in section 17.451, subdivision 2; 381.30 (6) primary and backup generator units used to generate 381.31 electricity for the purpose of operating farm machinery, as 381.32 defined in this subdivision, or providing light or space heating 381.33 necessary for the production of livestock, dairy animals, dairy 381.34 products, or poultry and poultry products; 381.35 (7) aquaculture production equipment as defined in 381.36 subdivision 13; and 382.1 (8) equipment used for maple syrup harvesting. 382.2 (c) Farm machinery does not include: 382.3 (1) repair or replacement parts; 382.4 (2) tools, shop equipment, grain bins,feed bunks,fencing 382.5 material except fencing material covered by paragraph (b), 382.6 clause (5), communication equipment, and other farm supplies; 382.7 (3) motor vehicles taxed under chapter 297B; 382.8 (4) snowmobiles or snow blowers; or 382.9 (5) lawn mowers except those used in the production of sod 382.10 for sale, or garden-type tractors or garden tillers. 382.11 [EFFECTIVE DATE.] This section is effective for sales and 382.12 purchases made after July 31, 2001. 382.13 Sec. 15. Minnesota Statutes 2000, section 297A.61, 382.14 subdivision 14, is amended to read: 382.15 Subd. 14. [LEASING; LEASE.] "Leasing" includes all 382.16 transfers of possession or the use of tangible personal property 382.17 by the lessee for a consideration, if title remains with the 382.18 lessor at the end of the lease.For purposes of this chapter,A 382.19 lease of tangible personal property is a series of sales 382.20 transactions that impose upon the lessee multiple payment 382.21 obligations. "Leasing" does not include a transaction defined 382.22 under subdivision 15. 382.23 [EFFECTIVE DATE.] This section is effective for sales and 382.24 purchases made after June 30, 2001. 382.25 Sec. 16. Minnesota Statutes 2000, section 297A.61, 382.26 subdivision 17, is amended to read: 382.27 Subd. 17. [COMPUTER SOFTWARE.] "Computer software" means a 382.28 computer program, either in the form of written procedures orin382.29the form of storage media on which, or in which, the program is382.30recordedcontained on tapes, discs, cards, or another device, or 382.31 any required documentation or manuals designed to facilitate the 382.32 use of the computer program. For purposes of this subdivision: 382.33 (1)"Storage media" includes punched cards, tapes, discs,382.34diskettes, or drums on which computer programs may be embodied382.35or stored;382.36(2)"Computer" does not include tape-controlled automatic 383.1 drilling, milling, or other manufacturing machinery or 383.2 equipment; and 383.3(3)(2) "Computer program" means information and directions 383.4 that dictate the function performed by data processing 383.5 equipment. It includes the complete plan for the solution of a 383.6 problem, such as the complete sequence of automatic data 383.7 processing equipment instructions necessary to solve a problem 383.8 and includes both systems and application programs and 383.9 subdivisions, such as assemblers, compilers, routines, 383.10 generators, and utility programs. Computer program includes a 383.11 "canned" or prewritten computer program that is held or existing 383.12 for general or repeated sale or lease, even if the prewritten or 383.13 "canned" program was initially developed on a custom basis or 383.14 for in-house use. 383.15 [EFFECTIVE DATE.] This section is effective for sales and 383.16 purchases made after June 30, 2001. 383.17 Sec. 17. Minnesota Statutes 2000, section 297A.61, 383.18 subdivision 19, is amended to read: 383.19 Subd. 19. [COMMONFOR-HIRE CARRIER.] "CommonFor-hire 383.20 carrier" means a person engaged in transportation for hire of 383.21 tangible personal propertyby motor vehicle, if the person:. 383.22(1) has a certificate or permit or has completed a383.23registration process that authorizes for-hire transportation of383.24property from the United States Department of Transportation,383.25the transportation regulation board, or the department of383.26transportation;383.27(2) is transporting commodities defined as "exempt" in383.28for-hire transportation; or383.29(3) transports tangible personal property pursuant to a383.30contract with a person described in clause (1) or (2).383.31 [EFFECTIVE DATE.] This section is effective for sales and 383.32 purchases made after June 30, 2001. 383.33 Sec. 18. Minnesota Statutes 2000, section 297A.61, 383.34 subdivision 22, is amended to read: 383.35 Subd. 22. [INTERNAL REVENUE CODE.] Unless specifically 383.36 provided otherwise, "Internal Revenue Code" means the Internal 384.1 Revenue Code of 1986, as amended through December 31,19992000. 384.2 [EFFECTIVE DATE.] This section is effective for sales and 384.3 purchases made after June 30, 2001. 384.4 Sec. 19. Minnesota Statutes 2000, section 297A.61, 384.5 subdivision 23, is amended to read: 384.6 Subd. 23. [UNITED STATES CODE.] Unless specifically 384.7 provided otherwise, "United States Code" means the United States 384.8 Code as amended through December 31,19992000. 