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Minnesota Legislature

Office of the Revisor of Statutes

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.
  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 by March February 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, 
 16.22  paragraph (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 of 12 15 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 debt 
 17.23  service equalization revenue, a district must levy an amount not 
 17.24  to 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 fiscal 
 18.16  year 2001, $26,934,000 in fiscal year 2002, and $24,540,000 in 
 18.17  fiscal 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 of each year 2001, 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, except 
 21.12  that excluding 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, with that 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  year 2000 and thereafter 2002, 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 formula 
 22.10  allowance for fiscal year 1998 is $3,581.  The formula allowance 
 22.11  for fiscal year 1999 is $3,530.  The formula allowance for 
 22.12  fiscal year 2000 is $3,740.  The formula allowance for fiscal 
 22.13  year years 2001 and subsequent fiscal years 2002 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 the general 
 22.23  education revenue, excluding transition revenue and supplemental 
 22.24  revenue, and the general education levy, times (ii) the ratio of 
 22.25  the actual amount levied to the permitted levy; 
 22.26     (2) transition aid according to section 126C.10, 
 22.27  subdivision 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   the referendum revenue authority for that year divided by its 
 23.3   resident 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 fiscal 
 24.35  year 2001 and later. 
 24.36     (c) Referendum equalization revenue must not exceed a 
 25.1   district's total referendum revenue for that year the 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 
 25.25  for a referendum levied against the referendum market value of 
 25.26  all taxable property as defined in section 126C.01, subdivision 
 25.27  3, 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 a 
 25.35  referendum levied against the net tax capacity of all taxable 
 25.36  property equals the district's referendum equalization revenue 
 26.1   times the lesser of one or the ratio of the district's adjusted 
 26.2   net 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 subdivision 5 4 and its 
 27.16  equalized referendum aid and levy according to subdivisions 6 
 27.17  and 7 referendum 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  than 24 36 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 pupils 
 30.4   per grade or is eligible for elementary or secondary sparsity 
 30.5   revenue there 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 to maintain or increase its 
 30.16  average daily membership over the next five years or is eligible 
 30.17  for elementary or secondary sparsity revenue have 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; 
 30.30  and 
 30.31     (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, or 363 540 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, or 363 540 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 awarded and, 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 project and disbursed to the 
 32.31  districts on a reimbursement basis, but in no event less than 
 32.32  3-1/2 percent per year on the principal amount from time to time 
 32.33  unpaid. 
 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 
 33.36  a the 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 of ten 15 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.  [ADMINISTRATIVE GENERAL FUND.] An administrative 
 37.22  A general fund, consisting of an ad valorem tax levy, may not 
 37.23  exceed 0.02418 0.048 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 the administrative general fund as provided 
 37.29  in section 103D.911.  In addition to the annual administrative 
 37.30  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 a municipality of political 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 receiving moneys money 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:  large 
 43.4   urbanized 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 percentages shall must be:  for large 
 43.11  urbanized 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; or 
 54.22     (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 with that the taxable portion of the value determined 
 60.10  in the preceding assessment.  The amount of the increase entered 
 60.11  in the current assessment shall not exceed the greater of (1) 
 60.12  8.5 percent of the value in the preceding assessment, or (2) 15 
 60.13  percent of the difference between the current assessment and the 
 60.14  preceding 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 effect only 
 61.4   through assessment year 2001 2006 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 PLATTED ON OR AFTER BEFORE AUGUST 
 61.18  1, 1991 2001.] (a) All land platted on or after before August 1, 
 61.19  1991 2001, 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 home or, 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 home or, 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 land except as 
 68.15  provided 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 "farm 
 68.24  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 in section sections 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 farm land under 
 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 of the that 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 a 
 69.10  member of a limited liability company, or by a partner in a 
 69.11  partnership operating a family farm and leased to the family 
 69.12  farm corporation by the shareholder, or to a member of a, 
 69.13  limited liability company, or to the partnership by the partner 
 69.14  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), or 
 69.17  class 2a under section 273.13, subdivision 23, paragraph (a), if 
 69.18  the owner is actually residing on the property except as 
 69.19  provided in subdivision 14, paragraph (g), and is actually 
 69.20  engaged in farming the land on behalf of the that 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 
 69.31  CLASSIFICATION REDUCTIONS.] If the assessor has classified a 
 69.32  property as both homestead and nonhomestead, the greater of the 
 69.33  value attributable to the portion of the property classified as 
 69.34  class 1 or class 2a or the value of the first tier of net class 
 69.35  rates provided under section 273.13, subdivision 22, or 23, 
 69.36  paragraph (a), is entitled to assessment as a homestead under 
 70.1   section 273.13, subdivision 22 or 23.  The limitation in this 
 70.2   subdivision does not apply to buildings containing fewer than 
 70.3   four residential units or to a single rented or leased dwelling 
 70.4   unit located within or attached to a private garage or similar 
 70.5   structure owned by the owner of a homestead and located on the 
 70.6   premises 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 the owner's son 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 property is a 
 77.8   Minnesota resident, and if the owner's son or daughter person 
 77.9   who is actively farming the agricultural property under clause 
 77.10  (1), that person must also be a are Minnesota 
 77.11  resident residents; 
 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 owner does not live nor 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, and except that if the owner's son or 
 77.18  daughter is actively farming the agricultural property under 
 77.19  clause (1), that person must also live within the owner 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) the a shareholder, member, or partner of that entity is 
 80.2   actively farming the agricultural property; 
 80.3      (2) the that shareholder, member, or partner of who is 
 80.4   actively farming the agricultural property is a Minnesota 
 80.5   resident; 
 80.6      (3) neither the that shareholder, member, or partner, nor 
 80.7   the spouse of the that shareholder, member, or partner claims 
 80.8   another agricultural homestead in Minnesota; and 
 80.9      (4) the that 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 class 1 1a.  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 of 1.65 1.25 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 a net class rate using the rates for class 1 1a 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 percent of 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 percent 
 84.3   of market value.  The value of class 2a property over $115,000 
 84.4   of market value up to and including $600,000 market value has a 
 84.5   net class rate of 0.8 0.55 percent of market value.  The 
 84.6   remaining property over $600,000 market value has a class rate 
 84.7   of 1.20 one 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 of 1.20 one 
 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; and 
 85.34     (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 of 2.4 1.5 percent of the first tier of market value, 
 87.29  and 3.4 2.0 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) Personal All 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), structures 
 89.2   which are (i) located on property classified as class 3a, (ii) 
 89.3   constructed under an initial building permit issued after 
 89.4   January 2, 1996, (iii) located in a transit zone as defined 
 89.5   under section 473.3915, subdivision 3, (iv) located within the 
 89.6   boundaries of a school district, and (v) not primarily used for 
 89.7   retail or transient lodging purposes, shall have a class rate 
 89.8   equal to the lesser of 2.975 percent or the class rate of the 
 89.9   second tier of the commercial property rate under paragraph (a) 
 89.10  on any portion of the market value that does not qualify for the 
 89.11  first tier class rate under paragraph (a).  As used in item (v), 
 89.12  a structure is primarily used for retail or transient lodging 
 89.13  purposes if over 50 percent of its square footage is used for 
 89.14  those purposes.  A class rate equal to the lesser of 2.975 
 89.15  percent or the class rate of the second tier of the commercial 
 89.16  property class rate under paragraph (a) shall also apply to 
 89.17  improvements to existing structures that meet the requirements 
 89.18  of items (i) to (v) if the improvements are constructed under an 
 89.19  initial building permit issued after January 2, 1996, even if 
 89.20  the remainder of the structure was constructed prior to January 
 89.21  2, 1996.  For the purposes of this paragraph, a structure shall 
 89.22  be considered to be located in a transit zone if any portion of 
 89.23  the structure lies within the zone.  If any property once 
 89.24  eligible for treatment under this paragraph ceases to remain 
 89.25  eligible due to revisions in transit zone boundaries, the 
 89.26  property shall continue to receive treatment under this 
 89.27  paragraph for a period of three years. 
 89.28     (2) This clause applies to any structure qualifying for the 
 89.29  transit zone reduced class rate under clause (1) on January 2, 
 89.30  1999, or any structure meeting any of the qualification criteria 
 89.31  in item (i) and otherwise qualifying for the transit zone 
 89.32  reduced class rate under clause (1).  Such a structure continues 
 89.33  to receive the transit zone reduced class rate until the 
 89.34  occurrence of one of the events in item (ii).  Property 
 89.35  qualifying under item (i)(D), that is located outside of a city 
 89.36  of the first class, qualifies for the transit zone reduced class 
 90.1   rate as provided in that item.  Property qualifying under item 
 90.2   (i)(E) qualifies for the transit zone reduced class rate as 
 90.3   provided in that item. 
