HF 2020

1st Committee Engrossment - 86th Legislature (2009 - 2010) Posted on 03/19/2013 07:29pm

1.1A bill for an act

1.2relating to the financing and operation of local government; allowing county
1.3local sales tax; eliminating certain existing local sales taxes; adjusting county
1.4program aid; modifying levy limits; providing flexibility and mandate reduction
1.5provisions; making changes to various property tax and local government
1.6aid-related provisions; providing temporary suspension of new or increased
1.7maintenance of effort and matching fund requirements; modifying county
1.8support of libraries; establishing the Council on Local Results and Innovation;
1.9providing property tax system benchmarks, critical indicators, and principles;
1.10establishing a property tax work group; creating the Legislative Commission
1.11on Mandate Reform; making changes to certain administrative procedures;
1.12modifying truth in taxation provisions; providing clarification for eligibility for
1.13property tax exemption for institutions of purely public charity; making changes
1.14to property tax refund, sustainable forest incentive, and senior citizen property
1.15tax deferral programs; extending time for establishment of special service
1.16district; requiring a fiscal disparity study; extending emergency medical service
1.17special taxing district; providing emergency debt certificates; providing and
1.18modifying local taxes; providing appointments; requiring reports; appropriating
1.19money;amending Minnesota Statutes 2008, sections 3.842, subdivision 4a;
1.203.843; 16C.28, subdivision 1a; 123B.10, subdivision 1; 134.34, subdivisions
1.211, 4; 272.02, subdivision 7, by adding a subdivision; 273.1231, subdivision
1.221; 273.1232, subdivision 1; 273.124, subdivision 1; 273.13, subdivisions 25,
1.2334; 273.1384, subdivisions 1, 4; 275.065, subdivisions 1, 1a, 1c, 3, 6; 275.07,
1.24subdivisions 1, 4, by adding a subdivision; 275.08, subdivision 1d; 275.70,
1.25subdivisions 3, 5; 275.71, subdivisions 2, 4, 5; 276.04, subdivision 2; 282.08;
1.26290A.04, subdivision 2; 290B.03, subdivision 1; 290B.04, subdivisions 3, 4;
1.27290B.05, subdivision 1; 290B.07; 290C.07; 297A.99, subdivision 1; 306.243,
1.28by adding a subdivision; 344.18; 365.28; 373.052, subdivision 1; 375.194,
1.29subdivision 5; 383A.75, subdivision 3; 428A.21; 429.041, subdivisions 1, 2;
1.30446A.086, subdivision 8; 465.719, subdivision 9; 469.015; 473.13, subdivision
1.311; 477A.011, subdivision 36; 477A.0124, by adding a subdivision; 477A.013,
1.32subdivision 9, by adding a subdivision; 477A.03, subdivisions 2a, 2b; 641.12,
1.33subdivision 1; Laws 1986, chapter 400, section 44, as amended; Laws 1991,
1.34chapter 291, article 8, section 27, subdivision 3, as amended; Laws 2001,
1.35First Special Session chapter 5, article 3, section 8, as amended; Laws 2002,
1.36chapter 377, article 3, section 25; Laws 2006, chapter 259, article 3, section
1.3712, subdivision 3; Laws 2008, chapter 366, article 6, sections 9; 10; article 7,
1.38section 16, subdivision 3; proposing coding for new law in Minnesota Statutes,
1.39chapters 3; 6; 14; 270C; 273; 275; 297A; 475; 477A; proposing coding for new
2.1law as Minnesota Statutes, chapter 290D; repealing Minnesota Statutes 2008,
2.2sections 275.065, subdivisions 5a, 6b, 6c, 8, 9, 10; 477A.0124, subdivisions 3, 4,
2.35; 477A.03, subdivision 5; Laws 2008, chapter 366, article 7, section 18.
2.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.5ARTICLE 1

2.6COUNTY REVENUE REFORM

2.7    Section 1. Minnesota Statutes 2008, section 275.70, subdivision 3, is amended to read:
2.8    Subd. 3. Local governmental unit. "Local governmental unit" means a county, or a
2.9statutory or home rule charter city with a population greater than 2,500.
2.10EFFECTIVE DATE.This section is effective for taxes levied in calendar year
2.112009, payable in 2010 and thereafter.

2.12    Sec. 2. Minnesota Statutes 2008, section 275.71, subdivision 2, is amended to read:
2.13    Subd. 2. Levy limit base. (a) The levy limit base for a local governmental unit for
2.14taxes levied in 2008 is its levy aid base from the previous year, subject to any adjustments
2.15under section 275.72. For taxes levied in 2009 and 2010, the levy limit base for a local
2.16governmental unit is its adjusted levy limit base in the previous year, subject to any
2.17adjustments under section 275.72.
2.18EFFECTIVE DATE.This section is effective for taxes levied in calendar year
2.192009, payable in 2010 and thereafter.

2.20    Sec. 3. Minnesota Statutes 2008, section 275.71, subdivision 4, is amended to read:
2.21    Subd. 4. Adjusted levy limit base. For taxes levied in 2008 through 2010 and 2009,
2.22the adjusted levy limit base is equal to the levy limit base computed under subdivision 2
2.23or section 275.72, multiplied by:
2.24    (1) one plus the lesser of 3.9 percent or the percentage growth in the implicit price
2.25deflator but not less than two percent;
2.26    (2) one plus a percentage equal to 50 percent of the percentage increase in the number
2.27of households, if any, for the most recent 12-month period for which data is available; and
2.28    (3) one plus a percentage equal to 50 percent of the percentage increase in the
2.29taxable market value of the jurisdiction due to new construction of class 3 property, as
2.30defined in section 273.13, subdivision 4, except for state-assessed utility and railroad
2.31property, for the most recent year for which data is available.
3.1EFFECTIVE DATE.This section is effective for taxes levied in calendar year
3.22009, payable in 2010 and thereafter.

3.3    Sec. 4. Minnesota Statutes 2008, section 275.71, subdivision 5, is amended to read:
3.4    Subd. 5. Property tax levy limit. For taxes levied in 2008 through 2010 2009, the
3.5property tax levy limit for a local governmental unit is equal to its adjusted levy limit
3.6base determined under subdivision 4 plus any additional levy authorized under section
3.7275.73 , which is levied against net tax capacity, reduced by the sum of (i) the total amount
3.8of aids and reimbursements that the local governmental unit is certified to receive under
3.9sections 477A.011 to 477A.014, (ii) the amount of aid reduction under section 477A.0124,
3.10subdivision (6), paragraph (c), (iii) taconite aids under sections 298.28 and 298.282
3.11including any aid which was required to be placed in a special fund for expenditure in the
3.12next succeeding year, (iii) (iv) estimated payments to the local governmental unit under
3.13section 272.029, adjusted for any error in estimation in the preceding year, and (iv) (v)
3.14aids under section 477A.16.
3.15EFFECTIVE DATE.This section is effective for taxes levied in calendar year
3.162009, payable in 2010 and thereafter.

3.17    Sec. 5. Minnesota Statutes 2008, section 297A.99, subdivision 1, is amended to read:
3.18    Subdivision 1. Authorization; scope. (a) A political subdivision of this state may
3.19impose a general sales tax (1) under section 297A.992, (2) under section 297A.993, (3)
3.20under section 297A.994, (4) if permitted by special law enacted prior to May 20, 2008, or
3.21(4) (5) if the political subdivision enacted and imposed the tax before January 1, 1982, and
3.22its predecessor provision.
3.23    (b) This section governs the imposition of a general sales tax by the political
3.24subdivision. The provisions of this section preempt the provisions of any special law:
3.25    (1) enacted before June 2, 1997, or
3.26    (2) enacted on or after June 2, 1997, that does not explicitly exempt the special law
3.27provision from this section's rules by reference.
3.28    (c) This section does not apply to or preempt a sales tax on motor vehicles or a
3.29special excise tax on motor vehicles.
3.30    (d) Until after May 31, 2010, a political subdivision may not advertise, promote,
3.31expend funds, or hold a referendum to support imposing a local option sales tax unless
3.32it is for extension of an existing tax or the tax was authorized by a special law enacted
3.33prior to May 20, 2008.
4.1EFFECTIVE DATE.This section is effective the day following final enactment.

4.2    Sec. 6. [297A.994] COUNTY LOCAL OPTION SALES TAX.
4.3    Subdivision 1. Authorization; rates. Notwithstanding section 297A.99,
4.4subdivisions 2, 3, and 5, or 477A.016, or any other law, a county board may, by resolution,
4.5impose a general sales tax of one-half of one percent on sales and uses taxable under this
4.6chapter. In addition, an excise tax of $20 per motor vehicle is imposed on motor vehicles,
4.7purchased or acquired from any person engaged within the county in the business of selling
4.8motor vehicles at retail if a county imposes a local sales and use tax under this section.
4.9    Subd. 2. Application of election requirement. (a) Imposition of the tax under this
4.10section is not subject to the requirements of section 297A.99, subdivision 3.
4.11(b) Before imposing the tax under this section, the county must publish a notice of
4.12its intention to impose the tax and the date and time of a hearing to obtain public comment
4.13on the matter. The notice must be published in the official newspaper of the county, or
4.14in a newspaper of general circulation in the county. The notice must be published at
4.15least 14 days before the date of the hearing, but not more than 28 days. Following the
4.16public hearing the county board may determine to take no further action, or may adopt a
4.17resolution imposing the tax.
4.18(c) A county may impose the tax only upon obtaining the approval of the majority
4.19of voters voting on the question of imposing the tax, if a petition requesting a vote on
4.20imposition of the tax is signed by voters equal to the greater of (1) 500, or (2) ten percent
4.21of the votes cast in the county at the last general election is filed with the county auditor
4.22within 30 days after the public hearing. The vote on the tax may be held at a general or
4.23special election. The commissioner of revenue shall prepare a suggested form of the
4.24question to be presented at the election.
4.25    Subd. 3. Use of revenues. Revenues from the tax imposed under this section
4.26must first be used to fund obligations under section 297A.9945. Remaining revenues
4.27are deposited in the county general fund.
4.28    Subd. 4. Administration, collection, and enforcement. The administration,
4.29collection, and enforcement of the provisions in section 297A.99, subdivisions 4 and 6 to
4.3012, apply to a tax imposed under this section.
4.31    Subd. 5. Termination. A county may terminate a tax imposed under this section
4.32upon resolution of the county board and notification to the commissioner of revenue, if
4.33all obligations under section 297A.9945 have been paid.
4.34EFFECTIVE DATE.This section is effective the day following final enactment.

5.1    Sec. 7. [297A.9945] EFFECT ON EXISTING LOCAL SALES TAXES;
5.2SATISFACTION OF PREEXISTING OBLIGATIONS.
5.3    Subdivision 1. Preemption of preexisting local sales taxes. (a) Notwithstanding
5.4section 297A.99 or any other law or local ordinance to the contrary, all general local
5.5sales and use taxes in a county or a part of a county is preempted on the day that a
5.6county local sales tax under section 297A.994 takes effect, except the following taxes
5.7are not preempted:
5.8(1) a local tax imposed under section 297A.992 or 297A.993; and
5.9(2) a local sales tax authorized by special law in a city of the first class.
5.10(b) A local sales tax that is imposed by a city located in two or more counties is
5.11preempted if one or more counties in which the city is located impose the county tax. A
5.12replacement tax must be imposed under subdivision 6 in any portion of the city located in
5.13a county that has not imposed the tax under section 297A.994.
5.14    Subd. 2. County payment to cities; forgone sales tax revenue. (a) If a local
5.15sales tax imposed in a city located partially or totally within a county is preempted under
5.16subdivision 1, the county shall pay a portion of its local sales tax revenues, as provided
5.17under subdivision 4 or 5, to the city to fund obligations allowed under the law authorizing
5.18the city tax. The county must make these payments to the city within five business days
5.19after it receives the revenues from the commissioner.
5.20(b) If the local sales tax was imposed under a joint powers agreement in cities
5.21located in more than one county, the share of the obligation to be funded by the county
5.22must be determined under subdivision 5.
5.23(c) The requirement to make these payments ceases on the earliest of the following:
5.24(1) the date on which the city tax was required to expire under the special law
5.25authorizing it;
5.26(2) when the city has received sufficient revenues from its tax and from payments
5.27under this section to pay in full or to defease debt obligations issued by the city under the
5.28law authorizing the city sales tax and to pay any additional spending obligations allowed
5.29under the special law and not funded by the issuance of debt obligations; or
5.30(3) the city becomes a city of the first class and imposes a city sales tax.
5.31    Subd. 3. Dedication of tax to fund county projects. If a county imposed local
5.32sales tax is preempted under subdivision 1, the revenues from the tax imposed under
5.33section 297A.994 are pledged first to pay and secure the bond obligations secured by and
5.34to be paid with the revenues from the preempted county sales tax.
6.1    Subd. 4. Calculation of forgone revenue in cities located entirely within a
6.2county. For purposes of subdivision 2, the forgone revenue to be paid to the city located
6.3entirely in a county imposing a tax under section 297A.994 is calculated as follows:
6.4(1) in the first 12 months after the tax is preempted, the county shall make quarterly
6.5payments to a city entirely located within the county equal to the amount that the city
6.6received from the commissioner of revenue from the preempted tax in the corresponding
6.7quarter in the previous year, multiplied by a percentage equal to the percentage change in
6.8total state sales tax revenue in the previous quarter compared to the total state sales tax
6.9revenue for the fifth preceding quarter; and
6.10(2) in subsequent years, the county shall make quarterly payments to the city equal
6.11to the payment made in the corresponding quarter in the previous year, multiplied by the
6.12ratio of the total quarterly remittance to the county in the current year compared to the
6.13total quarterly remittance to the county in the previous year.
6.14    Subd. 5. Calculation of forgone revenue in cities located partially within a
6.15county. (a) For purposes of subdivision 2, the forgone revenue to be paid to the city
6.16located partially in a county imposing a tax under section 297A.994 is calculated as
6.17provided in this subdivision.
6.18(b) The commissioner of revenue shall determine the percentage of the city's local
6.19sales tax revenue attributable to transactions located in the county. The commissioner
6.20may consult with the county and the city to determine a reasonable percentage, or the
6.21commissioner may set the percentage equal to the percentage of the city's market value
6.22for the most recently available assessment year of class 3 property, except utility real and
6.23personal property located in the county. The sum of the percentage of a city's local sales
6.24tax revenue attributable to each county in which the city is located must equal 100 percent.
6.25The determination of the commissioner is final.
6.26(c) In the first 12 months after the tax is preempted, the county shall make quarterly
6.27payments to a city partially located within the county equal to the amount that the city
6.28received from the commissioner from the preempted tax in the corresponding quarter in
6.29the previous year, multiplied by (1) a percentage equal to one plus the percentage change
6.30in total state sales tax revenue in the previous quarter compared to the total state sales tax
6.31revenue for the fifth preceding quarter, and (2) one plus the percentage calculated in
6.32paragraph (b).
6.33(d) In subsequent years, the county shall make quarterly payments to the city equal
6.34to the payment made in the corresponding quarter in the previous year multiplied by the
6.35ratio of the total quarterly remittance to the county in the current year compared to the
6.36total quarterly remittance to the county in the previous year.
7.1(e) A county's share of a city's obligations from the special law authorizing the city's
7.2sales tax is equal to the total obligation under the special law multiplied by one plus the
7.3percentage determined under paragraph (b).
7.4    Subd. 6. Establishment of special sales tax districts within certain cities. (a)
7.5For any city located in two or more counties, if at least one county imposes a county
7.6sales tax under subdivision 1, and at least one county does not impose a county sales tax,
7.7a special sales tax district is established in the portion of the city that is not subject to
7.8a county sales tax.
7.9(b) The governing body of the city is the governing body of the special taxing district
7.10and the special taxing district shall impose a replacement local sales tax by resolution
7.11to take effect upon the preemption of the city's sales tax under subdivision 1. The
7.12replacement tax must be imposed at the same rate as the city tax it replaces. Revenues
7.13from the replacement tax are pledged to and may only be used for the purposes permitted
7.14by law for the city sales tax, which it replaces. The authority to impose this tax expires
7.15upon the city's receipt of sufficient revenues to pay the obligations to which the city sales
7.16tax was pledged and other spending permitted by the law authorizing imposition of the
7.17city sales tax from the sum of the following:
7.18(1) the city sales tax;
7.19(2) county payments of forgone sales tax revenues under this section; and
7.20(3) the special taxing district sales tax.
7.21EFFECTIVE DATE.This section is effective the day following final enactment.

7.22    Sec. 8. Minnesota Statutes 2008, section 477A.0124, is amended by adding a
7.23subdivision to read:
7.24    Subd. 6. County program aid. (a) For calendar year 2010 and thereafter, a county's
7.25program aid under this section is equal to (1) its county program aid amount certified for
7.26aids payable in 2009 under this section, minus (2) an amount determined under paragraph
7.27(b) or (c). A county's program aid shall not be less than zero.
7.28(b) For a county that does not impose a tax under section 297A.994, the amount
7.29subtracted under paragraph (a) is equal to 3.58 percent of the county's 2009 levy plus aid
7.30revenue base. The "2009 levy plus aid revenue base" for a county is equal to the sum of
7.31the county's certified property tax levy for taxes payable in 2009 plus the amount the
7.32county was certified to receive in county program aid in 2009 under this section and
7.33the amount the county was certified to receive in taconite aids in 2009 under sections
7.34298.28 and 292.282, including any aid that was required to be placed in a special fund for
7.35expenditure in the next succeeding year.
8.1(c) For a county that imposes a tax under section 297A.994, the amount subtracted
8.2under paragraph (a) is equal to (1) 50 percent of its net sales tax revenue for the preceding
8.312-month period in excess of $7 per capita, plus (2) 25 percent of its net sales tax revenue
8.4for the preceding 12-month period in excess of $17 per capita.
8.5(d) For purposes of this subdivision, "net sales tax revenue for the preceding
8.612-month period" means the sales tax revenue for the county for the 12-month period
8.7ending July 1 of the year in which the aid under this section is certified minus its estimated
8.8existing obligations under section 297A.9945 for the year in which the aid is paid. For
8.9the first two years in which the aid is offset under this paragraph, the commissioner of
8.10revenue shall estimate the offset based on available data regarding sales tax collections in
8.11the county. Beginning with the third year in which the aid is offset under this paragraph,
8.12the offset will be based on actual sales tax collections in the county in the 12-month period
8.13ending July 1 of the year in which the aid is certified.
8.14EFFECTIVE DATE.This section is effective for aids payable in calendar year
8.152010 and thereafter.

8.16    Sec. 9. Minnesota Statutes 2008, section 477A.03, subdivision 2b, is amended to read:
8.17    Subd. 2b. Counties. (a) For aids payable in 2009 2010 and thereafter, in addition
8.18to the total aid payable under section 477A.0124, subdivision 3, is $111,500,000 minus
8.19one-half of the total aid amount determined under section 477A.0124, subdivision 5,
8.20paragraph (b), subject to adjustment in subdivision 5. Each calendar year, 477A.0124,
8.21 $500,000 shall be retained by is appropriated to the commissioner of revenue to make
8.22reimbursements to the commissioner of finance for payments made under section 611.27,
8.23$207,000 is appropriated to the commissioner of revenue to make reimbursements to
8.24the commissioner of finance for the preparation of local impact notes, and $7,000 is
8.25appropriated to the commissioner of revenue to reimburse the commissioner of education
8.26for the preparation of local impact notes for school districts. For calendar year 2004,
8.27the amount shall be in addition to the payments authorized under section 477A.0124,
8.28subdivision 1 . For calendar year 2005 and subsequent years, the amount shall be deducted
8.29from the appropriation under this paragraph. The reimbursements shall be to defray the
8.30additional costs associated with court-ordered counsel under section 611.27. Any retained
8.31appropriated amounts not used for reimbursement in a year shall be included in the next
8.32distribution of county need aid that is certified to the county auditors for the purpose
8.33of property tax reduction for the next taxes payable year. under this subdivision shall
8.34be returned to the general fund.
9.1    (b) For aids payable in 2009 and thereafter, the total aid under section 477A.0124,
9.2subdivision 4 , is $116,132,923 minus one-half of the total aid amount determined under
9.3section 477A.0124, subdivision 5, paragraph (b), subject to adjustment in subdivision
9.45. The commissioner of finance shall bill the commissioner of revenue for the cost of
9.5preparation of local impact notes as required by section 3.987, not to exceed $207,000 in
9.6fiscal year 2004 and thereafter. The commissioner of education shall bill the commissioner
9.7of revenue for the cost of preparation of local impact notes for school districts as required
9.8by section 3.987, not to exceed $7,000 in fiscal year 2004 and thereafter. The commissioner
9.9of revenue shall deduct the amounts billed under this paragraph from the appropriation
9.10under this paragraph. The amounts deducted are appropriated to the commissioner of
9.11finance and the commissioner of education for the preparation of local impact notes.
9.12EFFECTIVE DATE.This section is effective for aids payable in calendar year
9.132010 and thereafter.

9.14    Sec. 10. REPEALER.
9.15(a) Minnesota Statutes 2008, section 477A.0124, subdivisions 3, 4, and 5, are
9.16repealed.
9.17(b) Laws 2008, chapter 366, article 7, section 18, is repealed.
9.18EFFECTIVE DATE.Paragraph (a) is effective for aids payable in calendar year
9.192010 and thereafter. Paragraph (b) is effective the day following final enactment.

9.20ARTICLE 2

9.21PROPERTY TAX REFORM, ACCOUNTABILITY, VALUE AND
9.22EFFICIENCY PROVISIONS

9.23    Section 1. [6.90] COUNCIL ON LOCAL RESULTS AND INNOVATION.
9.24    Subdivision 1. Creation. The Council on Local Results and Innovation consists of
9.2511 members, as follows:
9.26(1) the state auditor;
9.27(2) two persons who are not members of the legislature, appointed by the chair of the
9.28Property and Local Sales Tax Division of the house of representatives Taxes Committee;
9.29(3) two persons who are not members of the legislature, appointed by the designated
9.30lead minority member of the Property and Local Sales Tax Division of the house of
9.31representatives Taxes Committee;
9.32(4) two persons who are not members of the legislature, appointed by the chair of
9.33the Taxes Division on Property Taxes of the senate Taxes Committee;
10.1(5) two persons who are not members of the legislature, appointed by the designated
10.2lead minority member of the Taxes Division on Property Taxes of the senate Taxes
10.3Committee;
10.4(6) one person who is not a member of the legislature, appointed by the Association
10.5of Minnesota Counties; and
10.6(7) one person who is not a member of the legislature, appointed by the League
10.7of Minnesota Cities.
10.8Each appointment under clauses (2) to (5) must include one person with expertise
10.9or interest in county government and one person with expertise or interest in city
10.10government. The appointing authorities must use their best efforts to ensure that a majority
10.11of council members have experience with local performance measurement systems. The
10.12membership of the council must include geographically balanced representation as well as
10.13representation balanced between large and small jurisdictions. The appointments under
10.14clauses (2) to (7) must be made within two months of the date of enactment.
10.15Appointees to the council under clauses (2) to (5) serve terms of four years, except
10.16that one of each of the initial appointments under clauses (2) to (5) shall serve a term of
10.17two years; each appointing agent must designate which appointee is serving the two-year
10.18term. Subsequent appointments for members appointed under clauses (2) to (5) must
10.19be made by the council, including appointments to replace any appointees who might
10.20resign from the council prior to completion of their term. Appointees under clauses (2) to
10.21(5) are not eligible to vote on appointing their successor, nor on the successors of other
10.22appointees whose terms are expiring contemporaneously. In making appointments, the
10.23council shall make all possible efforts to reflect the geographical distribution and meet the
10.24qualifications of appointees required of the initial appointees. Subsequent appointments
10.25for members appointed under clauses (6) and (7) must be made by the original appointing
10.26authority. Appointees to the council under clauses (2) to (7) may serve no more than two
10.27consecutive terms.
10.28    Subd. 2. Duties. (a) By February 15, 2010, the council shall develop a standard set
10.29of approximately ten performance measures for counties and ten performance measures
10.30for cities that aid residents, taxpayers, and state and local elected officials in determining
10.31the efficacy of counties and cities in providing services, and measure residents' opinions
10.32of those services. In developing its measures, the council must solicit input from private
10.33citizens. Counties and cities that elect to participate in the standard measures system
10.34shall report their results to the state auditor under section 6.91, who shall then compile
10.35the results and make them available to all interested parties by publishing them on the
10.36auditor's Web site and reporting them to the legislative tax committees. Each year after the
11.1initial designation of performance measures, the council shall evaluate the usefulness of
11.2the standard set of performance measures and may revise the set by adding or removing
11.3measures as it deems appropriate.
11.4(b) By February 15, 2011, the council shall develop minimum standards for
11.5comprehensive performance measurement systems, which may vary by size and type
11.6of governing jurisdiction.
11.7(c) In addition to its specific duties under paragraphs (a) and (b), the council
11.8shall generally promote the use of performance measurement for governmental entities
11.9across the state and shall serve as a resource for all governmental entities seeking to
11.10implement a system of local performance measurement. The council may highlight and
11.11promote systems that are innovative, or are ones that it deems to be best practices of local
11.12performance measurement systems across the state and nation. The council should give
11.13preference in its recommendations to systems that are results-oriented. The council may,
11.14with the cooperation of the state auditor, establish and foster a collaborative network
11.15of practitioners of local performance measurement systems. The council may support
11.16the Association of Minnesota Counties and the League of Minnesota Cities to seek and
11.17receive private funding to provide expert technical assistance to local governments for
11.18the purposes of replicating best practices.
11.19    Subd. 3. Reports. (a) The council shall report its initial set of standard performance
11.20measures to the Property and Local Sales Tax Division of the house of representatives
11.21Taxes Committee and the Taxes Division on Property Taxes of the senate Taxes Committee
11.22by February 28, 2010.
11.23(b) By February 1 of each subsequent year, the council shall report to the committees
11.24with jurisdiction over taxes in the house of representatives and the senate on participation
11.25in and results of the performance measurement system, along with any revisions in the
11.26standard set of performance measures for the upcoming year. These reports may be made
11.27by the state auditor in lieu of the council if agreed to by the auditor and the council.
11.28    Subd. 4. Operation of council. (a) The state auditor shall convene the initial
11.29meeting of the council.
11.30(b) The chair of the council shall be elected by the members. Once elected, a chair
11.31shall serve a term of two years.
11.32(c) Members of the council serve without compensation.
11.33(d) Council members shall share and rotate responsibilities for administrative
11.34support of the council.
11.35(e) Chapter 13D does not apply to meetings of the council. Meetings of the council
11.36must be open to the public and the council must provide notice of a meeting on the state
12.1auditor's Web site at least seven days before the meeting. A meeting of the council occurs
12.2when a quorum is present.
12.3(f) The council must meet at least two times prior to the initial release of the standard
12.4set of measurements. After the initial set has been developed, the council must meet a
12.5minimum of once per year.
12.6    Subd. 5. Termination. The council expires on January 1, 2019.
12.7EFFECTIVE DATE.This section is effective the day following final enactment.