384.9 [EFFECTIVE DATE.] This section is effective for sales and 384.10 purchases made after June 30, 2001. 384.11 Sec. 20. Minnesota Statutes 2000, section 297A.61, is 384.12 amended by adding a subdivision to read: 384.13 Subd. 24. [TELECOMMUNICATIONS SERVICES.] (a) 384.14 "Telecommunications services" means the transmission, 384.15 conveyance, or routing of voice, data, audio, video, or any 384.16 other information or signals to a point, or between or among 384.17 points, by or through any electronic, satellite, optical, 384.18 microwave, or other medium or method now in existence or 384.19 hereafter devised, regardless of the protocol used for such 384.20 transmission, conveyance, or routing. 384.21 (b) Telecommunications services includes the furnishing for 384.22 consideration of access to telephone services by a hotel to its 384.23 guests. 384.24 (c) Telecommunications services do not include: 384.25 (1) services purchased with a prepaid telephone calling 384.26 card; 384.27 (2) private communication service purchased by an agent 384.28 acting on behalf of the state lottery; 384.29 (3) information services; and 384.30 (4) purchases of telecommunications when the purchaser uses 384.31 the purchased services as a component part of or integrates such 384.32 service into another telecommunications service that is sold by 384.33 the purchaser in the normal course of business. 384.34 (d) For purposes of this subdivision, "information 384.35 services" means the offering of the capability for generating, 384.36 acquiring, storing, transforming, processing, retrieving, 385.1 utilizing, or making available information. 385.2 [EFFECTIVE DATE.] This section is effective for sales and 385.3 purchases occurring after July 31, 2001. 385.4 Sec. 21. Minnesota Statutes 2000, section 297A.61, is 385.5 amended by adding a subdivision to read: 385.6 Subd. 25. [CABLE TELEVISION SERVICE.] "Cable television 385.7 service" means the transmission of video, audio, or other 385.8 programming service to purchasers, and the subscriber 385.9 interaction, if any, required for the selection or use of the 385.10 programming service, regardless of whether the programming is 385.11 transmitted over facilities owned or operated by the cable 385.12 service provider or over facilities owned or operated by one or 385.13 more dealers of communications services. The term includes 385.14 point-to-multipoint distribution services by which programming 385.15 is transmitted or broadcast by microwave or other equipment 385.16 directly to the subscriber's premises. The term includes basic, 385.17 extended, premium, pay-per-view, digital, and music services. 385.18 [EFFECTIVE DATE.] This section is effective for sales and 385.19 purchases occurring after July 31, 2001. 385.20 Sec. 22. Minnesota Statutes 2000, section 297A.61, is 385.21 amended by adding a subdivision to read: 385.22 Subd. 26. [PRIVATE COMMUNICATION SERVICE.] "Private 385.23 communication service" means a communication service furnished 385.24 to a subscriber which entitles the subscriber to: 385.25 (1) exclusive or priority use of any communication channel 385.26 or group of channels; 385.27 (2) the use of an intercommunication system for the 385.28 subscriber's stations, or regardless of whether the channel, 385.29 group of channels, or intercommunication system may be connected 385.30 through switching; 385.31 (3) the switching capacity, extension lines and stations, 385.32 or other associated services that are provided in connection 385.33 with, and are necessary or unique to the use of, channels or 385.34 systems described in clause (1); or 385.35 (4) any combination of tunneling, encryption, 385.36 authentication, and access control technologies and services 386.1 used to carry traffic over the Internet, a managed Internet 386.2 provider network or provider's backbone. 386.3 [EFFECTIVE DATE.] This section is effective for sales and 386.4 purchases occurring after July 31, 2001. 386.5 Sec. 23. Minnesota Statutes 2000, section 297A.61, is 386.6 amended by adding a subdivision to read: 386.7 Subd. 27. [DIRECT SATELLITE SERVICE.] "Direct satellite 386.8 service" means programming transmitted or broadcast by satellite 386.9 directly to the subscriber's premises without the use of ground 386.10 receiving or distribution equipment, except at the subscriber's 386.11 premises or in the uplink process to the satellite. 386.12 [EFFECTIVE DATE.] This section is effective for sales and 386.13 purchases occurring after July 31, 2001. 386.14 Sec. 24. Minnesota Statutes 2000, section 297A.61, is 386.15 amended by adding a subdivision to read: 386.16 Subd. 28. [PURCHASE PRICE.] "Purchase price" means the 386.17 measure subject to the use tax and has the same meaning as 386.18 "sales price." 386.19 [EFFECTIVE DATE.] This section is effective January 1, 2002. 