 90.4      (i) A structure qualifies for the rate in this clause if it 
 90.5   is: 
 90.6      (A) property for which a building permit was issued before 
 90.7   December 31, 1998; or 
 90.8      (B) property for which a building permit was issued before 
 90.9   June 30, 2001, if: 
 90.10     (I) at least 50 percent of the land on which the structure 
 90.11  is to be built has been acquired or is the subject of signed 
 90.12  purchase agreements or signed options as of March 15, 1998, by 
 90.13  the entity that proposes construction of the project or an 
 90.14  affiliate of the entity; 
 90.15     (II) signed agreements have been entered into with one 
 90.16  entity or with affiliated entities to lease for the account of 
 90.17  the entity or affiliated entities at least 50 percent of the 
 90.18  square footage of the structure or the owner of the structure 
 90.19  will occupy at least 50 percent of the square footage of the 
 90.20  structure; and 
 90.21     (III) one of the following requirements is met: 
 90.22     the project proposer has submitted the completed data 
 90.23  portions of an environmental assessment worksheet by December 
 90.24  31, 1998; or 
 90.25     a notice of determination of adequacy of an environmental 
 90.26  impact statement has been published by April 1, 1999; or 
 90.27     an alternative urban areawide review has been completed by 
 90.28  April 1, 1999; or 
 90.29     (C) property for which a building permit is issued before 
 90.30  July 30, 1999, if: 
 90.31     (I) at least 50 percent of the land on which the structure 
 90.32  is to be built has been acquired or is the subject of signed 
 90.33  purchase agreements as of March 31, 1998, by the entity that 
 90.34  proposes construction of the project or an affiliate of the 
 90.35  entity; 
 90.36     (II) a signed agreement has been entered into between the 
 91.1   building developer and a tenant to lease for its own account at 
 91.2   least 200,000 square feet of space in the building; 
 91.3      (III) a signed letter of intent is entered into by July 1, 
 91.4   1998, between the building developer and the tenant to lease the 
 91.5   space for its own account; and 
 91.6      (IV) the environmental review process required by state law 
 91.7   was commenced by December 31, 1998; 
 91.8      (D) property for which an irrevocable letter of credit with 
 91.9   a housing and redevelopment authority was signed before December 
 91.10  31, 1998.  The structure shall receive the transit zone reduced 
 91.11  class rate during construction and for the duration of time that 
 91.12  the original tenants remain in the building.  Any unoccupied net 
 91.13  leasable square footage that is not leased within 36 months 
 91.14  after the certificate of occupancy has been issued for the 
 91.15  building shall not be eligible to receive the reduced class 
 91.16  rate.  This reduced class rate applies only if a qualifying 
 91.17  entity continues to own the property; 
 91.18     (E) property, located in a city of the first class, and for 
 91.19  which the building permits for the excavation, the parking ramp, 
 91.20  and the office tower were issued prior to April 1, 1999, shall 
 91.21  receive the reduced class rate during construction and for the 
 91.22  first five assessment years immediately following its initial 
 91.23  occupancy provided that, when completed, at least 25 percent of 
 91.24  the net leasable square footage must be occupied by a qualifying 
 91.25  entity each year during this time period.  In order to receive 
 91.26  the reduced class rate on the structure in any subsequent 
 91.27  assessment years, at least 50 percent of the rentable square 
 91.28  footage must be occupied by a qualifying entity.  This reduced 
 91.29  class rate applies only if a qualifying entity continues to own 
 91.30  the property. 
 91.31     (ii) A structure specified by this clause, other than a 
 91.32  structure qualifying under clause (i)(D) or (E), shall continue 
 91.33  to receive the transit zone reduced class rate until the 
 91.34  occurrence of one of the following events: 
 91.35     (A) if the structure upon initial occupancy will be owner 
 91.36  occupied by the entity initially constructing the structure or 
 92.1   an affiliated entity, the structure receives the reduced class 
 92.2   rate until the structure ceases to be at least 50 percent 
 92.3   occupied by the entity or an affiliated entity, provided, if the 
 92.4   portion of the structure occupied by that entity or an affiliate 
 92.5   of the entity is less than 85 percent, the transit zone class 
 92.6   rate reduction for the portion of structure not so occupied 
 92.7   terminates upon the leasing of such space to any nonaffiliated 
 92.8   entity; or 
 92.9      (B) if the structure is leased by a single entity or 
 92.10  affiliated entity at the time of initial occupancy, the 
 92.11  structure shall receive the reduced class rate until the 
 92.12  structure ceases to be at least 50 percent occupied by the 
 92.13  entity or an affiliated entity, provided, if the portion of the 
 92.14  structure occupied by that entity or an affiliate of the entity 
 92.15  is less than 85 percent, the transit zone class rate reduction 
 92.16  for the portion of structure not so occupied shall terminate 
 92.17  upon the leasing of such space to any nonaffiliated entity; or 
 92.18     (C) if the structure meets the criteria in item (i)(C), the 
 92.19  structure shall receive the reduced class rate until the 
 92.20  expiration of the initial lease term of the applicable tenants. 
 92.21     Percentages occupied or leased shall be determined based 
 92.22  upon net leasable square footage in the structure.  The assessor 
 92.23  shall allocate the value of the structure in the same fashion as 
 92.24  provided in the general law for portions of any structure 
 92.25  receiving and not receiving the transit tax class reduction as a 
 92.26  result of this clause. 
 92.27     (3) For purposes of paragraph (c), "qualifying entity" 
 92.28  means the entity owning the property on September 1, 2000, or an 
 92.29  affiliate of an entity that owned the property on September 1, 
 92.30  2000. 
 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 property in a city with a population of 5,000 or 
 93.8   less, that is (1) located outside of the metropolitan area, as 
 93.9   defined in section 473.121, subdivision 2, or outside any county 
 93.10  contiguous to the metropolitan area, and (2) whose city boundary 
 93.11  is at least 15 miles from the boundary of any city with a 
 93.12  population greater than 5,000 has a class rate of 2.15 percent 
 93.13  of market value.  All other class 4a property has a class rate 
 93.14  of 2.4 percent of market value.  For purposes of this paragraph, 
 93.15  population has the same meaning given in section 477A.011, 
 93.16  subdivision 3 1.8 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 
 93.34  1.65 percent of market value 1.5 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 has a class rate of 1.2 percent on the 
 94.7   first $76,000 of market value and a class rate of 1.65 percent 
 94.8   of its market value that exceeds $76,000 the 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 of 1.65 1.5 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 in 
 97.35  paragraph (d), clause (4), has the same class rate as the rate 
 97.36  applicable to the first tier of class 4bb nonhomestead 
 98.1   residential 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 of one percent of market 
 98.19  value 0.9 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 of 3.4 2.0 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; homestead 
100.23  credit under section 273.13 homestead 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) education homestead credit and agricultural credits as 
101.12  provided in section 273.1382 273.1384; 
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.] For In calendar year 2002, and each calendar year 
101.35  thereafter, the manufactured home homestead and agricultural 
101.36  credit aid for each taxing jurisdiction equals the taxing 
102.1   jurisdiction's shall 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 the jurisdiction plus the net tax capacity adjustment 
102.6   for the jurisdiction county.  Payment will not be made to 
102.7   any taxing jurisdiction county 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 to the local governments counties 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 be 
102.19  certified to the commissioner of children, families, and 
102.20  learning 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 appropriated 
102.26  from the general fund to the commissioner of children, families, 
102.27  and learning a sum sufficient to pay the aids provided under 
102.28  this section for school districts, intermediate school 
102.29  districts, or any group of school districts levying as a single 
102.30  taxing 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, and 
102.33  special 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, EXCEPTIONS FOR BONDED DEBT; 
103.17  CERTIFICATION OF TAX RATE.] 
103.18     The A 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 November 15 1 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 the advertisement 
113.16  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; and 
119.25     (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 purposes 
123.9   defined in Minnesota Statutes 1991 Supplement, section 275.50, 
123.10  subdivision 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 purposes 
123.16  defined in Minnesota Statutes 1991 Supplement, section 275.50, 
123.17  subdivision 5, clause (n); 
123.18     (4) for counties only, the amount of levy needed to fund 
123.19  increased county costs associated with the welfare reform under 
123.20  Laws 1997, chapter 85, including increased administration and 
123.21  program costs of the income maintenance programs and also 
123.22  related support services as they relate directly to the welfare 
123.23  reform (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 state determined school tax 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   state determined school tax, 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, 
124.21  printed in upper case letters in boldface print:  "EVEN THOUGH 
124.22  THE STATE OF MINNESOTA DOES NOT RECEIVE ANY PROPERTY TAX 
124.23  REVENUES, IT SETS THE AMOUNT OF THE STATE-DETERMINED SCHOOL TAX 
124.24  LEVY.  THE STATE OF MINNESOTA REDUCES YOUR PROPERTY TAX BY 
124.25  PAYING 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  the education homestead credit credits under section 273.1382 
125.16  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); and 
128.1      (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, as 
131.20  defined in and section 473.121, subdivision 2, the commissioner 
131.21  of revenue may shall 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 of 
131.27  tax-forfeited lands located in a targeted neighborhood, as 
131.28  defined in section 469.201, subdivision 10, in a county in the 
131.29  metropolitan area, as defined in section 473.121, subdivision 2, 
131.30  the commissioner of revenue shall convey by deed in the name of 
131.31  the state any tract of tax-forfeited land held in trust in favor 
131.32  of the taxing districts, to a political subdivision that submits 
131.33  an application to the commissioner of revenue and the county 
131.34  board. 
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, 
132.16  however, the governing body of the governmental subdivision by 
132.17  resolution determines that some other public use should be made 
132.18  of the lands, and the change of use is approved by the county 
132.19  board and an application for change of use is made to, and 
132.20  approved by, the commissioner, the changed use may be made 
132.21  without conveying the lands back to the state and securing a new 
132.22  conveyance 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.] When If 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 other 
132.32  authorized public use as provided in this section, or abandons 
132.33  that use, the governing body of the subdivision shall may, 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 than five years 
134.2   from the date of conveyance for failure to put land to the use 
134.3   specified or from the date of abandonment of that use if the 
134.4   lands have been put to that use 60 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, and 20.5 
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 remaining 68 
136.24  percent of the money 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   of the White Earth an 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 the 1980 most 
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 the 1980 most 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 the 1980 most 
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 council may must 
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 council may must provide 
140.32  to a system under this section may not exceed the sum of be less 
140.33  than the sum of the amounts determined for each municipality 
140.34  comprising the system as follows:  
140.35     (a) the portion of the available local transit funds which 
140.36  the applicant proposes to use to subsidize the proposed service; 
141.1   and transit 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 identical 
141.10  proportional relationship to the amount under clause (a) as the 
141.11  total amount of funds used by the council to fund its transit 
141.12  operations bears to the total amount of taxes collected by the 
141.13  council 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.  
141.32     For purposes of this section, "available local transit 
141.33  funds" means 90 percent of the tax revenues which would accrue 
141.34  to the council from the tax it levies under section 473.446 in 
141.35  the applicant city or town or combination thereof.  