12.8    Sec. 2. [6.91] LOCAL PERFORMANCE MEASUREMENT AND REPORTING.
12.9    Subdivision 1. Reports of local performance measures. (a) A county or city that
12.10elects to participate in the standard measures program must report its results to its citizens
12.11annually through publication, direct mailing, posting on the jurisdiction's Web site, or
12.12through a presentation at the jurisdiction's truth-in-taxation hearing under section 275.065.
12.13(b) Each year, jurisdictions participating in the local performance measurement
12.14and improvement program must file a report with the state auditor by July 1 in a form
12.15prescribed by the auditor. All reports must include a declaration that the jurisdiction has
12.16complied with, or will have complied with by the end of the year, the requirement in
12.17paragraph (a). For jurisdictions participating in the standard measures program, the report
12.18shall consist of the jurisdiction's results for the standard set of performance measures
12.19under section 6.90, subdivision 2, paragraph (a). In 2011, jurisdictions participating in the
12.20comprehensive performance measurement program must submit a resolution approved by
12.21its local governing body indicating that it either has implemented or is in the process of
12.22implementing a local performance measurement system that meets the minimum standards
12.23specified by the council under section 6.90, subdivision 2, paragraph (b). In 2012 and
12.24thereafter, jurisdictions participating in the comprehensive performance measurement
12.25program must submit a statement approved by its local governing body affirming that
12.26it has implemented a local performance measurement system that meets the minimum
12.27standards specified by the council under section 6.90, subdivision 2, paragraph (b).
12.28    Subd. 2. Benefits of participation. (a) A county or city that elects to participate in
12.29the standard measures program for 2010 is:
12.30(1) eligible for per capita reimbursement of $0.25 per capita, but not to exceed
12.31$25,000 for any government entity;
12.32(2) exempt from levy limits under sections 275.70 to 275.74 for taxes payable in
12.332011, if levy limits are in effect; and
12.34(3) exempt from the truth-in-taxation public hearing requirement under section
12.35275.065, subdivision 6, for taxes payable in 2011, if the hearing requirement is in effect.
13.1(b) Any county or city that elects to participate in the standard measures program
13.2for 2011 is eligible for per capita reimbursement of $0.25 per capita, but not to exceed
13.3$25,000 for any government entity. Any jurisdiction participating in the comprehensive
13.4performance measurement program is exempt from levy limits under sections 275.70
13.5to 275.74 for taxes payable in 2012 if levy limits are in effect, and is exempt from the
13.6truth-in-taxation public hearing requirement under section 275.065, subdivision 6, for
13.7taxes payable in 2012, if the hearing requirement is in effect.
13.8(c) Any county or city that elects to participate in the standard measures program for
13.92012 or any year thereafter is eligible for per capita reimbursement of $0.25 per capita,
13.10but not to exceed $25,000 for any government entity. Any jurisdiction participating in
13.11the comprehensive performance measurement program for 2012 or any year thereafter is
13.12exempt from levy limits under sections 275.70 to 275.74 for taxes payable in the following
13.13year, if levy limits are in effect, and is exempt from the truth-in-taxation public hearing
13.14requirement under section 275.065, subdivision 6, for taxes payable in the following
13.15year, if the hearing requirement is in effect.
13.16    Subd. 3. Certification of participation. (a) The state auditor shall certify to
13.17the commissioner of revenue by August 1 of each year the counties and cities that are
13.18participating in the standard measures program and the comprehensive performance
13.19measurement program.
13.20(b) The commissioner of revenue shall make per capita aid payments under this
13.21section on the second payment date specified in section 477A.015, in the same year that
13.22the measurements were reported.
13.23(c) The commissioner of revenue shall notify each county and city that is entitled to
13.24exemption from levy limits by August 10 of each levy year.
13.25    Subd. 4. Appropriation. A sum sufficient to meet the requirements of this section
13.26is annually appropriated from the general fund to the commissioner of revenue.
13.27EFFECTIVE DATE.This section is effective December 31, 2009.

13.28    Sec. 3. Minnesota Statutes 2008, section 134.34, subdivision 1, is amended to read:
13.29    Subdivision 1. Local support levels. (a) A regional library basic system support
13.30grant shall be made to any regional public library system where there are at least three
13.31participating counties and where each participating city and county is providing for
13.32public library service support the lesser of (a) (1) an amount equivalent to .82 percent
13.33of the average of the adjusted net tax capacity of the taxable property of that city or
13.34county, as determined by the commissioner of revenue for the second, third, and fourth
13.35year preceding that calendar year in 1991 and later years or (b) (2) a per capita amount
14.1calculated under the provisions of this subdivision. The per capita amount is established
14.2for calendar year 1993 as $7.62. In succeeding calendar years, the per capita amount shall
14.3be increased by a percentage equal to one-half of the percentage by which the total state
14.4adjusted net tax capacity of property as determined by the commissioner of revenue for
14.5the second year preceding that calendar year increases over that total adjusted net tax
14.6capacity for the third year preceding that calendar year.
14.7(b) The minimum level of support specified under this subdivision or subdivision 4
14.8shall be certified annually to the participating cities and counties by the Department of
14.9Education. If a city or county chooses to reduce its local support in accordance with
14.10subdivision 4, paragraph (b) or (c), it shall notify its regional public library system. The
14.11regional public library system shall notify the Department of Education that a revised
14.12certification is required. The revised minimum level of support shall be certified to the
14.13city or county by the Department of Education.
14.14(c) A city which is a part of a regional public library system shall not be required to
14.15provide this level of support if the property of that city is already taxable by the county
14.16for the support of that regional public library system. In no event shall the Department
14.17of Education require any city or county to provide a higher level of support than the
14.18level of support specified in this section in order for a system to qualify for a regional
14.19library basic system support grant. This section shall not be construed to prohibit a city
14.20or county from providing a higher level of support for public libraries than the level of
14.21support specified in this section.
14.22EFFECTIVE DATE.This section is effective for calendar years 2009 and
14.23thereafter, except that the change in paragraph (a) is effective for calendar years 2011
14.24and thereafter.

14.25    Sec. 4. Minnesota Statutes 2008, section 134.34, subdivision 4, is amended to read:
14.26    Subd. 4. Limitation. (a) A regional library basic system support grant shall not be
14.27made to a regional public library system for a participating city or county which decreases
14.28the dollar amount provided for support for operating purposes of public library service
14.29below the amount provided by it for the second or third preceding year, whichever is less.
14.30For purposes of this subdivision and subdivision 1, any funds provided under section
14.31473.757, subdivision 2 , for extending library hours of operation shall not be considered
14.32amounts provided by a city or county for support for operating purposes of public library
14.33service. This subdivision shall not apply to participating cities or counties where the
14.34adjusted net tax capacity of that city or county has decreased, if the dollar amount of the
14.35reduction in support is not greater than the dollar amount by which support would be
15.1decreased if the reduction in support were made in direct proportion to the decrease in
15.2adjusted net tax capacity.
15.3(b) In addition, in any calendar year in which a city's or county's aid under sections
15.4477A.011 to 477A.014 or credits under section 273.1384 are reduced after the city or
15.5county has certified its levy payable in that year, it may reduce its local support by the
15.6lesser of (1) ten percent, or (2) a percent equal to the percent the aid or credit reduction is
15.7of the city's or county's revenue base as defined in paragraph (e), based on aids certified for
15.8the current calendar year. For calendar year 2009 only, the reduction under this paragraph
15.9shall be based on 2008 aid and credit reductions under the December 2008 unallotment, as
15.10well as any aid and credit reductions in calendar year 2009. For calendar year 2009 only,
15.11the commissioner of revenue will calculate the reductions under this paragraph and certify
15.12them to the commissioner of education within 15 days of this provision becoming law.
15.13(c) In addition, in any payable year in which the total amounts certified for city
15.14or county aids under sections 477A.011 to 477A.014 are less than the total amounts
15.15paid under those sections in the previous calendar year, a city or county may reduce its
15.16local support by the lesser of (1) ten percent, or (2) a percent equal to the ratio of (i) the
15.17difference between the sum of the aid it was paid under sections 477A.011 to 477A.014
15.18and the credit reimbursements it received under section 273.1384 in the previous calendar
15.19year and the aid it is certified to be paid in the current calendar year under sections
15.20477A.011 to 477A.014 and the credits estimated to be paid under section 273.1384, to (ii)
15.21its revenue base for the previous year, based on aids actually paid in the previous calendar
15.22year. The commissioner of revenue shall calculate the percent aid cut for each county and
15.23city under this paragraph and certify the percentage cuts to the commissioner of education
15.24by August 1 of the year prior to the year in which the reduced aids and credits are to be
15.25paid. The percentage of reduction related to reductions to credit reimbursements under
15.26section 273.1384 shall be based on the best estimation available as of July 30.
15.27(d) Notwithstanding paragraph (a), (b), or (c), no city or county shall reduce its
15.28support for public libraries below the minimum level specified in subdivision 1. No county
15.29may make a reduction under paragraph (b) or (c) in a year in which it is receiving local
15.30sales tax revenue under section 297A.994.
15.31(e) For purposes of this subdivision, "revenue base" means the sum of:
15.32(1) its levy for taxes payable in the current calendar year, including the levy on
15.33the fiscal disparities distribution under section 276A.06, subdivision 3, paragraph (a),
15.34or 473F.08, subdivision 3, paragraph (a);
15.35(2) its aid under sections 477A.011 to 477A.014 in the current calendar year; and
15.36(3) its taconite aid in the current calendar year under sections 298.28 and 298.282.
16.1EFFECTIVE DATE.This section is effective for support in calendar year 2009 and
16.2thereafter for library grants paid in fiscal year 2010 and thereafter, except that the changes
16.3in paragraph (a) are effective for support in calendar year 2010 and thereafter.

16.4    Sec. 5. [270C.991] PROPERTY TAX SYSTEM BENCHMARKS AND
16.5CRITICAL INDICATORS.
16.6    Subdivision 1. Purpose. State policy makers should be provided with the tools to
16.7create a more accountable and efficient property tax system. This section provides the
16.8principles and available tools necessary to work toward achieving that goal.
16.9    Subd. 2. Property tax principles. To better evaluate the various property tax
16.10proposals that come before the legislature, the following basic property tax principles
16.11should be taken into consideration:
16.12(1) transparent and understandable;
16.13(2) simple and efficient;
16.14(3) equitable;
16.15(4) stable and predictable;
16.16(5) compliance and accountability;
16.17(6) competitive, both nationally and globally; and
16.18(7) responsive to economic conditions.
16.19    Subd. 3. Major indicators. There are many different types of indicators available to
16.20legislators to evaluate tax legislation. Indicators are useful to have available as benchmarks
16.21when legislators are contemplating changes. Each tool has its own limitation and no one
16.22tool is perfect or should be used independently. Some of the tools measure the global
16.23characteristics of the entire tax system, while others are only a measure of the property tax
16.24impacts and its administration. The following is a list of the available major indicators:
16.25(1) property tax principles scale, the components of which are listed in subdivision
16.262, as they relate to the various features of the property tax system;
16.27(2) price of government report, as required under section 16A.102;
16.28(3) tax incidence report, as required under section 270C.13;
16.29(4) tax expenditure budget and report, as required under section 270C.11;
16.30(5) state tax rankings;
16.31(6) property tax levy plus aid data, and market value and net tax capacity data, by
16.32taxing district for current and past years;
16.33(7) effective tax rate (tax as a percent of market value) and the equalized effective
16.34tax rate (effective tax rate adjusted for assessment differences);
16.35(8) assessment sales ratio study, as required under section 127A.48;
17.1(9) "Voss" database, which matches homeowner property taxes and household
17.2income;
17.3(10) revenue estimates under section 270C.11, subdivision 5, and state fiscal notes
17.4under section 477A.03, subdivision 2b; and
17.5(11) local impact notes, with improved local analysis as described in subdivision 7.
17.6    Subd. 4. Property tax working group. (a) A property tax working group is
17.7established as provided in this subdivision. The goals of the working group are:
17.8(1) to investigate ways to simplify the property tax system and make advisory
17.9recommendations on ways to make the system more understandable;
17.10(2) to reexamine the property tax calendar to determine what changes could be made
17.11to shorten the two-year cycle from assessment through property tax collection; and
17.12(3) to determine the cost versus the benefits of the various property tax components,
17.13including property classifications, credits, aids, exclusions, exemptions, and abatements,
17.14and to suggest ways to achieve some of the goals in simpler and more cost-efficient ways.
17.15(b) The 12-member working group shall consist of the following members:
17.16(1) two state representatives, both appointed by the chair of the house of
17.17representatives Tax Committee, one from the majority party and one from the minority
17.18party;
17.19(2) two senators, both appointed by the chair of the senate Tax Committee, one from
17.20the majority party and one from the minority party;
17.21(3) the commissioner of revenue, or designee;
17.22(4) one person, appointed by the Association of Minnesota Counties;
17.23(5) one person, appointed by the League of Minnesota Cities;
17.24(6) one person, appointed by the Minnesota Association of Townships;
17.25(7) one person, appointed by the Minnesota Chamber of Commerce;
17.26(8) one person, appointed by the Minnesota Association of Assessing Officers; and
17.27(9) two homeowners, one who is under 65 years of age, and one who is 65 years of
17.28age or older, both appointed by the commissioner of revenue.
17.29The commissioner of revenue shall chair the initial meeting, and the working group
17.30shall elect a chair at that initial meeting. The working group meets at the call of the chair.
17.31Members of the working group shall serve without compensation. The commissioner of
17.32revenue must provide administrative support to the working group. Chapter 13D does
17.33not apply to meetings of the working group. Meetings of the working group must be
17.34open to the public and the working group must provide notice of a meeting to potentially
17.35interested persons at least seven days before the meeting. A "meeting" of the council
17.36occurs when a quorum is present.
18.1(c) The working group shall make its advisory recommendations to the chairs of
18.2the house of representatives and senate tax committees on or before February 1, 2011,
18.3at which time the working group is finished and this subdivision expires. The advisory
18.4recommendations should be reviewed by the tax committee under subdivision 5.
18.5    Subd. 5. Tax committee review and resolution. On or before March 1, 2011, and
18.6every two years thereafter, the house of representatives and senate tax committees must
18.7review the major indicators as contained in subdivision 3, and ascertain the accountability
18.8and efficiency of the property tax system. The house of representatives and senate tax
18.9committees shall prepare a resolution on targets and benchmarks for use during the
18.10current biennium.
18.11    Subd. 6. Department of Revenue; revenue estimates. As provided under
18.12section 270C.11, subdivision 5, the Department of Revenue is required to prepare an
18.13estimate of the effect on the state's tax revenues which result from the passage of a
18.14legislative bill establishing, extending, or restricting a tax expenditure. Beginning with
18.15the 2010 legislative session, those revenue estimates must also identify how the property
18.16tax principles, contained in subdivision 2, apply to the proposed tax changes. The
18.17commissioner of revenue shall develop a scale for measuring the appropriate principles
18.18for each proposed change. The department shall quantify the effects, if possible, or at a
18.19minimum, shall identify the relevant factors so that legislators are aware of possible
18.20outcomes, including administrative difficulties and cost. The interaction of property tax
18.21shifting should be identified and quantified to the degree possible.
18.22    Subd. 7. Local impact notes. Local impact notes are statements that provide
18.23information about changes in local government responsibility, administration, and cost due
18.24to changes in state law. The local impact note process seeks the participation of political
18.25subdivisions to gather information as needed by the legislature. The local impact network
18.26of political subdivisions shall consist of representation from associations from Minnesota
18.27counties, cities, towns, and school districts, and other members as needed. They shall,
18.28among other things, work with the legislature and the commissioner of finance to analyze:
18.29(1) changes in tax revenues for local governments;
18.30(2) changes in expenditures for local governments, including program and
18.31administration costs; and
18.32(3) incidences of tax shifting, including identifying the target audience (taxpayers
18.33who benefit from the tax shift) and the impact audience (taxpayers who bear the burden of
18.34the tax shift).
18.35For tax bills, the local impact network of political subdivisions shall rate the impact
18.36on Minnesota's tax system using the tax principles contained in subdivision 2.
19.1Some of the cost for preparing this information is distributed to the local impact
19.2network as provided under section 477A.03, subdivision 2b, paragraph (b).
19.3EFFECTIVE DATE.This section is effective the day following final enactment.

19.4    Sec. 6. [275.77] TEMPORARY SUSPENSION OF NEW OR INCREASED
19.5MAINTENANCE OF EFFORT AND MATCHING FUND REQUIREMENTS.
19.6    Subdivision 1. Definitions. For purposes of this section, the following terms have
19.7the meanings given them:
19.8(1) "maintenance of effort" means a requirement imposed on a political subdivision
19.9by state law to continue providing funding of a service or program at a given or increasing
19.10level based on its funding of the service and program in prior years;
19.11(2) "matching fund requirements" means a requirement imposed on a political
19.12subdivision by state law to fund a portion of a program or service but does not mean
19.13required nonstate contributions to state capital funded projects or other nonstate
19.14contributions required in order to receive a grant or loan the political subdivision has
19.15requested or applied for; and
19.16(3) "political subdivision" means a county, town, or statutory or home rule charter
19.17city.
19.18    Subd. 2. Temporary suspension. (a) Notwithstanding any other provision of law
19.19to the contrary, any new maintenance of effort or matching fund requirement enacted
19.20after January 1, 2009, that will require spending by a political subdivision shall not be
19.21effective until January 1, 2012.
19.22(b) Notwithstanding any other provision of law to the contrary, any changes to
19.23existing maintenance of effort or matching fund requirement enacted after January 1,
19.242009, that will require new spending by a political subdivision shall not be effective
19.25until January 1, 2012.
19.26(c) The suspension of changes to existing maintenance of effort and matching fund
19.27requirements under paragraph (b) does not apply if the spending is required by federal law
19.28and there would be a cost to the state budget without the change.
19.29EFFECTIVE DATE.This section is effective the day following final enactment.

19.30    Sec. 7. Minnesota Statutes 2008, section 477A.03, subdivision 2b, is amended to read:
19.31    Subd. 2b. Counties. (a) For aids payable in 2009 and thereafter, the total aid
19.32payable under section 477A.0124, subdivision 3, is $111,500,000 minus one-half of the
19.33total aid amount determined under section 477A.0124, subdivision 5, paragraph (b),
20.1subject to adjustment in subdivision 5. Each calendar year, $500,000 shall be retained
20.2by the commissioner of revenue to make reimbursements to the commissioner of finance
20.3for payments made under section 611.27. For calendar year 2004, the amount shall
20.4be in addition to the payments authorized under section 477A.0124, subdivision 1.
20.5For calendar year 2005 and subsequent years, the amount shall be deducted from the
20.6appropriation under this paragraph. The reimbursements shall be to defray the additional
20.7costs associated with court-ordered counsel under section 611.27. Any retained amounts
20.8not used for reimbursement in a year shall be included in the next distribution of county
20.9need aid that is certified to the county auditors for the purpose of property tax reduction
20.10for the next taxes payable year.
20.11    (b) For aids payable in 2009 and thereafter, the total aid under section 477A.0124,
20.12subdivision 4 , is $116,132,923 minus one-half of the total aid amount determined under
20.13section 477A.0124, subdivision 5, paragraph (b), subject to adjustment in subdivision
20.145. The commissioner of finance shall bill the commissioner of revenue for the cost of
20.15preparation of local impact notes as required by section 3.987, not to exceed $207,000 in
20.16fiscal year 2004 and thereafter. The commissioner of education shall bill the commissioner
20.17of revenue for the cost of preparation of local impact notes for school districts as
20.18required by section 3.987, not to exceed $7,000 in fiscal year 2004 and thereafter. The
20.19commissioner of revenue shall deduct the amounts billed under this paragraph from
20.20the appropriation under this paragraph. The amounts deducted are appropriated to the
20.21commissioner of finance and the commissioner of education for the preparation of local
20.22impact notes. The commissioner of finance shall annually use at least $150,000 of the
20.23$207,000 appropriation to contract with the representative associations for counties, cities,
20.24towns, and school districts to establish a local impact network of political subdivisions
20.25for preparing local impact notes that provide information to the legislature as provided in
20.26section 270C.991, subdivision 7.
20.27EFFECTIVE DATE.This section is effective for fiscal year 2010 and thereafter.

20.28ARTICLE 3

20.29LOCAL GOVERNMENT FLEXIBILITY AND MANDATE
20.30REDUCTION PROVISIONS

20.31    Section 1. Minnesota Statutes 2008, section 3.842, subdivision 4a, is amended to read:
20.32    Subd. 4a. Objections to rules. (a) For purposes of this subdivision, "committee"
20.33means the house of representatives policy committee or senate policy committee with
20.34primary jurisdiction over state governmental operations. The commission, the Legislative
20.35Commission on Mandate Reform, or a committee may object to a rule as provided in
21.1this subdivision. If the commission, the Legislative Commission on Mandate Reform,
21.2or a committee objects to all or some portion of a rule because the commission, the
21.3Legislative Commission on Mandate Reform, or a committee considers it to be beyond
21.4the procedural or substantive authority delegated to the agency, including a proposed rule
21.5submitted under section 14.15, subdivision 4, or 14.26, subdivision 3, paragraph (c), the
21.6commission, the Legislative Commission on Mandate Reform, or a committee may file
21.7that objection in the Office of the Secretary of State. The filed objection must contain a
21.8concise statement of the commission's, the Legislative Commission on Mandate Reform,
21.9or a committee's reasons for its action. An objection to a proposed rule submitted by the
21.10commission, the Legislative Commission on Mandate Reform, or a committee under
21.11section 14.15, subdivision 4, or 14.26, subdivision 3, paragraph (c), may not be filed
21.12before the rule is adopted.
21.13(b) The secretary of state shall affix to each objection a certification of the date and
21.14time of its filing and as soon after the objection is filed as practicable shall transmit a
21.15certified copy of it to the agency issuing the rule in question and to the revisor of statutes.
21.16The secretary of state shall also maintain a permanent register open to public inspection of
21.17all objections by the commission, the Legislative Commission on Mandate Reform, or
21.18a committee.
21.19(c) The commission, the Legislative Commission on Mandate Reform, or a
21.20committee shall publish and index an objection filed under this section in the next issue
21.21of the State Register. The revisor of statutes shall indicate the existence of the objection
21.22adjacent to the rule in question when that rule is published in Minnesota Rules.
21.23(d) Within 14 days after the filing of an objection by the commission, the Legislative
21.24Commission on Mandate Reform, or a committee to a rule, the issuing agency shall
21.25respond in writing to the objecting entity. After receipt of the response, the commission,
21.26the Legislative Commission on Mandate Reform, or a committee may withdraw or modify
21.27its objection.
21.28(e) After the filing of an objection by the commission, the Legislative Commission
21.29on Mandate Reform, or a committee that is not subsequently withdrawn, the burden is
21.30upon the agency in any proceeding for judicial review or for enforcement of the rule to
21.31establish that the whole or portion of the rule objected to is valid.
21.32(f) The failure of the commission, the Legislative Commission on Mandate Reform,
21.33or a committee to object to a rule is not an implied legislative authorization of its validity.
21.34(g) In accordance with sections 14.44 and 14.45, the commission, the Legislative
21.35Commission on Mandate Reform, or a committee may petition for a declaratory judgment
21.36to determine the validity of a rule objected to by the commission, the Legislative
22.1Commission on Mandate Reform, or a committee. The action must be started within two
22.2years after an objection is filed in the Office of the Secretary of State.
22.3(h) The commission, the Legislative Commission on Mandate Reform, or a
22.4committee may intervene in litigation arising from agency action. For purposes of this
22.5paragraph, agency action means the whole or part of a rule, or the failure to issue a rule.

22.6    Sec. 2. Minnesota Statutes 2008, section 3.843, is amended to read:
22.73.843 PUBLIC HEARINGS BY STATE AGENCIES.
22.8By a vote of a majority of its members, the commission or the Legislative
22.9Commission on Mandate Reform may request any agency issuing rules to hold a
22.10public hearing in respect to recommendations made under section 3.842, including
22.11recommendations made by the commission or the Legislative Commission on Mandate
22.12Reform to promote adequate and proper rules by that agency and recommendations
22.13contained in the commission's biennial report. The agency shall give notice as provided in
22.14section 14.14, subdivision 1, of a hearing under this section, to be conducted in accordance
22.15with sections 14.05 to 14.28. The hearing must be held not more than 60 days after receipt
22.16of the request or within any other longer time period specified by the commission or the
22.17Legislative Commission on Mandate Reform in the request.

22.18    Sec. 3. [3.99] LEGISLATIVE COMMISSION ON MANDATE REFORM;
22.19ESTABLISHED.
22.20    Subdivision 1. Established. The Legislative Commission on Mandate Reform is
22.21established as provided in this section, with the powers and duties given it in sections
22.223.842, subdivision 4a; 3.843; and 3.99 to 3.992.
22.23    Subd. 2. Membership. The commission consists of four senators appointed by the
22.24senate Subcommittee on Committees of the Committee on Rules and Administration,
22.25three senators appointed by the senate minority leader, four state representatives appointed
22.26by the speaker of the house, and three state representatives appointed by the house
22.27of representatives minority leader. The appointing authorities must ensure balanced
22.28geographic representation. Each appointing authority must make appointments as soon as
22.29possible.
22.30    Subd. 3. Terms; vacancies. Members of the commission serve for a two-year term
22.31beginning upon appointment and expiring upon appointment of a successor after the
22.32opening of the next regular session of the legislature in the odd-numbered year. A vacancy
22.33in the membership of the commission must be filled for the unexpired term in a manner
22.34that preserves the representation established by this section.
23.1    Subd. 4. Chair. The commission must meet as soon as practicable after members
23.2are appointed in each odd-numbered year to elect its chair and other officers as it may
23.3determine necessary. A chair serves a two-year term, expiring in the odd-numbered year
23.4after a successor is elected. The chair must alternate biennially between the senate and the
23.5house of representatives.
23.6    Subd. 5. Compensation. Members may be reimbursed for their reasonable
23.7expenses as members of the legislature.
23.8    Subd. 6. Staff. The Legislative Coordinating Commission must provide
23.9administrative support to the commission, including secretarial services, record keeping,
23.10and grants administration.
23.11    Subd. 7. Meetings; procedures; tie votes. The first meeting of the biennium must
23.12be convened by the member designated by the senate majority leader if a senator is to chair
23.13the commission for the biennium, or by the speaker of the house if a state representative
23.14is to chair the commission for the biennium. The commission meets at the call of the
23.15chair. Commission action requires a positive vote of at least four house of representatives
23.16members and at least four senate members.
23.17    Subd. 8. Funding. The Legislative Coordinating Commission shall annually bill the
23.18commissioner of revenue for costs incurred by the Legislative Coordinating Commission
23.19in providing administrative support and to make the grants authorized by the legislative
23.20commission on unnecessary mandates, in an amount not to exceed $100,000 per year. The
23.21commissioner of revenue shall deduct one-half of the certified costs from payments to
23.22counties under section 477A.03, subdivision 2b, and one-half of the certified costs from
23.23payments to cities under section 477A.03, subdivision 2a.