386.20 Sec. 25. Minnesota Statutes 2000, section 297A.61, is 386.21 amended by adding a subdivision to read: 386.22 Subd. 29. [STATE.] Unless specifically provided otherwise, 386.23 "state" means any state of the United States and the District of 386.24 Columbia. 386.25 [EFFECTIVE DATE.] This section is effective January 1, 2002. 386.26 Sec. 26. Minnesota Statutes 2000, section 297A.61, is 386.27 amended by adding a subdivision to read: 386.28 Subd. 30. [DELIVERY CHARGES.] "Delivery charges" means 386.29 charges by the seller for preparation and delivery to a location 386.30 designated by the purchaser of personal property or services 386.31 including, but not limited to, transportation, shipping, 386.32 postage, handling, crating, and packing. 386.33 [EFFECTIVE DATE.] This section is effective January 1, 2002. 386.34 Sec. 27. Minnesota Statutes 2000, section 297A.61, is 386.35 amended by adding a subdivision to read: 386.36 Subd. 31. [PREPARED FOOD.] "Prepared food" means (i) food 387.1 sold in a heated state or heated by the seller; (ii) two or more 387.2 food ingredients mixed or combined by the seller for sale as a 387.3 single item; or (iii) food sold with eating utensils provided by 387.4 the seller, including plates, knives, forks, spoons, glasses, 387.5 cups, napkins, or straws. Prepared food does not include food 387.6 that is sliced, repackaged, or pasteurized by the seller. 387.7 [EFFECTIVE DATE.] This section is effective January 1, 2002. 387.8 Sec. 28. Minnesota Statutes 2000, section 297A.61, is 387.9 amended by adding a subdivision to read: 387.10 Subd. 32. [SOFT DRINKS.] "Soft drinks" means nonalcoholic 387.11 beverages that contain natural or artificial sweeteners. Soft 387.12 drinks do not include beverages that contain milk or milk 387.13 products; soy, rice, or similar milk substitutes; or greater 387.14 than 50 percent vegetable or fruit juice by volume. 387.15 [EFFECTIVE DATE.] This section is effective January 1, 2002. 387.16 Sec. 29. Minnesota Statutes 2000, section 297A.61, is 387.17 amended by adding a subdivision to read: 387.18 Subd. 33. [CANDY.] "Candy" means a preparation of sugar, 387.19 honey, or other natural or artificial sweeteners in combination 387.20 with chocolate, fruits, nuts, or other ingredients or flavorings 387.21 in the form of bars, drops, or pieces. Candy does not include 387.22 any preparation containing flour and must require no 387.23 refrigeration. 387.24 [EFFECTIVE DATE.] This section is effective January 1, 2002. 387.25 Sec. 30. Minnesota Statutes 2000, section 297A.61, is 387.26 amended by adding a subdivision to read: 387.27 Subd. 34. [FOOD SOLD THROUGH VENDING MACHINES.] "Food sold 387.28 through vending machines" means food dispensed from a machine or 387.29 other mechanical device that accepts payment. 387.30 [EFFECTIVE DATE.] This section is effective January 1, 2002. 387.31 Sec. 31. Minnesota Statutes 2000, section 297A.64, 387.32 subdivision 3, is amended to read: 387.33 Subd. 3. [ADMINISTRATION.]The retailer shall report and387.34pay the tax imposed in subdivision 1 to the commissioner of387.35revenue with the taxes imposed in this chapter.Thetax imposed387.36in subdivision 1 and thefee imposed in subdivision 2areis 388.1 subject to the same interest, penalty, and other provisions 388.2 provided for sales and use taxes under chapter 289A and this 388.3 chapter. The commissioner has the same powers to assess and 388.4 collect thetax andfee that are given the commissioner in 388.5 chapters 270 and 289A and this chapter to assess and collect 388.6 sales and use tax. 388.7 [EFFECTIVE DATE.] This section is effective for leases 388.8 entered into after December 31, 2005. 388.9 Sec. 32. Minnesota Statutes 2000, section 297A.64, 388.10 subdivision 4, is amended to read: 388.11 Subd. 4. [EXEMPTIONS.] (a) Thetax and thefee imposed by 388.12 this sectiondodoes not apply to a lease or rental of (1) a 388.13 vehicle to be used by the lessee to provide a licensed taxi 388.14 service; (2) a hearse or limousine used in connection with a 388.15 burial or funeral service; or (3) a van designed or adapted 388.16 primarily for transporting property rather than passengers. 388.17 (b) The lessor may elect not to charge the fee imposed in 388.18 subdivision 2 if in the previous calendar year the lessor had no 388.19 more than 20 vehicles available for lease that would have been 388.20 subject to tax under this section, or no more than $50,000 in 388.21 gross receipts that would have been subject to tax under this 388.22 section. 388.23 [EFFECTIVE DATE.] This section is effective for leases 388.24 entered into after December 31, 2005. 