Minnesota Legislature
HF 2102
2nd Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
Current Version - 2nd Engrossment
1.1 A bill for an act 1.2 relating to the financing and operation of government 1.3 in this state; modifying certain tax rates, credits, 1.4 refunds, bases, and exemptions; modifying property tax 1.5 valuation and classification; changing tax increment 1.6 financing, special services district, and taxing 1.7 district provisions; authorizing local taxes; 1.8 authorizing certain special districts; providing local 1.9 levy or other authority; providing for distribution of 1.10 production tax proceeds; providing for certain tax 1.11 base sharing; changing certain aids; providing local 1.12 performance aid; modifying revenue recapture; making 1.13 tax policy, collection, administrative and technical 1.14 changes, corrections, and clarifications; modifying 1.15 collection of fees; requiring studies; providing for 1.16 appointments; appropriating money; amending Minnesota 1.17 Statutes 1994, sections 10A.31, subdivision 3a; 13.99, 1.18 subdivision 97a; 103E.611, subdivision 7; 115.26, by 1.19 adding a subdivision; 115A.919, by adding a 1.20 subdivision; 115A.923, subdivision 1a; 165.08, 1.21 subdivision 5; 239.761, subdivision 5; 270.067, 1.22 subdivision 2; 270.07, subdivision 1; 270.102, 1.23 subdivisions 1, 2, and 3; 270.70, subdivision 2; 1.24 270A.03, subdivision 2; 273.02, subdivision 3; 1.25 273.111, subdivision 3; 273.13, subdivisions 22 and 1.26 23; 273.1398, subdivision 4, and by adding a 1.27 subdivision; 275.065, subdivision 5a; 275.07, 1.28 subdivision 4; 275.61; 278.01, by adding a 1.29 subdivision; 278.08; 279.06, subdivision 1; 279.37, by 1.30 adding a subdivision; 281.17; 287.06; 289A.39, 1.31 subdivision 1; 289A.50, by adding a subdivision; 1.32 289A.56, subdivision 4; 290.01, subdivision 4a; 1.33 290.06, subdivisions 2c and 22; 290.091, subdivision 1.34 2; 290.0922, subdivisions 1 and 3; 290.095, 1.35 subdivision 3; 290.17, subdivision 2; 290A.25; 295.50, 1.36 subdivision 6; 295.51, subdivision 1, and by adding a 1.37 subdivision; 295.52, by adding a subdivision; 295.54, 1.38 subdivisions 1, 2, and by adding a subdivision; 1.39 296.01, subdivisions 2 and 13; 296.02, subdivision 8, 1.40 and by adding a subdivision; 296.025, subdivision 6; 1.41 296.141, subdivisions 4 and 5; 296.15, by adding a 1.42 subdivision; 296.17, subdivision 7; 297.04, 1.43 subdivision 9; 297A.14, by adding a subdivision; 1.44 297A.15, subdivisions 4, 5, and 6; 297A.21, 1.45 subdivision 4; 297A.211, subdivisions 1 and 3; 1.46 297A.24, subdivision 1; 297A.25, subdivisions 14, 28, 2.1 and 37; 297A.256, subdivision 1; 297A.2572; 297A.2573; 2.2 297A.44, subdivision 1; 297A.46; 297E.02, subdivisions 2.3 4 and 10; 298.01, subdivision 4e; 298.17; 298.28, 2.4 subdivisions 2 and 6; 298.296, subdivision 2; 298.75, 2.5 subdivision 1; 349.15, by adding a subdivision; 2.6 349.154, subdivision 2; 349.19, subdivision 2, and by 2.7 adding a subdivision; 375.192, subdivision 2; 383B.51; 2.8 428A.01, subdivisions 2 and 3; 428A.02, subdivision 1; 2.9 444.075, by adding a subdivision; 458A.32, subdivision 2.10 4; 469.040, by adding a subdivision; 469.167, 2.11 subdivision 2; 469.173, subdivision 7; 469.174, 2.12 subdivision 2; 469.176, subdivision 4f; 469.1761, 2.13 subdivision 1; 469.177, subdivision 3; 471.59, by 2.14 adding a subdivision; 471.88, subdivision 14; 473.39, 2.15 by adding a subdivision; 473.608, by adding a 2.16 subdivision; 473.625; 477A.011, subdivisions 3, 20, 2.17 27, 32, and 35; Minnesota Statutes 1995 Supplement, 2.18 sections 16A.152, subdivision 2; 16A.67, subdivision 2.19 5; 41A.09, subdivision 2a; 115B.48, by adding 2.20 subdivisions; 115B.49, subdivisions 2 and 4; 121.904, 2.21 subdivision 4a; 124A.03, subdivision 2; 216B.161, 