23.24    Sec. 4. [3.991] LEGISLATIVE COMMISSION ON MANDATE REFORM;
23.25REVIEW AND RECOMMENDATIONS TO LEGISLATURE.
23.26The Legislative Commission on Mandate Reform must solicit from local
23.27governments information on state laws and rules that local governments consider to be
23.28problematic mandates. The commission must review the mandates identified and consider
23.29why each mandate was enacted or adopted, whether the reason for it still exists, the costs
23.30to local governments to comply with the mandate, and whether repeal or modification
23.31of the mandate is appropriate. Before the beginning of each legislative session, the
23.32commission must prepare for introduction a bill to repeal or modify those laws or rules the
23.33commission determines are unnecessary.

24.1    Sec. 5. [3.992] LEGISLATIVE COMMISSION ON MANDATE REFORM;
24.2GRANTS.
24.3Upon recommendation of the Legislative Commission on Mandate Reform,
24.4the commissioner of revenue may make grants to the League of Minnesota Cities,
24.5the Association of Minnesota Counties, Minnesota Association of Townships, other
24.6organizations representing local governments, the Board of Regents of the University of
24.7Minnesota, the Board of Trustees of Minnesota State Colleges and Universities, or other
24.8accredited postsecondary institutions to research and make recommendations on mandate
24.9reform. A grant may be in any amount up to $........ The commissioner must specify the
24.10work to be done, the completion date, and the maximum grant amount, and may specify
24.11any other conditions the commissioner deems necessary or useful.

24.12    Sec. 6. [3.993] EXPIRATION.
24.13Sections 3.99 to 3.992 expire June 30, 2013.

24.14    Sec. 7. [14.128] EFFECTIVE DATE FOR RULES REQUIRING LOCAL
24.15IMPLEMENTATION.
24.16    Subdivision 1. Determination. An agency must determine if a local government is
24.17required to adopt or amend an ordinance or other regulation to comply with a proposed
24.18agency rule. An agency must make this determination before the close of the hearing
24.19record or before the agency submits the record to the administrative law judge if there
24.20is no hearing. The administrative law judge must review and approve or disapprove
24.21the agency's determination. "Local government" means a town, county, or home rule
24.22charter or statutory city.
24.23    Subd. 2. Effective dates. If the agency determines that the proposed rule requires
24.24adoption or amendment of an ordinance or other regulation, or if the administrative law
24.25judge disapproves the agency's determination that the rule does not have this effect, the
24.26rule may not become effective until:
24.27(1) the next July 1 or January 1 after notice of final adoption is published in the
24.28State Register; or
24.29(2) a later date provided by law or specified in the proposed rule.
24.30    Subd. 3. Exceptions. Subdivision 2 does not apply:
24.31(1) to a rule adopted under section 14.388, 14.389, or 14.3895, or under another law
24.32specifying that the rulemaking procedures of this chapter do not apply;
25.1(2) if the administrative law judge approves an agency's determination that the rule
25.2has been proposed pursuant to a specific federal statutory or regulatory mandate that
25.3requires the rule to take effect before the date specified in subdivision 1; or
25.4(3) if the governor waives application of subdivision 2.

25.5    Sec. 8. Minnesota Statutes 2008, section 16C.28, subdivision 1a, is amended to read:
25.6    Subd. 1a. Establishment and purpose. (a) The state recognizes the importance of
25.7the inclusion of a best value contracting system for construction as an alternative to the
25.8current low-bid system of procurement. In order to accomplish that goal, state and local
25.9governmental entities shall be able to choose the best value system in different phases.
25.10    (b) "Best value" means the procurement method defined in section 16C.02,
25.11subdivision 4a.
25.12    (c) The following entities are eligible to participate in phase I:
25.13    (1) state agencies;
25.14    (2) counties;
25.15    (3) cities; and
25.16    (4) school districts with the highest 25 percent enrollment of students in the state.
25.17Phase I begins on July 1, 2007.
25.18    (d) The following entities are eligible to participate in phase II:
25.19    (1) those entities included in phase I; and
25.20    (2) school districts with the highest 50 percent enrollment of students in the state.
25.21Phase II begins two years from July 1, 2007.
25.22    (e) The following entities are eligible to participate in phase III:
25.23    (1) all entities included in phases I and II; and
25.24    (2) all other townships, school districts, and political subdivisions in the state.
25.25Phase III begins three years from July 1, 2007.
25.26    (f) The commissioner or any agency for which competitive bids or proposals are
25.27required may not use best value contracting as defined in section 16C.02, subdivision 4a,
25.28for more than one project annually, or 20 percent of its projects, whichever is greater, in
25.29each of the first three fiscal years in which best value construction contracting is used.

25.30    Sec. 9. Minnesota Statutes 2008, section 306.243, is amended by adding a subdivision
25.31to read:
26.1    Subd. 6. Abandonment; end of operation as cemetery. A county that has accepted
26.2responsibility for an abandoned cemetery may prohibit further burials in the abandoned
26.3cemetery, and may cease all acceptance of responsibility for new burials.

26.4    Sec. 10. Minnesota Statutes 2008, section 344.18, is amended to read:
26.5344.18 COMPENSATION OF VIEWERS.
26.6Fence viewers must be paid for their services by the person employing them at the
26.7rate of $15 each for each day's employment. $60 must be deposited with the town or city
26.8treasurer before the service is performed. Upon completion of the service, any of the $60
26.9not spent to compensate the fence viewers must be returned to the depositor. The town
26.10board may by resolution require the person employing the fence viewers to post a bond or
26.11other security acceptable to the board for the total estimated costs before the viewing takes
26.12place. The total estimated costs may include the cost of professional and other services,
26.13hearing costs, administrative costs, recording costs, and other costs and expenses which
26.14the town may incur in connection with the viewing.

26.15    Sec. 11. Minnesota Statutes 2008, section 365.28, is amended to read:
26.16365.28 PUBLIC BURIAL GROUND IS TOWN'S AFTER TEN YEARS.
26.17A tract of land in a town becomes town property after it has been used as a public
26.18burial ground for ten years if the tract is not owned by a cemetery association. The town
26.19board shall control the burial ground as it controls other town cemeteries. A town that has
26.20assumed ownership of a cemetery may prohibit further burials in it.

26.21    Sec. 12. Minnesota Statutes 2008, section 373.052, subdivision 1, is amended to read:
26.22    Subdivision 1. Business days. County offices shall be open for public business on
26.23all at least four business days per week except (a) legal holidays, (b) holidays established
26.24by the county board pursuant to contract with certified employee bargaining units, and
26.25(c) emergency situations. For purposes of this section "business day" means Monday,
26.26Tuesday, Wednesday, Thursday, and Friday.

26.27    Sec. 13. Minnesota Statutes 2008, section 429.041, subdivision 1, is amended to read:
26.28    Subdivision 1. Plans and specifications, advertisement for bids. When the
26.29council determines to make any improvement, it shall let the contract for all or part of
26.30the work, or order all or part of the work done by day labor or otherwise as authorized by
26.31subdivision 2, no later than one year after the adoption of the resolution ordering such
26.32improvement, unless a different time limit is specifically stated in the resolution ordering
27.1the improvement. The council shall cause plans and specifications of the improvement
27.2to be made, or if previously made, to be modified, if necessary, and to be approved and
27.3filed with the clerk, and if the estimated cost exceeds $50,000 the amount in section
27.4471.345, subdivision 3, shall advertise for bids for the improvement in the newspaper and
27.5such other papers and for such length of time as it may deem advisable. If the estimated
27.6cost exceeds $100,000 twice the amount in section 471.345, subdivision 3, publication
27.7shall be made no less than three weeks before the last day for submission of bids once
27.8in the newspaper and at least once in either a newspaper published in a city of the first
27.9class or a trade paper. To be eligible as such a trade paper, a publication shall have all
27.10the qualifications of a legal newspaper except that instead of the requirement that it shall
27.11contain general and local news, such trade paper shall contain building and construction
27.12news of interest to contractors in this state, among whom it shall have a general circulation.
27.13The advertisement shall specify the work to be done, shall state the time when the bids
27.14will be publicly opened for consideration by the council, which shall be not less than ten
27.15days after the first publication of the advertisement when the estimated cost is less than
27.16$100,000 twice the amount in section 471.345, subdivision 3, and not less than three
27.17weeks after such publication in other cases, and shall state that no bids will be considered
27.18unless sealed and filed with the clerk and accompanied by a cash deposit, cashier's check,
27.19bid bond, or certified check payable to the clerk, for such percentage of the amount of the
27.20bid as the council may specify. In providing for the advertisement for bids the council
27.21may direct that the bids shall be opened publicly by two or more designated officers or
27.22agents of the municipality and tabulated in advance of the meeting at which they are to
27.23be considered by the council. Nothing herein shall prevent the council from advertising
27.24separately for various portions of the work involved in an improvement, or from itself,
27.25supplying by such means as may be otherwise authorized by law, all or any part of the
27.26materials, supplies, or equipment to be used in the improvement or from combining two or
27.27more improvements in a single set of plans and specifications or a single contract.

27.28    Sec. 14. Minnesota Statutes 2008, section 429.041, subdivision 2, is amended to read:
27.29    Subd. 2. Contracts; day labor. In contracting for an improvement, the council shall
27.30require the execution of one or more written contracts and bonds, conditioned as required
27.31by law. The council shall award the contract to the lowest responsible bidder or it may
27.32reject all bids. If any bidder to whom a contract is awarded fails to enter promptly into
27.33a written contract and to furnish the required bond, the defaulting bidder shall forfeit to
27.34the municipality the amount of the defaulter's cash deposit, cashier's check, bid bond, or
27.35certified check, and the council may thereupon award the contract to the next lowest
28.1responsible bidder. When it appears to the council that the cost of the entire work projected
28.2will be less than $50,000 the amount in section 471.345, subdivision 3, or whenever no
28.3bid is submitted after proper advertisement or the only bids submitted are higher than
28.4the engineer's estimate, the council may advertise for new bids or, without advertising
28.5for bids, directly purchase the materials for the work and do it by the employment of day
28.6labor or in any other manner the council considers proper. The council may have the
28.7work supervised by the city engineer or other qualified person but shall have the work
28.8supervised by a registered engineer if done by day labor and it appears to the council that
28.9the entire cost of all work and materials for the improvement will be more than $25,000
28.10the lowest amount in section 471.345, subdivision 4. In case of improper construction
28.11or unreasonable delay in the prosecution of the work by the contractor, the council may
28.12order and cause the suspension of the work at any time and relet the contract, or order
28.13a reconstruction of any portion of the work improperly done, and where the cost of
28.14completion or reconstruction necessary will be less than $50,000 the amount in section
28.15471.345, subdivision 3, the council may do it by the employment of day labor.

28.16    Sec. 15. Minnesota Statutes 2008, section 469.015, is amended to read:
28.17469.015 LETTING OF CONTRACTS; PERFORMANCE BONDS.
28.18    Subdivision 1. Bids; notice. All construction work, and work of demolition or
28.19clearing, and every purchase of equipment, supplies, or materials, necessary in carrying
28.20out the purposes of sections 469.001 to 469.047, that involve expenditure of $50,000 the
28.21amount in section 471.345, subdivision 3, or more shall be awarded by contract. Before
28.22receiving bids the authority shall publish, once a week for two consecutive weeks in an
28.23official newspaper of general circulation in the community a notice that bids will be
28.24received for that construction work, or that purchase of equipment, supplies, or materials.
28.25The notice shall state the nature of the work and the terms and conditions upon which the
28.26contract is to be let, naming a time and place where bids will be received, opened and read
28.27publicly, which time shall be not less than seven days after the date of the last publication.
28.28After the bids have been received, opened and read publicly and recorded, the authority
28.29shall award the contract to the lowest responsible bidder, provided that the authority
28.30reserves the right to reject any or all bids. Each contract shall be executed in writing, and
28.31the person to whom the contract is awarded shall give sufficient bond to the authority for its
28.32faithful performance. If no satisfactory bid is received, the authority may readvertise. The
28.33authority may establish reasonable qualifications to determine the fitness and responsibility
28.34of bidders and to require bidders to meet the qualifications before bids are accepted.
29.1    Subd. 1a. Best value alternative. As an alternative to the procurement method
29.2described in subdivision 1, the authority may issue a request for proposals and award the
29.3contract to the vendor or contractor offering the best value under a request for proposals as
29.4described in section 16C.28, subdivision 1, paragraph (a), clause (2), and paragraph (c).
29.5    Subd. 2. Exception; emergency. If the authority by a vote of four-fifths of its
29.6members shall declare that an emergency exists requiring the immediate purchase of any
29.7equipment or material or supplies at a cost in excess of $50,000 the amount in section
29.8471.345, subdivision 3, but not exceeding $75,000 half again as much as the amount in
29.9section 471.345, subdivision 3, or making of emergency repairs, it shall not be necessary
29.10to advertise for bids, but the material, equipment, or supplies may be purchased in the
29.11open market at the lowest price obtainable, or the emergency repairs may be contracted for
29.12or performed without securing formal competitive bids. An emergency, for purposes of
29.13this subdivision, shall be understood to be unforeseen circumstances or conditions which
29.14result in the placing in jeopardy of human life or property.
29.15    Subd. 3. Performance and payment bonds. Performance and payment bonds shall
29.16be required from contractors for any works of construction as provided in and subject
29.17to all the provisions of sections 574.26 to 574.31 except for contracts entered into by
29.18an authority for an expenditure of less than $50,000 the minimum threshold amount in
29.19section 471.345, subdivision 3.
29.20    Subd. 4. Exceptions. (a) An authority need not require competitive bidding in the
29.21following circumstances:
29.22(1) in the case of a contract for the acquisition of a low-rent housing project:
29.23(i) for which financial assistance is provided by the federal government;
29.24(ii) which does not require any direct loan or grant of money from the municipality
29.25as a condition of the federal financial assistance; and
29.26(iii) for which the contract provides for the construction of the project upon land that
29.27is either owned by the authority for redevelopment purposes or not owned by the authority
29.28at the time of the contract but the contract provides for the conveyance or lease to the
29.29authority of the project or improvements upon completion of construction;
29.30(2) with respect to a structured parking facility:
29.31(i) constructed in conjunction with, and directly above or below, a development; and
29.32(ii) financed with the proceeds of tax increment or parking ramp general obligation
29.33or revenue bonds;
29.34(3) until August 1, 2009, with respect to a facility built for the purpose of facilitating
29.35the operation of public transit or encouraging its use:
29.36(i) constructed in conjunction with, and directly above or below, a development; and
30.1(ii) financed with the proceeds of parking ramp general obligation or revenue bonds
30.2or with at least 60 percent of the construction cost being financed with funding provided
30.3by the federal government; and
30.4(4) in the case of any building in which at least 75 percent of the usable square
30.5footage constitutes a housing development project if:
30.6(i) the project is financed with the proceeds of bonds issued under section 469.034 or
30.7from nongovernmental sources;
30.8(ii) the project is either located on land that is owned or is being acquired by the
30.9authority only for development purposes, or is not owned by the authority at the time the
30.10contract is entered into but the contract provides for conveyance or lease to the authority
30.11of the project or improvements upon completion of construction; and
30.12(iii) the authority finds and determines that elimination of the public bidding
30.13requirements is necessary in order for the housing development project to be economical
30.14and feasible.
30.15(b) An authority need not require a performance bond for the following projects:
30.16(1) a contract described in paragraph (a), clause (1);
30.17(2) a construction change order for a housing project in which 30 percent of the
30.18construction has been completed;
30.19(3) a construction contract for a single-family housing project in which the authority
30.20acts as the general construction contractor; or
30.21(4) a services or materials contract for a housing project.
30.22For purposes of this paragraph, "services or materials contract" does not include
30.23construction contracts.
30.24    Subd. 5. Security in lieu of bond. The authority may accept a certified check or
30.25cashier's check in the same amount as required for a bond in lieu of a performance bond
30.26for contracts entered into by an authority for an expenditure of less than $50,000 the
30.27minimum threshold amount in section 471.345, subdivision 3. The check must be held by
30.28the authority for 90 days after the contract has been completed. If no suit is brought within
30.29the 90 days, the authority must return the amount of the check to the person making it. If a
30.30suit is brought within the 90-day period, the authority must disburse the amount of the
30.31check pursuant to the order of the court.

30.32    Sec. 16. Minnesota Statutes 2008, section 641.12, subdivision 1, is amended to read:
30.33    Subdivision 1. Fee. A county board may require that each person who is booked for
30.34confinement at a county or regional jail, and not released upon completion of the booking
30.35process, pay a fee of up to $10 to the sheriff's department of the county in which the jail
31.1is located to cover costs incurred by the county in the booking of that person. The fee
31.2is payable immediately from any money then possessed by the person being booked, or
31.3any money deposited with the sheriff's department on the person's behalf. If the person
31.4has no funds at the time of booking or during the period of any incarceration, the sheriff
31.5shall notify the district court in the county where the charges related to the booking are
31.6pending, and shall request the assessment of the fee. Notwithstanding section 609.10 or
31.7609.125 , upon notification from the sheriff, the district court must order the fee paid to the
31.8sheriff's department as part of any sentence or disposition imposed. If the person is not
31.9charged, is acquitted, or if the charges are dismissed, the sheriff shall return the fee to the
31.10person at the last known address listed in the booking records.

31.11    Sec. 17. FIRST MEETING AFTER EFFECTIVE DATE OF ACT.
31.12The first meeting of the Legislative Commission on Mandate Reform must be held
31.13as soon as practicable after all appointments are made. The speaker of the house must
31.14designate a commission member to convene the first meeting. The first commission serves
31.15until a new commission is appointed at the beginning of the next biennium.

31.16ARTICLE 4

31.17TRUTH IN TAXATION

31.18    Section 1. Minnesota Statutes 2008, section 123B.10, subdivision 1, is amended to read:
31.19    Subdivision 1. Budgets; form of notification. (a) Every board must publish revenue
31.20and expenditure budgets for the current year and the actual revenues, expenditures, fund
31.21balances for the prior year and projected fund balances for the current year in a form
31.22prescribed by the commissioner within one week of the acceptance of the final audit by
31.23the board, or November 30, whichever is earlier. The forms prescribed must be designed
31.24so that year to year comparisons of revenue, expenditures and fund balances can be made.
31.25    (b) A school board annually must notify the public of its revenue, expenditures, fund
31.26balances, and other relevant budget information. The board must include the budget
31.27information required by this section in the materials provided as a part of its truth in
31.28taxation hearing, post the materials in a conspicuous place on the district's official Web
31.29site, including a link to the district's school report card on the Department of Education's
31.30Web site, and publish the information in a qualified newspaper of general circulation
31.31in the district.
31.32EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
31.33thereafter.

32.1    Sec. 2. Minnesota Statutes 2008, section 275.065, subdivision 1, is amended to read:
32.2    Subdivision 1. Proposed levy. (a) Notwithstanding any law or charter to the
32.3contrary, on or before September 15 5, each taxing authority, other than a school district,
32.4shall adopt a proposed budget and shall certify to the county auditor the proposed or, in
32.5the case of a town, the final property tax levy for taxes payable in the following year.
32.6    (b) On or before September 30 20, each school district that has not mutually agreed
32.7with its home county to extend this date shall certify to the county auditor the proposed
32.8property tax levy for taxes payable in the following year. Each school district that has
32.9agreed with its home county to delay the certification of its proposed property tax levy
32.10must certify its proposed property tax levy for the following year no later than October 7
32.11September 28. The school district shall certify the proposed levy as:
32.12    (1) a specific dollar amount by school district fund, broken down between
32.13voter-approved and non-voter-approved levies and between referendum market value
32.14and tax capacity levies; or
32.15    (2) the maximum levy limitation certified by the commissioner of education
32.16according to section 126C.48, subdivision 1.
32.17    (c) If the board of estimate and taxation or any similar board that establishes
32.18maximum tax levies for taxing jurisdictions within a first class city certifies the maximum
32.19property tax levies for funds under its jurisdiction by charter to the county auditor by
32.20September 15 1, the city shall be deemed to have certified its levies for those taxing
32.21jurisdictions.
32.22    (d) For purposes of this section, "taxing authority" includes all home rule and
32.23statutory cities, towns, counties, school districts, and special taxing districts as defined
32.24in section 275.066. Intermediate school districts that levy a tax under chapter 124 or
32.25136D, joint powers boards established under sections 123A.44 to 123A.446, and Common
32.26School Districts No. 323, Franconia, and No. 815, Prinsburg, are also special taxing
32.27districts for purposes of this section.
32.28(e) At the meeting where the taxing authority adopts its proposed tax levy under
32.29paragraph (a) or (b), the taxing authority shall announce the time and place of its
32.30subsequent regularly scheduled meetings at which the budget levy will be discussed and at
32.31which the public will be allowed to speak. The time and place of those meetings must
32.32be included in the proceedings or summary of the proceedings published in the official
32.33newspaper of the taxing authority under section 123B.09, 375.12, or 412.191.
32.34EFFECTIVE DATE.This section is effective for proposed notices prepared in 2010
32.35and thereafter, for property taxes payable in 2011 and thereafter, except that paragraph
32.36(e) is effective for taxes payable in 2010 and thereafter.

33.1    Sec. 3. Minnesota Statutes 2008, section 275.065, subdivision 1a, is amended to read:
33.2    Subd. 1a. Overlapping jurisdictions. In the case of a taxing authority lying in two
33.3or more counties, the home county auditor shall certify the proposed levy and the proposed
33.4local tax rate to the other county auditor by October 5 September 20, unless the home
33.5county has agreed to delay the certification of its proposed property tax levy, in which case
33.6the home county auditor shall certify the proposed levy and the proposed local tax rate
33.7to the other county auditor by October 10 September 25. The home county auditor must
33.8estimate the levy or rate in preparing the notices required in subdivision 3, if the other
33.9county has not certified the appropriate information. If requested by the home county
33.10auditor, the other county auditor must furnish an estimate to the home county auditor.
33.11EFFECTIVE DATE.This section is effective for proposed notices prepared in
33.122010 and thereafter, for property taxes payable in 2011 and thereafter.

33.13    Sec. 4. Minnesota Statutes 2008, section 275.065, subdivision 1c, is amended to read:
33.14    Subd. 1c. Levy; shared, merged, consolidated services. If two or more taxing
33.15authorities are in the process of negotiating an agreement for sharing, merging, or
33.16consolidating services between those taxing authorities at the time the proposed levy is to
33.17be certified under subdivision 1, each taxing authority involved in the negotiation shall
33.18certify its total proposed levy as provided in that subdivision, including a notification to the
33.19county auditor of the specific service involved in the agreement which is not yet finalized.
33.20The affected taxing authorities may amend their proposed levies under subdivision 1 until
33.21October 10 September 25 for levy amounts relating only to the specific service involved.
33.22EFFECTIVE DATE.This section is effective for proposed notices prepared in
33.232010 and thereafter, for property taxes payable in 2011 and thereafter.