141.36     For purposes of this section, "tax revenues" in the city or 
142.1   town means the sum of the following: 
142.2      (1) the nondebt spread levy, which is the total of the 
142.3   taxes extended by application of the local tax rate for nondebt 
142.4   purposes on the taxable net tax capacity; 
142.5      (2) the portion of the fiscal disparity distribution levy 
142.6   under section 473F.08, subdivision 3, attributable to nondebt 
142.7   purposes; and 
142.8      (3) the portion of the homestead credit and agricultural 
142.9   credit aid and disparity reduction aid amounts under section 
142.10  273.1398, subdivisions 2 and 3, attributable to nondebt purposes.
142.11     Tax revenues do not include the state feathering 
142.12  reimbursement 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 tax for 
142.20  payment of the operating and capital expenditures for transit 
142.21  and other related activities and to provide for payment of 
142.22  obligations issued by the municipality for such purposes, 
142.23  provided that the tax must be sufficient to maintain the level 
142.24  of transit service provided in the municipality in the previous 
142.25  year capital 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 municipality 
142.30  may not exceed: 
142.31     (1) for the first transit levy year and any subsequent 
142.32  transit levy year immediately following a year in which the 
142.33  municipality declines to make the levy, the maximum available 
142.34  local transit funds for the municipality for taxes payable in 
142.35  the current year under section 473.446, calculated as if the 
142.36  percentage of transit tax revenues for the municipality were 88 
143.1   percent instead of 90 percent, and multiplied by the 
143.2   municipality's market value adjustment ratio; and 
143.3      (2) for taxes levied in any year that immediately follows a 
143.4   year in which the municipality elects to levy under this 
143.5   subdivision, the maximum transit tax that the municipality may 
143.6   have levied in the previous year under this subdivision, 
143.7   multiplied by the municipality's market value adjustment ratio. 
143.8      The commissioner of revenue shall certify the 
143.9   municipality's levy limitation under this subdivision to the 
143.10  municipality by June 1 of the levy year.  The tax must be 
143.11  accumulated and kept in a separate fund to be known as the 
143.12  "replacement transit fund." 
143.13     (c) To enable the municipality to receive revenues 
143.14  described in clauses (2) and (3) of the definition of "tax 
143.15  revenues" in subdivision 4, that would otherwise be lost if the 
143.16  municipality's transit tax levy was not treated as a successor 
143.17  levy to that made by the council under section 473.446: 
143.18     (1) in the first transit levy year and any subsequent 
143.19  transit levy year immediately following a year in which the 
143.20  municipality declined to make the levy, 88 percent of the 
143.21  council's nondebt spread levy for the current taxes payable year 
143.22  shall be treated as levied by the municipality, and not the 
143.23  council, for purposes of section 473F.08, subdivision 3, for the 
143.24  purpose of determining its local tax rate for the preceding 
143.25  year; and 
143.26     (2) 88 percent of the revenues described in clause (3) of 
143.27  the definition of "tax revenues" in subdivision 4, payable in 
143.28  the first transit levy year, or payable in any subsequent 
143.29  transit levy year following a year in which a municipality 
143.30  declined to make the levy, shall be permanently transferred from 
143.31  the council to the municipality.  If a municipality levies a tax 
143.32  under this subdivision in one year, but declines to levy in a 
143.33  subsequent year, the aid transferred under this clause shall be 
143.34  transferred back to the council. 
143.35     (d) Any transit taxes levied under this subdivision are not 
143.36  subject to, or counted towards, any limit hereafter imposed by 
144.1   law on the levy of taxes upon taxable property within any 
144.2   municipality unless the law specifically includes the transit 
144.3   tax. 
144.4      (e) This subdivision is consistent with the transit 
144.5   redesign plan.  Eligible municipalities opting to levy the 
144.6   transit tax operate 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" 
144.12  is any year in which the municipality elects to levy under this 
144.13  subdivision. 
144.14     (h) A municipality may not levy taxes under this 
144.15  subdivision in any year unless it notifies the council and the 
144.16  commissioner of revenue of its intent to levy before July 1 of 
144.17  the levy year.  The notification must include the amount of the 
144.18  municipality's proposed transit tax for the current levy year.  
144.19  After June 30 in the levy year, a municipality's decision to 
144.20  levy or not levy taxes under this subdivision is irrevocable for 
144.21  that 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 DISTRICT 
144.27  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 subdivision and subdivision 1b, 
144.30  the council shall levy each year upon all taxable property 
144.31  within the metropolitan transit taxing district area, defined in 
144.32  section 473.121, subdivision 2, a transit tax consisting of: 
144.33     (a) an amount which shall be used for payment of the 
144.34  expenses of operating transit and paratransit service and to 
144.35  provide for payment of obligations issued by the council under 
144.36  section 473.436, subdivision 6; 
145.1      (b) an additional amount, if any, the council determines to 
145.2   be necessary to provide for the full and timely payment of its 
145.3   certificates of indebtedness and other obligations outstanding 
145.4   on July 1, 1985, to which property taxes under this section have 
145.5   been pledged; and 
145.6      (c) an additional amount necessary 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 
145.13     The property tax levied by the council for general purposes 
145.14  under paragraph (a) must not exceed the following amount for the 
145.15  years specified: 
145.16     (1) for taxes payable in 1995, the council's property tax 
145.17  levy limitation for general transit purposes is equal to the 
145.18  former regional transit board's property tax levy limitation for 
145.19  general transit purposes under this subdivision, for taxes 
145.20  payable in 1994, multiplied by an index for market valuation 
145.21  changes equal to the total market valuation of all taxable 
145.22  property located within the metropolitan transit taxing district 
145.23  for the current taxes payable year divided by the total market 
145.24  valuation of all taxable property located within the 
145.25  metropolitan transit taxing district for the previous taxes 
145.26  payable year; and 
145.27     (2) for taxes payable in 1996 and subsequent years, the 
145.28  product of (i) the council's property tax levy limitation for 
145.29  general transit purposes for the previous year determined under 
145.30  this subdivision before reduction by the amount levied by any 
145.31  municipality in the previous year under section 473.388, 
145.32  subdivision 7, multiplied by (ii) an index for market valuation 
145.33  changes equal to the total market valuation of all taxable 
145.34  property located within the metropolitan transit taxing district 
145.35  for the current taxes payable year divided by the total market 
145.36  valuation of all taxable property located within the 
146.1   metropolitan transit taxing district for the previous taxes 
146.2   payable year, minus the amount levied by any municipality in the 
146.3   current levy year under section 473.388, subdivision 7. 
146.4      The portion of the property tax levy for transit district 
146.5   operating purposes attributable to a municipality that has 
146.6   exercised a local levy option under section 473.388, subdivision 
146.7   7, is the amount as determined under subdivision 1b.  The 
146.8   portion of the property tax levy for transit district operating 
146.9   purposes attributable to the remaining municipalities within the 
146.10  transit district is found by subtracting the portions 
146.11  attributable to the municipalities that have exercised a local 
146.12  levy option under section 473.388, subdivision 7. 
146.13     For the taxes payable year 1995, the index for market 
146.14  valuation changes shall be multiplied by an amount equal to the 
146.15  sum of the regional transit board's property tax levy limitation 
146.16  for the taxes payable year 1994 and $160,665.  The $160,665 
146.17  increase shall be a permanent adjustment to the levy limit base 
146.18  used in determining the regional transit board's property tax 
146.19  levy limitation for general purposes for subsequent taxes 
146.20  payable years. 
146.21     For the purpose of determining the council's property tax 
146.22  levy limitation for general transit purposes under this 
146.23  subdivision, "total market valuation" means the total market 
146.24  valuation of all taxable property within the metropolitan 
146.25  transit taxing district without valuation adjustments for fiscal 
146.26  disparities (chapter 473F), tax increment financing (sections 
146.27  469.174 to 469.179), and high voltage transmission lines 
146.28  (section 273.425). 
146.29     The county auditor shall reduce the tax levied pursuant to 
146.30  this section and section 473.388 on all property within 
146.31  statutory and home rule charter cities and towns that receive 
146.32  full-peak service and limited off-peak service by an amount 
146.33  equal to the tax levy that would be produced by applying a rate 
146.34  of 0.510 percent of net tax capacity on the property.  The 
146.35  county auditor shall reduce the tax levied pursuant to this 
146.36  section and section 473.388 on all property within statutory and 
147.1   home rule charter cities and towns that receive limited peak 
147.2   service by an amount equal to the tax levy that would be 
147.3   produced by applying a rate of 0.765 percent of net tax capacity 
147.4   on the property.  The amounts so computed by the county auditor 
147.5   shall be submitted to the commissioner of revenue as part of the 
147.6   abstracts of tax lists required to be filed with the 
147.7   commissioner under section 275.29.  Any prior year adjustments 
147.8   shall also be certified in the abstracts of tax lists.  The 
147.9   commissioner shall review the certifications to determine their 
147.10  accuracy and may make changes in the certification as necessary 
147.11  or return a certification to the county auditor for 
147.12  corrections.  The commissioner shall pay to the council and to 
147.13  the municipalities levying under section 473.388, subdivision 7, 
147.14  the amounts certified by the county auditors on the dates 
147.15  provided in section 273.1398, apportioned between the council 
147.16  and the municipality in the same proportion as the total transit 
147.17  levy is apportioned within the municipality.  There is annually 
147.18  appropriated from the general fund in the state treasury to the 
147.19  department of revenue the amounts necessary to make these 
147.20  payments.  
147.21     For the purposes of this subdivision, "full-peak and 
147.22  limited off-peak service" means peak period regular route 
147.23  service, plus weekday midday regular route service at intervals 
147.24  longer than 60 minutes on the route with the greatest frequency; 
147.25  and "limited peak period service" means peak period regular 
147.26  route service only.  