388.25 Sec. 33. Minnesota Statutes 2000, section 297A.66, 388.26 subdivision 1, is amended to read: 388.27 Subdivision 1. [DEFINITIONS.] (a) "Retailer maintaining a 388.28 place of business in this state," or a similar term, means a 388.29 retailer: 388.30 (1) having or maintaining within this state, directly or by 388.31 a subsidiary, an office, place of distribution, sales or sample 388.32 room or place, warehouse, or other place of business; or 388.33 (2) having a representative, agent, salesperson, canvasser, 388.34 or solicitor operating in this state under the authority of the 388.35 retailer or its subsidiary, for any purpose, including the 388.36 repairing, selling, delivering, installing, or soliciting of 389.1 orders for the retailer's goods or services, or the leasing of 389.2 tangible personal property located in this state, whether the 389.3 place of business or agent, representative, salesperson, 389.4 canvasser, or solicitor is located in the state permanently or 389.5 temporarily, or whether or not the retailer or subsidiary is 389.6 authorized to do business in this state. 389.7 (b) "Destination of a sale" means the location to which the 389.8 retailer makes delivery of the property sold, or causes the 389.9 property to be delivered, to the purchaser of the property, or 389.10 to the agent or designee of the purchaser. The delivery may be 389.11 made by any means, including the United States Postal Service, a389.12common carrier,or acontractfor-hire carrier. 389.13 [EFFECTIVE DATE.] This section is effective for sales and 389.14 purchases made after June 30, 2001. 389.15 Sec. 34. Minnesota Statutes 2000, section 297A.66, 389.16 subdivision 3, is amended to read: 389.17 Subd. 3. [RETAILER NOT MAINTAINING A PLACE OF BUSINESS IN 389.18 THIS STATE.] (a) To the extent allowed by the United States 389.19 Constitution and the laws of the United States, a retailer 389.20 making retail sales from outside this state to a destination 389.21 within this state and not maintaining a place of business in 389.22 this state shall collect sales and use taxes and remit them to 389.23 the commissioner under section 297A.77, if the retailer engages 389.24 in the regular or systematic soliciting of sales from potential 389.25 customers in this state by: 389.26 (1) distribution, by mail or otherwise, of catalogs, 389.27 periodicals, advertising flyers, or other written solicitations 389.28 of business to customers in this state; 389.29 (2) display of advertisements on billboards or other 389.30 outdoor advertising in this state; 389.31 (3) advertisements in newspapers published in this state; 389.32 (4) advertisements in trade journals or other periodicals 389.33 the circulation of which is primarily within this state; 389.34 (5) advertisements in a Minnesota edition of a national or 389.35 regional publication or a limited regional edition in which this 389.36 state is included as part of a broader regional or national 390.1 publication which are not placed in other geographically defined 390.2 editions of the same issue of the same publication; 390.3 (6) advertisements in regional or national publications in 390.4 an edition which is not by its contents geographically targeted 390.5 to Minnesota but which is sold over the counter in Minnesota or 390.6 by subscription to Minnesota residents; 390.7 (7) advertisements broadcast on a radio or television 390.8 station located in Minnesota; or 390.9 (8) any other solicitation by telegraphy, telephone, 390.10 computer database, cable, optic, microwave, or other 390.11 communication system. 390.12 This paragraph (a) must be construed without regard to the 390.13 state from which distribution of the materials originated or in 390.14 which they were prepared. 390.15 (b) The location within or without this state of 390.16 independent vendorsindependent of the retailerthat provide 390.17 products or services to the retailer in connection with its 390.18 solicitation of customers within this state, including such 390.19 products and services as creation of copy, printing, 390.20 distribution, and recording, is not considered in determining 390.21 whether the retailer is required to collect tax. 390.22 (c) A retailer not maintaining a place of business in this 390.23 state is presumed, subject to rebuttal, to be engaged in regular 390.24 solicitation within this state if it engages in any of the 390.25 activities in paragraph (a) and: 390.26 (1) makes 100 or more retail sales from outside this state 390.27 to destinations in this state during a period of 12 consecutive 390.28 months; or 390.29 (2) makes ten or more retail sales totaling more than 390.30 $100,000 from outside this state to destinations in this state 390.31 during a period of 12 consecutive months. 390.32 [EFFECTIVE DATE.] This section is effective for sales and 390.33 purchases made after June 30, 2001. 390.34 Sec. 35. [297A.668] [SOURCING OF SALE; SITUS IN THIS 390.35 STATE.] 390.36 Subdivision 1. [SOURCING RULES.] (a) The following 391.1 provisions apply regardless of the characterization of a product 391.2 as tangible personal property, a digital good, or a service; but 391.3 do not apply to telecommunications services, or the sales of 391.4 motor vehicles, watercraft, aircraft, modular homes, 391.5 manufactured homes, or mobile homes. These provisions only 391.6 apply to determine a seller's obligation to pay or collect and 391.7 remit a sales or use tax with respect to the seller's sale of a 391.8 product. These provisions do not affect the obligation of a 391.9 seller as purchaser to remit tax on the use of the product. 