33.24    Sec. 5. Minnesota Statutes 2008, section 275.065, subdivision 3, is amended to read:
33.25    Subd. 3. Notice of proposed property taxes. (a) The county auditor shall prepare
33.26and the county treasurer shall deliver after November 10 October 15 and on or before
33.27November October 24 each year, by first class mail to each taxpayer at the address listed
33.28on the county's current year's assessment roll, a notice of proposed property taxes. Upon
33.29written request by the taxpayer, the treasurer may send the notice in electronic form or by
33.30electronic mail instead of on paper or by ordinary mail.
33.31    (b) The commissioner of revenue shall prescribe the form of the notice.
33.32    (c) The notice must inform taxpayers that it contains the amount of property taxes
33.33each taxing authority proposes to collect for taxes payable the following year. In the
34.1case of a town, or in the case of the state general tax, the final tax amount will be its
34.2proposed tax. In the case of taxing authorities required to hold a public meeting under
34.3subdivision 6, the notice must clearly state that each taxing authority, including regional
34.4library districts established under section 134.201, and including the metropolitan taxing
34.5districts as defined in paragraph (i), but excluding all other special taxing districts and
34.6towns, will hold a public meeting to receive public testimony on the proposed budget and
34.7proposed or final property tax levy, or, in case of a school district, on the current budget
34.8and proposed property tax levy. The notice must clearly state for each city, county, school
34.9district, regional library authority established under section 134.201, and metropolitan
34.10taxing districts as defined in paragraph (i), the time and place of the taxing authorities
34.11regularly scheduled meetings occurring after October 24 at which the budget and levy will
34.12be discussed. The taxing authorities must provide the county auditor with the information
34.13to be included in the notice on or before the time it certifies its proposed levy under
34.14subdivision 1. The public shall be allowed to speak at that meeting. It must clearly state
34.15the time and place of each taxing authority's meeting, provide a telephone number for the
34.16taxing authority that taxpayers may call if they have questions related to the notice, and an
34.17address where comments will be received by mail.
34.18    (d) The notice must state for each parcel:
34.19    (1) the market value of the property as determined under section 273.11, and used
34.20for computing property taxes payable in the following year and for taxes payable in the
34.21current year as each appears in the records of the county assessor on November October
34.221 of the current year; and, in the case of residential property, whether the property is
34.23classified as homestead or nonhomestead. The notice must clearly inform taxpayers of the
34.24years to which the market values apply and that the values are final values;
34.25    (2) the items listed below, shown separately by county, city or town, and state general
34.26tax, net of the residential and agricultural homestead credit under section 273.1384, voter
34.27approved school levy, other local school levy, and the sum of the special taxing districts,
34.28and as a total of all taxing authorities:
34.29    (i) the actual tax for taxes payable in the current year; and
34.30    (ii) the proposed tax amount.
34.31    If the county levy under clause (2) includes an amount for a lake improvement
34.32district as defined under sections 103B.501 to 103B.581, the amount attributable for that
34.33purpose must be separately stated from the remaining county levy amount.
34.34    In the case of a town or the state general tax, the final tax shall also be its proposed
34.35tax unless the town changes its levy at a special town meeting under section 365.52. If a
34.36school district has certified under section 126C.17, subdivision 9, that a referendum will
35.1be held in the school district at the November general election, the county auditor must
35.2note next to the school district's proposed amount that a referendum is pending and that, if
35.3approved by the voters, the tax amount may be higher than shown on the notice. In the
35.4case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be
35.5listed separately from the remaining amount of the city's levy. In the case of the city of
35.6St. Paul, the levy for the St. Paul Library Agency must be listed separately from the
35.7remaining amount of the city's levy. In the case of Ramsey County, any amount levied
35.8under section 134.07 may be listed separately from the remaining amount of the county's
35.9levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax
35.10under chapter 276A or 473F applies, the proposed tax levy on the captured value or the
35.11proposed tax levy on the tax capacity subject to the areawide tax must each be stated
35.12separately and not included in the sum of the special taxing districts; and
35.13    (3) the increase or decrease between the total taxes payable in the current year and
35.14the total proposed taxes, expressed as a percentage.
35.15    For purposes of this section, the amount of the tax on homesteads qualifying under
35.16the senior citizens' property tax deferral program under chapter 290B is the total amount
35.17of property tax before subtraction of the deferred property tax amount.
35.18    (e) The notice must clearly state that the proposed or final taxes do not include
35.19the following:
35.20    (1) special assessments;
35.21    (2) levies approved by the voters after the date the proposed taxes are certified,
35.22including bond referenda and school district levy referenda;
35.23    (3) a levy limit increase approved by the voters by the first Tuesday after the first
35.24Monday in November of the levy year as provided under section 275.73;
35.25    (4) amounts necessary to pay cleanup or other costs due to a natural disaster
35.26occurring after the date the proposed taxes are certified;
35.27    (5) amounts necessary to pay tort judgments against the taxing authority that become
35.28final after the date the proposed taxes are certified; and
35.29    (6) the contamination tax imposed on properties which received market value
35.30reductions for contamination.
35.31    (f) Except as provided in subdivision 7, failure of the county auditor to prepare or
35.32the county treasurer to deliver the notice as required in this section does not invalidate the
35.33proposed or final tax levy or the taxes payable pursuant to the tax levy.
35.34    (g) If the notice the taxpayer receives under this section lists the property as
35.35nonhomestead, and satisfactory documentation is provided to the county assessor by the
35.36applicable deadline, and the property qualifies for the homestead classification in that
36.1assessment year, the assessor shall reclassify the property to homestead for taxes payable
36.2in the following year.
36.3    (h) In the case of class 4 residential property used as a residence for lease or rental
36.4periods of 30 days or more, the taxpayer must either:
36.5    (1) mail or deliver a copy of the notice of proposed property taxes to each tenant,
36.6renter, or lessee; or
36.7    (2) post a copy of the notice in a conspicuous place on the premises of the property.
36.8    The notice must be mailed or posted by the taxpayer by November October 27 or
36.9within three days of receipt of the notice, whichever is later. A taxpayer may notify the
36.10county treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises
36.11to which the notice must be mailed in order to fulfill the requirements of this paragraph.
36.12    (i) For purposes of this subdivision, subdivisions and subdivision 5a and 6,
36.13"metropolitan special taxing districts" means the following taxing districts in the
36.14seven-county metropolitan area that levy a property tax for any of the specified purposes
36.15listed below:
36.16    (1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325,
36.17473.446 , 473.521, 473.547, or 473.834;
36.18    (2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672;
36.19and
36.20    (3) Metropolitan Mosquito Control Commission under section 473.711.
36.21    For purposes of this section, any levies made by the regional rail authorities in the
36.22county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
36.23398A shall be included with the appropriate county's levy and shall be discussed at that
36.24county's public hearing.
36.25    (j) The governing body of a county, city, or school district may, with the consent
36.26of the county board, include supplemental information with the statement of proposed
36.27property taxes about the impact of state aid increases or decreases on property tax
36.28increases or decreases and on the level of services provided in the affected jurisdiction.
36.29This supplemental information may include information for the following year, the current
36.30year, and for as many consecutive preceding years as deemed appropriate by the governing
36.31body of the county, city, or school district. It may include only information regarding:
36.32    (1) the impact of inflation as measured by the implicit price deflator for state and
36.33local government purchases;
36.34    (2) population growth and decline;
36.35    (3) state or federal government action; and
37.1    (4) other financial factors that affect the level of property taxation and local services
37.2that the governing body of the county, city, or school district may deem appropriate to
37.3include.
37.4    The information may be presented using tables, written narrative, and graphic
37.5representations and may contain instruction toward further sources of information or
37.6opportunity for comment.
37.7EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
37.8thereafter, except that the changes advancing the dates for preparing and mailing the
37.9notices are effective for proposed notices in 2010, for taxes payable in 2011 and thereafter.

37.10    Sec. 6. Minnesota Statutes 2008, section 275.065, subdivision 6, is amended to read:
37.11    Subd. 6. Public hearing; Adoption of budget and levy. (a) For purposes of this
37.12section, the following terms shall have the meanings given:
37.13(1) "Initial hearing" means the first and primary hearing held to discuss the taxing
37.14authority's proposed budget and proposed property tax levy for taxes payable in the
37.15following year, or, for school districts, the current budget and the proposed property tax
37.16levy for taxes payable in the following year.
37.17(2) "Continuation hearing" means a hearing held to complete the initial hearing, if
37.18the initial hearing is not completed on its scheduled date.
37.19(3) "Subsequent hearing" means the hearing held to adopt the taxing authority's final
37.20property tax levy, and, in the case of taxing authorities other than school districts, the final
37.21budget, for taxes payable in the following year.
37.22(b) Between November 29 and December 20, the governing bodies of a city that has a
37.23population over 500, county, metropolitan special taxing districts as defined in subdivision
37.243, paragraph (i), and regional library districts shall each hold an initial public hearing
37.25to discuss and seek public comment on its final budget and property tax levy for taxes
37.26payable in the following year, and the governing body of the school district shall hold an
37.27initial public hearing to review its current budget and proposed property tax levy for taxes
37.28payable in the following year. The metropolitan special taxing districts shall be required to
37.29hold only a single joint initial public hearing, the location of which will be determined by
37.30the affected metropolitan agencies. A city, county, metropolitan special taxing district as
37.31defined in subdivision 3, paragraph (i), regional library district established under section
37.32134.201, or school district is not required to hold a public hearing under this subdivision
37.33unless its proposed property tax levy for taxes payable in the following year, as certified
37.34under subdivision 1, has increased over its final property tax levy for taxes payable in the
37.35current year by a percentage that is greater than the percentage increase in the implicit
38.1price deflator for government consumption expenditures and gross investment for state
38.2and local governments prepared by the Bureau of Economic Analysts of the United States
38.3Department of Commerce for the 12-month period ending March 31 of the current year.
38.4(c) The initial hearing must be held after 5:00 p.m. if scheduled on a day other than
38.5Saturday. No initial hearing may be held on a Sunday.
38.6(d) At the initial hearing under this subdivision, the percentage increase in property
38.7taxes proposed by the taxing authority, if any, and the specific purposes for which property
38.8tax revenues are being increased must be discussed. During the discussion, the governing
38.9body shall hear comments regarding a proposed increase and explain the reasons for the
38.10proposed increase. The public shall be allowed to speak and to ask questions. At the public
38.11hearing, the school district must also provide and discuss information on the distribution
38.12of its revenues by revenue source, and the distribution of its spending by program area.
38.13(e) If the initial hearing is not completed on its scheduled date, the taxing authority
38.14must announce, prior to adjournment of the hearing, the date, time, and place for the
38.15continuation of the hearing. The continuation hearing must be held at least five business
38.16days but no more than 14 business days after the initial hearing. A continuation hearing
38.17may not be held later than December 20 except as provided in paragraphs (f) and (g).
38.18A continuation hearing must be held after 5:00 p.m. if scheduled on a day other than
38.19Saturday. No continuation hearing may be held on a Sunday.
38.20(f) The governing body of a county shall hold its initial hearing on the first Thursday
38.21in December each year, and may hold additional initial hearings on other dates before
38.22December 20 if necessary for the convenience of county residents. If the county needs a
38.23continuation of its hearing, the continuation hearing shall be held on the third Tuesday
38.24in December. If the third Tuesday in December falls on December 21, the county's
38.25continuation hearing shall be held on Monday, December 20.
38.26(g) The metropolitan special taxing districts shall hold a joint initial public hearing
38.27on the first Wednesday of December. A continuation hearing, if necessary, shall be held on
38.28the second Wednesday of December even if that second Wednesday is after December 10.
38.29(h) The county auditor shall provide for the coordination of initial and continuation
38.30hearing dates for all school districts and cities within the county to prevent conflicts under
38.31clauses (i) and (j).
38.32(i) By August 10, each school board and the board of the regional library district
38.33shall certify to the county auditors of the counties in which the school district or regional
38.34library district is located the dates on which it elects to hold its initial hearing and any
38.35continuation hearing. If a school board or regional library district does not certify these
38.36dates by August 10, the auditor will assign the initial and continuation hearing dates. The
39.1dates elected or assigned must not conflict with the initial and continuation hearing dates
39.2of the county or the metropolitan special taxing districts.
39.3(j) By August 20, the county auditor shall notify the clerks of the cities within the
39.4county of the dates on which school districts and regional library districts have elected to
39.5hold their initial and continuation hearings. At the time a city certifies its proposed levy
39.6under subdivision 1 it shall certify the dates on which it elects to hold its initial hearing and
39.7any continuation hearing. Until September 15, the first and second Mondays of December
39.8are reserved for the use of the cities. If a city does not certify its hearing dates by
39.9September 15, the auditor shall assign the initial and continuation hearing dates. The dates
39.10elected or assigned for the initial hearing must not conflict with the initial hearing dates
39.11of the county, metropolitan special taxing districts, regional library districts, or school
39.12districts within which the city is located. To the extent possible, the dates of the city's
39.13continuation hearing should not conflict with the continuation hearing dates of the county,
39.14metropolitan special taxing districts, regional library districts, or school districts within
39.15which the city is located. This paragraph does not apply to cities of 500 population or less.
39.16(k) The county initial hearing date and the city, metropolitan special taxing district,
39.17regional library district, and school district initial hearing dates must be designated on
39.18the notices required under subdivision 3. The continuation hearing dates need not be
39.19stated on the notices.
39.20(l) At a subsequent hearing, each county, school district, city over 500 population,
39.21and metropolitan special taxing district may amend its proposed property tax levy
39.22and must adopt a final property tax levy. Each county, city over 500 population, and
39.23metropolitan special taxing district may also amend its proposed budget and must adopt a
39.24final budget at the subsequent hearing. The final property tax levy must be adopted prior
39.25to adopting the final budget. A school district is not required to adopt its final budget at the
39.26subsequent hearing. The subsequent hearing of a taxing authority must be held on a date
39.27subsequent to the date of the taxing authority's initial public hearing. If a continuation
39.28hearing is held, the subsequent hearing must be held either immediately following the
39.29continuation hearing or on a date subsequent to the continuation hearing. The subsequent
39.30hearing may be held at a regularly scheduled board or council meeting or at a special
39.31meeting scheduled for the purposes of the subsequent hearing. The subsequent hearing
39.32of a taxing authority does not have to be coordinated by the county auditor to prevent a
39.33conflict with an initial hearing, a continuation hearing, or a subsequent hearing of any
39.34other taxing authority. All subsequent hearings must be held prior to five working days
39.35after December 20 of the levy year. The date, time, and place of the subsequent hearing
39.36must be announced at the initial public hearing or at the continuation hearing.
40.1(m) (a) The property tax levy certified under section 275.07 by a city of any
40.2population, county, metropolitan special taxing district, regional library district, or school
40.3district must not exceed the proposed levy determined under subdivision 1, except by an
40.4amount up to the sum of the following amounts:
40.5(1) the amount of a school district levy whose voters approved a referendum to
40.6increase taxes under section 123B.63, subdivision 3, or 126C.17, subdivision 9, after
40.7the proposed levy was certified;
40.8(2) the amount of a city or county levy approved by the voters after the proposed
40.9levy was certified;
40.10(3) the amount of a levy to pay principal and interest on bonds approved by the
40.11voters under section 475.58 after the proposed levy was certified;
40.12(4) the amount of a levy to pay costs due to a natural disaster occurring after the
40.13proposed levy was certified, if that amount is approved by the commissioner of revenue
40.14under subdivision 6a;
40.15(5) the amount of a levy to pay tort judgments against a taxing authority that become
40.16final after the proposed levy was certified, if the amount is approved by the commissioner
40.17of revenue under subdivision 6a;
40.18(6) the amount of an increase in levy limits certified to the taxing authority by the
40.19commissioner of education or the commissioner of revenue after the proposed levy was
40.20certified; and
40.21(7) the amount required under section 126C.55; and
40.22(8) the amount of unallotment under section 16A.152 that was recertified under
40.23section 275.07, subdivision 6.
40.24(n) (b) This subdivision does not apply to towns and special taxing districts other
40.25than regional library districts and metropolitan special taxing districts.
40.26(o) (c) Notwithstanding the requirements of this section, the employer is required to
40.27meet and negotiate over employee compensation as provided for in chapter 179A.
40.28EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
40.29thereafter.

40.30    Sec. 7. Minnesota Statutes 2008, section 275.07, subdivision 1, is amended to read:
40.31    Subdivision 1. Certification of levy. (a) Except as provided under paragraph (b),
40.32the taxes voted by cities, counties, school districts, and special districts shall be certified
40.33by the proper authorities to the county auditor on or before five working days after
40.34December 20 10 in each year. A town must certify the levy adopted by the town board to
40.35the county auditor by September 15 5 each year. If the town board modifies the levy at
41.1a special town meeting after September 15 5, the town board must recertify its levy to
41.2the county auditor on or before five working days after December 20 10. If a city, town,
41.3county, school district, or special district fails to certify its levy by that date, its levy shall
41.4be the amount levied by it for the preceding year.
41.5(b)(i) The taxes voted by counties under sections 103B.241, 103B.245, and
41.6103B.251 shall be separately certified by the county to the county auditor on or before
41.7five working days after December 20 10 in each year. The taxes certified shall not be
41.8reduced by the county auditor by the aid received under section 273.1398, subdivision
41.93 . If a county fails to certify its levy by that date, its levy shall be the amount levied by
41.10it for the preceding year.
41.11(ii) For purposes of the proposed property tax notice under section 275.065 and
41.12the property tax statement under section 276.04, for the first year in which the county
41.13implements the provisions of this paragraph, the county auditor shall reduce the county's
41.14levy for the preceding year to reflect any amount levied for water management purposes
41.15under clause (i) included in the county's levy.
41.16EFFECTIVE DATE.This section is effective for property taxes payable in 2011
41.17and thereafter.

41.18    Sec. 8. Minnesota Statutes 2008, section 275.07, subdivision 4, is amended to read:
41.19    Subd. 4. Report to commissioner. (a) On or before October 8 September 20 of
41.20each year, the county auditor shall report to the commissioner of revenue the proposed
41.21levy certified by local units of government under section 275.065, subdivision 1. If
41.22any taxing authorities have notified the county auditor that they are in the process of
41.23negotiating an agreement for sharing, merging, or consolidating services but that when
41.24the proposed levy was certified under section 275.065, subdivision 1c, the agreement was
41.25not yet finalized, the county auditor shall supply that information to the commissioner
41.26when filing the report under this section and shall recertify the affected levies as soon as
41.27practical after October 10 September 25.
41.28(b) On or before January 15 5 of each year, the county auditor shall report to the
41.29commissioner of revenue the final levy certified by local units of government under
41.30subdivision 1.
41.31(c) The levies must be reported in the manner prescribed by the commissioner.
41.32EFFECTIVE DATE.This section is effective for property taxes payable in 2011
41.33and thereafter.

42.1    Sec. 9. Minnesota Statutes 2008, section 375.194, subdivision 5, is amended to read:
42.2    Subd. 5. Determination of county tax rate. The eligible county's proposed and
42.3final tax rates shall be determined by dividing the certified levy by the total taxable net tax
42.4capacity, without regard to any abatements granted under this section. The county board
42.5shall make available the estimated amount of the abatement at the public hearing under
42.6section 275.065, subdivision 6.
42.7EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
42.8thereafter.

42.9    Sec. 10. Minnesota Statutes 2008, section 383A.75, subdivision 3, is amended to read:
42.10    Subd. 3. Duties. The committee is authorized to and shall meet from time to time
42.11to make appropriate recommendations for the efficient and effective use of property tax
42.12dollars raised by the jurisdictions for programs, buildings, and operations. In addition,
42.13the committee shall:
42.14(1) identify trends and factors likely to be driving budget outcomes over the next
42.15five years with recommendations for how the jurisdictions should manage those trends
42.16and factors to increase efficiency and effectiveness;
42.17(2) agree, by October 1 of each year, on the appropriate level of overall property tax
42.18levy for the three jurisdictions and publicly report such to the governing bodies of each
42.19jurisdiction for ratification or modification by resolution; and
42.20(3) plan for the joint truth-in-taxation hearings under section 275.065, subdivision
42.218 ; and
42.22(4) (3) identify, by December 31 of each year, areas of the budget to be targeted in
42.23the coming year for joint review to improve services or achieve efficiencies.
42.24In carrying out its duties, the committee shall consult with public employees of
42.25each jurisdiction and with other stakeholders of the city, county, and school district, as
42.26appropriate.
42.27EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
42.28thereafter.

42.29    Sec. 11. Minnesota Statutes 2008, section 446A.086, subdivision 8, is amended to read:
42.30    Subd. 8. Tax levy for repayment. (a) With the approval of the authority, a
42.31governmental unit may levy in the year the state makes a payment under this section an
42.32amount up to the amount necessary to provide funds for the repayment of the amount paid
42.33by the state plus interest through the date of estimated repayment by the governmental
43.1unit. The proceeds of this levy may be used only for this purpose unless they exceed the
43.2amount actually due. Any excess must be used to repay other state payments made under
43.3this section or must be deposited in the debt redemption fund of the governmental unit.
43.4The amount of aids to be reduced to repay the state are decreased by the amount levied.
43.5    (b) If the state is not repaid in full for a payment made under this section by
43.6November 30 of the calendar year following the year in which the state makes the
43.7payment, the authority shall require the governmental unit to certify a property tax levy in
43.8an amount up to the amount necessary to provide funds for repayment of the amount paid
43.9by the state plus interest through the date of estimated repayment by the governmental unit.
43.10To prevent undue hardship, the authority may allow the governmental unit to certify the
43.11levy over a five-year period. The proceeds of the levy may be used only for this purpose
43.12unless they are in excess of the amount actually due, in which case the excess must be used
43.13to repay other state payments made under this section or must be deposited in the debt
43.14redemption fund of the governmental unit. If the authority orders the governmental unit to
43.15levy, the amount of aids reduced to repay the state are decreased by the amount levied.
43.16    (c) A levy under this subdivision is an increase in the levy limits of the governmental
43.17unit for purposes of section 275.065, subdivision 6, and must be explained as a specific
43.18increase at the meeting required under that provision.
43.19EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
43.20thereafter.

43.21    Sec. 12. Minnesota Statutes 2008, section 465.719, subdivision 9, is amended to read:
43.22    Subd. 9. Application of other laws. A corporation created by a political subdivision
43.23under this section must comply with every law that applies to the political subdivision,
43.24as if the corporation is a part of the political subdivision, unless the resolution ratifying
43.25creation of the corporation specifically exempts the corporation from part or all of a law.
43.26If the resolution exempts the corporation from part or all of a law, the resolution must
43.27make a detailed and specific finding as to why the corporation cannot fulfill its purpose if
43.28the corporation is subject to that law. A corporation may not be exempted from chapter
43.2913D, the Minnesota Open Meeting Law, sections 138.163 to 138.25, governing records
43.30management, or chapter 13, the Minnesota Government Data Practices Act. Any affected
43.31or interested person may bring an action in district court to void the resolution on the
43.32grounds that the findings are not sufficiently detailed and specific, or that the corporation
43.33can fulfill its purpose if it is subject to the law from which the resolution exempts the
43.34corporation. Laws that apply to a political subdivision that also apply to a corporation
43.35created by a political subdivision under this subdivision include, but are not limited to:
44.1(1) chapter 13D, the Minnesota Open Meeting Law;
44.2(2) chapter 13, the Minnesota Government Data Practices Act;
44.3(3) section 471.345, the Uniform Municipal Contracting Law;
44.4(4) sections 43A.17, limiting the compensation of employees based on the governor's
44.5salary; 471.991 to 471.999, providing for equitable pay; and 465.72 and 465.722,
44.6governing severance pay;
44.7(5) section 275.065, providing for truth-in-taxation hearings. If any tax revenues of
44.8the political subdivision will be appropriated to the corporation, the corporation's annual
44.9operating and capital budgets must be included in the truth-in-taxation hearing of the
44.10political subdivision that created the corporation;
44.11(6) (5) if the corporation issues debt, its debt is included in the political subdivision's
44.12debt limit if it would be included if issued by the political subdivision, and issuance of the
44.13debt is subject to the election and other requirements of chapter 475 and section 471.69;
44.14(7) (6) section 471.895, prohibiting acceptance of gifts from interested parties, and
44.15sections 471.87 to 471.89, relating to interests in contracts;
44.16(8) (7) chapter 466, relating to municipal tort liability;
44.17(9) (8) chapter 118A, requiring deposit insurance or bond or pledged collateral for
44.18deposits;
44.19(10) (9) chapter 118A, restricting investments;
44.20(11) (10) section 471.346, requiring ownership of vehicles to be identified;
44.21(12) (11) sections 471.38 to 471.41, requiring claims to be in writing, itemized, and
44.22approved by the governing board before payment can be made; and
44.23(13) (12) the corporation cannot make advances of pay, make or guarantee loans to
44.24employees, or provide in-kind benefits unless authorized by law.
44.25EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
44.26thereafter.

44.27    Sec. 13. Minnesota Statutes 2008, section 473.13, subdivision 1, is amended to read:
44.28    Subdivision 1. Budget. (a) On or before December 20 10 of each year, the council,
44.29after the public hearing required in section 275.065, shall adopt a final budget covering its
44.30anticipated receipts and disbursements for the ensuing year and shall decide upon the total
44.31amount necessary to be raised from ad valorem tax levies to meet its budget. The budget
44.32shall state in detail the expenditures for each program to be undertaken, including the
44.33expenses for salaries, consultant services, overhead, travel, printing, and other items. The
44.34budget shall state in detail the capital expenditures of the council for the budget year, based
44.35on a five-year capital program adopted by the council and transmitted to the legislature.
45.1After adoption of the budget and no later than five working days after December 20, the
45.2council shall certify to the auditor of each metropolitan county the share of the tax to be
45.3levied within that county, which must be an amount bearing the same proportion to the
45.4total levy agreed on by the council as the net tax capacity of the county bears to the net tax
45.5capacity of the metropolitan area. The maximum amount of any levy made for the purpose
45.6of this chapter may not exceed the limits set by the statute authorizing the levy.
45.7(b) Each even-numbered year the council shall prepare for its transit programs a
45.8financial plan for the succeeding three calendar years, in half-year segments. The financial
45.9plan must contain schedules of user charges and any changes in user charges planned or
45.10anticipated by the council during the period of the plan. The financial plan must contain a
45.11proposed request for state financial assistance for the succeeding biennium.
45.12(c) In addition, the budget must show for each year:
45.13(1) the estimated operating revenues from all sources including funds on hand at the
45.14beginning of the year, and estimated expenditures for costs of operation, administration,
45.15maintenance, and debt service;
45.16(2) capital improvement funds estimated to be on hand at the beginning of the year
45.17and estimated to be received during the year from all sources and estimated cost of capital
45.18improvements to be paid out or expended during the year, all in such detail and form as
45.19the council may prescribe; and
45.20(3) the estimated source and use of pass-through funds.
45.21EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
45.22thereafter, except that the date change in certifying the budget is effective for taxes
45.23payable in 2011 and thereafter.

45.24    Sec. 14. REPEALER.
45.25Minnesota Statutes 2008, section 275.065, subdivisions 5a, 6b, 6c, 8, 9, and 10, are
45.26repealed.
45.27EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
45.28thereafter.

45.29ARTICLE 5

45.30PROPERTY TAX

45.31    Section 1. Minnesota Statutes 2008, section 272.02, subdivision 7, is amended to read:
45.32    Subd. 7. Institutions of public charity. (a) Institutions of purely public charity that
45.33are exempt from federal income taxation under section 501(c)(3) of the Internal Revenue
46.1Code are exempt. if they meet the requirements of this subdivision. In determining
46.2whether real property is exempt under this subdivision, the following factors must be
46.3considered:
46.4(1) whether the stated purpose of the undertaking is to be helpful to others without
46.5immediate expectation of material reward;
46.6(2) whether the institution of public charity is supported by material donations, gifts,
46.7or government grants for services to the public in whole or in part;
46.8(3) whether a material number of the recipients of the charity receive benefits or
46.9services at reduced or no cost, or whether the organization provides services to the public
46.10that alleviate burdens or responsibilities that would otherwise be borne by the government;
46.11(4) whether the income received, including material gifts and donations, produces a
46.12profit to the charitable institution that is distributed to private interests;
46.13(5) whether the beneficiaries of the charity are restricted or unrestricted, and, if
46.14restricted, whether the class of persons to whom the charity is made available is one
46.15having a reasonable relationship to the charitable objectives; and
46.16(6) whether dividends, in form or substance, or assets upon dissolution, are available
46.17to private interests.
46.18A charitable organization must satisfy the factors in clauses (1) to (6) for its property
46.19to be exempt under this subdivision, unless there is a reasonable justification for missing
46.20the factors in clause (2), (3), or (5). If there is reasonable justification for failing to meet
46.21the factors in clause (2), (3), or (5), an organization is a purely public charity under this
46.22subdivision without meeting those factors. After an exemption is properly granted under
46.23this subdivision, it remains in effect unless there is a material change in facts.
46.24(b) For purposes of this subdivision, a grant is a written instrument or electronic
46.25document defining a legal relationship between a granting agency and a grantee when
46.26the principal purpose of the relationship is to transfer cash or something of value to the
46.27grantee to support a public purpose authorized by law in a general manner instead of
46.28acquiring by professional or technical contract, purchase, lease, or barter property or
46.29services for the direct benefit or use of the granting agency.
46.30(c) In determining whether rental housing property qualifies for exemption under
46.31this subdivision, the following are not gifts or donations to the owner of the rental housing:
46.32(1) rent assistance provided by the government to or on behalf of tenants; and
46.33(2) financing assistance or tax credits provided by the government to the owner on
46.34condition that specific units or a specific quantity of units be set aside for persons or
46.35families with certain income characteristics.
47.1EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
47.2thereafter.