147.27     For the purposes of property taxes payable in the following 
147.28  year, the council shall annually determine which cities and 
147.29  towns qualify for the 0.510 percent or 0.765 percent tax 
147.30  capacity rate reduction and shall certify this list to the 
147.31  county auditor of the county wherein such cities and towns are 
147.32  located on or before September 15.  No changes may be made to 
147.33  the 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); 
148.30  and 
148.31     (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.] In 1994 each town that had levied 
155.24  for taxes payable in the prior year a local tax rate of at least 
155.25  .008 shall receive a distribution equal to the amount it 
155.26  received in 1993 under this section before any nonpermanent 
155.27  reductions made under section 477A.0132.  In 1995 each town that 
155.28  had levied for taxes payable in 1993 a local tax rate of at 
155.29  least .008 shall receive a distribution equal to 102 percent of 
155.30  the amount it received in 1994 under this section before any 
155.31  increases or reductions under sections 16A.711, subdivision 5, 
155.32  and 477A.0132.  In 1996 and subsequent years each town that had 
155.33  levied for taxes payable in 1993 a local tax rate of at least 
155.34  .008 shall receive a distribution equal to the amount it 
155.35  received in the previous year under this section, adjusted for 
155.36  inflation as provided under section 477A.03, subdivision 3 2002, 
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 
156.7   1994 2002 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 cities 
156.33  which in 1992 or 1993 transferred an amount from governmental 
156.34  funds to their sewer and water fund in an amount greater than 
156.35  their net levy for taxes payable in the year in which the 
156.36  transfer occurred, the total aid shall not exceed the sum of (1) 
157.1   20 percent of the city's net levy for the year prior to the aid 
157.2   distribution plus (2) its total aid in the previous year before 
157.3   any increases or decreases under sections 16A.711, subdivision 
157.4   5, 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 in 1999 2002 under section 
157.27  477A.013, subdivision 9, are limited to $380,565,489.  For aids 
157.28  payable in 2000, the total aids paid under section 477A.013, 
157.29  subdivision 9, are the amounts certified to be paid in the 
157.30  previous year, adjusted for inflation as provided in subdivision 
157.31  3, and increased by the amount necessary to effectuate Laws 
157.32  1999, chapter 243, article 5, section 48, paragraph 
157.33  (b) $140,000,000.  For aids payable in 2001 through 2003, 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.] 
162.33     Minnesota Statutes 1990, sections 124A.02, subdivision 24; 
162.34  124A.23, subdivisions 2 and 3; 124A.26, subdivisions 2 and 3; 
162.35  124A.27; 124A.28; and 124A.29, subdivision 2; and Minnesota 
162.36  Statutes 1991 Supplement, sections 124A.02, subdivisions 16 and 
163.1   23; 124A.03, subdivisions 1b, 1c, 1d, 1e, 1f, 1g, 1h, and 1i; 
163.2   124A.04; 124A.22, subdivisions 2, 3, 4, 4a, 4b, 8, and 9; 
163.3   124A.23, subdivisions 1, 4, and 5; 124A.24; 124A.26, subdivision 
163.4   1; and 124A.29, subdivision 1, are repealed effective June 30, 
163.5   2004; 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 the first $600,000 of 
170.19  market 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 1,029     1.2 percent        18 percent   $440
172.16      $0 to 1,189     1.0 percent        15 percent   $1,450
172.17   1,030 to 2,059     1.3 percent        18 percent   $440
172.18   1,190 to 2,379     1.1 percent        15 percent   $1,450
172.19   2,060 to 3,099     1.4 percent        20 percent   $440
172.20   2,380 to 3,589     1.2 percent        15 percent   $1,410
172.21   3,100 to 4,129     1.6 percent        20 percent   $440
172.22   3,590 to 4,789     1.3 percent        20 percent   $1,410
172.23   4,130 to 5,159     1.7 percent        20 percent   $440
172.24   4,790 to 5,979     1.4 percent        20 percent   $1,360
172.25   5,160 to 7,229     1.9 percent        25 percent   $440
172.26   5,980 to 8,369     1.5 percent        20 percent   $1,360
172.27   7,230 to 8,259     2.1 percent        25 percent   $440
172.28   8,370 to 9,559     1.6 percent        25 percent   $1,310
172.29   8,260 to 9,289     2.2 percent        25 percent   $440
172.30   9,560 to 10,759    1.7 percent        25 percent   $1,310
172.31   9,290 to 10,319    2.3 percent        30 percent   $440
172.32  10,760 to 11,949    1.8 percent        25 percent   $1,260
172.33  10,320 to 11,349    2.4 percent        30 percent   $440
172.34  11,950 to 13,139    1.9 percent        30 percent   $1,260
172.35  11,350 to 12,389    2.5 percent        30 percent   $440
172.36  13,140 to 14,349    2.0 percent        30 percent   $1,210
172.37  12,390 to 14,449    2.6 percent        30 percent   $440
172.38  14,350 to 16,739    2.1 percent        30 percent   $1,210
172.39  14,450 to 15,479    2.8 percent        35 percent   $440
172.40  16,740 to 17,929    2.2 percent        35 percent   $1,160
172.41  15,480 to 16,509    3.0 percent        35 percent   $440
172.42  17,930 to 19,119    2.3 percent        35 percent   $1,160
172.43  16,510 to 17,549    3.2 percent        40 percent   $440
172.44  19,120 to 20,319    2.4 percent        35 percent   $1,110
172.45  17,550 to 21,669    3.3 percent        40 percent   $440
172.46  20,320 to 25,099    2.5 percent        40 percent   $1,110
172.47  21,670 to 24,769    3.4 percent        45 percent   $440
172.48  25,100 to 28,679    2.6 percent        40 percent   $1,070
172.49  24,770 to 30,959    3.5 percent        45 percent   $440
172.50  28,680 to 35,849    2.7 percent        40 percent   $1,070
172.51  30,960 to 36,119    3.5 percent        45 percent   $440
172.52  35,850 to 41,819    2.8 percent        45 percent   $970
172.53  36,120 to 41,279    3.7 percent        50 percent   $440
172.54  41,820 to 47,799    3.0 percent        45 percent   $970
172.55  41,280 to 58,829    4.0 percent        50 percent   $440
172.56  47,800 to 53,779    3.2 percent        45 percent   $870
172.57  58,830 to 59,859    4.0 percent        50 percent   $310
172.58  53,780 to 59,749    3.5 percent        50 percent   $780
172.59  59,860 to 60,889    4.0 percent        50 percent   $210
172.60  59,750 to 65,729    4.0 percent        50 percent   $680
173.1   60,890 to 61,929    4.0 percent        50 percent   $100 
173.2   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 3,099
173.26        0 to 3,589     1.0 percent       5 percent    $1,030 $1,190
173.27    3,100 to 4,129
173.28    3,590 to 4,779     1.0 percent      10 percent    $1,030 $1,190
173.29    4,130 to 5,159
173.30    4,780 to 5,969     1.1 percent      10 percent    $1,030 $1,190
173.31    5,160 to 7,229
173.32    5,970 to 8,369     1.2 percent      10 percent    $1,030 $1,190
173.33    7,230 to 9,289
173.34    8,370 to 10,759    1.3 percent      15 percent    $1,030 $1,190
173.35    9,290 to 10,319
173.36   10,760 to 11,949    1.4 percent      15 percent    $1,030 $1,190
173.37   10,320 to 11,349
173.38   11,950 to 13,139    1.4 percent      20 percent    $1,030 $1,190
173.39   11,350 to 13,419
173.40   13,140 to 15,539    1.5 percent      20 percent    $1,030 $1,190
173.41   13,420 to 14,449
173.42   15,540 to 16,729    1.6 percent      20 percent    $1,030 $1,190
173.43   14,450 to 15,479
173.44   16,730 to 17,919    1.7 percent      25 percent    $1,030 $1,190
173.45   15,480 to 17,549
173.46   17,920 to 20,319    1.8 percent      25 percent    $1,030 $1,190
173.47   17,550 to 18,579
173.48   20,320 to 21,509    1.9 percent      30 percent    $1,030 $1,190
173.49   18,580 to 19,609
173.50   21,510 to 22,699    2.0 percent      30 percent    $1,030 $1,190
173.51   19,610 to 20,639
173.52   22,700 to 23,899    2.2 percent      30 percent    $1,030 $1,190
173.53   20,640 to 21,669
173.54   23,900 to 25,089    2.4 percent      30 percent    $1,030 $1,190
174.1    21,670 to 22,709
174.2    25,090 to 26,289    2.6 percent      35 percent    $1,030 $1,190
174.3    22,710 to 23,739
174.4    26,290 to 27,489    2.7 percent      35 percent    $1,030 $1,190
174.5    23,740 to 24,769
174.6    27,490 to 28,679    2.8 percent      35 percent    $1,030 $1,190
174.7    24,770 to 25,799
174.8    28,680 to 29,869    2.9 percent      40 percent    $1,030 $1,190
174.9    25,800 to 26,839
174.10   29,870 to 31,079    3.0 percent      40 percent    $1,030 $1,190
174.11   26,840 to 27,869
174.12   31,080 to 32,269    3.1 percent      40 percent    $1,030 $1,190
174.13   27,870 to 28,899
174.14   32,270 to 33,459    3.2 percent      40 percent    $1,030 $1,190
174.15   28,900 to 29,929
174.16   33,460 to 34,649    3.3 percent      45 percent    $  930 $1,080
174.17   29,930 to 30,959
174.18   34,650 to 35,849    3.4 percent      45 percent    $  830 $  960
174.19   30,960 to 31,999
174.20   35,850 to 37,049    3.5 percent      45 percent    $  720 $  830
174.21   32,000 to 33,029
174.22   37,050 to 38,239    3.5 percent      50 percent    $  620 $  720
174.23   33,030 to 34,059
174.24   38,240 to 39,439    3.5 percent      50 percent    $  520 $  600
174.25   34,060 to 35,089
174.26   39,440 to 40,629    3.5 percent      50 percent    $  310 $  360
174.27   35,090 to 36,119
174.28   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 
174.39  net property 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's net 
174.45  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 terms 
175.5   have the meanings given: 
175.6      (1) "Net property taxes payable" means property taxes 
175.7   payable minus refund amounts for which the claimant qualifies 
175.8   pursuant to subdivision 2 and this subdivision.  