2.22 subdivision 1; 270A.03, subdivision 7; 273.11, 2.23 subdivision 16; 273.124, subdivisions 1, 3, and 13; 2.24 273.13, subdivision 25; 273.1398, subdivision 1; 2.25 273.1399, subdivisions 6 and 7; 275.065, subdivisions 2.26 3 and 6; 275.08, subdivision 1b; 276.04, subdivision 2.27 2; 289A.02, subdivision 7; 289A.40, subdivision 1; 2.28 290.01, subdivisions 19 and 31; 290.191, subdivisions 2.29 5 and 6; 290A.04, subdivision 2h; 291.005, subdivision 2.30 1; 295.50, subdivisions 3 and 4; 295.53, subdivisions 2.31 1 and 5; 296.02, subdivision 1; 296.025, subdivision 2.32 1; 296.12, subdivision 3; 297A.02, subdivision 4; 2.33 297A.25, subdivisions 57, 59, and 61; 297A.45, 2.34 subdivisions 2, 3, and 4; 297B.01, subdivision 8; 2.35 298.227; 298.24, subdivision 1; 298.28, subdivision 2.36 9a; 298.296, subdivision 4; 428A.05; 465.82, 2.37 subdivision 2; 469.169, subdivisions 9 and 10; 2.38 469.174, subdivision 4; 469.175, subdivisions 1, 5, 2.39 and 6; 469.176, subdivisions 2 and 7; 471.6965; 2.40 473.39, subdivision 1b; 473.448; 477A.0121, 2.41 subdivision 4; 477A.0132; 477A.03, subdivision 2; 2.42 501B.38, subdivision 1a; Laws 1963, chapter 118, 2.43 sections 1, subdivision 3; 2; 4; and 6; Laws 1971, 2.44 chapter 869, section 2, subdivisions 2, as amended; 2.45 14; and 17, as added; section 3, subdivisions 5, 6, 2.46 and 9; section 4, subdivisions 1, 2, and 5, as 2.47 amended; section 5, subdivisions 1 and 3; section 8; 2.48 section 10, subdivision 3b, as added; section 12, 2.49 subdivisions 1, as amended; and 2, as amended; section 2.50 17, subdivision 11; section 19; section 20, 2.51 subdivision 2; section 21; and section 24; Laws 1985, 2.52 chapter 302, section 2, subdivision 1, as amended; 2.53 Laws 1989, chapter 211, section 4, subdivision 1; Laws 2.54 1991, chapter 291, article 8, section 27; and Laws 2.55 1995, chapter 264, article 2, sections 42, subdivision 2.56 1; and 44; and article 5, sections 40, subdivision 1; 2.57 44, subdivision 4; and 45, subdivision 1; proposing 2.58 coding for new law in Minnesota Statutes, chapters 2.59 103D; 115B; 276; 281; 287; 290A; 297A; 298; 315; 375; 2.60 428A; and 477A; proposing coding for new law as 2.61 Minnesota Statutes, chapter 276A; repealing Minnesota 2.62 Statutes 1994, sections 13.99, subdivision 97; 2.63 273.1398, subdivision 5b; 290.06, subdivision 21; 2.64 290.092; 295.37; 295.39; 295.40; 295.41; 295.42; 2.65 295.43; 295.50, subdivisions 8, 9, 9a, 11, 12, and 2.66 12a; 296.25, subdivision 1a; 297A.14, subdivision 3; 2.67 297A.24, subdivision 2; and 469.150; Laws 1971, 2.68 chapter 869, section 6, subdivision 3; and Laws 1987, 2.69 chapter 285. 2.70 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 3.1 ARTICLE 1 3.2 INCOME AND FRANCHISE TAXES 3.3 Section 1. Minnesota Statutes 1994, section 10A.31, 3.4 subdivision 3a, is amended to read: 3.5 Subd. 3a. [QUALIFICATION OF POLITICAL PARTIES.] A major 3.6 political party as defined in section 10A.01, subdivision 12, 3.7 qualifies for inclusion on the income tax form and property tax 3.8 refund return as provided in subdivision 3, provided that it 3.9 qualifies as a major political party by July 1 of the taxable 3.10 year. 3.11 A minor political party as defined in section 10A.01, 3.12 subdivision 13 qualifies for inclusion on the income tax form 3.13 and property tax refund return as provided in subdivision 3, 3.14 provided that 3.15 (1) (a) if a petition is filed, it is filed by June 1 of 3.16 the taxable year; or 3.17 (b) if the party ran a candidate for statewide office, that 3.18 office must have been the office of governor and lieutenant 3.19 governor, secretary of state, state auditor, state treasurer, or 3.20 attorney general; and 3.21 (2) the secretary of state certifies to the commissioner of 3.22 revenue by July 1, 1984, and by July 1 of every odd-numbered 3.23 year thereafter the parties which qualify as minor political 3.24 parties under this subdivision. 