47.3    Sec. 2. PURPOSE; COMMISSIONER OF REVENUE GUIDANCE.
47.4The purpose of Minnesota Statutes, section 272.02, subdivision 7, is not to contract
47.5or expand the definition of "institutions of purely public charity" but to provide clear
47.6standards that can be applied uniformly to determine eligibility for exemption from
47.7property taxation. To carry out this purpose and to promote uniformity in application of
47.8the provisions of Minnesota Statutes, section 272.02, subdivision 7, the commissioner of
47.9revenue shall prepare a bulletin providing guidance to assessors as to the commissioner's
47.10interpretation of Minnesota Statutes, section 272.02, subdivision 7. The bulletin may
47.11include a discussion of court decisions that provide background to and context for
47.12Minnesota Statutes, section 272.02, subdivision 7, as the commissioner deems appropriate.
47.13This guidance must include examples of facts or circumstances that satisfy the requirement
47.14of "a reasonable justification for failing to meet clause (2), (3), or (5)" under Minnesota
47.15Statutes, section 272.02, subdivision 7. Assessors shall give due consideration to the
47.16bulletin in assessing property requesting an exemption as an institution of purely public
47.17charity. The commissioner shall distribute the bulletin to all assessors by July 1, 2010.
47.18EFFECTIVE DATE.This section is effective the day following final enactment.

47.19    Sec. 3. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision
47.20to read:
47.21    Subd. 90. Nursing homes. A nursing home licensed under section 144A.02 or a
47.22boarding care home certified as a nursing facility under title 19 of the Social Security
47.23Act that is exempt from federal income taxation pursuant to section 501(c)(3) of the
47.24Internal Revenue Code is exempt from property taxation if the nursing home or boarding
47.25care home either:
47.26(1) is certified to participate in the medical assistance program under title 19 of
47.27the Social Security Act; or
47.28(2) certifies to the commissioner of revenue that it does not discharge residents
47.29due to the inability to pay.
47.30EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
47.31thereafter.

47.32    Sec. 4. Minnesota Statutes 2008, section 273.1231, subdivision 1, is amended to read:
48.1    Subdivision 1. Applicability. For purposes of sections 273.1231 to 273.1235
48.2273.1236, the following words, terms, and phrases have the meanings given them in this
48.3section unless the language or context clearly indicates that a different meaning is intended.
48.4EFFECTIVE DATE.This section is effective for assessment year 2009 and
48.5thereafter.

48.6    Sec. 5. Minnesota Statutes 2008, section 273.1232, subdivision 1, is amended to read:
48.7    Subdivision 1. Reassessments required. For the purposes of sections 273.1231 to
48.8273.1235 273.1236, the county assessor must reassess all damaged property in a disaster
48.9or emergency area, except that the commissioner of revenue shall reassess all property
48.10for which an application is submitted to the commissioner under section 273.1233 or
48.11273.1235 . As soon as practical, the assessor or commissioner of revenue must report
48.12the reassessed value to the county auditor.
48.13EFFECTIVE DATE.This section is effective for assessment year 2009 and
48.14thereafter.

48.15    Sec. 6. [273.1236] DISASTER-DAMAGED HOMES; PARTIAL VALUATION
48.16EXCLUSION.
48.17(a) A homestead property that (1) sustained physical damage from a disaster or
48.18emergency resulting in a reassessed market value that is at least $15,000 less than the
48.19market value of the property established for the January 2 assessment in the year in which
48.20the damage occurred, (2) has been restored or rebuilt by the end of the year following the
48.21year in which the damage occurred, (3) has a gross living area after reconstruction that
48.22does not exceed 150 percent of the gross living area prior to the disaster or emergency, and
48.23(4) has an estimated market value for the assessment year following the year in which
48.24the restoration or reconstruction was completed that exceeds its estimated market value
48.25established for the January 2 assessment in the year in which the damage occurred by at
48.26least $25,000 due to the restoration or reconstruction, is eligible for a valuation exclusion
48.27under this section for the three assessment years immediately following the year in which
48.28the restoration or reconstruction was completed.
48.29(b) The assessor shall determine the difference between the estimated market value
48.30established for the January 2 assessment in the year in which the damage occurred and the
48.31estimated market value established for the January 2 assessment in the year following the
48.32completion of the restoration or reconstruction.
49.1(c) In the first assessment year following the restoration or reconstruction, all of
49.2the difference identified under paragraph (b) shall be excluded in determining taxable
49.3market value. In the second assessment year following the restoration or reconstruction,
49.4three-quarters of the difference identified under paragraph (b) shall be excluded in
49.5determining taxable market value. In the third assessment year following the restoration
49.6or reconstruction, one-half of the difference identified under paragraph (b) shall be
49.7excluded in determining taxable market value. In the fourth assessment year following
49.8the restoration or reconstruction, one-quarter of the difference identified under paragraph
49.9(b) shall be excluded in determining taxable market value.
49.10(d) For the purposes of this section, "gross living area" includes only above-grade
49.11living area, and does not include any finished basement living area.
49.12EFFECTIVE DATE.This section is effective for assessment year 2009 and
49.13thereafter.

49.14    Sec. 7. Minnesota Statutes 2008, section 273.124, subdivision 1, is amended to read:
49.15    Subdivision 1. General rule. (a) Residential real estate that is occupied and used
49.16for the purposes of a homestead by its owner, who must be a Minnesota resident, is
49.17a residential homestead.
49.18    Agricultural land, as defined in section 273.13, subdivision 23, that is occupied and
49.19used as a homestead by its owner, who must be a Minnesota resident, is an agricultural
49.20homestead.
49.21    Dates for establishment of a homestead and homestead treatment provided to
49.22particular types of property are as provided in this section.
49.23    Property held by a trustee under a trust is eligible for homestead classification if the
49.24requirements under this chapter are satisfied.
49.25    The assessor shall require proof, as provided in subdivision 13, of the facts upon
49.26which classification as a homestead may be determined. Notwithstanding any other law,
49.27the assessor may at any time require a homestead application to be filed in order to verify
49.28that any property classified as a homestead continues to be eligible for homestead status.
49.29Notwithstanding any other law to the contrary, the Department of Revenue may, upon
49.30request from an assessor, verify whether an individual who is requesting or receiving
49.31homestead classification has filed a Minnesota income tax return as a resident for the most
49.32recent taxable year for which the information is available.
49.33    When there is a name change or a transfer of homestead property, the assessor may
49.34reclassify the property in the next assessment unless a homestead application is filed to
49.35verify that the property continues to qualify for homestead classification.
50.1    (b) For purposes of this section, homestead property shall include property which
50.2is used for purposes of the homestead but is separated from the homestead by a road,
50.3street, lot, waterway, or other similar intervening property. The term "used for purposes
50.4of the homestead" shall include but not be limited to uses for gardens, garages, or other
50.5outbuildings commonly associated with a homestead, but shall not include vacant land
50.6held primarily for future development. In order to receive homestead treatment for
50.7the noncontiguous property, the owner must use the property for the purposes of the
50.8homestead, and must apply to the assessor, both by the deadlines given in subdivision
50.99. After initial qualification for the homestead treatment, additional applications for
50.10subsequent years are not required.
50.11    (c) Residential real estate that is occupied and used for purposes of a homestead by a
50.12relative of the owner is a homestead but only to the extent of the homestead treatment
50.13that would be provided if the related owner occupied the property. For purposes of this
50.14paragraph and paragraph (g), "relative" means a parent, stepparent, child, stepchild,
50.15grandparent, grandchild, brother, sister, uncle, aunt, nephew, or niece. This relationship
50.16may be by blood or marriage. Property that has been classified as seasonal residential
50.17recreational property at any time during which it has been owned by the current owner or
50.18spouse of the current owner will not be reclassified as a homestead unless it is occupied as
50.19a homestead by the owner; this prohibition also applies to property that, in the absence of
50.20this paragraph, would have been classified as seasonal residential recreational property at
50.21the time when the residence was constructed. Neither the related occupant nor the owner
50.22of the property may claim a property tax refund under chapter 290A for a homestead
50.23occupied by a relative. In the case of a residence located on agricultural land, only the
50.24house, garage, and immediately surrounding one acre of land shall be classified as a
50.25homestead under this paragraph, except as provided in paragraph (d). In the case of
50.26nonagricultural property, this paragraph only applies to applications approved before
50.27December 16, 2009.
50.28    (d) Agricultural property that is occupied and used for purposes of a homestead by
50.29a relative of the owner, is a homestead, only to the extent of the homestead treatment
50.30that would be provided if the related owner occupied the property, and only if all of the
50.31following criteria are met:
50.32    (1) the relative who is occupying the agricultural property is a son, daughter, brother,
50.33sister, grandson, granddaughter, father, or mother of the owner of the agricultural property
50.34or a son, daughter, brother, sister, grandson, or granddaughter of the spouse of the owner
50.35of the agricultural property;
50.36    (2) the owner of the agricultural property must be a Minnesota resident;
51.1    (3) the owner of the agricultural property must not receive homestead treatment on
51.2any other agricultural property in Minnesota; and
51.3    (4) the owner of the agricultural property is limited to only one agricultural
51.4homestead per family under this paragraph.
51.5    Neither the related occupant nor the owner of the property may claim a property
51.6tax refund under chapter 290A for a homestead occupied by a relative qualifying under
51.7this paragraph. For purposes of this paragraph, "agricultural property" means the house,
51.8garage, other farm buildings and structures, and agricultural land.
51.9    Application must be made to the assessor by the owner of the agricultural property to
51.10receive homestead benefits under this paragraph. The assessor may require the necessary
51.11proof that the requirements under this paragraph have been met.
51.12    (e) In the case of property owned by a property owner who is married, the assessor
51.13must not deny homestead treatment in whole or in part if only one of the spouses occupies
51.14the property and the other spouse is absent due to: (1) marriage dissolution proceedings,
51.15(2) legal separation, (3) employment or self-employment in another location, or (4) other
51.16personal circumstances causing the spouses to live separately, not including an intent to
51.17obtain two homestead classifications for property tax purposes. To qualify under clause
51.18(3), the spouse's place of employment or self-employment must be at least 50 miles distant
51.19from the other spouse's place of employment, and the homesteads must be at least 50 miles
51.20distant from each other. Homestead treatment, in whole or in part, shall not be denied to
51.21the owner's spouse who previously occupied the residence with the owner if the absence
51.22of the owner is due to one of the exceptions provided in this paragraph.
51.23    (f) The assessor must not deny homestead treatment in whole or in part if:
51.24    (1) in the case of a property owner who is not married, the owner is absent due to
51.25residence in a nursing home, boarding care facility, or an elderly assisted living facility
51.26property as defined in section 273.13, subdivision 25a, and the property is not otherwise
51.27occupied; or
51.28    (2) in the case of a property owner who is married, the owner or the owner's spouse
51.29or both are absent due to residence in a nursing home, boarding care facility, or an elderly
51.30assisted living facility property as defined in section 273.13, subdivision 25a, and the
51.31property is not occupied or is occupied only by the owner's spouse.
51.32    (g) If an individual is purchasing property with the intent of claiming it as a
51.33homestead and is required by the terms of the financing agreement to have a relative
51.34shown on the deed as a co-owner, the assessor shall allow a full homestead classification.
51.35This provision only applies to first-time purchasers, whether married or single, or to a
51.36person who had previously been married and is purchasing as a single individual for the
52.1first time. The application for homestead benefits must be on a form prescribed by the
52.2commissioner and must contain the data necessary for the assessor to determine if full
52.3homestead benefits are warranted.
52.4    (h) If residential or agricultural real estate is occupied and used for purposes of a
52.5homestead by a child of a deceased owner and the property is subject to jurisdiction of
52.6probate court, the child shall receive relative homestead classification under paragraph (c)
52.7or (d) to the same extent they would be entitled to it if the owner was still living, until
52.8the probate is completed. For purposes of this paragraph, "child" includes a relationship
52.9by blood or by marriage.
52.10    (i) If a single-family home, duplex, or triplex classified as either residential
52.11homestead or agricultural homestead is also used to provide licensed child care, the
52.12portion of the property used for licensed child care must be classified as a part of the
52.13homestead property.
52.14EFFECTIVE DATE.This section is effective the day following final enactment.

52.15    Sec. 8. Minnesota Statutes 2008, section 273.13, subdivision 25, is amended to read:
52.16    Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more
52.17units and used or held for use by the owner or by the tenants or lessees of the owner
52.18as a residence for rental periods of 30 days or more, excluding property qualifying for
52.19class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other
52.20than hospitals exempt under section 272.02, and contiguous property used for hospital
52.21purposes, without regard to whether the property has been platted or subdivided. The
52.22market value of class 4a property has a class rate of 1.25 percent.
52.23    (b) Class 4b includes:
52.24    (1) residential real estate containing less than four units that does not qualify as class
52.254bb, other than seasonal residential recreational property;
52.26    (2) manufactured homes not classified under any other provision;
52.27    (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
52.28farm classified under subdivision 23, paragraph (b) containing two or three units; and
52.29    (4) unimproved property that is classified residential as determined under subdivision
52.3033.
52.31    The market value of class 4b property has a class rate of 1.25 percent.
52.32    (c) Class 4bb includes:
52.33    (1) nonhomestead residential real estate containing one unit, other than seasonal
52.34residential recreational property; and
53.1    (2) a single family dwelling, garage, and surrounding one acre of property on a
53.2nonhomestead farm classified under subdivision 23, paragraph (b).
53.3    Class 4bb property has the same class rates as class 1a property under subdivision 22.
53.4    Property that has been classified as seasonal residential recreational property at
53.5any time during which it has been owned by the current owner or spouse of the current
53.6owner does not qualify for class 4bb.
53.7    (d) Class 4c property includes:
53.8    (1) except as provided in subdivision 22, paragraph (c), or subdivision 23, paragraph
53.9(b), clause (1), real and personal property devoted to temporary and seasonal residential
53.10occupancy for recreation purposes, including real and personal property devoted to
53.11temporary and seasonal residential occupancy for recreation purposes and not devoted to
53.12commercial purposes for more than 250 days in the year preceding the year of assessment.
53.13For purposes of this clause, property is devoted to a commercial purpose on a specific
53.14day if any portion of the property is used for residential occupancy, and a fee is charged
53.15for residential occupancy. Class 4c property must contain three or more rental units. A
53.16"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual
53.17camping site equipped with water and electrical hookups for recreational vehicles.
53.18Except for property described in item (iii), class 4c property must provide recreational
53.19activities such as renting ice fishing houses, boats and motors, snowmobiles, downhill or
53.20cross-country ski equipment; provide marina services, launch services, or guide services;
53.21or sell bait and fishing tackle. A camping pad offered for rent by a property that otherwise
53.22qualifies for class 4c is also class 4c regardless of the term of the rental agreement, as
53.23long as the use of the camping pad does not exceed 250 days. In order for a property to
53.24be classified as class 4c, seasonal residential recreational for commercial purposes under
53.25this clause, at least 40 percent of the annual gross lodging receipts related to the property
53.26must be from business conducted during 90 consecutive days and either (i) at least 60
53.27percent of all paid bookings by lodging guests during the year must be for periods of at
53.28least two consecutive nights; or (ii) at least 20 percent of the annual gross receipts must
53.29be from charges for rental of fish houses, boats and motors, snowmobiles, downhill or
53.30cross-country ski equipment, or charges for marina services, launch services, and guide
53.31services, or the sale of bait and fishing tackle; or (iii) the property contains 20 rental units
53.32or less, is devoted to temporary residential occupancy, is located in a township or a city
53.33that has a population of 2,500 or less, and is located outside the metropolitan area as
53.34defined under section 473.121, subdivision 2. For purposes of this determination, a paid
53.35booking of five or more nights shall be counted as two bookings. Class 4c also includes
53.36commercial use real property used exclusively for recreational purposes in conjunction
54.1with class 4c property devoted to temporary and seasonal residential occupancy for
54.2recreational purposes, up to a total of two acres, provided the property is not devoted
54.3to commercial recreational use for more than 250 days in the year preceding the year
54.4of assessment and is located within two miles of the class 4c property with which it is
54.5used. Owners of real and personal property devoted to temporary and seasonal residential
54.6occupancy for recreation purposes and all or a portion of which was devoted to commercial
54.7purposes for not more than 250 days in the year preceding the year of assessment desiring
54.8classification as class 4c, must submit a declaration to the assessor designating the cabins
54.9or units occupied for 250 days or less in the year preceding the year of assessment by
54.10January 15 of the assessment year. Those cabins or units and a proportionate share of the
54.11land on which they are located must be designated class 4c as otherwise provided. The
54.12remainder of the cabins or units and a proportionate share of the land on which they are
54.13located will be designated as class 3a. The owner of property desiring designation as class
54.144c property must provide guest registers or other records demonstrating that the units for
54.15which class 4c designation is sought were not occupied for more than 250 days in the
54.16year preceding the assessment if so requested. The portion of a property operated as a
54.17(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other
54.18nonresidential facility operated on a commercial basis not directly related to temporary
54.19and seasonal residential occupancy for recreation purposes does not qualify for class 4c;
54.20    (2) qualified property used as a golf course if:
54.21    (i) it is open to the public on a daily fee basis. It may charge membership fees or
54.22dues, but a membership fee may not be required in order to use the property for golfing,
54.23and its green fees for golfing must be comparable to green fees typically charged by
54.24municipal courses; and
54.25    (ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
54.26    A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
54.27with the golf course is classified as class 3a property;
54.28    (3) real property up to a maximum of three acres of land owned and used by a
54.29nonprofit community service oriented organization and that is not used for residential
54.30purposes on either a temporary or permanent basis, qualifies for class 4c provided that
54.31it meets either of the following:
54.32    (i) the property is not used for a revenue-producing activity for more than six days
54.33in the calendar year preceding the year of assessment; or
54.34    (ii) the organization makes annual charitable contributions and donations at least
54.35equal to the property's previous year's property taxes and the property is allowed to be
55.1used for public and community meetings or events for no charge, as appropriate to the
55.2size of the facility.
55.3    For purposes of this clause,
55.4    (A) "charitable contributions and donations" has the same meaning as lawful
55.5gambling purposes under section 349.12, subdivision 25, excluding those purposes
55.6relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
55.7    (B) "property taxes" excludes the state general tax;
55.8    (C) a "nonprofit community service oriented organization" means any corporation,
55.9society, association, foundation, or institution organized and operated exclusively for
55.10charitable, religious, fraternal, civic, or educational purposes, and which is exempt
55.11from federal income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal
55.12Revenue Code; and
55.13    (D) "revenue-producing activities" shall include but not be limited to property or that
55.14portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
55.15liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
55.16alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
55.17insurance business, or office or other space leased or rented to a lessee who conducts a
55.18for-profit enterprise on the premises.
55.19Any portion of the property qualifying under item (i) which is used for revenue-producing
55.20activities for more than six days in the calendar year preceding the year of assessment
55.21shall be assessed as class 3a. The use of the property for social events open exclusively
55.22to members and their guests for periods of less than 24 hours, when an admission is
55.23not charged nor any revenues are received by the organization shall not be considered a
55.24revenue-producing activity.
55.25    The organization shall maintain records of its charitable contributions and donations
55.26and of public meetings and events held on the property and make them available upon
55.27request any time to the assessor to ensure eligibility. An organization meeting the
55.28requirement under item (ii) must file an application by May 1 with the assessor for
55.29eligibility for the current year's assessment. The commissioner shall prescribe a uniform
55.30application form and instructions;
55.31    (4) postsecondary student housing of not more than one acre of land that is owned by
55.32a nonprofit corporation organized under chapter 317A and is used exclusively by a student
55.33cooperative, sorority, or fraternity for on-campus housing or housing located within two
55.34miles of the border of a college campus;
55.35    (5) manufactured home parks as defined in section 327.14, subdivision 3;
56.1    (6) real property that is actively and exclusively devoted to indoor fitness, health,
56.2social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
56.3and is located within the metropolitan area as defined in section 473.121, subdivision 2;
56.4    (7) a leased or privately owned noncommercial aircraft storage hangar not exempt
56.5under section 272.01, subdivision 2, and the land on which it is located, provided that:
56.6    (i) the land is on an airport owned or operated by a city, town, county, Metropolitan
56.7Airports Commission, or group thereof; and
56.8    (ii) the land lease, or any ordinance or signed agreement restricting the use of the
56.9leased premise, prohibits commercial activity performed at the hangar.
56.10    If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
56.11be filed by the new owner with the assessor of the county where the property is located
56.12within 60 days of the sale;
56.13    (8) a privately owned noncommercial aircraft storage hangar not exempt under
56.14section 272.01, subdivision 2, and the land on which it is located, provided that:
56.15    (i) the land abuts a public airport; and
56.16    (ii) the owner of the aircraft storage hangar provides the assessor with a signed
56.17agreement restricting the use of the premises, prohibiting commercial use or activity
56.18performed at the hangar; and
56.19    (9) residential real estate, a portion of which is used by the owner for homestead
56.20purposes, and that is also a place of lodging, if all of the following criteria are met:
56.21    (i) rooms are provided for rent to transient guests that generally stay for periods
56.22of 14 or fewer days;
56.23    (ii) meals are provided to persons who rent rooms, the cost of which is incorporated
56.24in the basic room rate;
56.25    (iii) meals are not provided to the general public except for special events on fewer
56.26than seven days in the calendar year preceding the year of the assessment; and
56.27    (iv) the owner is the operator of the property.
56.28The market value subject to the 4c classification under this clause is limited to five rental
56.29units. Any rental units on the property in excess of five, must be valued and assessed as
56.30class 3a. The portion of the property used for purposes of a homestead by the owner must
56.31be classified as class 1a property under subdivision 22; and
56.32    (10) real property up to a maximum of three acres and operated as a restaurant
56.33as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake
56.34as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B)
56.35is either devoted to commercial purposes for not more than 250 consecutive days, or
56.36receives at least 60 percent of its annual gross receipts from business conducted during
57.1four consecutive months. Gross receipts from the sale of alcoholic beverages must be
57.2included in determining the property's qualification under subitem (B). The property's
57.3primary business must be as a restaurant and not as a bar. Gross receipts from gift shop
57.4sales located on the premises must be excluded. Owners of real property desiring 4c
57.5classification under this clause must submit an annual declaration to the assessor by
57.6February 1 of the current assessment year, based on the property's relevant information for
57.7the preceding assessment year.
57.8    Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
57.9parcel of seasonal residential recreational property not used for commercial purposes has
57.10the same class rates as class 4bb property, (ii) manufactured home parks assessed under
57.11clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal
57.12residential recreational property has a class rate of one percent for the first $500,000 of
57.13market value, and 1.25 percent for the remaining market value, (iv) the market value of
57.14property described in clause (4) has a class rate of one percent, (v) the market value of
57.15property described in clauses (2), (6), and (10) has a class rate of 1.25 percent, and (vi)
57.16that portion of the market value of property in clause (9) qualifying for class 4c property
57.17has a class rate of 1.25 percent.
57.18    (e) Class 4d property is qualifying low-income rental housing certified to the assessor
57.19by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion
57.20of the units in the building qualify as low-income rental housing units as certified under
57.21section 273.128, subdivision 3, only the proportion of qualifying units to the total number
57.22of units in the building qualify for class 4d. The remaining portion of the building shall be
57.23classified by the assessor based upon its use. Class 4d also includes the same proportion of
57.24land as the qualifying low-income rental housing units are to the total units in the building.
57.25For all properties qualifying as class 4d, the market value determined by the assessor must
57.26be based on the normal approach to value using normal unrestricted rents.
57.27    Class 4d property has a class rate of 0.75 percent.
57.28EFFECTIVE DATE.This section is effective for assessment year 2009, taxes
57.29payable in 2010, and thereafter. For assessment year 2009 only, the January 15 application
57.30date under paragraph (d), clause (1), shall be extended to July 1, 2009, for property
57.31initially qualifying for the 2009 assessment under paragraph (d), clause (1), item (iii).

57.32    Sec. 9. Minnesota Statutes 2008, section 273.13, subdivision 34, is amended to read:
57.33    Subd. 34. Homestead of disabled veteran. (a) All or a portion of the market value
57.34of property owned by a veteran or by the veteran and the veteran's spouse qualifying
57.35for homestead classification under subdivision 22 or 23 is excluded in determining the
58.1property's taxable market value if it serves as the homestead of a military veteran, as
58.2defined in section 197.447, who has a service-connected disability of 70 percent or more.
58.3To qualify for exclusion under this subdivision, the veteran must have been honorably
58.4discharged from the United States armed forces, as indicated by United States Government
58.5Form DD214 or other official military discharge papers, and must be certified by the
58.6United States Veterans Administration as having a service-connected disability.
58.7    (b)(1) For a disability rating of 70 percent or more, $150,000 of market value is
58.8excluded, except as provided in clause (2); and
58.9    (2) for a total (100 percent) and permanent disability, $300,000 of market value is
58.10excluded.
58.11    (c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b),
58.12clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the
58.13spouse holds the legal or beneficial title to the homestead and permanently resides there,
58.14the exclusion shall carry over to the benefit of the veteran's spouse for one five additional
58.15assessment year or years or until such time as the spouse sells, transfers, or otherwise
58.16disposes of the property or remarries, whichever comes first.
58.17    (d) In the case of an agricultural homestead, only the portion of the property
58.18consisting of the house and garage and immediately surrounding one acre of land qualifies
58.19for the valuation exclusion under this subdivision.
58.20    (e) A property qualifying for a valuation exclusion under this subdivision is not
58.21eligible for the credit under section 273.1384, subdivision 1, or classification under
58.22subdivision 22, paragraph (b).
58.23    (f) To qualify for a valuation exclusion under this subdivision a property owner must
58.24apply to the assessor by July 1 of each assessment year, except that an annual reapplication
58.25is not required once a property has been accepted for a valuation exclusion under paragraph
58.26(b), clause (2), and the property continues to qualify until there is a change in ownership.
58.27EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
58.28thereafter.