175.9      (2) "gross property taxes payable" means net property 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 year 1996 2002, 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 section 290.06, subdivision 2d 1f 
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, 1994 2000, 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 Laws 
177.2   1999, 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, 1999 of 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.101 or until June 30, 
179.31  2001, 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 unresolved on June 30, 2001, or 
180.2   upon agreement with the state court administrator on a contract 
180.3   for a new unit established under section 179A.101, whichever is 
180.4   earlier.  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, 2001 of 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, 2001 of 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 effective date of sections 3 to 15 dates 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 employees of judicial districts that 
181.6   are 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, 1999 of 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, 
181.19  1999 of 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 judicial 
181.24  district, the county's share of the costs assumed in the 
181.25  judicial districts specified under Laws 1999, chapter 216, 
181.26  article 7, section 480.183, subdivision 1, during the succeeding 
181.27  fiscal year beginning 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 year 1998 preceding 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 year 2000 in 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 year 2001 after 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, 
185.33  section 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   and shall be credited as follows: 
186.2      (1) In the fiscal year ending June 30, 1991, the first 
186.3   $275,000 in money received by the state treasurer after June 4, 
186.4   1991, must be credited to the transportation services fund, and 
186.5   the remainder in the fiscal year credited to the trunk highway 
186.6   fund. 
186.7      (2) In fiscal year 1992, the first $215,000 in money 
186.8   received by the state treasurer in the fiscal year must be 
186.9   credited to the transportation services fund, and the remainder 
186.10  credited to the trunk highway fund. 
186.11     (3) In fiscal year 1993 and subsequent years, the entire 
186.12  amount received by the state treasurer must 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 Laws 
187.2   1999, 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, chapter 
187.28  216, 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, 
195.21  section 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, 
196.17  section 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 revenue 
198.23  recognized pursuant to section 477A.15 in 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; 
199.12  298.24 to 298.28, except an amount distributed under section 
199.13  298.28, 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 to 
199.16  section 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 sections or 
199.23  revenue recognized pursuant to section 477A.15 in 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 sections or revenue 
199.27  recognized pursuant to section 477A.15 in 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 reduce 
199.31  the levy made by the district pursuant to section 126C.13, to an 
199.32  amount less than the amount raised by a levy of a net tax rate 
199.33  of 6.82 percent times the adjusted net tax capacity for taxes 
199.34  payable in 1990 and thereafter of that district for the 
199.35  preceding 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 in clause paragraph (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 in clause paragraph (c).  
202.25     (c) The maximum reduction of the tax is $315.10 on property 
202.26  described in clause paragraph (a) and $289.80 on property 
202.27  described in clause paragraph (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 
203.26  clause (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 in clause 
204.2   (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 county by May 15 and 
204.28  October 15 annually at 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, subdivisions 2 3 
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   released only on the written authorization of by 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.  Each 
212.10  producer's joint committee may authorize release of The 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 the 
212.21  representatives 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 by a joint committee the 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 in 1999 2001, 
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 in 2000 2004 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, is was 
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 receive the 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; times 
217.12     (ii) the lesser of: 
217.13     (A) one, or 
217.14     (B) the ratio of the sum of the amount certified pursuant 
217.15  to section 126C.17, subdivision 6, in the previous year, plus 
217.16  the amount certified pursuant to section 126C.17, subdivision 8, 
217.17  in the previous year, plus the referendum aid according to 
217.18  section 126C.17, subdivision 7, for the current year, plus an 
217.19  amount equal to the reduction under section 126C.17, subdivision 
217.20  12, to the product of 1.8 percent times the district's taxable 
217.21  net 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) In 1999, 38.81 2002 
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) 
219.27  15.4 30.1 cents per ton for distributions in 1999, 2000, 2001, 
219.28  and 2002 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, the amounts amount determined under subdivisions 6, 
220.10  paragraph (a), and subdivision 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, shall must 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 being herein 
220.33  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, 
222.33  2002 2003, 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, 2002 
223.13  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 grants or loans to 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 grants and loans to 
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; or 
224.3      (2) pit or plant repairs, expansions, or modernizations 
224.4   other than for a value added iron products plant that extend the 
224.5   life 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, and 
225.5   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 tax equal up 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 taxes or, 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 of revenue health 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 of revenue health each calendar quarter.  The first 
230.23  quarterly 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 of revenue health 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 and disbar bar 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, 
236.10  within five years after the date of assessment of the 
236.11  tax, 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 years 1991 2001 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 section 290.06, subdivision 2d, for 
238.36  the expansion of the tax rate brackets 1f 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; and 
240.3      (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 
240.15  unsolicited data, 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 
241.6   classifications otherwise applicable under any other laws become 
241.7   effective data 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 air or, 
241.32  water, or land pollution shall file an application with the 
241.33  commissioner of revenue.  The equipment or device shall meet 
241.34  standards, rules, or criteria prescribed by the Minnesota 
241.35  pollution control agency, and must be installed or operated in 
241.36  accordance 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 information or and 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 equipment or, device, or real property shall 
242.13  continue to be exempt from taxation as long as the permit order 
242.14  issued by the Minnesota pollution control agency commissioner 
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, within 30 90 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 of inefficiency or neglect 
243.24  of duty malfeasance, 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 exceeding 30 90 days during which the county board must 
244.8   appoint a county assessor.  Such 30-day 90-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 471.59 and approved by the commissioner of 
244.29  revenue, 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, 
244.32  whether 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 commissioner prior to adjustment under 
245.31  subdivision 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 data obtained 
246.22  from for agricultural lands located outside the seven 
246.23  metropolitan counties but within the region used for computing 
246.24  the range of values under section 273.11, subdivision 10.  The 
246.25  sales shall have having similar soil types, number of degree 
246.26  days, and other similar agricultural characteristics as 
246.27  contained 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 
247.2   assessed or reclassified included 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 of review or appeal 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) the new classification 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 of review or 
247.22  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, the 
247.25  notice shall be sent by ordinary mail at least ten days prior to 
247.26  the date on which the board of review has adjourned The 
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 of review appeal 
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.  
248.31     If in any county, at least 25 percent of the total net tax 
248.32  capacity of a city or town is noncommercial seasonal residential 
248.33  recreational property classified under section 273.13, 
248.34  subdivision 25, the county must hold two countywide 
248.35  informational meetings on Saturdays.  The meetings will allow 
248.36  noncommercial seasonal residential recreational taxpayers to 
249.1   discuss their property valuation with the appropriate assessment 
249.2   staff.  These Saturday informational meetings must be scheduled 
249.3   to allow the owner of the noncommercial seasonal residential 
249.4   recreational property the opportunity to attend one of the 
249.5   meetings prior to the scheduled board of review for their city 
249.6   or town.  The Saturday meeting dates must be contained on the 
249.7   notice 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 board of review has 
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 board of review may 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 board of review without 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 board of review meeting.  
251.1      (f) The local board of review or the board of equalization 
251.2   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 board of review file written objections to an 
251.10  assessment or classification with the county assessor.  The 
251.11  objections must be presented to the board of review at 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 property under either 
253.30  chapter 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 tax of 23 cents is imposed upon each $100, or fraction 
254.33  thereof, 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 the mortgagee 
255.1   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 of bonds or other obligations 
255.21  issued by the St. Paul port authority under its common revenue 
255.22  bond fund if each of the following conditions are met. 
255.23     (1) The bonds or other obligations are secured by a 
255.24  mortgage on property, title to which is held by the political 
255.25  subdivision. 
255.26     (2) The mortgage is recorded after May 19, 1993. 
255.27     (3) The bonds or other obligations are either (i)  
255.28  outstanding on May 19, 1993, or (ii) issued in exchange for or 
255.29  to otherwise refund bonds or other obligations the original 
255.30  series of which were issued before May 19, 1993 a 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) Mortgages taken in good faith by persons or granted 
255.35  corporations whose property is expressly exempted from taxation 
255.36  by section 272.02, subdivisions 2 to 8, or mortgagees that are 
256.1   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  tax that has been erroneously paid, or a person having paid a 
256.30  mortgage registry tax amount may seek a refund of the tax, or 
256.31  other 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 made 
259.23  by a person engaged in the business of land sales or 
259.24  construction of buildings and other improvements, or by an 
259.25  affiliated person if 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 the amount paid 
259.31  for the land price 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, the 
259.34  commissioner shall adopt rules that define the phrases "engaged 
259.35  in the business of land sales or construction of buildings and 
259.36  other improvements" and "affiliated person" as those phrases are 
260.1   used 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 fraction 
261.7   of 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 may refund in whole or in part any 
261.16  tax which has been erroneously paid and may allow for or redeem 
261.17  such of the stamps, issued under the authority of sections 
261.18  287.20 to 287.31 as may that 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 order Redemption 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 a 
261.24  refund 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 the 
261.35  payment.  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 section 290.31 290.311, 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 sales and tax 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 shall adjust the threshold amount by the percentage 
268.5   determined under section 290.06, subdivision 2d, for the taxable 
268.6   year. 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 shall adjust the 
269.28  earned income and threshold amounts by the percentage determined 
269.29  under 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 is as shown in 
270.28  the table in this subdivision, based on the couple's taxable 
270.29  income for the tax year and on the earned income of the 
270.30  lesser-earning spouse the 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. 