3.25 A minor party shall be certified only if the secretary of 3.26 state determines that the party satisfies the following 3.27 conditions: 3.28 (a) the party meets the requirements of section 10A.01, 3.29 subdivision 13, and in the last applicable election ran a 3.30 candidate for the statewide offices listed in clause (1)(b) of 3.31 this subdivision; 3.32 (b) it is a political party, not a principal campaign 3.33 committee; 3.34 (c) it has held a state convention in the last two years, 3.35 adopted a state constitution, and elected state officers; and 3.36 (d) an officer of the party has filed with the secretary of 4.1 state a certification that the party held a state convention in 4.2 the last two years, adopted a state constitution, and elected 4.3 state officers. 4.4 Sec. 2. Minnesota Statutes 1994, section 165.08, 4.5 subdivision 5, is amended to read: 4.6 Subd. 5. [EXEMPTIONS.] Notwithstanding any other provision 4.7 of law to the contrary, the properties, moneys, and other assets 4.8 of any joint and independent international authority or 4.9 commission created under subdivision 1, all revenues or other 4.10 income of any such authority or commission, and all bonds,4.11certificates of indebtedness, or other obligations issued by any4.12such authority or commission, and the interest thereon,shall be 4.13 exempt from all taxation, licenses, fees, or charges of any kind 4.14 imposed by the state or by any county, municipality, political 4.15 subdivision, taxing district, or other public agency or body of 4.16 the state. 4.17 Sec. 3. Minnesota Statutes 1994, section 290.01, 4.18 subdivision 4a, is amended to read: 4.19 Subd. 4a. [FINANCIAL INSTITUTION.] (a) "Financial 4.20 institution" means: 4.21 (1) a holding company; 4.22 (2) any regulated financial corporation; or 4.23 (3) any other corporation organized under the laws of the 4.24 United States or organized under the laws of this state or any 4.25 other state or country that is carrying on the business of a 4.26 financial institution. 4.27 (b) "Holding company" means any corporation registered 4.28 under the Federal Bank Holding Company Act of 1956, as amended, 4.29 or registered as a savings and loan holding company under the 4.30 Federal National Housing Act, as amended. 4.31 (c) "Regulated financial corporation" means an institution, 4.32 the deposits or accounts of which are insured under the Federal 4.33 Deposit Insurance Act or by the Federal Savings and Loan 4.34 Insurance Corporation, any institution which is a member of a 4.35 Federal Home Loan Bank, any other bank or thrift institution 4.36 incorporated or organized under the laws of any state or any 5.1 foreign country which is engaged in the business of receiving 5.2 deposits, any corporation organized under the provisions of 5.3 United States Code, title 12, sections 611 to 631 (Edge Act 5.4 Corporations), and any agency of a foreign depository as defined 5.5 in United States Code, title 12, section 3101. 5.6 (d) "Business of a financial institution" means: 5.7 (1)the business that a regulated financial corporation may5.8be authorized to do under state or federal law or the business5.9that its subsidiary is authorized to do by the proper regulatory5.10authorities;5.11(2)the business that any corporation organized under the 5.12 authority of the United States or organized under the laws of 5.13 this state or any other state or country does or has authority 5.14 to do which is substantially similar to the business which a 5.15 corporation may be created to do under chapters 46 to 55 or any 5.16 business which a corporationor its subsidiaryis authorized to 5.17 do by those laws; or 