58.29    Sec. 10. Minnesota Statutes 2008, section 276.04, subdivision 2, is amended to read:
58.30    Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the
58.31printing of the tax statements. The commissioner of revenue shall prescribe the form of
58.32the property tax statement and its contents. The tax statement must not state or imply
58.33that property tax credits are paid by the state of Minnesota. The statement must contain
58.34a tabulated statement of the dollar amount due to each taxing authority and the amount
58.35of the state tax from the parcel of real property for which a particular tax statement is
59.1prepared. The dollar amounts attributable to the county, the state tax, the voter approved
59.2school tax, the other local school tax, the township or municipality, and the total of
59.3the metropolitan special taxing districts as defined in section 275.065, subdivision 3,
59.4paragraph (i), must be separately stated. The amounts due all other special taxing districts,
59.5if any, may be aggregated except that any levies made by the regional rail authorities in the
59.6county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
59.7398A shall be listed on a separate line directly under the appropriate county's levy. If the
59.8county levy under this paragraph includes an amount for a lake improvement district as
59.9defined under sections 103B.501 to 103B.581, the amount attributable for that purpose
59.10must be separately stated from the remaining county levy amount. In the case of Ramsey
59.11County, if the county levy under this paragraph includes an amount for public library
59.12service under section 134.07, the amount attributable for that purpose may be separated
59.13from the remaining county levy amount. The amount of the tax on homesteads qualifying
59.14under the senior citizens' property tax deferral program under chapter 290B is the total
59.15amount of property tax before subtraction of the deferred property tax amount. The
59.16amount of the tax on contamination value imposed under sections 270.91 to 270.98, if any,
59.17must also be separately stated. The dollar amounts, including the dollar amount of any
59.18special assessments, may be rounded to the nearest even whole dollar. For purposes of this
59.19section whole odd-numbered dollars may be adjusted to the next higher even-numbered
59.20dollar. The amount of market value excluded under section 273.11, subdivision 16, if any,
59.21must also be listed on the tax statement.
59.22    (b) The property tax statements for manufactured homes and sectional structures
59.23taxed as personal property shall contain the same information that is required on the
59.24tax statements for real property.
59.25    (c) Real and personal property tax statements must contain the following information
59.26in the order given in this paragraph. The information must contain the current year tax
59.27information in the right column with the corresponding information for the previous year
59.28in a column on the left:
59.29    (1) the property's estimated market value under section 273.11, subdivision 1;
59.30    (2) the property's taxable market value after reductions under section 273.11,
59.31subdivisions 1a and 16 ;
59.32    (3) the property's gross tax, before credits;
59.33    (4) for homestead residential and agricultural properties, the credits under section
59.34273.1384 ;
59.35    (5) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
59.36273.1391 ; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of
60.1credit received under section 273.135 must be separately stated and identified as "taconite
60.2tax relief"; and
60.3    (6) the net tax payable in the manner required in paragraph (a).
60.4    (d) If the county uses envelopes for mailing property tax statements and if the county
60.5agrees, a taxing district may include a notice with the property tax statement notifying
60.6taxpayers when the taxing district will begin its budget deliberations for the current
60.7year, and encouraging taxpayers to attend the hearings. If the county allows notices to
60.8be included in the envelope containing the property tax statement, and if more than
60.9one taxing district relative to a given property decides to include a notice with the tax
60.10statement, the county treasurer or auditor must coordinate the process and may combine
60.11the information on a single announcement.
60.12EFFECTIVE DATE.This section is effective for taxes payable in 2011 and
60.13thereafter.

60.14    Sec. 11. Minnesota Statutes 2008, section 282.08, is amended to read:
60.15282.08 APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.
60.16    The net proceeds from the sale or rental of any parcel of forfeited land, or from the
60.17sale of products from the forfeited land, must be apportioned by the county auditor to the
60.18taxing districts interested in the land, as follows:
60.19    (1) the portion required to pay any amounts included in the appraised value
60.20under section 282.01, subdivision 3, as representing increased value due to any public
60.21improvement made after forfeiture of the parcel to the state, but not exceeding the
60.22amount certified by the appropriate governmental authority must be apportioned to the
60.23governmental subdivision entitled to it;
60.24    (2) the portion required to pay any amount included in the appraised value under
60.25section 282.019, subdivision 5, representing increased value due to response actions
60.26taken after forfeiture of the parcel to the state, but not exceeding the amount of expenses
60.27certified by the Pollution Control Agency or the commissioner of agriculture, must be
60.28apportioned to the agency or the commissioner of agriculture and deposited in the fund
60.29from which the expenses were paid;
60.30    (3) the portion of the remainder required to discharge any special assessment
60.31chargeable against the parcel for drainage or other purpose whether due or deferred at the
60.32time of forfeiture, must be apportioned to the governmental subdivision entitled to it; and
60.33    (4) any balance must be apportioned as follows:
61.1    (i)(A) Except as provided in subitem (B), the county board may annually by
61.2resolution set aside no more than 30 percent of the receipts remaining to be used for forest
61.3development on tax-forfeited land and dedicated memorial forests, to be expended under
61.4the supervision of the county board. It must be expended only on projects improving the
61.5health and management of the forest resource.
61.6(B) The county board is authorized to use some of the money set aside under subitem
61.7(A) to replace all or a portion of the amount of aid or credit reimbursement that the county
61.8was to receive under sections 273.1384 and 477A.0124, but did not receive due to aid cuts
61.9or unallotment from the state. Within six months of the actual aid or credit reimbursement
61.10loss, the county board may adopt a resolution transferring money from this fund to the
61.11county's general fund, not to exceed the amount of aid or credit reimbursement loss to the
61.12county. This subitem expires January 1, 2012.
61.13    (ii) The county board may annually by resolution set aside no more than 20 percent
61.14of the receipts remaining to be used for the acquisition and maintenance of county parks
61.15or recreational areas as defined in sections 398.31 to 398.36, to be expended under the
61.16supervision of the county board.
61.17    (iii) Any balance remaining must be apportioned as follows: county, 40 percent;
61.18town or city, 20 percent; and school district, 40 percent, provided, however, that in
61.19unorganized territory that portion which would have accrued to the township must be
61.20administered by the county board of commissioners.
61.21EFFECTIVE DATE.This section is effective the day following final enactment.

61.22    Sec. 12. Minnesota Statutes 2008, section 290B.03, subdivision 1, is amended to read:
61.23    Subdivision 1. Program qualifications. The qualifications for the senior citizens'
61.24property tax deferral program are as follows:
61.25(1) the property must be owned and occupied as a homestead by a person 65 years
61.26of age or older. In the case of a married couple, both at least one of the spouses must
61.27be at least 65 years old at the time the first property tax deferral is granted, regardless
61.28of whether the property is titled in the name of one spouse or both spouses, or titled in
61.29another way that permits the property to have homestead status, and the other spouse
61.30must be at least 62 years of age;
61.31(2) the total household income of the qualifying homeowners, as defined in section
61.32290A.03, subdivision 5 , for the calendar year preceding the year of the initial application
61.33may not exceed $60,000 $75,000;
62.1(3) the homestead must have been owned and occupied as the homestead of at
62.2least one of the qualifying homeowners for at least 15 ten years prior to the year the
62.3initial application is filed;
62.4(4) there are no state or federal tax liens or judgment liens on the homesteaded
62.5property;
62.6(5) there are no mortgages or other liens on the property that secure future advances,
62.7except for those subject to credit limits that result in compliance with clause (6); and
62.8(6) the total unpaid balances of debts secured by mortgages and other liens on the
62.9property, including unpaid and delinquent special assessments and interest and any
62.10delinquent property taxes, penalties, and interest, but not including property taxes payable
62.11during the year, does not exceed 75 percent of the assessor's estimated market value for
62.12the year.
62.13EFFECTIVE DATE.This section is effective July 1, 2009, and thereafter.

62.14    Sec. 13. Minnesota Statutes 2008, section 290B.04, subdivision 3, is amended to read:
62.15    Subd. 3. Excess-income certification by taxpayer. A taxpayer whose initial
62.16application has been approved under subdivision 2 shall notify the commissioner of
62.17revenue in writing by July 1 if the taxpayer's household income for the preceding calendar
62.18year exceeded $60,000 $75,000. The certification must state the homeowner's total
62.19household income for the previous calendar year. No property taxes may be deferred
62.20under this chapter in any year following the year in which a program participant filed
62.21or should have filed an excess-income certification under this subdivision, unless the
62.22participant has filed a resumption of eligibility certification as described in subdivision 4.
62.23EFFECTIVE DATE.This section is effective July 1, 2009, and thereafter.

62.24    Sec. 14. Minnesota Statutes 2008, section 290B.04, subdivision 4, is amended to read:
62.25    Subd. 4. Resumption of eligibility certification by taxpayer. A taxpayer who has
62.26previously filed an excess-income certification under subdivision 3 may resume program
62.27participation if the taxpayer's household income for a subsequent year is $60,000 $75,000
62.28or less. If the taxpayer chooses to resume program participation, the taxpayer must notify
62.29the commissioner of revenue in writing by July 1 of the year following a calendar year in
62.30which the taxpayer's household income is $60,000 $75,000 or less. The certification must
62.31state the taxpayer's total household income for the previous calendar year. Once a taxpayer
62.32resumes participation in the program under this subdivision, participation will continue
63.1until the taxpayer files a subsequent excess-income certification under subdivision 3 or
63.2until participation is terminated under section 290B.08, subdivision 1.
63.3EFFECTIVE DATE.This section is effective July 1, 2009, and thereafter.

63.4    Sec. 15. Minnesota Statutes 2008, section 290B.05, subdivision 1, is amended to read:
63.5    Subdivision 1. Determination by commissioner. The commissioner shall
63.6determine each qualifying homeowner's "annual maximum property tax amount"
63.7following approval of the homeowner's initial application and following the receipt of a
63.8resumption of eligibility certification. The "annual maximum property tax amount" equals
63.9three percent of the homeowner's total household income for the year preceding either the
63.10initial application or the resumption of eligibility certification, whichever is applicable.
63.11Following approval of the initial application, the commissioner shall determine the
63.12qualifying homeowner's "maximum allowable deferral." No tax may be deferred relative
63.13to the appropriate assessment year for any homeowner whose total household income
63.14for the previous year exceeds $60,000 $75,000. No tax shall be deferred in any year in
63.15which the homeowner does not meet the program qualifications in section 290B.03. The
63.16maximum allowable total deferral is equal to 75 percent of the assessor's estimated market
63.17value for the year, less the balance of any mortgage loans and other amounts secured by
63.18liens against the property at the time of application, including any unpaid and delinquent
63.19special assessments and interest and any delinquent property taxes, penalties, and interest,
63.20but not including property taxes payable during the year.
63.21EFFECTIVE DATE.This section is effective July 1, 2009, and thereafter.

63.22    Sec. 16. Minnesota Statutes 2008, section 290B.07, is amended to read:
63.23290B.07 LIEN; DEFERRED PORTION.
63.24(a) Payment by the state to the county treasurer of property taxes, penalties, interest,
63.25or special assessments and interest deferred under this chapter is deemed a loan from the
63.26state to the program participant. The commissioner must compute the interest as provided
63.27in section 270C.40, subdivision 5, but not to exceed five three percent, and maintain
63.28records of the total deferred amount and interest for each participant. Interest shall accrue
63.29beginning September 1 of the payable year for which the taxes are deferred. Any deferral
63.30made under this chapter shall not be construed as delinquent property taxes.
63.31The lien created under section 272.31 continues to secure payment by the taxpayer,
63.32or by the taxpayer's successors or assigns, of the amount deferred, including interest, with
63.33respect to all years for which amounts are deferred. The lien for deferred taxes and interest
64.1has the same priority as any other lien under section 272.31, except that liens, including
64.2mortgages, recorded or filed prior to the recording or filing of the notice under section
64.3290B.04, subdivision 2 , have priority over the lien for deferred taxes and interest. A
64.4seller's interest in a contract for deed, in which a qualifying homeowner is the purchaser
64.5or an assignee of the purchaser, has priority over deferred taxes and interest on deferred
64.6taxes, regardless of whether the contract for deed is recorded or filed. The lien for deferred
64.7taxes and interest for future years has the same priority as the lien for deferred taxes and
64.8interest for the first year, which is always higher in priority than any mortgages or other
64.9liens filed, recorded, or created after the notice recorded or filed under section 290B.04,
64.10subdivision 2 . The county treasurer or auditor shall maintain records of the deferred
64.11portion and shall list the amount of deferred taxes for the year and the cumulative deferral
64.12and interest for all previous years as a lien against the property. In any certification of
64.13unpaid taxes for a tax parcel, the county auditor shall clearly distinguish between taxes
64.14payable in the current year, deferred taxes and interest, and delinquent taxes. Payment
64.15of the deferred portion becomes due and owing at the time specified in section 290B.08.
64.16Upon receipt of the payment, the commissioner shall issue a receipt for it to the person
64.17making the payment upon request and shall notify the auditor of the county in which the
64.18parcel is located, within ten days, identifying the parcel to which the payment applies.
64.19Upon receipt by the commissioner of revenue of collected funds in the amount of the
64.20deferral, the state's loan to the program participant is deemed paid in full.
64.21(b) If property for which taxes have been deferred under this chapter forfeits
64.22under chapter 281 for nonpayment of a nondeferred property tax amount, or because
64.23of nonpayment of amounts previously deferred following a termination under section
64.24290B.08 , the lien for the taxes deferred under this chapter, plus interest and costs, shall be
64.25canceled by the county auditor as provided in section 282.07. However, notwithstanding
64.26any other law to the contrary, any proceeds from a subsequent sale of the property under
64.27chapter 282 or another law, must be used to first reimburse the county's forfeited tax sale
64.28fund for any direct costs of selling the property or any costs directly related to preparing
64.29the property for sale, and then to reimburse the state for the amount of the canceled
64.30lien. Within 90 days of the receipt of any sale proceeds to which the state is entitled
64.31under these provisions, the county auditor must pay those funds to the commissioner of
64.32revenue by warrant for deposit in the general fund. No other deposit, use, distribution,
64.33or release of gross sale proceeds or receipts may be made by the county until payments
64.34sufficient to fully reimburse the state for the canceled lien amount have been transmitted
64.35to the commissioner.
64.36EFFECTIVE DATE.This section is effective July 1, 2009, and thereafter.

65.1    Sec. 17. Minnesota Statutes 2008, section 290C.07, is amended to read:
65.2290C.07 CALCULATION OF INCENTIVE PAYMENT.
65.3    An approved claimant under the sustainable forest incentive program is eligible to
65.4receive an annual payment. The payment shall equal the greater of:
65.5    (1) the difference between the property tax that would be paid on the land using the
65.6previous year's statewide average total township tax rate and the class rate for class 2b
65.7timberland under section 273.13, subdivision 23, paragraph (b), if the land were valued
65.8at (i) the average statewide timberland market value per acre calculated under section
65.9290C.06 , and (ii) the average statewide timberland current use value per acre calculated
65.10under section 290C.02, subdivision 5; or
65.11    (2) two-thirds of the property tax amount determined by using the previous year's
65.12statewide average total township tax rate, the estimated market value per acre as calculated
65.13in section 290C.06, and the class rate for 2b timberland under section 273.13, subdivision
65.1423 , paragraph (b), provided that the payment shall be no less greater than $7 $6 per acre
65.15for each acre enrolled in the sustainable forest incentive program and the maximum annual
65.16payment per claimant shall be $400,000.
65.17EFFECTIVE DATE.This section is effective for payments made in 2010 and
65.18thereafter.

65.19    Sec. 18. Minnesota Statutes 2008, section 428A.21, is amended to read:
65.20428A.21 DEADLINE FOR HOUSING IMPROVEMENT DISTRICTS UNDER
65.21GENERAL LAW.
65.22The establishment of a new housing improvement area after June 30, 2009 2012,
65.23requires enactment of a special law authorizing the establishment of the area.
65.24EFFECTIVE DATE.This section is effective the day following final enactment.

65.25    Sec. 19. Laws 2001, First Special Session chapter 5, article 3, section 8, the effective
65.26date, as amended by Laws 2005, chapter 151, article 3, section 19, and Laws 2006, chapter
65.27259, article 4, section 20, is amended to read:
65.28    EFFECTIVE DATE. This section is effective for taxes levied in 2002, payable in
65.292003, through taxes levied in 2011 2014, payable in 2012 2015.

65.30    Sec. 20. Laws 2008, chapter 366, article 6, section 9, the effective date, is amended to
65.31read:
66.1EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
66.2thereafter, on land platted after May 18, 2008.

66.3    Sec. 21. Laws 2008, chapter 366, article 6, section 10, the effective date, is amended to
66.4read:
66.5EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
66.6thereafter, on land platted after May 18, 2008.

66.7    Sec. 22. FISCAL DISPARITIES STUDY.
66.8    Subdivision 1. Study required. The commissioner of revenue must conduct a study
66.9of the metropolitan revenue distribution program contained in Minnesota Statutes, chapter
66.10473F, commonly known as the fiscal disparities program. On or before February 1, 2010,
66.11the commissioner shall make a report to the chairs of the house of representatives and
66.12senate tax committees consisting of the findings of the study and any recommendations
66.13resulting from the study.
66.14The study shall consider to what extent the program is meeting the following goals,
66.15and what changes could be made to the program in the furtherance of meeting those goals:
66.16(1) reducing the extent to which the property tax encourages development patterns
66.17that do not make cost-effective use of public infrastructure or impose other high public
66.18costs;
66.19(2) ensuring that the benefits of economic growth of the region are shared throughout
66.20the region, especially for growth that results from state or regional decisions;
66.21(3) improving the ability of each jurisdiction within the region to deliver services at
66.22a level commensurate with its tax effort;
66.23(4) compensating jurisdictions containing properties that provide regional benefits
66.24for the costs those properties impose on their host jurisdictions in excess of their tax
66.25payments;
66.26(5) promoting a fair distribution of property tax burdens across jurisdictions of
66.27the region; and
66.28(6) reducing the economic losses that result from competition among communities
66.29for commercial-industrial tax base.
66.30    Subd. 2. Appropriation. $50,000 is appropriated to the commissioner of revenue
66.31from the general fund in fiscal year 2010 to conduct the study required under subdivision 1.
66.32EFFECTIVE DATE.This section is effective July 1, 2009.

67.1ARTICLE 6

67.2AIDS AND CREDITS

67.3    Section 1. Minnesota Statutes 2008, section 273.1384, subdivision 1, is amended to
67.4read:
67.5    Subdivision 1. Residential homestead market value credit. Each county auditor
67.6shall determine a homestead credit for each class 1a, 1b, and 2a homestead property
67.7within the county equal to 0.4 percent of the first $76,000 $75,000 of market value of
67.8the property minus .09 0.1 percent of the market value in excess of $76,000 $75,000.
67.9The credit amount may not be less than zero. In the case of an agricultural or resort
67.10homestead, only the market value of the house, garage, and immediately surrounding one
67.11acre of land is eligible in determining the property's homestead credit. In the case of a
67.12property that is classified as part homestead and part nonhomestead, (i) the credit shall
67.13apply only to the homestead portion of the property, but (ii) if a portion of a property is
67.14classified as nonhomestead solely because not all the owners occupy the property, not all
67.15the owners have qualifying relatives occupying the property, or solely because not all the
67.16spouses of owners occupy the property, the credit amount shall be initially computed as
67.17if that nonhomestead portion were also in the homestead class and then prorated to the
67.18owner-occupant's percentage of ownership. For the purpose of this section, when an
67.19owner-occupant's spouse does not occupy the property, the percentage of ownership for
67.20the owner-occupant spouse is one-half of the couple's ownership percentage.
67.21EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
67.22thereafter.

67.23    Sec. 2. Minnesota Statutes 2008, section 273.1384, subdivision 4, is amended to read:
67.24    Subd. 4. Payment. (a) The commissioner of revenue shall reimburse each local
67.25taxing jurisdiction, other than school districts, for the tax reductions granted under this
67.26section in two equal installments on October 31 and December 26 of the taxes payable
67.27year for which the reductions are granted, including in each payment the prior year
67.28adjustments certified on the abstracts for that taxes payable year. The reimbursements
67.29related to tax increments shall be issued in one installment each year on December 26.
67.30(b) The commissioner of revenue shall certify the total of the tax reductions
67.31granted under this section for each taxes payable year within each school district to the
67.32commissioner of the Department of Education and the commissioner of education shall
67.33pay the reimbursement amounts to each school district as provided in section 273.1392.
68.1(c) The market value credit reimbursements payable in 2011 and 2012 for each city
68.2under this section are reduced by the dollar amount of the 2010 reduction in market value
68.3credit reimbursements under section 477A.013, subdivision 11. The payable market value
68.4credit reimbursement for a city is not reduced less than zero under this paragraph.
68.5EFFECTIVE DATE.This section is effective for credits payable in calendar year
68.62011 and thereafter.

68.7    Sec. 3. Minnesota Statutes 2008, section 275.08, subdivision 1d, is amended to read:
68.8    Subd. 1d. Additional adjustment. If, after computing each local government's
68.9adjusted local tax rate within a unique taxing jurisdiction pursuant to subdivision 1c, the
68.10auditor finds that the total adjusted local tax rate of all local governments combined is less
68.11than 90 percent of gross tax capacity for taxes payable in 1989 and 90 113 percent of net
68.12tax capacity for taxes payable in 1990 and thereafter, the auditor shall increase each local
68.13government's adjusted local tax rate proportionately so the total adjusted local tax rate of
68.14all local governments combined equals 90 113 percent. The total amount of the increase in
68.15tax resulting from the increased local tax rates must not exceed the amount of disparity
68.16aid allocated to the unique taxing district under section 273.1398. The auditor shall
68.17certify to the Department of Revenue the difference between the disparity aid originally
68.18allocated under section 273.1398, subdivision 3, and the amount necessary to reduce
68.19the total adjusted local tax rate of all local governments combined to 90 percent. Each
68.20local government's disparity reduction aid payment under section 273.1398, subdivision
68.216 , must be reduced accordingly.
68.22EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
68.23thereafter.

68.24    Sec. 4. Minnesota Statutes 2008, section 290A.04, subdivision 2, is amended to read:
68.25    Subd. 2. Homeowners. A claimant whose property taxes payable are in excess
68.26of the percentage of the household income stated below shall pay an amount equal to
68.27the percent of income shown for the appropriate household income level along with the
68.28percent to be paid by the claimant of the remaining amount of property taxes payable.
68.29The state refund equals the amount of property taxes payable that remain, up to the state
68.30refund amount shown below.

68.31 68.32	Household Income		Percent of Income	Percent Paid by Claimant	Maximum State Refund
68.33	$0 to 1,189		1.0 percent	15 percent	$	1,8502,040
69.1	1,190 to 2,379		1.1 percent	15 percent	$	1,8502,040
69.2	2,380 to 3,589		1.2 percent	15 percent	$	1,8001,980
69.3	3,590 to 4,789		1.3 percent	20 percent	$	1,8001,980
69.4	4,790 to 5,979		1.4 percent	20 percent	$	1,7301,900
69.5	5,980 to 8,369		1.5 percent	20 percent	$	1,7301,900
69.6	8,370 to 9,559		1.6 percent	25 percent	$	1,6701,840
69.7	9,560 to 10,759		1.7 percent	25 percent	$	1,6701,840
69.8	10,760 to 11,949		1.8 percent	25 percent	$	1,6101,770
69.9	11,950 to 13,139		1.9 percent	30 percent	$	1,6101,770
69.10	13,140 to 14,349		2.0 percent	30 percent	$	1,5401,690
69.11	14,350 to 16,739		2.12.0 percent	30 percent	$	1,5401,690
69.12	16,740 to 17,929		2.2 percent	35 percent	$	1,480
69.13	17,930 to 19,119		2.32.0 percent	35 percent	$	1,4801,630
69.14	19,120 to 20,319		2.42.1 percent	35 percent	$	1,4201,560
69.15	20,320 to 25,099		2.52.2 percent	40 percent	$	1,4201,560
69.16	25,100 to 28,679		2.62.3 percent	40 percent	$	1,3601,500
69.17	28,680 to 35,849		2.72.5 percent	40 percent	$	1,3601,500
69.18	35,850 to 41,819		2.82.6 percent	45 percent	$	1,2401,360
69.19	41,820 to 47,799		3.02.8 percent	45 percent	$	1,2401,360
69.20	47,800 to 53,779		3.23.0 percent	45 percent	$	1,1101,220
69.21	53,780 to 59,749		3.5 percent	50 percent	$	9901,090
69.22	59,750 to 65,729		3.5 percent	50 percent	$	870960
69.23	65,730 to 69,319		3.5 percent	50 percent	$	740810
69.24	69,320 to 71,719		3.5 percent	50 percent	$	610670
69.25	71,720 to 74,619		3.5 percent	50 percent	$	500550
69.26	74,620 to 77,519		3.5 percent	50 percent	$	370410

69.27    The payment made to a claimant shall be the amount of the state refund calculated
69.28under this subdivision. No payment is allowed if the claimant's household income is
69.29$77,520 or more.
69.30EFFECTIVE DATE.This section is effective beginning with refunds based on
69.31property taxes payable in 2010.