271.3                                Credit For          Credit For
271.4     Earned Income of           Taxable Income      Taxable Income
271.5     Lesser Earning Spouse      $25,680-$102,029    $102,030-over
271.6     $14,250 - $15,249          $7                  $0    
271.7     $15,250 - $16,249          $24                 $0    
271.8     $16,250 - $17,249          $41                 $0    
271.9     $17,250 - $18,249          $58                 $0    
271.10    $18,250 - $19,249          $75                 $0    
271.11    $19,250 - $20,249          $92                 $0  
271.12    $20,250 - $21,249          $109                $0  
271.13    $21,250 - $22,249          $126                $0 
271.14    $22,250 - $23,249          $143                $0
271.15    $23,250 - $24,249          $160                $0 
271.16    $24,250 - $25,249          $161                $0   
271.17    $25,250 - $26,249          $161                $0  
271.18    $26,250 - $27,249          $161                $0   
271.19    $27,250 - $28,249          $161                $0
271.20    $28,250 - $29,249          $161                $0
271.21    $29,250 - $30,249          $161                $0
271.22    $30,250 - $31,249          $161                $0
271.23    $31,250 - $32,249          $161                $6
271.24    $32,250 - $33,249          $161                $14
271.25    $33,250 - $34,249          $161                $22
271.26    $34,250 - $35,249          $161                $30
271.27    $35,250 - $36,249          $161                $38
271.28    $36,250 - $37,249          $161                $46
271.29    $37,250 - $38,249          $161                $54
271.30    $38,250 - $39,249          $161                $62
271.31    $39,250 - $40,249          $161                $70
271.32    $40,250 - $41,249          $161                $78
271.33    $41,250 - $42,249          $161                $86
271.34    $42,250 - $43,249          $161                $94
271.35    $43,250 - $44,249          $161                $102
271.36    $44,250 - $45,249          $161                $110
272.1     $45,250 - $46,249          $161                $118
272.2     $46,250 - $47,249          $161                $126
272.3     $47,250 - $48,249          $161                $134
272.4     $48,250 - $49,249          $161                $142
272.5     $49,250 - $50,249          $161                $150
272.6     $50,250 - $51,249          $161                $158
272.7     $51,250 - $52,249          $161                $166
272.8     $52,250 - $53,249          $161                $174
272.9     $53,250 - $54,249          $161                $182
272.10    $54,250 - $55,249          $161                $190
272.11    $55,250 - $56,249          $161                $198
272.12    $56,250 - $57,249          $161                $206
272.13    $57,250 - $58,249          $161                $214
272.14    $58,250 - $59,249          $161                $222
272.15    $59,250 - $60,249          $161                $230
272.16    $60,250 - $61,249          $161                $238
272.17    $61,250 - $62,249          $161                $246
272.18    $62,250 - $63,249          $161                $254
272.19    $63,250 - $64,249          $161                $262
272.20    $64,250 and over           $161                $268
272.21     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, 2000 2002, 
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 expire 180 
275.22  days one 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 of the claimant or spouse of the 
278.30  claimant payable to the department of revenue any 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 who shall buy buys and use uses 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 who shall have paid 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.  
280.25     By July 1, 1998, the commissioner shall adopt rules that 
280.26  determine the rates and percentages necessary to develop 
280.27  formulas 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.  [GENERAL RULE RULES.] (a) The commissioner 
282.24  shall make determinations, corrections, and assessments, 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 FOR REPAYMENT CERTAIN REFUNDS.] No 
283.8   repayment Notwithstanding 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 invoice shall be are filed with 
283.11  the commissioner within one year from the date of purchase.  The 
283.12  postmark on the envelope in which a written claim is mailed 
283.13  shall 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 licensed physician health 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 TAX TO COMMISSIONER.] If the an 
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 tax to the commissioner of revenue prior to 
288.7   registering or licensing the aircraft in this state.  The 
288.8   commissioner of revenue shall issue a certificate stating that 
288.9   the sales and use tax in respect to the transaction has been 
288.10  paid. 
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 REFUNDS OR CREDITS.] An erroneous 
290.27  refund or credit is considered an underpayment of tax on the 
290.28  date made.  An assessment of a deficiency arising out of an 
290.29  erroneous refund or credit must be made within 3-1/2 years from 
290.30  the date prescribed for filing the return, plus any extension of 
290.31  time granted for filing the return, but only if filed within the 
290.32  extended time, or two years from the time the tax is paid in 
290.33  full, whichever period expires later two 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 REFUNDS OR CREDITS.] An erroneous 
291.6   refund or credit is considered an underpayment of tax on the 
291.7   date made.  An assessment of a deficiency arising out of an 
291.8   erroneous refund or credit must be made within 3-1/2 years from 
291.9   the date prescribed for filing the return, plus any extension of 
291.10  time granted for filing the return, but only if filed within the 
291.11  extended time, or two years from the time the tax is paid in 
291.12  full, whichever period expires later two 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, 
291.25  or two years from the time the tax is paid in full, whichever 
291.26  period expires later.  Claimants under this section are subject 
291.27  to the notice requirements of section 289A.38, subdivision 7 or 
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 equals one cent 
293.22  for each $100 or fraction .0001 of the principal. 
293.23     (c) The rate of the deed tax equals five cents for each 
293.24  $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 equals one cent 
293.33  for each $100 or fraction .0001 of the principal. 
293.34     (c) The rate of the deed tax equals five cents for each 
293.35  $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 sections 270.31 to 270.39 
296.13  inclusive 290C.01 to 290C.11, the Minnesota Tree Growth Tax Law 
296.14  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 the Tree 
297.17  Growth Tax Law Sustainable 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 inclusion in the Tree Growth 
297.27  Tax Law under the provisions of the Sustainable Forest Incentive 
297.28  Act; provided that when such lands are included in the Tree 
297.29  Growth Tax Law Sustainable 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 in accordance with the 
297.32  provisions of section 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 Law from the date of 
298.4   the 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  equipment used purchased 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 recovery 
311.14  system 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, 
312.14  holocaust victims' settlement payments for any injury incurred 
312.15  as a result of the holocaust, if received by an individual who 
312.16  was persecuted for racial or religious reasons by Nazi Germany 
312.17  or any other Axis regime or an heir of such a person; and 
312.18     (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 for 
314.1   federal income tax purposes under section 170 of the Internal 
314.2   Revenue 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 income 
316.29  attributable to the credits provided in Minnesota Statutes 1986, 
316.30  section 273.1314, subdivision 9, or Minnesota Statutes, section 
316.31  469.171, 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 after 
318.19  December 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; and 
318.28     (iii) the charitable contribution deduction under section 
318.29  290.21, 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 company that is domiciled in a state or 
320.28  country other than Minnesota that imposes retaliatory taxes, 
320.29  fines, deposits, penalties, licenses, or fees and that does not 
320.30  grant, on a reciprocal basis, exemption from such retaliatory 
320.31  taxes to insurance companies or their agents domiciled in 
320.32  Minnesota.  "Retaliatory taxes" means taxes imposed on insurance 
320.33  companies organized in another state or country that result from 
320.34  the fact that an insurance company organized in the taxing 
320.35  jurisdiction and doing business in the other jurisdiction is 
320.36  subject to taxes, fines, deposits, penalties, licenses, or fees 
321.1   in an amount exceeding that imposed by the taxing jurisdiction 
321.2   upon an insurance company organized in the other state or 
321.3   country and doing business to the same extent in the taxing 
321.4   jurisdiction; and 
321.5      (d) town and farmers' mutual insurance companies and mutual 
321.6   property and casualty insurance companies, other than those (1) 
321.7   writing life insurance or (2) whose total assets on December 31, 
321.8   1989, 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 state or 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 state or province or territory of Canada if 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 state or province or territory of Canada that 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 state or province or territory of Canada by 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 state or 
322.8   province or territory of Canada on the gross income earned 
322.9   within the other state or province or territory of Canada 
322.10  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 state or province 
322.17  or territory of Canada on 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 state or province or 
322.28  territory of Canada on 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 state or province or territory of 
322.34  Canada.  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 Rico or and 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), or by a 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 equipment used purchased 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, 
329.29  clauses clause (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  income less the credit allowed under section 290.35, subdivision 
330.28  3; 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 section 290.35 or 290.36 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 section 290.35 or 290.36 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 290.05 other 
332.6   than insurance companies exempt under subdivision 1, paragraph 
332.7   (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 tax consisting of the sum 
332.27  of the taxes determined under clauses (1) and (2):  
332.28     (1) a tax computed 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 manner as if this section did not apply; 
332.32  and 
332.33     (2) a tax computed on the income of the life insurance 
332.34  department determined without regard to any items of gross 
332.35  income or deductions not properly allocable to the department 
332.36  computed in the manner provided in section 290.35 and at the 
333.1   rate provided in section 290.06 for 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 the 
333.14  case 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 life 
333.23  insurance 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, 
334.10  290.35, 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 
335.2   determined 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 section 290.35 or 
338.4   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  section 290.35 or 290.36 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; and 
341.11     (2) the tax under sections 290.06, subdivision 1, and 
341.12  290.0921 apply to a financial institution to which either 
341.13  section 585 or 593 of the Internal Revenue Code applies or that 
341.14  has a wholly owned subsidiary as described in section 
341.15  1361(b)(3)(B) of the Internal Revenue Code which is a financial 
341.16  institution under section 585 or 593 of the Internal Revenue 
341.17  Code. 
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 the greater of the insurance 
343.6   company's premium tax liability under this section or its 
343.7   corporate franchise tax liability under chapter 290 prior 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 the greater of the amount of the carryforward credit 
343.19  allowed as an offset against the premium tax under this 
343.20  paragraph or the amount of the carryforward credit allowed as an 
343.21  offset against the insurance company's corporate franchise tax 
343.22  liability 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 chapter and 
343.27  corporate franchise tax under chapter 290 if 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 franchise 
345.31  tax 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 through December 31, 1999 June 
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; and 
347.5      (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, and the 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, and the 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, and the 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; and 
352.12     (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; and 
355.17     (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 through December 31, 1999 June 
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 "modified 
357.31  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 
358.3   December 31, 1999 June 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, 
359.11  1999 2000. 