5.18(3)(2) the business that any corporation organized under 5.19 the authority of the United States or organized under the laws 5.20 of this state or any other state or country does or has 5.21 authority to do if the corporation derives more than 50 percent 5.22 of its gross income from lending activities (including 5.23 discounting obligations) in substantial competition with the 5.24 businesses described inclausesclause (1)and (2). For 5.25 purposes of this clause, the computation of the gross income of 5.26 a corporation does not include income from nonrecurring, 5.27 extraordinary items. 5.28 Sec. 4. Minnesota Statutes 1994, section 290.06, 5.29 subdivision 2c, is amended to read: 5.30 Subd. 2c. [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 5.31 AND TRUSTS.] (a) The income taxes imposed by this chapter upon 5.32 married individuals filing joint returns and surviving spouses 5.33 as defined in section 2(a) of the Internal Revenue Code must be 5.34 computed by applying to their taxable net income the following 5.35 schedule of rates: 5.36 (1) On the first $19,910, 6 percent; 6.1 (2) On all over $19,910, but not over $79,120, 8 percent; 6.2 (3) On all over $79,120, 8.5 percent. 6.3 Married individuals filing separate returns, estates, and 6.4 trusts must compute their income tax by applying the above rates 6.5 to their taxable income, except that the income brackets will be 6.6 one-half of the above amounts. 6.7 (b) The income taxes imposed by this chapter upon unmarried 6.8 individuals must be computed by applying to taxable net income 6.9 the following schedule of rates: 6.10 (1) On the first $13,620, 6 percent; 6.11 (2) On all over $13,620, but not over $44,750, 8 percent; 6.12 (3) On all over $44,750, 8.5 percent. 6.13 (c) The income taxes imposed by this chapter upon unmarried 6.14 individuals qualifying as a head of household as defined in 6.15 section 2(b) of the Internal Revenue Code must be computed by 6.16 applying to taxable net income the following schedule of rates: 6.17 (1) On the first $16,770, 6 percent; 6.18 (2) On all over $16,770, but not over $67,390, 8 percent; 6.19 (3) On all over $67,390, 8.5 percent. 6.20 (d) In lieu of a tax computed according to the rates set 6.21 forth in this subdivision, the tax of any individual taxpayer 6.22 whose taxable net income for the taxable year is less than an 6.23 amount determined by the commissioner must be computed in 6.24 accordance with tables prepared and issued by the commissioner 6.25 of revenue based on income brackets of not more than $100. The 6.26 amount of tax for each bracket shall be computed at the rates 6.27 set forth in this subdivision, provided that the commissioner 6.28 may disregard a fractional part of a dollar unless it amounts to 6.29 50 cents or more, in which case it may be increased to $1. 6.30 (e) An individual who is not a Minnesota resident for the 6.31 entire year must compute the individual's Minnesota income tax 6.32 as provided in this subdivision. After the application of the 6.33 nonrefundable credits provided in this chapter, the tax 6.34 liability must then be multiplied by a fraction in which: 6.35 (1) The numerator is the individual's Minnesota source 6.36 federal adjusted gross income as defined in section 62 of the 7.1 Internal Revenue Code increased by the addition required for 7.2 interest income from non-Minnesota state and municipal bonds 7.3 under section 290.01, subdivision 19a, clause (1), after 7.4 applying the allocation and assignability provisions of section 7.5 290.081, clause (a), or 290.17; and 7.6 (2) the denominator is the individual's federal adjusted 7.7 gross income as defined in section 62 of the Internal Revenue 7.8 Code of 1986, as amended through April 15, 1995, increased by 7.9 the addition required for interest income from non-Minnesota 7.10 state and municipal bonds under section 290.01, subdivision 19a, 7.11 clause (1). 