391.10 (b) When the product is received by the purchaser at a 391.11 business location of the seller, the sale is sourced to that 391.12 business location. 391.13 (c) When the product is not received by the purchaser at a 391.14 business location of the seller, the sale is sourced to the 391.15 location where receipt by the purchaser or the donee designated 391.16 by the purchaser occurs, including the location indicated by 391.17 instructions for delivery to the purchasers or the purchaser's 391.18 donee, known to the seller. 391.19 (d) When paragraphs (b) and (c) do not apply, the sale is 391.20 sourced to the location indicated by an address for the 391.21 purchaser that is available from the business records of the 391.22 seller that are maintained in the ordinary course of the 391.23 seller's business, when use of this address does not constitute 391.24 bad faith. 391.25 (e) When paragraphs (b), (c), and (d) do not apply, the 391.26 sale is sourced to the location indicated by an address for the 391.27 purchaser obtained during the consummation of the sale, 391.28 including the address of a purchaser's payment instrument if no 391.29 other address is available, when use of this address does not 391.30 constitute bad faith. 391.31 (f) When paragraphs (b), (c), (d), and (e) do not apply, 391.32 including the circumstance where the seller is without 391.33 sufficient information to apply the previous paragraphs, then 391.34 the location is determined by the address from which tangible 391.35 personal property was shipped, from which the digital good was 391.36 first available for transmission by the seller, or from which 392.1 the service was provided. 392.2 Subd. 2. [MULTIPLE POINTS OF USE.] (a) Notwithstanding the 392.3 provisions of subdivision 1, a business purchaser that is not a 392.4 holder of a direct pay permit that knows at the time of its 392.5 purchase of a digital good or service that the digital good or 392.6 service will be concurrently available for use in more than one 392.7 taxing jurisdiction shall deliver to the seller in conjunction 392.8 with its purchase a multiple points of use exemption certificate 392.9 disclosing this fact. 392.10 (b) Upon receipt of the multiple points of use exemption 392.11 certificate, the seller is relieved of the obligation to 392.12 collect, pay, or remit the applicable tax and the purchaser is 392.13 obligated to collect, pay, or remit the applicable tax on a 392.14 direct pay basis. 392.15 (c) A purchaser delivering the multiple points of use 392.16 exemption certificate may use any reasonable, but consistent and 392.17 uniform, method of apportionment that is supported by the 392.18 purchaser's business records as they exist at the time of the 392.19 consummation of the sale. 392.20 (d) The multiple points of use exemption certificate 392.21 remains in effect for all future sales by the seller to the 392.22 purchaser until it is revoked in writing. 392.23 (e) A holder of a direct pay permit is not required to 392.24 deliver a multiple points or use exemption certificate to the 392.25 seller. A direct pay permit holder shall follow the provisions 392.26 of paragraph (c) in apportioning the tax due on a digital good 392.27 or a service that will be concurrently available for use in more 392.28 than one taxing jurisdiction. 392.29 Subd. 3. [DEFINITION OF TERMS.] For purposes of this 392.30 section, the terms "receive" and "receipt" mean taking 392.31 possession of tangible personal property, making first use of 392.32 services, or taking possession of making first use of digital 392.33 goods, whichever occurs first. The terms receive and receipt do 392.34 not include possession by a carrier for hire on behalf of the 392.35 purchaser. 392.36 [EFFECTIVE DATE.] This section is effective for sales and 393.1 purchases made after December 31, 2001. 393.2 Sec. 36. Minnesota Statutes 2000, section 297A.67, 393.3 subdivision 2, is amended to read: 393.4 Subd. 2. [FOODPRODUCTSAND FOOD INGREDIENTS.] 