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 a 
359.33  tax other than a withholding or sales or use tax is not paid 
359.34  within the time specified for payment, a penalty must be added 
359.35  to the amount required to be shown as tax.  The penalty is three 
359.36  percent of the tax not paid on or before the date specified for 
360.1   payment of the tax if the failure is for not more than 30 days, 
360.2   with an additional penalty of three percent of the amount of tax 
360.3   remaining unpaid during each additional 30 days or fraction of 
360.4   30 days during which the failure continues, not exceeding 24 
360.5   percent 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 tax 
360.24  return and pays all of the state individual income tax with the 
360.25  filing of a return within six months of the date the return is 
360.26  due and the amount paid by the due date of the return is at 
360.27  least 90 percent of the amount of tax due, as shown on the 
360.28  return, the individual is presumed to have reasonable cause for 
360.29  the 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 a return other than an income 
361.23  tax return of an individual, a withholding return, or sales or 
361.24  use tax return, within the time prescribed or an extension, a 
361.25  penalty is added to the tax.  The penalty is three percent of 
361.26  the amount of tax not paid on or before the date prescribed for 
361.27  payment of the tax including any extensions if the failure is 
361.28  for not more than 30 days, with an additional five percent of 
361.29  the amount of tax remaining unpaid during each additional 30 
361.30  days or fraction of 30 days, during which the failure continues, 
361.31  not exceeding 23 percent in the aggregate. 
361.32     If a taxpayer fails to file an individual income tax return 
361.33  within six months after the date prescribed for filing of the 
361.34  return, a penalty of ten percent of the amount of tax not paid 
361.35  by the end of that six-month period is added to the tax.  
361.36     If a taxpayer fails to file a withholding or sales or use 
362.1   tax return within the time prescribed, including an extension, a 
362.2   penalty of five percent of the amount of tax not timely paid 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.] If an individual 
362.30  a taxpayer files what purports to be a tax return required by 
362.31  chapter 290 or a claim for refund but which does not contain 
362.32  information on which the substantial correctness of 
362.33  the assessment purported return or claim for refund may be 
362.34  judged or contains information that on its face shows that the 
362.35  assessment purported 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 refund 
366.20  unless the seller submits written evidence to the commissioner 
366.21  that the tax and any interest earned on the tax has been or will 
366.22  be 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 that it the 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   business or subsequent use solely outside Minnesota of tangible 
369.8   personal 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, 
370.9   and any or group or and any combination of individuals, 
370.10  groups, or individuals and groups acting as a unit, and the 
370.11  plural 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, business 
370.16  trusts estate, 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) Person also includes any agent or consignee of any 
370.26  individual or organization enumerated listed 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 the furnishing, preparing, or 
371.13  serving for a consideration of food or drinks.  Notwithstanding 
371.14  section 297A.67, subdivision 2, taxable food or drinks 
371.15  include includes, but are is not limited to, the following: 
371.16     (1) prepared food or drinks sold by the retailer for 
371.17  immediate consumption on the retailer's premises.  Food and 
371.18  drinks sold within a building or grounds that require an 
371.19  admission charge for entrance are presumed to be sold for 
371.20  consumption on the premises; 
371.21     (2) food or drinks prepared by the retailer for immediate 
371.22  consumption either on or off the retailer's premises.  For 
371.23  purposes of this subdivision, "food or drinks prepared for 
371.24  immediate consumption" means any food product upon which an act 
371.25  of preparation including, but not limited to, cooking, mixing, 
371.26  sandwich making, blending, heating, or pouring has been 
371.27  performed by the retailer so the food product may be immediately 
371.28  consumed by the purchaser; 
371.29     (3) ice cream, ice milk, frozen yogurt products, or frozen 
371.30  novelties sold in single or individual servings including, but 
371.31  not limited to, cones, sundaes, and snow cones; 
371.32     (4) (2) soft drinks and other beverages, including all 
371.33  carbonated and noncarbonated beverages or drinks sold in liquid 
371.34  form, but not including beverages or drinks which contain milk 
371.35  or milk products, beverages or drinks containing 15 or more 
371.36  percent fruit juice, and noncarbonated and noneffervescent 
372.1   bottled water sold in individual containers of one-half gallon 
372.2   or more in size; 
372.3      (5) gum, (3) candy, and candy products; and 
372.4      (6) ice; 
372.5      (7) (4) all food sold from through vending machines;.  
372.6      (8) all food for immediate consumption sold from concession 
372.7   stands and vehicles; 
372.8      (9) party trays; 
372.9      (10) all meals and single servings of packaged snack food 
372.10  sold in restaurants and bars; and 
372.11     (11) bakery products that are: 
372.12     (i) prepared by the retailer for consumption on the 
372.13  retailer's premises; 
372.14     (ii) sold at a place that charges admission; 
372.15     (iii) sold from vending machines; or 
372.16     (iv) sold in single or individual servings from concession 
372.17  stands, vehicles, bars, and restaurants.  
372.18     For purposes of this paragraph, "single or individual 
372.19  servings" does not include products when sold in bulk containers 
372.20  or bulk packaging.  
372.21     For purposes of this paragraph, "premises" means the total 
372.22  space and facilities, including buildings, grounds, and parking 
372.23  lots that are made available or that are available for use by 
372.24  the retailer or customer for the purpose of sale or consumption 
372.25  of prepared food and drinks.  The premises of a caterer is the 
372.26  place 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 state or local exchange telephone 
372.30  service, intrastate toll service, and interstate toll service, 
372.31  if that service originates from and is charged to a telephone 
372.32  located in this state.  Telephone service includes (1) paging 
372.33  services, and (2) private communication service, as defined in 
372.34  United States Code, title 26, section 4252(d), except for 
372.35  private communication service purchased by an agent acting on 
372.36  behalf of the state lottery.  Telephone service does not include 
373.1   services purchased with a prepaid telephone calling card.  The 
373.2   furnishing for a consideration of access to telephone services 
373.3   by a hotel to its guests is a sale.  The furnishing for a 
373.4   consideration of items listed in this paragraph by a municipal 
373.5   corporation 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 of taxable services as defined in subdivision 
373.10  16. 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" means a any 
376.21  sale, lease, or rental for any purpose other than resale in the 
376.22  regular 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  subdivision 16 3, 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, or taxable services, 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" means the total 
378.15  consideration for a retail sale, valued in money, whether paid 
378.16  in 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, 
379.1   labor or service cost, interest, or discount allowed after the 
379.2   sale is consummated; 
379.3      (2) the cost of transportation incurred prior to the time 
379.4   of sale; 
379.5      (3) any amount for which credit is given by the seller to 
379.6   the purchaser; 
379.7      (4) charges for services that are part of a sale; or 
379.8      (5) any other expense whatsoever. 
379.9      (c) (b) Sales price does not include the following: 
379.10     (1) an amount allowed as credit for tangible personal 
379.11  property taken in trade for resale discounts, 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 the 
379.16  charges are separately stated interest, 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 charges 
379.21  are 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 or 
379.25  applying the property sold if the charges are separately stated; 
379.26     (5) transportation charges if the transportation occurs 
379.27  after the retail sale of the property if the charges are 
379.28  separately stated; 
379.29     (6) cash discounts allowed and taken on sales or the amount 
379.30  refunded either in cash or in credit for property returned by 
379.31  purchasers; 
379.32     (7) the rental motor vehicle tax imposed under section 
379.33  297A.64; or 
379.34     (8) the amount of any tax imposed by the United States on 
379.35  communications services under United States Code, title 26, 
379.36  section 4251(a). 
380.1      (d) Notwithstanding paragraph (c), "sales price," for 
380.2   purposes of sales of ready-mixed concrete sold from a 
380.3   ready-mixed concrete truck, includes any transportation, 
380.4   delivery, or other service charges, and no deduction is allowed 
380.5   for those charges, whether or not the charges are separately 
380.6   stated.  
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  means every any person engaged in making retail sales, 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, automatic 
381.17  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 or in 
382.29  the form of storage media on which, or in which, the program is 
382.30  recorded contained 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, 
382.34  diskettes, or drums on which computer programs may be embodied 
382.35  or 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.  [COMMON FOR-HIRE CARRIER.] "Common For-hire 
383.20  carrier" means a person engaged in transportation for hire of 
383.21  tangible personal property by motor vehicle, if the person:. 
383.22     (1) has a certificate or permit or has completed a 
383.23  registration process that authorizes for-hire transportation of 
383.24  property from the United States Department of Transportation, 
383.25  the transportation regulation board, or the department of 
383.26  transportation; 
383.27     (2) is transporting commodities defined as "exempt" in 
383.28  for-hire transportation; or 
383.29     (3) transports tangible personal property pursuant to a 
383.30  contract 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, 1999 2000. 
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, 1999 2000. 
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 and 
387.34  pay the tax imposed in subdivision 1 to the commissioner of 
387.35  revenue with the taxes imposed in this chapter.  The tax imposed 
387.36  in subdivision 1 and the fee imposed in subdivision 2 are is 
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 the tax and fee 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) The tax and the fee imposed by 
388.12  this section do does 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, a 
389.12  common carrier, or a contract for-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 vendors independent of the retailer that 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.  [FOOD PRODUCTS AND FOOD INGREDIENTS.] 