7.12 Sec. 5. Minnesota Statutes 1994, section 290.06, 7.13 subdivision 22, is amended to read: 7.14 Subd. 22. [CREDIT FOR TAXES PAID TO ANOTHER STATE.] (a) A 7.15 taxpayer who is liable for taxes on or measured by net income to 7.16 another state or province or territory of Canada, as provided in 7.17 paragraphs (b) through (f), upon income allocated or apportioned 7.18 to Minnesota, is entitled to a credit for the tax paid to 7.19 another state or province or territory of Canada if the tax is 7.20 actually paid in the taxable year or a subsequent taxable year. 7.21 A taxpayer who is a resident of this state pursuant to section 7.22 290.01, subdivision 7, clause (2), and who is subject to income 7.23 tax as a resident in the state of the individual's domicile is 7.24 not allowed this credit unless the state of domicile does not 7.25 allow a similar credit. 7.26 (b) For an individual, estate, or trust, the credit is 7.27 determined by multiplying the tax payable under this chapter by 7.28 the ratio derived by dividing the income subject to tax in the 7.29 other state or province or territory of Canada that is also 7.30 subject to tax in Minnesota while a resident of Minnesota by the 7.31 taxpayer's federal adjusted gross income, as defined in section 7.32 62 of the Internal Revenue Code, modified by the addition 7.33 required by section 290.01, subdivision 19a, clause (1), and the 7.34 subtraction allowed by section 290.01, subdivision 19b, clause 7.35 (1), to the extent the income is allocated or assigned to 7.36 Minnesota under sections 290.081 and 290.17. 8.1 (c) If the taxpayer is an athletic team that apportions all 8.2 of its income under section 290.17, subdivision 5, paragraph 8.3 (c), the credit is determined by multiplying the tax payable 8.4 under this chapter by the ratio derived from dividing the total 8.5 net income subject to tax in the other state or province or 8.6 territory of Canada by the taxpayer's Minnesota taxable income. 8.7 (d) The credit determined under paragraph (b) or (c) shall 8.8 not exceed the amount of tax so paid to the other state or 8.9 province or territory of Canada on the gross income earned 8.10 within the other state or province or territory of Canada 8.11 subject to tax under this chapter, nor shall the allowance of 8.12 the credit reduce the taxes paid under this chapter to an amount 8.13 less than what would be assessed if such income amount was 8.14 excluded from taxable net income. 8.15 (e) In the case of the tax assessed on a lump sum 8.16 distribution under section 290.032, the credit allowed under 8.17 paragraph (a) is the tax assessed by the other state or province 8.18 or territory of Canada on the lump sum distribution that is also 8.19 subject to tax under section 290.032, and shall not exceed the 8.20 tax assessed under section 290.032. To the extent the total 8.21 lump sum distribution defined in section 290.032, subdivision 1, 8.22 includes lump sum distributions received in prior years or is 8.23 all or in part an annuity contract, the reduction to the tax on 8.24 the lump sum distribution allowed under section 290.032, 8.25 subdivision 2, includes tax paid to another state that is 8.26 properly apportioned to that distribution. 8.27 (f) If a Minnesota resident reported an item of income to 8.28 Minnesota and is assessed tax in such other state or province or 8.29 territory of Canada on that same income after the Minnesota 8.30 statute of limitations has expired, the taxpayer shall receive a 8.31 credit for that year under paragraph (a), notwithstanding any 8.32 statute of limitations to the contrary. The claim for the 8.33 credit must be submitted within one year from the date the taxes 8.34 were paid to the other state or province or territory of 8.35 Canada. The taxpayer must submit sufficient proof to show 8.36 entitlement to a credit. 