393.5 Foodproducts including, but not limited to, cereal and cereal393.6products, butter, cheese, milk and milk products, oleomargarine,393.7meat and meat products, fish and fish products, eggs and egg393.8products, vegetables and vegetable products, fruit and fruit393.9products, spices and salt, sugar and sugar products, coffee and393.10coffee substitutes, tea, and cocoa and cocoa productsand food 393.11 ingredients are exempt. For purposes of this subdivision, 393.12 "food" and "food ingredients" mean substances, whether in 393.13 liquid, concentrated, solid, frozen, dried, or dehydrated form, 393.14 that are sold for ingestion or chewing by humans and are 393.15 consumed for their taste or nutritional value. Food and food 393.16 ingredients do not include candy, soft drinks, food sold through 393.17 vending machines, and prepared foods. Food and food ingredients 393.18 do not include alcoholic beverages, dietary supplements, and 393.19 tobacco. For purposes of this subdivision, "alcoholic 393.20 beverages" means beverages that are suitable for human 393.21 consumption and contain one-half of one percent or more of 393.22 alcohol by volume. For purposes of this subdivision, "tobacco" 393.23 means cigarettes, cigars, chewing or pipe tobacco, or any other 393.24 item that contains tobacco. For purposes of this subdivision, 393.25 "dietary supplements" means any product, other than tobacco, 393.26 intended to supplement the diet that: 393.27 (1) contains one or more of the following dietary 393.28 ingredients: 393.29 (i) a vitamin; 393.30 (ii) a mineral; 393.31 (iii) an herb or other botanical; 393.32 (iv) an amino acid; 393.33 (v) a dietary substance for use by humans to supplement the 393.34 diet by increasing the total dietary intake; and 393.35 (vi) a concentrate, metabolite, constituent, extract, or 393.36 combination of any ingredient described in items (i) to (v); 394.1 (2) is intended for ingestion in tablet, capsule, powder, 394.2 softgel, gelcap, or liquid form, or if not intended for 394.3 ingestion in such form, is not represented as conventional food 394.4 and is not represented for use as a sole item of a meal or of 394.5 the diet; and 394.6 (3) is required to be labeled as a dietary supplement, 394.7 identifiable by the supplement facts box found on the label and 394.8 as required pursuant to Code of Federal Regulations, title 21, 394.9 section 101.36. 394.10 [EFFECTIVE DATE.] This section is effective for sales and 394.11 purchases made after December 31, 2001. 394.12 Sec. 37. Minnesota Statutes 2000, section 297A.67, 394.13 subdivision 8, is amended to read: 394.14 Subd. 8. [CLOTHING.] (a) Clothingand wearing apparel,394.15including sewing materials to be directly incorporated into394.16wearing apparel, areis exempt. For purposes of this 394.17 subdivision,clothing and wearing apparel do not include the394.18following:394.19(1) articles designed primarily for use while engaging in a394.20specific sport or recreational activity that are not also worn394.21for general use;394.22(2) articles designed primarily to provide safety or394.23protection against injury while the user is engaged in394.24industrial or general job activities;394.25(3) all articles commonly or commercially known as jewelry394.26including, but not limited to, watches;394.27(4) nonprescription optical glasses of any sort;394.28(5) articles made entirely of fur on the hide or pelt, or394.29partially of such fur if the value of the fur is more than three394.30times the value of the next most valuable component material;394.31(6) perfume, lotions, creams, dyes, or other substances394.32that are applied to the skin or the hair; and394.33(7) luggage, bags, purses, wallets, or cases of any394.34sort."clothing" means all human wearing apparel suitable for 394.35 general use. 394.36 (b) Clothing includes, but is not limited to, aprons, 395.1 household and shop; athletic supporters; baby receiving 395.2 blankets; bathing suits and caps; beach capes and coats; belts 395.3 and suspenders; boots; coats and jackets; costumes; children and 395.4 adult diapers, including disposable; ear muffs; footlets; formal 395.5 wear; garters and garter belts; girdles; gloves and mittens for 395.6 general use; hats and caps; hosiery; insoles for shoes; lab 395.7 coats; neckties; overshoes; pantyhose; rainwear; rubber pants; 395.8 sandals; scarves; shoes and shoe laces; slippers; sneakers; 395.9 socks and stockings; steel-toed boots; underwear; uniforms, 395.10 athletic and nonathletic; and wedding apparel. 395.11 (c) Clothing does not include the following: 395.12 (1) belt buckles sold separately; 395.13 (2) costume masks sold separately; 395.14 (3) patches and emblems sold separately; 395.15 (4) sewing equipment and supplies, including but not 395.16 limited to, knitting needles, patterns, pins, scissors, sewing 395.17 machines, sewing needles, tape measures, and thimbles; 395.18 (5) sewing materials that become part of clothing, 395.19 including but not limited to, buttons, fabric, lace, thread, 395.20 yarn, and zippers; 395.21 (6) clothing accessories or equipment; 395.22 (7) sports or recreational equipment; and 395.23 (8) protective equipment. 395.24 Clothing also does not include apparel made from fur if a 395.25 uniform definition of "apparel made from fur" is developed by 395.26 the member states of the Streamlined Sales and Use Tax Agreement. 