393.5   Food products including, but not limited to, cereal and cereal 
393.6   products, butter, cheese, milk and milk products, oleomargarine, 
393.7   meat and meat products, fish and fish products, eggs and egg 
393.8   products, vegetables and vegetable products, fruit and fruit 
393.9   products, spices and salt, sugar and sugar products, coffee and 
393.10  coffee substitutes, tea, and cocoa and cocoa products and 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) Clothing and wearing apparel, 
394.15  including sewing materials to be directly incorporated into 
394.16  wearing apparel, are is exempt.  For purposes of this 
394.17  subdivision, clothing and wearing apparel do not include the 
394.18  following: 
394.19     (1) articles designed primarily for use while engaging in a 
394.20  specific sport or recreational activity that are not also worn 
394.21  for general use; 
394.22     (2) articles designed primarily to provide safety or 
394.23  protection against injury while the user is engaged in 
394.24  industrial or general job activities; 
394.25     (3) all articles commonly or commercially known as jewelry 
394.26  including, 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, or 
394.29  partially of such fur if the value of the fur is more than three 
394.30  times the value of the next most valuable component material; 
394.31     (6) perfume, lotions, creams, dyes, or other substances 
394.32  that are applied to the skin or the hair; and 
394.33     (7) luggage, bags, purses, wallets, or cases of any 
394.34  sort. "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, 
396.21  and of selling that kind of property or service are exempt.  The 
396.22  storage, use, or consumption of property or services resulting 
396.23  from such sales, are acquired 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 gross 
396.31  receipts from The sale of and the storage, use, or other 
396.32  consumption in Minnesota of tangible personal property, tickets, 
396.33  or admissions, electricity, gas, or local exchange telephone 
396.34  service or 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   subdivision 16 3, 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 exempt only if 
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 particular industrial product; 
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 
400.17  purchases made after June 30, 2001. 
400.18     Sec. 46.  Minnesota Statutes 2000, section 297A.68, 
400.19  subdivision 3, is amended to read: 
400.20     Subd. 3.  [MATERIALS USED IN PROVIDING CERTAIN TAXABLE 
400.21  SERVICES.] (a) Materials stored, used, or consumed in providing 
400.22  a taxable service listed in section 297A.61, subdivision 16 3, 
400.23  paragraph (g), clause (5), intended to be sold ultimately at 
400.24  retail are exempt. 
400.25     (b) This exemption includes, but is not limited to: 
400.26     (1) chemicals, lubricants, packaging materials, seeds, 
400.27  trees, fertilizers, and herbicides, if these items are used or 
400.28  consumed in providing the taxable service; 
400.29     (2) chemicals used to treat waste generated as a result of 
400.30  providing the taxable service; 
400.31     (3) accessory tools, equipment, and other items that are 
400.32  separate detachable units used in providing the service and that 
400.33  have an ordinary useful life of less than 12 months; and 
400.34     (4) fuel, electricity, gas, and steam used or consumed in 
400.35  the production process, except that electricity, gas, or steam 
400.36  used for space heating, cooling, or lighting is exempt only if 
401.1   (i) it is in excess of average climate control or lighting, and 
401.2   (ii) it is necessary to produce that particular taxable service. 
401.3      (c) This exemption does not include machinery, equipment, 
401.4   implements, tools, accessories, appliances, contrivances, 
401.5   furniture, and fixtures used in providing the taxable service. 
401.6      [EFFECTIVE DATE.] This section is effective for sales and 
401.7   purchases made after June 30, 2001. 
401.8      Sec. 47.  Minnesota Statutes 2000, section 297A.68, 
401.9   subdivision 5, is amended to read: 
401.10     Subd. 5.  [CAPITAL EQUIPMENT.] (a) Capital equipment is 
401.11  exempt.  The tax must be imposed and collected as if the rate 
401.12  under section 297A.62, subdivision 1, applied, and then refunded 
401.13  in the manner provided in section 297A.75. 
401.14     "Capital equipment" means machinery and equipment purchased 
401.15  or leased, and used in this state by the purchaser or lessee 
401.16  primarily for manufacturing, fabricating, mining, or refining 
401.17  tangible personal property to be sold ultimately at retail. 
401.18     Capital equipment means if the machinery and equipment is 
401.19  essential to the integrated production process of manufacturing, 
401.20  fabricating, mining, or refining.  Capital equipment also 
401.21  includes machinery and equipment used to electronically transmit 
401.22  results retrieved by a customer of an online computerized data 
401.23  retrieval system. 
401.24     (b) Capital equipment includes, but is not limited to: 
401.25     (1) machinery and equipment used to operate, control, or 
401.26  regulate the production equipment; 
401.27     (2) machinery and equipment used for research and 
401.28  development, design, quality control, and testing activities; 
401.29     (3) environmental control devices that are used to maintain 
401.30  conditions such as temperature, humidity, light, or air pressure 
401.31  when those conditions are essential to and are part of the 
401.32  production process; 
401.33     (4) materials and supplies used to construct and install 
401.34  machinery or equipment; 
401.35     (5) repair and replacement parts, including accessories, 
401.36  whether purchased as spare parts, repair parts, or as upgrades 
402.1   or modifications to machinery or equipment; 
402.2      (6) materials used for foundations that support machinery 
402.3   or equipment; 
402.4      (7) materials used to construct and install special purpose 
402.5   buildings used in the production process; and 
402.6      (8) ready-mixed concrete trucks in which the ready-mixed 
402.7   concrete is mixed as part of the delivery process.  
402.8      (c) Capital equipment does not include the following: 
402.9      (1) motor vehicles taxed under chapter 297B; 
402.10     (2) machinery or equipment used to receive or store raw 
402.11  materials; 
402.12     (3) building materials, except for materials included in 
402.13  paragraph (b), clauses (6) and (7); 
402.14     (4) machinery or equipment used for nonproduction purposes, 
402.15  including, but not limited to, the following:  plant security, 
402.16  fire prevention, first aid, and hospital stations; support 
402.17  operations or administration; pollution control; and plant 
402.18  cleaning, disposal of scrap and waste, plant communications, 
402.19  space heating, cooling, lighting, or safety; 
402.20     (5) farm machinery and aquaculture production equipment as 
402.21  defined by section 297A.61, subdivisions 12 and 13; 
402.22     (6) machinery or equipment purchased and installed by a 
402.23  contractor as part of an improvement to real property; or 
402.24     (7) any other item that is not essential to the integrated 
402.25  process of manufacturing, fabricating, mining, or refining. 
402.26     (d) For purposes of this subdivision: 
402.27     (1) "Machinery" means mechanical, electronic, or electrical 
402.28  devices, including computers and computer software, that are 
402.29  purchased or constructed to be used for the activities set forth 
402.30  in paragraph (a), beginning with the removal of raw materials 
402.31  from inventory through completion of the product, including 
402.32  packaging of the product. 
402.33     (2) "Equipment" means independent devices or tools separate 
402.34  from machinery but essential to an integrated production 
402.35  process, including computers and computer software, used in 
402.36  operating, controlling, or regulating machinery and equipment; 
403.1   and any subunit or assembly comprising a component of any 
403.2   machinery or accessory or attachment parts of machinery, such as 
403.3   tools, dies, jigs, patterns, and molds.  
403.4      (3) "Primarily" means machinery and equipment used 50 
403.5   percent or more of the time in an activity described in 
403.6   paragraph (a). 
403.7      (4) "Manufacturing" means an operation or series of 
403.8   operations where raw materials are changed in form, composition, 
403.9   or condition by machinery and equipment and which results in the 
403.10  production of a new article of tangible personal property.  For 
403.11  purposes of this subdivision, "manufacturing" includes the 
403.12  generation of electricity or steam to be sold at retail. 
403.13     (5) "Fabricating" means to make, build, create, produce, or 
403.14  assemble components or property to work in a new or different 
403.15  manner. 
403.16     (6) "Mining" means the extraction of minerals, ores, stone, 
403.17  or peat. 
403.18     (7) "Refining" means the process of converting a natural 
403.19  resource to a product, including the treatment of water to be 
403.20  sold at retail. 
403.21     (8) "Integrated production process" means a process 
403.22  beginning with the removal of raw materials from inventory 
403.23  through the completion of the product, including packaging of 
403.24  the product. 
403.25     (9) "Online data retrieval system" means a system whose 
403.26  cumulation of information is equally available and accessible to 
403.27  all its customers. 
403.28     (10) (9) "Machinery and equipment used for pollution 
403.29  control" means machinery and equipment used solely to eliminate, 
403.30  prevent, or reduce pollution resulting from an activity 
403.31  described in paragraph (a).  
403.32     [EFFECTIVE DATE.] This section is effective for sales and 
403.33  purchases made after June 30, 2001. 
403.34     Sec. 48.  Minnesota Statutes 2000, section 297A.68, 
403.35  subdivision 11, is amended to read: 
403.36     Subd. 11.  [ADVERTISING MATERIALS.] Material Materials 
404.1   designed to advertise and promote the sale of merchandise or 
404.2   services is are exempt if the material is purchased and stored 
404.3   for the purpose of subsequently shipping or otherwise 
404.4   transferring outside the state by the purchaser for later these 
404.5   materials are mailed or transferred to a person outside the 
404.6   state for use solely outside the state of Minnesota.  Mailing 
404.7   and reply envelopes and cards used exclusively in connection 
404.8   with these advertising and promotional materials are included in 
404.9   this exemption.  The exemption applies regardless of where the 
404.10  mailing occurs.  The storage of these materials in the state for 
404.11  the purpose of subsequently shipping or otherwise transferring 
404.12  the material out of state is also exempt if the other conditions 
404.13  in this subdivision are met. 
404.14     [EFFECTIVE DATE.] This section is effective for sales and 
404.15  purchases made after June 30, 2001. 
404.16     Sec. 49.  Minnesota Statutes 2000, section 297A.68, 
404.17  subdivision 13, is amended to read: 
404.18     Subd. 13.  [OUTSTATE TRANSPORT OR DELIVERY.] (a) Tangible 
404.19  personal property is exempt if the property, without 
404.20  intermediate use, is all of the following conditions are met:  
404.21     (1) the property, without intermediate use, is shipped or 
404.22  transported outside Minnesota by the purchaser or is stored, 
404.23  processed, fabricated or manufactured into, attached to or 
404.24  incorp