69.32    Sec. 5. Minnesota Statutes 2008, section 477A.011, subdivision 36, is amended to read:
69.33    Subd. 36. City aid base. (a) Except as otherwise provided in this subdivision,
69.34"city aid base" is zero.
69.35    (b) The city aid base for any city with a population less than 500 is increased by
69.36$40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount
69.37of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also
69.38increased by $40,000 for aids payable in calendar year 1995 only, provided that:
69.39    (i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent;
70.1    (ii) the city portion of the tax capacity rate exceeds 100 percent; and
70.2    (iii) its city aid base is less than $60 per capita.
70.3    (c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and
70.4the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
70.5paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that:
70.6    (i) the city has a population in 1994 of 2,500 or more;
70.7    (ii) the city is located in a county, outside of the metropolitan area, which contains a
70.8city of the first class;
70.9    (iii) the city's net tax capacity used in calculating its 1996 aid under section
70.10477A.013 is less than $400 per capita; and
70.11    (iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of
70.12property located in the city is classified as railroad property.
70.13    (d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and
70.14the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
70.15paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that:
70.16    (i) the city was incorporated as a statutory city after December 1, 1993;
70.17    (ii) its city aid base does not exceed $5,600; and
70.18    (iii) the city had a population in 1996 of 5,000 or more.
70.19    (e) The city aid base for a city is increased by $150,000 for aids payable in 2000 and
70.20thereafter, and the maximum amount of total aid it may receive under section 477A.013,
70.21subdivision 9 , paragraph (c), is also increased by $150,000 in calendar year 2000 only,
70.22provided that:
70.23    (1) the city has a population that is greater than 1,000 and less than 2,500;
70.24    (2) its commercial and industrial percentage for aids payable in 1999 is greater
70.25than 45 percent; and
70.26    (3) the total market value of all commercial and industrial property in the city
70.27for assessment year 1999 is at least 15 percent less than the total market value of all
70.28commercial and industrial property in the city for assessment year 1998.
70.29    (f) The city aid base for a city is increased by $200,000 in 2000 and thereafter, and
70.30the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
70.31paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that:
70.32    (1) the city had a population in 1997 of 2,500 or more;
70.33    (2) the net tax capacity of the city used in calculating its 1999 aid under section
70.34477A.013 is less than $650 per capita;
70.35    (3) the pre-1940 housing percentage of the city used in calculating 1999 aid under
70.36section 477A.013 is greater than 12 percent;
71.1    (4) the 1999 local government aid of the city under section 477A.013 is less than
71.220 percent of the amount that the formula aid of the city would have been if the need
71.3increase percentage was 100 percent; and
71.4    (5) the city aid base of the city used in calculating aid under section 477A.013
71.5is less than $7 per capita.
71.6    (g) The city aid base for a city is increased by $102,000 in 2000 and thereafter, and
71.7the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
71.8paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that:
71.9    (1) the city has a population in 1997 of 2,000 or more;
71.10    (2) the net tax capacity of the city used in calculating its 1999 aid under section
71.11477A.013 is less than $455 per capita;
71.12    (3) the net levy of the city used in calculating 1999 aid under section 477A.013 is
71.13greater than $195 per capita; and
71.14    (4) the 1999 local government aid of the city under section 477A.013 is less than
71.1538 percent of the amount that the formula aid of the city would have been if the need
71.16increase percentage was 100 percent.
71.17    (h) The city aid base for a city is increased by $32,000 in 2001 and thereafter, and
71.18the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
71.19paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that:
71.20    (1) the city has a population in 1998 that is greater than 200 but less than 500;
71.21    (2) the city's revenue need used in calculating aids payable in 2000 was greater
71.22than $200 per capita;
71.23    (3) the city net tax capacity for the city used in calculating aids available in 2000
71.24was equal to or less than $200 per capita;
71.25    (4) the city aid base of the city used in calculating aid under section 477A.013
71.26is less than $65 per capita; and
71.27    (5) the city's formula aid for aids payable in 2000 was greater than zero.
71.28    (i) The city aid base for a city is increased by $7,200 in 2001 and thereafter, and
71.29the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
71.30paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that:
71.31    (1) the city had a population in 1998 that is greater than 200 but less than 500;
71.32    (2) the city's commercial industrial percentage used in calculating aids payable in
71.332000 was less than ten percent;
71.34    (3) more than 25 percent of the city's population was 60 years old or older according
71.35to the 1990 census;
72.1    (4) the city aid base of the city used in calculating aid under section 477A.013
72.2is less than $15 per capita; and
72.3    (5) the city's formula aid for aids payable in 2000 was greater than zero.
72.4    (j) The city aid base for a city is increased by $45,000 in 2001 and thereafter and
72.5by an additional $50,000 in calendar years 2002 to 2011, and the maximum amount of
72.6total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also
72.7increased by $45,000 in calendar year 2001 only, and by $50,000 in calendar year 2002
72.8only, provided that:
72.9    (1) the net tax capacity of the city used in calculating its 2000 aid under section
72.10477A.013 is less than $810 per capita;
72.11    (2) the population of the city declined more than two percent between 1988 and 1998;
72.12    (3) the net levy of the city used in calculating 2000 aid under section 477A.013 is
72.13greater than $240 per capita; and
72.14    (4) the city received less than $36 per capita in aid under section 477A.013,
72.15subdivision 9 , for aids payable in 2000.
72.16    (k) The city aid base for a city with a population of 10,000 or more which is located
72.17outside of the seven-county metropolitan area is increased in 2002 and thereafter, and the
72.18maximum amount of total aid it may receive under section 477A.013, subdivision 9,
72.19paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to
72.20the lesser of:
72.21    (1)(i) the total population of the city, as determined by the United States Bureau of
72.22the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or
72.23    (2) $2,500,000.
72.24    (l) The city aid base is increased by $50,000 in 2002 and thereafter, and the
72.25maximum amount of total aid it may receive under section 477A.013, subdivision 9,
72.26paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that:
72.27    (1) the city is located in the seven-county metropolitan area;
72.28    (2) its population in 2000 is between 10,000 and 20,000; and
72.29    (3) its commercial industrial percentage, as calculated for city aid payable in 2001,
72.30was greater than 25 percent.
72.31    (m) The city aid base for a city is increased by $150,000 in calendar years 2002 to
72.322011 and by an additional $75,000 in calendar years 2009 to 2014 and the maximum
72.33amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is
72.34also increased by $150,000 in calendar year 2002 only and by $75,000 in calendar year
72.352009 only, provided that:
72.36    (1) the city had a population of at least 3,000 but no more than 4,000 in 1999;
73.1    (2) its home county is located within the seven-county metropolitan area;
73.2    (3) its pre-1940 housing percentage is less than 15 percent; and
73.3    (4) its city net tax capacity per capita for taxes payable in 2000 is less than $900
73.4per capita.
73.5    (n) The city aid base for a city is increased by $200,000 beginning in calendar
73.6year 2003 and the maximum amount of total aid it may receive under section 477A.013,
73.7subdivision 9 , paragraph (c), is also increased by $200,000 in calendar year 2003 only,
73.8provided that the city qualified for an increase in homestead and agricultural credit aid
73.9under Laws 1995, chapter 264, article 8, section 18.
73.10    (o) The city aid base for a city is increased by $200,000 in 2004 only and the
73.11maximum amount of total aid it may receive under section 477A.013, subdivision 9, is
73.12also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear
73.13dry cask storage facility.
73.14    (p) The city aid base for a city is increased by $10,000 in 2004 and thereafter and the
73.15maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
73.16by $10,000 in calendar year 2004 only, if the city was included in a federal major disaster
73.17designation issued on April 1, 1998, and its pre-1940 housing stock was decreased by
73.18more than 40 percent between 1990 and 2000.
73.19    (q) The city aid base for a city is increased by $30,000 in 2009 and thereafter and the
73.20maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
73.21by $25,000 in calendar year 2006 only if the city had a population in 2003 of at least 1,000
73.22and has a state park for which the city provides rescue services and which comprised at
73.23least 14 percent of the total geographic area included within the city boundaries in 2000.
73.24    (r) The city aid base for a city is increased by $80,000 in 2009 and thereafter and
73.25the minimum and maximum amount of total aid it may receive under section 477A.013,
73.26subdivision 9, is also increased by $80,000 in calendar year 2009 only, if:
73.27    (1) as of May 1, 2006, at least 25 percent of the tax capacity of the city is proposed
73.28to be placed in trust status as tax-exempt Indian land;
73.29    (2) the placement of the land is being challenged administratively or in court; and
73.30    (3) due to the challenge, the land proposed to be placed in trust is still on the tax
73.31rolls as of May 1, 2006.
73.32    (s) The city aid base for a city is increased by $100,000 in 2007 and thereafter and
73.33the minimum and maximum total amount of aid it may receive under this section is also
73.34increased in calendar year 2007 only, provided that:
73.35    (1) the city has a 2004 estimated population greater than 200 but less than 2,000;
73.36    (2) its city net tax capacity for aids payable in 2006 was less than $300 per capita;
74.1    (3) the ratio of its pay 2005 tax levy compared to its city net tax capacity for aids
74.2payable in 2006 was greater than 110 percent; and
74.3    (4) it is located in a county where at least 15,000 acres of land are classified as
74.4tax-exempt Indian reservations according to the 2004 abstract of tax-exempt property.
74.5    (t) The city aid base for a city is increased by $30,000 in 2009 only, and the
74.6maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
74.7by $30,000 in calendar year 2009, only if the city had a population in 2005 of less than
74.83,000 and the city's boundaries as of 2007 were formed by the consolidation of two cities
74.9and one township in 2002.
74.10    (u) The city aid base for a city is increased by $100,000 in 2009 and thereafter, and
74.11the maximum total aid it may receive under section 477A.013, subdivision 9, is also
74.12increased by $100,000 in calendar year 2009 only, if the city had a city net tax capacity for
74.13aids payable in 2007 of less than $150 per capita and the city experienced flooding on
74.14March 14, 2007, that resulted in evacuation of at least 40 homes.
74.15    (v) The city aid base for a city is increased by $100,000 in 2009 to 2013, and the
74.16maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
74.17by $100,000 in calendar year 2009 only, if the city:
74.18    (1) is located outside of the Minneapolis-St. Paul standard metropolitan statistical
74.19area;
74.20    (2) has a 2005 population greater than 7,000 but less than 8,000; and
74.21    (3) has a 2005 net tax capacity per capita of less than $500.
74.22    (w) The city aid base is increased by $25,000 in calendar years 2009 to 2013 and the
74.23maximum amount of total aid it may receive under section 477A.013, subdivision 9, is
74.24increased by $25,000 in calendar year 2009 only, provided that:
74.25    (1) the city is located in the seven-county metropolitan area;
74.26    (2) its population in 2006 is less than 200; and
74.27    (3) the percentage of its housing stock built before 1940, according to the 2000
74.28United States Census, is greater than 40 percent.
74.29    (x) The city aid base is increased by $90,000 in calendar year 2009 only and the
74.30minimum and maximum total amount of aid it may receive under section 477A.013,
74.31subdivision 9, is also increased by $90,000 in calendar year 2009 only, provided that the
74.32city is located in the seven-county metropolitan area, has a 2006 population between 5,000
74.33and 7,000 and has a 1997 population of over 7,000.
74.34(y) The city aid base is increased by $100,000 in calendar years 2011 to 2015 and
74.35the maximum amount of total aid a city may receive under section 477A.013, subdivision
74.369, is increased by $100,000 in 2011 only, provided that:
75.1(1) the city is located in the metropolitan area;
75.2(2) its 2006 population is less than 2,000; and
75.3(3) its population has grown by at least 200 percent between 1996 and 2006.
75.4EFFECTIVE DATE.This section is effective for aids payable in calendar year
75.52011 and thereafter.

75.6    Sec. 6. Minnesota Statutes 2008, section 477A.013, subdivision 9, is amended to read:
75.7    Subd. 9. City aid distribution. (a) In calendar year 2009 and thereafter, each
75.8city shall receive an aid distribution equal to the sum of (1) the city formula aid under
75.9subdivision 8, and (2) its city aid base. In calendar year 2010, each city receives an aid
75.10distribution under this section, before the reductions under subdivision 11, equal to the
75.11amount of aid under this section that it was certified to receive in 2009. In calendar year
75.122011 and thereafter, each city receives an aid distribution under this section equal to the
75.13sum of (1) the city formula aid under subdivision 8, and (2) its city aid base.
75.14    (b) For aids payable in 2009 only, the total aid for any city shall not exceed the sum
75.15of (1) 35 percent of the city's net levy for the year prior to the aid distribution, plus (2)
75.16its total aid in the previous year.
75.17    (c) For aids payable in 2010 and thereafter, the total aid for any city shall not exceed
75.18the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution
75.19plus (2) its total aid in the previous year. For aids payable in 2009 and thereafter, the total
75.20aid for any city with a population of 2,500 or more may not be less than its total aid under
75.21this section in the previous year minus the lesser of $10 multiplied by its population, or ten
75.22percent of its net levy in the year prior to the aid distribution.
75.23    (d) For aids payable in 2010 and thereafter, the total aid for a city with a population
75.24less than 2,500 must not be less than the amount it was certified to receive in the
75.25previous year minus the lesser of $10 multiplied by its population, or five percent of its
75.262003 certified aid amount. For aids payable in 2009 only, the total aid for a city with a
75.27population less than 2,500 must not be less than what it received under this section in the
75.28previous year unless its total aid in calendar year 2008 was aid under section 477A.011,
75.29subdivision 36, paragraph (s), in which case its minimum aid is zero.
75.30    (e) A city's aid loss under this section may not exceed $300,000 in any year in
75.31which the total city aid appropriation under section 477A.03, subdivision 2a, is equal or
75.32greater than the appropriation under that subdivision in the previous year, unless the
75.33city has an adjustment in its city net tax capacity under the process described in section
75.34469.174, subdivision 28 .
76.1    (f) If a city's net tax capacity used in calculating aid under this section has decreased
76.2in any year by more than 25 percent from its net tax capacity in the previous year due to
76.3property becoming tax-exempt Indian land, the city's maximum allowed aid increase
76.4under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the
76.5year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease
76.6resulting from the property becoming tax exempt.
76.7EFFECTIVE DATE.This section is effective the day following final enactment.

76.8    Sec. 7. Minnesota Statutes 2008, section 477A.013, is amended by adding a
76.9subdivision to read:
76.10    Subd. 11. 2010 city aid. For aid payable in 2010 only, each city's distribution
76.11amount under subdivision 9 is reduced by an amount equal to 1.8889 percent of the city's
76.12net tax capacity, as defined in section 477A.011, subdivision 20, that would otherwise be
76.13used in calculating aids payable in 2010.
76.14The reduction is limited to the sum of the city's payable 2010 distribution under
76.15this section and the city's payable 2010 reimbursement under section 273.1384 before
76.16the reductions in this subdivision.
76.17The reduction is applied first to the city's distribution under this section, and then, if
76.18necessary, to the city's reimbursements under section 273.1384.
76.19EFFECTIVE DATE.This section is effective the day following final enactment.

76.20    Sec. 8. [477A.0133] 2009 CITY AND COUNTY AID REDUCTIONS.
76.21    Subdivision 1. City aid. The commissioner of revenue shall compute an aid
76.22reduction amount for each city for aid payable in 2009 equal to 1.2111 percent of the city's
76.23net tax capacity, as defined in section 477A.011, subdivision 20, that would be used in
76.24calculating for aids payable in 2010.
76.25The reduction is limited to the sum of the city's payable 2009 distributions, prior to
76.26the reductions under this subdivision, under sections 273.1384 and 477A.013.
76.27The reduction is applied first to the city's distribution under section 477A.013, and
76.28then, if necessary, to the city's reimbursements under section 273.1384.
76.29To the extent that sufficient information is available on each successive payment date
76.30within the year, the commissioner of revenue shall pay any remaining 2009 distribution or
76.31reimbursement amount that is reduced under this subdivision in equal installments on the
76.32payment dates provided by law.
77.1    Subd. 2. County aid. The commissioner of revenue shall compute an aid reduction
77.2amount for each county's aid under section 477A.0124 for aid payable in 2009 equal
77.3to 0.2308 percent of the county's net tax capacity, as defined in section 477A.0124,
77.4subdivision 2, used in calculating the 2009 certified amount.
77.5To the extent that sufficient information is available on each payment date in 2009,
77.6the commissioner of revenue shall pay any remaining 2009 distribution or reimbursement
77.7amount that is reduced under this section in equal installments on the payment dates
77.8provided by law.
77.9EFFECTIVE DATE.This section is effective the day following final enactment.

77.10    Sec. 9. Minnesota Statutes 2008, section 477A.03, subdivision 2a, is amended to read:
77.11    Subd. 2a. Cities. For aids payable in 2009 and thereafter, the total aid paid under
77.12section 477A.013, subdivision 9, is $526,148,487, subject to adjustment in subdivision 5.
77.13For aids payable in 2010, the total aid paid under section 477A.013, subdivision 9, prior
77.14to the reductions under section 477A.013, subdivision 11, is $526,148,487. For aids
77.15payable in 2011 and thereafter, the total aid paid under section 477A.013, subdivision
77.169, is $516,500,000.
77.17EFFECTIVE DATE.This section is effective for aid paid in 2010 and thereafter.

77.18    Sec. 10. PAYMENTS TO CITY OF COON RAPIDS.
77.19The commissioner of revenue shall make a payment of $225,000 to the city of Coon
77.20Rapids to compensate for its final city aid base payment of $225,000 in December 2008
77.21under Minnesota Statutes 2006, section 477A.011, subdivision 36, paragraph (e), which
77.22was canceled due to the governor's unallotment. The payment shall be made at the time of
77.23the first aid payments in calendar year 2010 under Minnesota Statutes, section 477A.015.
77.24This payment shall not be included when calculating any city aid or credit reductions.
77.25EFFECTIVE DATE.This section is effective for aids payable in calendar year
77.262010.

77.27    Sec. 11. REPEALER.
77.28Minnesota Statutes 2008, section 477A.03, subdivision 5, is repealed.
77.29EFFECTIVE DATE.This section is effective for aid paid in 2010 and thereafter.

78.1ARTICLE 7

78.2SEASONAL RECREATIONAL PROPERTY TAX DEFERRAL PROGRAM

78.3    Section 1. [290D.01] CITATION.
78.4This program shall be named the "seasonal recreational property tax deferral
78.5program."

78.6    Sec. 2. [290D.02] TERMS.
78.7    Subdivision 1. Terms. For purposes of sections 290D.01 to 290D.08, the terms
78.8defined in this section have the meanings given them.
78.9    Subd. 2. Primary property owner. "Primary property owner" means a person who
78.10(1) has been the owner, or one of the owners, of the eligible property for at least 15 years
78.11prior to the year the application is filed under section 290D.04; and (2) applies for the
78.12deferral of property taxes under section 290D.04.
78.13    Subd. 3. Secondary property owner. "Secondary property owner" means any
78.14person, other than the primary property owner, who has been an owner of the eligible
78.15property for at least 15 years prior to the year the initial application is filed for deferral
78.16of property taxes under section 290D.04.
78.17    Subd. 4. Eligible property. "Eligible property" means a parcel of property or
78.18contiguous parcels of property under the same ownership classified as noncommercial
78.19seasonal residential recreational 4c(1) property under section 273.13, subdivision 25.
78.20    Subd. 5. Base property tax amount. "Base property tax amount" means the total
78.21property taxes levied by all taxing jurisdictions, including special assessments, on the
78.22eligible property in the year prior to the year that the initial application is approved under
78.23section 290D.04 and payable in the year of the application.
78.24    Subd. 6. Special assessments. "Special assessments" mean any assessment, fee, or
78.25other charge that may be made by law, and that appears on the property tax statement for
78.26the property for collection under the laws applicable to the enforcement of real estate taxes.
78.27    Subd. 7. Commissioner. "Commissioner" means the commissioner of revenue.

78.28    Sec. 3. [290D.03] QUALIFICATIONS FOR DEFERRAL.
78.29In order for an eligible property to qualify for treatment under this program:
78.30(1) the eligible property must have been owned solely by the primary property owner,
78.31or jointly with others, for at least 15 years prior to the year the initial application is filed;
78.32(2) there must be no state or federal tax liens or judgment liens on the eligible
78.33property;
79.1(3) there must be no mortgages or other liens on the eligible property that secure
79.2future advances, except for those subject to credit limits that result in compliance with
79.3clause (4); and
79.4(4) the total unpaid balances of debts secured by mortgages and other liens on the
79.5eligible property, including unpaid and delinquent special assessments and interest, and
79.6any delinquent property taxes, penalties, and interest, but not including property taxes
79.7payable during the year, must not exceed 60 percent of the assessor's estimated market
79.8value for the current assessment year.

79.9    Sec. 4. [290D.04] APPLICATION FOR DEFERRAL.
79.10    Subdivision 1. Initial application. (a) A primary owner of a property meeting
79.11the qualifications under section 290D.03 may apply to the commissioner for deferral
79.12of taxes on the eligible property. Applications are due on or before July 1 for deferral
79.13of any taxes payable in the following year. The application, which must be prescribed
79.14by the commissioner, shall include the following items and any other information the
79.15commissioner deems necessary:
79.16(1) the name, address, and Social Security number of the primary property owner
79.17and secondary property owners, if any;
79.18(2) a copy of the property tax statement for the current taxes payable year for the
79.19eligible property;
79.20(3) the initial year of ownership of the primary property owner and any second
79.21property owners of the eligible property;
79.22(4) information on any mortgage loans or other amounts secured by mortgages or
79.23other liens against the eligible property, for which purpose the commissioner may require
79.24the applicant to provide a copy of the mortgage note, the mortgage, or a statement of the
79.25balance owing on the mortgage loan provided by the mortgage holder. The commissioner
79.26may require the appropriate documents in connection with obtaining and confirming
79.27information on unpaid amounts secured by other liens; and
79.28(5) the signatures of the primary property owner and all other owners, if any, stating
79.29that each owner agrees to enroll the eligible property in the program to defer property
79.30taxes under this chapter.
79.31The application must state that program participation is voluntary. The application
79.32must also state that program participation includes authorization for the annual deferred
79.33amount. The deferred property tax calculated by the county and the cumulative deferred
79.34property tax amount is public data.
80.1(b) As part of the initial application process, if the property is abstract property, the
80.2commissioner may require the applicant to obtain at the applicant's cost a report prepared
80.3by a licensed abstracter showing the last deed and any unsatisfied mortgages, liens,
80.4judgments, and state and federal tax lien notices which were recorded on or after the date
80.5of that last deed with respect to the eligible property or to the applicant.
80.6The certificate or report need not include references to any documents filed or
80.7recorded more than 40 years prior to the date of the certification or report. The certification
80.8or report must be as of a date not more than 30 days prior to submission of the application
80.9under this section.
80.10The commissioner may also require the county recorder or county registrar of the
80.11county where the eligible property is located to provide copies of recorded documents
80.12related to the applicant of the eligible property, for which the recorder or registrar shall
80.13not charge a fee. The commissioner may use any information available to determine or
80.14verify eligibility under this section.
80.15    Subd. 2. Approval; recording. The commissioner shall approve all initial
80.16applications that qualify under this chapter and shall notify the primary property owner on
80.17or before December 1. The commissioner may investigate the facts or require confirmation
80.18in regard to an application. The commissioner shall record or file a notice of qualification
80.19for deferral, including the names of the primary and any secondary property owners and a
80.20legal description of the eligible property, in the Office of the County Recorder, or registrar
80.21of titles, whichever is applicable, in the county where the eligible property is located. The
80.22notice must state that it serves as a notice of lien and that it includes deferrals under this
80.23section for future years. The primary property owner shall pay the recording or filing fees
80.24for the notice, which, notwithstanding section 357.18, shall be paid by that owner at the
80.25time of satisfaction of the lien.
80.26    Subd. 3. Penalty for failure; investigations. (a) The commissioner shall assess
80.27a penalty equal to 20 percent of the property taxes improperly deferred in the case of a
80.28false application. The commissioner shall assess a penalty equal to 50 percent of the
80.29property taxes improperly deferred if the taxpayer knowingly filed a false application. The
80.30commissioner shall assess penalties under this section through the issuance of an order
80.31under the provisions of chapter 270C. Persons affected by a commissioner's order issued
80.32under this section may appeal as provided in chapter 270C.
80.33(b) The commissioner may conduct investigations related to initial applications
80.34required under this chapter within the period ending 3-1/2 years from the due date of
80.35the application.
81.1    Subd. 4. Annual certification to commissioner. Annually, on or before July 1,
81.2the primary property owner must certify to the commissioner that the person continues
81.3to qualify as a primary property owner. If the primary owner has died or has transferred
81.4the property in the preceding year, a certification may be filed by the primary owner's
81.5spouse, or by one of the secondary owners, provided that the person is currently an
81.6owner of the property. In this case, the primary owner's spouse or the secondary owner
81.7shall be considered the primary owner from that point forward. If neither the primary
81.8owner, the primary owner's spouse, or a secondary owner is eligible to file the required
81.9annual certification for the property, the property's participation in the program shall be
81.10terminated, and the procedures in section 290D.08 apply.
81.11    Subd. 5. Annual notice to primary property owner. Annually, on or before
81.12September 1, the commissioner shall notify each primary property owner, in writing, of
81.13the total cumulative deferred taxes and accrued interest on the qualifying property as of
81.14that date.

81.15    Sec. 5. [290D.05] DEFERRED PROPERTY TAX AMOUNT.
81.16    Subdivision 1. Calculation of deferred property tax amount. Each year after
81.17the county auditor has determined the final property tax rates under section 275.08, the
81.18"deferred property tax amount" must be calculated on each eligible property. The deferred
81.19property tax amount is equal to 50 percent of the amount of the difference between (1) the
81.20total amount of property taxes and special assessments levied upon the eligible property
81.21for the current year by all taxing jurisdictions and (2) the eligible property's base property
81.22tax amount. Any tax attributable to new improvements made to the eligible property after
81.23the initial application has been approved under section 290D.04, subdivision 2, must be
81.24excluded in determining the deferred property tax amount. The eligible property's total
81.25current year's tax less the deferred property tax amount for the current year must be listed
81.26on the property tax statement and is the amount due to the county under chapter 276.
81.27Reference that the property is enrolled in the seasonal recreational property tax deferral
81.28program under this chapter and a state lien has been recorded must be clearly printed on
81.29the statement.
81.30    Subd. 2. Certification to commissioner. The county auditor shall annually, on or
81.31before April 15, certify to the commissioner the property tax deferral amounts determined
81.32under this section for each eligible property in the county. The commissioner shall
81.33prescribe the information that is necessary to identify the eligible properties.
81.34    Subd. 3. Limitation on total amount of deferred taxes. The total amount of
81.35deferred taxes and interest on a property, when added to (1) the balance owed on any
82.1mortgages on the property at the time of initial application; (2) other amounts secured by
82.2liens on the property at the time of the initial application; and (3) any unpaid and delinquent
82.3special assessments and interest and any delinquent property taxes, penalties, and interest,
82.4but not including property taxes payable during the year, must not exceed 60 percent of
82.5the assessor's estimated market value of the property for the current assessment year.