395.27 For purposes of this subdivision, "clothing accessories or 395.28 equipment" means incidental items worn on the person or in 395.29 conjunction with clothing. Clothing accessories include, but 395.30 are not limited to, briefcases; cosmetics; hair notions, 395.31 including barrettes, hair bows, and hairnets; handbags; 395.32 handkerchiefs; jewelry; nonprescription sunglasses; umbrellas; 395.33 wallets; watches; and wigs and hairpieces. "Sports or 395.34 recreational equipment" means items designed for human use and 395.35 worn in conjunction with an athletic or recreational activity 395.36 that are not suitable for general use. Sports and recreational 396.1 equipment includes, but is not limited to, ballet and tap shoes; 396.2 cleated or spiked athletic shoes; baseball, bowling, boxing, 396.3 hockey, and golf gloves; goggles; hand and elbow guards; life 396.4 preservers and vests; mouth guards; roller and ice skates; shin 396.5 guards; shoulder pads; ski boots; waders; and wetsuits and 396.6 fins. "Protective equipment" means items for human wear and 396.7 designed as protection of the wearer against injury or disease 396.8 or as protection against damage or injury of other persons or 396.9 property but not suitable for general use. Protective equipment 396.10 includes, but is not limited to, breathing masks; clean room 396.11 apparel and equipment; ear and hearing protectors; face shields; 396.12 finger guards; hard hats; helmets; paint or dust respirators; 396.13 protective gloves; safety glasses and goggles; safety belts; 396.14 tool belts; and welders gloves and masks. 396.15 [EFFECTIVE DATE.] This section is effective for sales and 396.16 purchases made after December 31, 2001. 396.17 Sec. 38. Minnesota Statutes 2000, section 297A.67, 396.18 subdivision 23, is amended to read: 396.19 Subd. 23. [OCCASIONAL SALES.] Isolated and occasional 396.20 sales in Minnesota not made in the normal course of business,396.21andof selling that kind of property or service are exempt. The 396.22 storage, use, or consumption of property or servicesresulting396.23from such sales, areacquired as a result of such a sale is 396.24 exempt. This exemption does not apply to sales of tangible 396.25 personal property primarily used in a trade or business. 396.26 [EFFECTIVE DATE.] This section is effective for sales and 396.27 purchases made after June 30, 2001. 396.28 Sec. 39. Minnesota Statutes 2000, section 297A.67, 396.29 subdivision 24, is amended to read: 396.30 Subd. 24. [CONSTITUTIONAL PROHIBITIONS.]The gross396.31receipts fromThe sale of and the storage, use, orother396.32 consumption in Minnesota of tangible personal property,tickets,396.33or admissions, electricity, gas, or local exchange telephone396.34serviceor services, that the state of Minnesota is prohibited 396.35 from taxing under the Constitution or laws of the United States 396.36 or under the Constitution of Minnesota, are exempt. 397.1 [EFFECTIVE DATE.] This section is effective for sales and 397.2 purchases made after June 30, 2001. 397.3 Sec. 40. Minnesota Statutes 2000, section 297A.67, 397.4 subdivision 25, is amended to read: 397.5 Subd. 25. [MAINTENANCE OF CEMETERY GROUNDS.] Lawn care and 397.6 related services used in the maintenance of cemetery grounds are 397.7 exempt. For purposes of this subdivision, "lawn care and 397.8 related services" means the services listed in section 297A.61, 397.9 subdivision163, paragraph (g), clause(6)(5), item (vi), 397.10 and "cemetery" means a cemetery for human burial. 397.11 [EFFECTIVE DATE.] This section is effective for sales and 397.12 purchases made after June 30, 2001. 397.13 Sec. 41. Minnesota Statutes 2000, section 297A.67, is 397.14 amended by adding a subdivision to read: 397.15 Subd. 26. [TRADE ALLOWANCE.] The amount allowed as a 397.16 credit against the sales price for tangible personal property 397.17 taken in trade for resale is exempt. 397.18 [EFFECTIVE DATE.] This section is effective for sales and 397.19 purchases made after December 31, 2001. 397.20 Sec. 42. Minnesota Statutes 2000, section 297A.67, is 397.21 amended by adding a subdivision to read: 397.22 Subd. 27. [SEWING MATERIALS.] Sewing materials are exempt. 397.23 For purposes of this subdivision "sewing materials" mean fabric, 397.24 thread, zippers, interfacing, buttons, trim, and other items 397.25 that are usually directly incorporated into the construction of 397.26 clothing, regardless of whether it is actually used for making 397.27 clothing. It does not include batting, foam, or fabric 397.28 specifically manufactured for arts and craft projects, or other 397.29 materials for craft projects. 397.30 [EFFECTIVE DATE.] This section is effective for sales and 397.31 purchases made after December 31, 2001. 397.32 Sec. 43. Minnesota Statutes 2000, section 297A.67, is 397.33 amended by adding a subdivision to read: 397.34 Subd. 28. [AMBULANCE SUPPLIES, PARTS, AND EQUIPMENT.] The 397.35 following sales to or use by an ambulance service licensed under 397.36 section 144E.10 are exempt: 398.1 (1) supplies and equipment used to provide medical care; 398.2 and 398.3 (2) repair and replacement parts for ambulances. 398.4 [EFFECTIVE DATE.] This section is effective for sales and 398.5 purchases made after July 31, 2001. 