9.1 (g) For the purposes of this subdivision, a resident 9.2 shareholder of a corporation having a valid election in effect 9.3 under section 1362 of the Internal Revenue Code must be 9.4 considered to have paid a tax imposed on the shareholder in an 9.5 amount equal to the shareholder's pro rata share of any net 9.6 income tax paid by the S corporation toaanother statethat9.7does not measure the income of the shareholder of the S9.8corporation by reference to the income of the S corporation. 9.9 For the purposes of the preceding sentence, the term "net income 9.10 tax" means any tax imposed on or measured by a corporation's net 9.11 income. 9.12 (h) For the purposes of this subdivision, a resident member 9.13 of a limited liability company taxed as a partnership under the 9.14 Internal Revenue Code must be considered to have paid a tax 9.15 imposed on the member in an amount equal to the member's pro 9.16 rata share of any net income tax paid by the limited liability 9.17 company to a state that does not measure the income of the 9.18 member of the limited liability company by reference to the 9.19 income of the limited liability company. For purposes of the 9.20 preceding sentence, the term "net income" tax means any tax 9.21 imposed on or measured by a limited liability company's net 9.22 income. 9.23 Sec. 6. Minnesota Statutes 1994, section 290.091, 9.24 subdivision 2, is amended to read: 9.25 Subd. 2. [DEFINITIONS.] For purposes of the tax imposed by 9.26 this section, the following terms have the meanings given: 9.27 (a) "Alternative minimum taxable income" means the sum of 9.28 the following for the taxable year: 9.29 (1) the taxpayer's federal alternative minimum taxable 9.30 income as defined in section 55(b)(2) of the Internal Revenue 9.31 Code; 9.32 (2) the taxpayer's itemized deductions allowed in computing 9.33 federal alternative minimum taxable income, but excluding the 9.34 Minnesota charitable contribution deduction and the medical 9.35 expense deduction; 9.36 (3) for depletion allowances computed under section 613A(c) 10.1 of the Internal Revenue Code, with respect to each property (as 10.2 defined in section 614 of the Internal Revenue Code), to the 10.3 extent not included in federal alternative minimum taxable 10.4 income, the excess of the deduction for depletion allowable 10.5 under section 611 of the Internal Revenue Code for the taxable 10.6 year over the adjusted basis of the property at the end of the 10.7 taxable year (determined without regard to the depletion 10.8 deduction for the taxable year); 10.9 (4) to the extent not included in federal alternative 10.10 minimum taxable income, the amount of the tax preference for 10.11 intangible drilling cost under section 57(a)(2) of the Internal 10.12 Revenue Code determined without regard to subparagraph (E); 10.13 (5) to the extent not included in federal alternative 10.14 minimum taxable income, the amount of interest income as 10.15 provided by section 290.01, subdivision 19a, clause (1); 10.16 less the sum of the amounts determined under the following 10.17 clauses (1) to (3): 10.18 (1) interest income as defined in section 290.01, 10.19 subdivision 19b, clause (1); 10.20 (2) an overpayment of state income tax as provided by 10.21 section 290.01, subdivision 19b, clause (2), to the extent 10.22 included in federal alternative minimum taxable income; and 10.23 (3) the amount of investment interest paid or accrued 10.24 within the taxable year on indebtedness to the extent that the 10.25 amount does not exceed net investment income, as defined in 10.26 section 163(d)(4) of the Internal Revenue Code. Interest does 10.27 not include amounts deducted in computing federal adjusted gross 10.28 income. 