82.6    Sec. 6. [290D.06] LIEN; DEFERRED PORTION.
82.7(a) Payment by the state to the county treasurer of property taxes, penalties, interest,
82.8or special assessments and interest, deferred under this chapter, is deemed a loan from the
82.9state to the program participant. The commissioner shall compute the interest as provided
82.10in section 270C.40, subdivision 5, but not to exceed two percent over the maximum
82.11interest rate provided in section 290B.07, paragraph (a), and maintain records of the total
82.12deferred amount and interest for each participant. Interest accrues beginning September 1
82.13of the payable year for which the taxes are deferred. Any deferral made under this chapter
82.14must not be construed as delinquent property taxes.
82.15The lien created under section 272.31 continues to secure payment by the taxpayer,
82.16or by the taxpayer's successors or assigns, of the amount deferred, including interest, with
82.17respect to all years for which amounts are deferred. The lien for deferred taxes and interest
82.18has the same priority as any other lien under section 272.31, except that liens, including
82.19mortgages, recorded or filed prior to the recording or filing of the notice under section
82.20290D.04, subdivision 2, have priority over the lien for deferred taxes and interest. A
82.21seller's interest in a contract for deed, in which a qualifying owner is the purchaser or an
82.22assignee of the purchaser, has priority over deferred taxes and interest on deferred taxes,
82.23regardless of whether the contract for deed is recorded or filed. The lien for deferred taxes
82.24and interest for future years has the same priority as the lien for deferred taxes and interest
82.25for the first year, which is always higher in priority than any mortgages or other liens filed,
82.26recorded, or created after the notice recorded or filed under section 290D.04, subdivision
82.272 . The county treasurer or auditor shall maintain records of the deferred portion and shall
82.28list the amount of deferred taxes for the year and the cumulative deferral and interest for
82.29all previous years as a lien against the eligible property. In any certification of unpaid
82.30taxes for a tax parcel, the county auditor shall clearly distinguish between taxes payable in
82.31the current year, deferred taxes and interest, and delinquent taxes. Payment of the deferred
82.32portion becomes due and owing at the time specified in section 290D.07. Upon receipt of
82.33the payment, the commissioner shall issue a receipt to the person making the payment
82.34upon request and shall notify the auditor of the county in which the parcel is located,
82.35within ten days, identifying the parcel to which the payment applies. Upon receipt by the
83.1commissioner of collected funds in the amount of the deferral, the state's loan to the
83.2program participant is deemed paid in full.
83.3(b) If eligible property for which taxes have been deferred under this chapter forfeits
83.4under chapter 281 for nonpayment of a nondeferred property tax amount, or because
83.5of nonpayment of amounts previously deferred following a termination under section
83.6290D.07, the lien for the taxes deferred under this chapter, plus interest and costs, shall be
83.7canceled by the county auditor as provided in section 282.07. However, notwithstanding
83.8any other law to the contrary, any proceeds from a subsequent sale of the eligible property
83.9under chapter 282 or another law, must be used to first reimburse the county's forfeited
83.10tax sale fund for any direct costs of selling the eligible property or any costs directly
83.11related to preparing the eligible property for sale, and then to reimburse the state for
83.12the amount of the canceled lien. Within 90 days of the receipt of any sale proceeds to
83.13which the state is entitled under these provisions, the county auditor must pay those funds
83.14to the commissioner by warrant for deposit in the general fund. No other deposit, use,
83.15distribution, or release of gross sale proceeds or receipts may be made by the county until
83.16payments sufficient to fully reimburse the state for the canceled lien amount have been
83.17transmitted to the commissioner.

83.18    Sec. 7. [290D.07] TERMINATION OF DEFERRAL; PAYMENT OF DEFERRED
83.19TAXES.
83.20    Subdivision 1. Termination. (a) The deferral of taxes granted under this chapter
83.21terminates when one of the following occurs:
83.22(1) the eligible property is sold or transferred to someone other than the primary
83.23owner's spouse or a secondary owner;
83.24(2) the death of the primary owner, or in the case of a married couple, after the
83.25death of both spouses, provided that there is not a secondary owner eligible to become
83.26the primary owner;
83.27(3) the primary property owner notifies the commissioner, in writing, that all owners,
83.28including any secondary property owners, desire to discontinue the deferral; or
83.29(4) the eligible property no longer qualifies under section 290D.03.
83.30(b) An eligible property is not terminated from the program because no deferred
83.31property tax amount is determined for any given year after the eligible property's initial
83.32enrollment into the program.
83.33(c) An eligible property is not terminated from the program if the eligible property
83.34subsequently becomes the homestead of one or more of the property owners and the
84.1property and the owners qualify for, and are immediately enrolled in, the senior deferral
84.2program under chapter 290B.
84.3    Subd. 2. Payment upon termination. Upon the termination of the deferral under
84.4subdivision 1, the amount of deferred taxes, penalties, interest, and special assessments
84.5and interest, plus the recording or filing fees under this subdivision and section 290D.04,
84.6subdivision 2 , becomes due and payable to the commissioner within 90 days of termination
84.7of the deferral for terminations under subdivision 1, paragraph (a), clauses (1) and (2),
84.8and within one year of termination of the deferral for terminations under subdivision 1,
84.9paragraph (a), clauses (3) and (4). No additional interest is due on the deferral if timely
84.10paid. On receipt of payment, the commissioner shall, within ten days, notify the auditor
84.11of the county in which the parcel is located, identifying the parcel to which the payment
84.12applies, and shall remit the recording or filing fees under this subdivision and section
84.13290D.04, subdivision 2, to the auditor. A notice of termination of deferral, containing the
84.14legal description and the recording or filing data for the notice of qualification for deferral
84.15under section 290D.04, subdivision 2, shall be prepared and recorded or filed by the
84.16county auditor in the same office in which the notice of qualification for deferral under
84.17section 290D.04, subdivision 2, was recorded or filed, and the county auditor shall mail a
84.18copy of the notice of termination to the property owner. The property owner shall pay the
84.19recording or filing fees. Upon recording or filing of the notice of termination of deferral,
84.20the notice of qualification for deferral under section 290D.04, subdivision 2, and the lien
84.21created by it are discharged. If the deferral is not timely paid, the penalty, interest, lien,
84.22forfeiture, and other rules for the collection of ad valorem property taxes apply.

84.23    Sec. 8. [290D.08] STATE REIMBURSEMENT.
84.24    Subdivision 1. Determination; payment. The county auditor shall determine the
84.25total current year's deferred amount of property tax under this chapter in the county, and
84.26submit those amounts as part of the abstracts of tax lists submitted by the county auditors
84.27under section 275.29. The commissioner may make changes in the abstracts of tax lists as
84.28deemed necessary. The commissioner, after such review, shall pay the deferred amount of
84.29property tax to each county treasurer on or before August 31.
84.30The county treasurer shall distribute as part of the October settlement the funds
84.31received as if they had been collected as part of the property tax.
84.32    Subd. 2. Appropriation. An amount sufficient to pay the total amount of property
84.33tax determined under subdivision 1, plus any other amounts paid under this chapter, is
84.34annually appropriated from the general fund to the commissioner.

85.1    Sec. 9. EFFECTIVE DATE.
85.2Sections 1 to 8 are effective for applications filed July 1, 2009, and thereafter.

85.3ARTICLE 8

85.4MISCELLANEOUS

85.5    Section 1. Minnesota Statutes 2008, section 275.07, is amended by adding a
85.6subdivision to read:
85.7    Subd. 6. Recertification due to unallotment. If a local government's December
85.8aid or credit payments under sections 273.1384 and 477A.011 to 477A.014 are reduced
85.9due to unallotment under section 16A.152, the local government may recertify its levy
85.10under subdivision 1 by January 15 of the year in which the levy is paid. The local
85.11government must report the recertified amount to the county auditor within two business
85.12days of January 15 or the levy shall remain at the amount certified under subdivision 1.
85.13Notwithstanding subdivision 4, the county auditor shall report to the commissioner of
85.14revenue any recertified levies under this subdivision by January 30 of the year in which
85.15the levy is paid.
85.16EFFECTIVE DATE.This section is effective the day following final enactment.

85.17    Sec. 2. Minnesota Statutes 2008, section 275.70, subdivision 5, is amended to read:
85.18    Subd. 5. Special levies. "Special levies" means those portions of ad valorem taxes
85.19levied by a local governmental unit for the following purposes or in the following manner:
85.20    (1) to pay the costs of the principal and interest on bonded indebtedness or to
85.21reimburse for the amount of liquor store revenues used to pay the principal and interest
85.22due on municipal liquor store bonds in the year preceding the year for which the levy
85.23limit is calculated;
85.24    (2) to pay the costs of principal and interest on certificates of indebtedness issued for
85.25any corporate purpose except for the following:
85.26    (i) tax anticipation or aid anticipation certificates of indebtedness;
85.27    (ii) certificates of indebtedness issued under sections 298.28 and 298.282;
85.28    (iii) certificates of indebtedness used to fund current expenses or to pay the costs of
85.29extraordinary expenditures that result from a public emergency; or
85.30    (iv) certificates of indebtedness used to fund an insufficiency in tax receipts or
85.31an insufficiency in other revenue sources;
85.32    (3) to provide for the bonded indebtedness portion of payments made to another
85.33political subdivision of the state of Minnesota;
86.1    (4) to fund payments made to the Minnesota State Armory Building Commission
86.2under section 193.145, subdivision 2, to retire the principal and interest on armory
86.3construction bonds;
86.4    (5) property taxes approved by voters which are levied against the referendum
86.5market value as provided under section 275.61;
86.6    (6) to fund matching requirements needed to qualify for federal or state grants or
86.7programs to the extent that either (i) the matching requirement exceeds the matching
86.8requirement in calendar year 2001, or (ii) it is a new matching requirement that did not
86.9exist prior to 2002;
86.10    (7) to pay the expenses reasonably and necessarily incurred in preparing for or
86.11repairing the effects of natural disaster including the occurrence or threat of widespread
86.12or severe damage, injury, or loss of life or property resulting from natural causes, in
86.13accordance with standards formulated by the Emergency Services Division of the state
86.14Department of Public Safety, as allowed by the commissioner of revenue under section
86.15275.74, subdivision 2 ;
86.16    (8) pay amounts required to correct an error in the levy certified to the county
86.17auditor by a city or county in a levy year, but only to the extent that when added to the
86.18preceding year's levy it is not in excess of an applicable statutory, special law or charter
86.19limitation, or the limitation imposed on the governmental subdivision by sections 275.70
86.20to 275.74 in the preceding levy year;
86.21    (9) to pay an abatement under section 469.1815;
86.22    (10) to pay any costs attributable to increases in the employer contribution rates
86.23under chapter 353, or locally administered pension plans, that are effective after June
86.2430, 2001;
86.25    (11) to pay the operating or maintenance costs of a county jail as authorized in
86.26section 641.01 or 641.262, or of a correctional facility as defined in section 241.021,
86.27subdivision 1 , paragraph (f), to the extent that the county can demonstrate to the
86.28commissioner of revenue that the amount has been included in the county budget as
86.29a direct result of a rule, minimum requirement, minimum standard, or directive of the
86.30Department of Corrections, or to pay the operating or maintenance costs of a regional jail
86.31as authorized in section 641.262. For purposes of this clause, a district court order is
86.32not a rule, minimum requirement, minimum standard, or directive of the Department of
86.33Corrections. If the county utilizes this special levy, except to pay operating or maintenance
86.34costs of a new regional jail facility under sections 641.262 to 641.264 which will not
86.35replace an existing jail facility, any amount levied by the county in the previous levy year
86.36for the purposes specified under this clause and included in the county's previous year's
87.1levy limitation computed under section 275.71, shall be deducted from the levy limit
87.2base under section 275.71, subdivision 2, when determining the county's current year
87.3levy limitation. The county shall provide the necessary information to the commissioner
87.4of revenue for making this determination;
87.5    (12) to pay for operation of a lake improvement district, as authorized under section
87.6103B.555 . If the county utilizes this special levy, any amount levied by the county in the
87.7previous levy year for the purposes specified under this clause and included in the county's
87.8previous year's levy limitation computed under section 275.71 shall be deducted from
87.9the levy limit base under section 275.71, subdivision 2, when determining the county's
87.10current year levy limitation. The county shall provide the necessary information to the
87.11commissioner of revenue for making this determination;
87.12    (13) to repay a state or federal loan used to fund the direct or indirect required
87.13spending by the local government due to a state or federal transportation project or other
87.14state or federal capital project. This authority may only be used if the project is not a
87.15local government initiative;
87.16    (14) to pay for court administration costs as required under section 273.1398,
87.17subdivision 4b , less the (i) county's share of transferred fines and fees collected by the
87.18district courts in the county for calendar year 2001 and (ii) the aid amount certified to be
87.19paid to the county in 2004 under section 273.1398, subdivision 4c; however, for taxes
87.20levied to pay for these costs in the year in which the court financing is transferred to the
87.21state, the amount under this clause is limited to the amount of aid the county is certified to
87.22receive under section 273.1398, subdivision 4a;
87.23    (15) to fund a police or firefighters relief association as required under section 69.77
87.24to the extent that the required amount exceeds the amount levied for this purpose in 2001;
87.25    (16) for purposes of a storm sewer improvement district under section 444.20;
87.26    (17) to pay for the maintenance and support of a city or county society for the
87.27prevention of cruelty to animals under section 343.11. If the city or county uses this
87.28special levy, any amount levied by the city or county in the previous levy year for the
87.29purposes specified in this clause and included in the city's or county's previous year's levy
87.30limit computed under section 275.71, must be deducted from the levy limit base under
87.31section 275.71, subdivision 2, in determining the city's or county's current year levy limit;
87.32    (18) for counties, to pay for the increase in their share of health and human service
87.33costs caused by reductions in federal health and human services grants effective after
87.34September 30, 2007;
87.35    (19) for a city, for the costs reasonably and necessarily incurred for securing,
87.36maintaining, or demolishing foreclosed or abandoned residential properties, as allowed by
88.1the commissioner of revenue under section 275.74, subdivision 2. A city must have either
88.2(i) a foreclosure rate of at least 1.4 percent in 2007, or (ii) a foreclosure rate in 2007 in
88.3the city or in a zip code area of the city that is at least 50 percent higher than the average
88.4foreclosure rate in the metropolitan area, as defined in section 473.121, subdivision 2,
88.5to use this special levy. For purposes of this paragraph, "foreclosure rate" means the
88.6number of foreclosures, as indicated by sheriff sales records, divided by the number of
88.7households in the city in 2007;
88.8    (20) for a city, for the unreimbursed costs of redeployed traffic control agents and
88.9lost traffic citation revenue due to the collapse of the Interstate 35W bridge, as certified
88.10to the Federal Highway Administration;
88.11    (21) to pay costs attributable to wages and benefits for sheriff, police, and fire
88.12personnel. If a local governmental unit did not use this special levy in the previous year its
88.13levy limit base under section 275.71 shall be reduced by the amount equal to the amount it
88.14levied for the purposes specified in this clause in the previous year; and
88.15    (22) an amount equal to any reductions in the certified aids or credits payable
88.16under sections 477A.011 to 477A.014, and section 273.1384, due to unallotment under
88.17section 16A.152 in any year, reductions in aids under chapter 477A, that are enacted
88.18by the legislature in the year in which the aid is paid, and reductions to credits under
88.19section 273.1384 enacted by the legislature in any year. The amount of the levy allowed
88.20under this clause is equal to the amount unallotted or reduced in the calendar year in
88.21which the tax is levied unless the unallotment amount is not known by September 1 of
88.22the levy year, and the local government has not adjusted its levy under section 275.065,
88.23subdivision 6, or 275.07, subdivision 6, in which case the unallotment amount may be
88.24levied in the following year.;
88.25(23) to pay for the difference between one-half of the costs of confining sex offenders
88.26undergoing the civil commitment process and any state payments for this purpose pursuant
88.27to section 253B.185, subdivision 5; and
88.28(24) for a county to pay the costs of the first year of maintaining and operating a new
88.29facility or new expansion, either of which contains courts, corrections, dispatch, criminal
88.30investigation labs, or other public safety facilities and for which all or a portion of the
88.31funding for the site acquisition, building design, site preparation, construction, and related
88.32equipment was issued or authorized prior to the imposition of levy limits in 2008. The
88.33levy limit base shall then be increased by an amount equal to the new facility's first full
88.34year's operating costs as described in this clause.
88.35EFFECTIVE DATE.This section is effective for levies certified in calendar year
88.362009 and thereafter, payable in 2010 and thereafter.

89.1    Sec. 3. [475.755] EMERGENCY DEBT CERTIFICATES.
89.2(a) If at any time during a fiscal year the receipts of a local government are
89.3reasonably expected to be reduced below the amount provided in the local government's
89.4budget when the final property tax levy to be collected during the fiscal year was certified
89.5and the receipts are insufficient to meet the expenses incurred or to be incurred during the
89.6fiscal year, the governing body of the local government may authorize and sell certificates
89.7of indebtedness to mature within two years or less from the end of the fiscal year in which
89.8the certificates are issued. The maximum principal amount of the certificates that it may
89.9issue in a fiscal year is limited to the expected reduction in receipts plus the cost of
89.10issuance. The certificates may be issued in the manner and on the terms the governing
89.11body determines by resolution.
89.12(b) The governing body of the local government shall levy taxes for the payment of
89.13principal and interest on the certificates in accordance with section 475.61.
89.14(c) The certificates are not to be included in the net debt of the issuing local
89.15government.
89.16    (d) To the extent that a local government issues certificates under this section to fund
89.17an unallotment or other reduction in its state aid, the local government may not use a
89.18special levy for the aid reduction under section 275.70, subdivision 5, clause (22), or a
89.19similar or successor provision. This provision does not affect the status of the levy under
89.20section 475.61 to pay the certificates as a levy that is not subject to levy limits.
89.21(e) For purposes of this section, the following terms have the meanings given:
89.22(1) "Local government" means a statutory or home rule charter city, a town, or
89.23a county.
89.24(2) "Receipts" includes the following amounts scheduled to be received by the
89.25local government for the fiscal year from:
89.26(i) taxes;
89.27(ii) aid payments previously certified by the state to be paid to the local government;
89.28(iii) state reimbursement payments for property tax credits; and
89.29(iv) any other source.
89.30EFFECTIVE DATE.This section is effective the day following final enactment.

89.31    Sec. 4. Laws 1986, chapter 400, section 44, as amended by Laws 1995, chapter 264,
89.32article 2, section 39, is amended to read:
89.33    Sec. 44. DOWNTOWN TAXING AREA.
89.34    If a bill is enacted into law in the 1986 legislative session which authorizes the city
89.35of Minneapolis to issue bonds and expend certain funds including taxes to finance the
90.1acquisition and betterment of a convention center and related facilities, which authorizes
90.2certain taxes to be levied in a downtown taxing area, then, notwithstanding the provisions
90.3of that law "downtown taxing area" shall mean the geographic area bounded by the
90.4portion of the Mississippi River between I-35W and Washington Avenue, the portion
90.5of Washington Avenue between the river and I-35W, the portion of I-35W between
90.6Washington Avenue and 8th Street South, the portion of 8th Street South between I-35W
90.7and Portland Avenue South, the portion of Portland Avenue South between 8th Street
90.8South and I-94, the portion of I-94 from the intersection of Portland Avenue South to
90.9the intersection of I-94 and the Burlington Northern Railroad tracks, the portion of the
90.10Burlington Northern Railroad tracks from I-94 to Main Street and including Nicollet
90.11Island, and the portion of Main Street to Hennepin Avenue and the portion of Hennepin
90.12Avenue between Main Street and 2nd Street S.E., and the portion of 2nd Street S.E.
90.13between Main Street and Bank Street, and the portion of Bank Street between 2nd Street
90.14S.E. and University Avenue S.E., and the portion of University Avenue S.E. between Bank
90.15Street and I-35W, and by I-35W from University Avenue S.E., to the river. The downtown
90.16taxing area excludes the area bounded on the south and west by Oak Grove Street, on the
90.17east by Spruce Place, and on the north by West 15th Street. The downtown taxing area
90.18also excludes any property located in a zoned area that is contained in chapter 546 of the
90.19Minneapolis zone code of ordinances on which a restaurant or liquor establishment is
90.20operated.
90.21EFFECTIVE DATE.This section is effective for sales made after July 31, 2012,
90.22provided that the proceeds of the tax collected between July 1, 2009, and July 31, 2012,
90.23by a restaurant or liquor establishment that is excluded from the downtown taxing area
90.24by this section, when collected by the commissioner of revenue, shall be deposited in the
90.25general fund of the state treasury.

90.26    Sec. 5. Laws 1991, chapter 291, article 8, section 27, subdivision 3, as amended by
90.27Laws 1998, chapter 389, article 8, section 28, and Laws 2008, chapter 366, article 7,
90.28section 9, is amended to read:
90.29    Subd. 3. Use of revenues. Revenues received from taxes authorized by subdivisions
90.301 and 2 shall be used by the city to pay the cost of collecting the tax and to pay all or
90.31a portion of the expenses of constructing and improving facilities as part of an urban
90.32revitalization project in downtown Mankato known as Riverfront 2000. Authorized
90.33expenses include, but are not limited to, acquiring property and paying relocation expenses
90.34related to the development of Riverfront 2000 and related facilities, and securing or paying
90.35debt service on bonds or other obligations issued to finance the construction of Riverfront
91.12000 and related facilities. For purposes of this section, "Riverfront 2000 and related
91.2facilities" means a civic-convention center, an arena, a riverfront park, a technology center
91.3and related educational facilities, and all publicly owned real or personal property that
91.4the governing body of the city determines will be necessary to facilitate the use of these
91.5facilities, including but not limited to parking, skyways, pedestrian bridges, lighting, and
91.6landscaping. It also includes the performing arts theatre and the Southern Minnesota
91.7Women's Hockey Exposition Center, attached to the Mankato Civic Center for use by
91.8Minnesota State University, Mankato.
91.9EFFECTIVE DATE.This section is effective the day after the governing body of
91.10the city of Mankato and its chief clerical officer comply with Minnesota Statutes, section
91.11645.021, subdivisions 2 and 3.

91.12    Sec. 6. Laws 2002, chapter 377, article 3, section 25, is amended to read:
91.13    Sec. 25. ROCHESTER LODGING TAX.
91.14    Subdivision 1. Authorization. Notwithstanding Minnesota Statutes, section
91.15469.190 or 477A.016, or any other law, the city of Rochester may impose an additional
91.16tax of one percent on the gross receipts from the furnishing for consideration of lodging at
91.17a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing of it
91.18for a continuous period of 30 days or more.
91.19    Subd. 1a. Authorization. Notwithstanding Minnesota Statutes, section 469.190 or
91.20477A.016, or any other law, and in addition to the tax authorized by subdivision 1, the city
91.21of Rochester may impose an additional tax of one percent on the gross receipts from the
91.22furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or
91.23resort, other than the renting or leasing of it for a continuous period of 30 days or more
91.24only upon (1) enactment of a law appropriating state money for construction costs of
91.25renovating, improving, or expanding the Mayo Civic Center Complex; and (2) approval of
91.26the city governing body of a total financial package for the project.
91.27    Subd. 2. Disposition of proceeds. (a) The gross proceeds from any the tax imposed
91.28under subdivision 1 must be used by the city to fund a local convention or tourism bureau
91.29for the purpose of marketing and promoting the city as a tourist or convention center.
91.30(b) The gross proceeds from the one percent tax imposed under subdivision 1a may
91.31be used to pay for (1) construction, renovation, improvement, and expansion of the Mayo
91.32Civic Center Complex and related skyway access, lighting, parking, or landscaping;
91.33and (2) for payment of any principal, interest, or premium on bonds issued to finance
91.34the Mayo Civic Center Complex.
92.1    Subd. 3. Expiration of taxing authority. The authority of the city to impose a
92.2tax under subdivision 1a shall expire when the principal and interest on any bonds or
92.3other obligations issued to finance the Mayo Civic Center Complex and related skyway
92.4access, lighting, parking, or landscaping have been paid or at an earlier time as the city
92.5shall, by ordinance, determine.
92.6EFFECTIVE DATE.This section is effective the day after the governing body of
92.7the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
92.8645.021, subdivisions 2 and 3.

92.9    Sec. 7. Laws 2006, chapter 259, article 3, section 12, subdivision 3, is amended to read:
92.10    Subd. 3. Use of revenues. Revenues received from the taxes authorized by
92.11subdivisions 1 and 2 must be used to pay all or part of the capital costs of transportation
92.12projects included in the 2004 U.S. Highway 14-Owatonna Beltline Study by the Minnesota
92.13Department of Transportation, Steele County, and the city of Owatonna; regional parks
92.14and trail developments; and the West Hills complex, including the firehall, and library
92.15improvement projects; as described in the city resolution No. 4-06, Exhibit A, as adopted
92.16by the city on January 17, 2006. Notwithstanding the specific transportation projects
92.17described in city resolution No. 4-06, Exhibit A, the city may transfer up to $1,500,000
92.18of the sales and use tax revenues from the Alexander Street to 39th Avenue Southwest
92.19project to the reconstruction of 18th Street Southwest from 24th Avenue Southwest to 39th
92.20Avenue West. The amount paid from these revenues for transportation projects may not
92.21exceed $4,450,000 plus associated bond costs. The amount paid from these revenues for
92.22park and trail projects may not exceed $5,400,000 plus associated bond costs. The amount
92.23paid from these revenues for West Hills complex, fire hall, and library improvement
92.24projects may not exceed $2,823,000 plus associated bond costs.
92.25EFFECTIVE DATE.This section is effective the day after compliance by the
92.26governing body of the city of Owatonna with Minnesota Statutes, section 645.021,
92.27subdivision 3.

92.28    Sec. 8. Laws 2008, chapter 366, article 7, section 16, subdivision 3, is amended to read:
92.29    Subd. 3. Use of proceeds from authorized taxes. The proceeds of any tax imposed
92.30under subdivisions 1 and 2 shall be used by the city to pay all or a portion of the expenses
92.31of operation and maintenance of the Riverfront 2000 and related facilities, including a
92.32performing arts theatre and the Southern Minnesota Women's Hockey Exposition Center,
92.33attached to the Mankato Civic Center for use by Minnesota State University, Mankato.
93.1Authorized expenses include securing or paying debt service on bonds or other obligations
93.2issued to finance the construction of the facilities.
93.3EFFECTIVE DATE.This section is effective the day after the governing body of
93.4the city of Mankato and its chief clerical officer comply with Minnesota Statutes, section
93.5645.021, subdivisions 2 and 3.

93.6    Sec. 9. ROCHESTER FOOD AND BEVERAGE TAX.
93.7    Subdivision 1. Authorization. Notwithstanding Minnesota Statutes, section
93.8477A.016, or any other law or charter provision, the city of Rochester may impose a tax of
93.9one percent on the gross receipts on all sales of food and beverages by restaurants and
93.10places of refreshment, as defined by resolution of the city, that occur in the city. For
93.11purposes of this section, "food and beverages" include retail on-sale of intoxicating liquor
93.12and fermented malt beverages.
93.13    Subd. 2. Use of proceeds. The proceeds of this tax shall be used for (1) paying the
93.14cost of collection; (2) to pay for construction, renovation, improvement, and expansion
93.15of the Mayo Civic Center Complex and related skyway access, lighting, parking, or
93.16landscaping; and (3) for payment of any principal, interest, or premium on bonds issued to
93.17finance the Mayo Civic Center Complex.
93.18    Subd. 3. Imposition of the tax. The tax under this section may only be imposed
93.19upon (1) enactment of a law appropriating state money for construction costs of
93.20renovating, improving, or expanding the Mayo Civic Center Complex; and (2) approval of
93.21the city governing body of a total financing package for the project.
93.22    Subd. 4. Expiration of taxing authority. The authority granted under subdivision
93.231 to the city to impose a one percent tax on food and beverages shall expire when the
93.24principal and interest on any bonds or other obligations issued to finance the Mayo Civic
93.25Center Complex and related skyway access, lighting, parking, or landscaping have been
93.26paid or at an earlier time as the city shall, by ordinance, determine.
93.27EFFECTIVE DATE.This section is effective the day after the governing body of
93.28the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
93.29645.021, subdivisions 2 and 3, and upon approval of the city governing body of a total
93.30financing package to renovate, improve, or expand the Mayo Civic Center Complex.