398.6 Sec. 44. Minnesota Statutes 2000, section 297A.67, is 398.7 amended by adding a subdivision to read: 398.8 Subd. 29. [ENERGY EFFICIENT PRODUCTS.] (a) A residential 398.9 lighting fixture or a compact fluorescent bulb is exempt if it 398.10 has an energy star label. 398.11 (b) The following products are exempt if they have an 398.12 energyguide label that indicates that the product meets or 398.13 exceeds the standards listed below: 398.14 (1) an electric heat pump hot water heater with an energy 398.15 factor of at least 1.9; 398.16 (2) a natural gas water heater with an energy factor of at 398.17 least 0.62; and 398.18 (3) a natural gas furnace with an annual fuel utilization 398.19 efficiency greater than 92 percent. 398.20 (c) A photovoltaic device is exempt. For purposes of this 398.21 subdivision, "photovoltaic device" means a solid-state 398.22 electrical device, such as a solar module, that converts light 398.23 directly into direct current electricity of voltage-current 398.24 characteristics that are a function of the characteristics of 398.25 the light source and the materials in and design of the device. 398.26 A "solar module" is a photovoltaic device that produces a 398.27 specified power output under defined test conditions, usually 398.28 composed of groups of solar cells connected in series, in 398.29 parallel, or in series-parallel combinations. 398.30 (d) For purposes of this subdivision, "energy star label" 398.31 means the label granted to certain products that meet United 398.32 States Environmental Protection Agency and United States 398.33 Department of Energy criteria for energy efficiency. For 398.34 purposes of this subdivision, "energyguide label" means the 398.35 label that the United State Federal Trade Commissioner requires 398.36 manufacturers to apply to certain appliances under United States 399.1 Code, title 16, part 305. 399.2 [EFFECTIVE DATE.] This section is effective for sales and 399.3 purchases made after July 31, 2001, and before August 1, 2005. 399.4 Sec. 45. Minnesota Statutes 2000, section 297A.68, 399.5 subdivision 2, is amended to read: 399.6 Subd. 2. [MATERIALS CONSUMED IN INDUSTRIAL PRODUCTION.] 399.7 (a) Materials stored, used, or consumed in industrial production 399.8 of personal property intended to be sold ultimately at retail 399.9 are exempt, whether or not the item so used becomes an 399.10 ingredient or constituent part of the property produced. 399.11 Materials that qualify for this exemption include, but are not 399.12 limited to, the following: 399.13 (1) chemicals, including chemicals used for cleaning food 399.14 processing machinery and equipment; 399.15 (2) materials, including chemicals, fuels, and electricity 399.16 purchased by persons engaged in industrial production to treat 399.17 waste generated as a result of the production process; 399.18 (3) fuels, electricity, gas, and steam used or consumed in 399.19 the production process, except that electricity, gas, or steam 399.20 used for space heating, cooling, or lighting is exemptonlyif 399.21 (i) it is in excess of the average climate control or lighting 399.22 for the production area, and (ii) it is necessary to produce 399.23 that particularindustrialproduct; 399.24 (4) petroleum products and lubricants; 399.25 (5) packaging materials, including returnable containers 399.26 used in packaging food and beverage products; 399.27 (6) accessory tools, equipment, and other items that are 399.28 separate detachable units with an ordinary useful life of less 399.29 than 12 months used in producing a direct effect upon the 399.30 product; and 399.31 (7) the following materials, tools, and equipment used in 399.32 metalcasting: crucibles, thermocouple protection sheaths and 399.33 tubes, stalk tubes, refractory materials, molten metal filters 399.34 and filter boxes, degassing lances, and base blocks. 399.35 (b) This exemption does not include: 399.36 (1) machinery, equipment, implements, tools, accessories, 400.1 appliances, contrivances and furniture and fixtures, except 400.2 those listed in paragraph (a), clause (6); and 400.3 (2) petroleum and special fuels used in producing or 400.4 generating power for propelling ready-mixed concrete trucks on 400.5 the public highways of this state. 400.6 (c) Industrial production includes, but is not limited to, 400.7 research, development, design or production of any tangible 400.8 personal property, manufacturing, processing (other than by 400.9 restaurants and consumers) of agricultural products (whether 400.10 vegetable or animal), commercial fishing, refining, smelting, 400.11 reducing, brewing, distilling, printing, mining, quarrying, 400.12 lumbering, generating electricity and the production of road 400.13 building materials. Industrial production does not include 400.14 painting, cleaning, repairing or similar processing of property 400.15 except as part of the original manufacturing process. 400.16 [EFFECTIVE DATE.] This section is effective for sales and 4