10.29 In the case of an estate or trust, alternative minimum 10.30 taxable income must be computed as provided in section 59(c) of 10.31 the Internal Revenue Code. 10.32 (b) "Investment interest" means investment interest as 10.33 defined in section 163(d)(3) of the Internal Revenue Code. 10.34 (c) "Tentative minimum tax" equals seven percent of 10.35 alternative minimum taxable income after subtracting the 10.36 exemption amount determined under subdivision 3. 11.1 (d) "Regular tax" means the tax that would be imposed under 11.2 this chapter (without regard to this section and section 11.3 290.032), reduced by the sum of the nonrefundable credits 11.4 allowed under this chapter. 11.5 (e) "Net minimum tax" means the minimum tax imposed by this 11.6 section. 11.7 (f) "Minnesota charitable contribution deduction" means a 11.8 charitable contribution deduction under section 170 of the 11.9 Internal Revenue Code to or for the use of an entity described 11.10 in section 290.21, subdivision 3, clauses (a) to (e). When the 11.11 federal deduction for charitable contributions is limited under 11.12 section 170(b) of the Internal Revenue Code, the allowable 11.13 contributions in the year of contribution are deemed to be first 11.14 contributions to entities described in section 290.21, 11.15 subdivision 3, clauses (a) to (e). 11.16 Sec. 7. Minnesota Statutes 1994, section 290.0922, 11.17 subdivision 1, is amended to read: 11.18 Subdivision 1. [IMPOSITION.] (a) In addition to the tax 11.19 imposed by this chapter without regard to this section, the 11.20 franchise tax imposed on a corporation required to file under 11.21 section 289A.08, subdivision 3, other than a corporation having 11.22 a valid election in effect under section 1362 of the Internal 11.23 Revenue Code for the taxable year includes a tax equal to the 11.24 following amounts: 11.25 If the sum of the corporation's 11.26 Minnesota property, payrolls, and sales 11.27 or receipts is: the tax equals: 11.28 less than $500,000 $0 11.29 $ 500,000 to $ 999,999 $100 11.30 $ 1,000,000 to $ 4,999,999 $300 11.31 $ 5,000,000 to $ 9,999,999 $1,000 11.32 $10,000,000 to $19,999,999 $2,000 11.33 $20,000,000 or more $5,000 11.34 (b) A tax is imposedannually beginning in 1990for each 11.35 taxable year on a corporation required to file a return under 11.36 section 289A.12, subdivision 3, that has a valid election in 12.1 effect for the taxable year under section 1362 of the Internal 12.2 Revenue Code and on a partnership required to file a return 12.3 under section 289A.12, subdivision 3, other than a partnership 12.4 that derives over 80 percent of its income from farming. The 12.5 tax imposed under this paragraph is due on or before the due 12.6 date of the return for the taxpayer due under section 289A.18, 12.7 subdivision 1. The commissioner shall prescribe the return to 12.8 be used for payment of this tax. The tax under this paragraph is 12.9 equal to the following amounts: 12.10 If the sum of the S corporation's or partnership's 12.11 Minnesota property, payrolls, and sales 12.12 or receipts is: the tax equals: 12.13 less than $500,000 $0 12.14 $ 500,000 to $ 999,999 $100 12.15 $ 1,000,000 to $ 4,999,999 $300 12.16 $ 5,000,000 to $ 9,999,999 $1,000 12.17 $10,000,000 to $19,999,999 $2,000 12.18 $20,000,000 or more $5,000 12.19 Sec. 8. Minnesota Statutes 1994, section 290.17, 12.20 subdivision 2, is amended to read: 12.21 Subd. 2. [INCOME NOT DERIVED FROM CONDUCT OF A TRADE OR 12.22 BUSINESS.] The income of a taxpayer subject to the allocation 12.23 rules that is not derived from the conduct of a trade or 12.24 business must be assigned in accordance with paragraphs (a) to 12.25 (f): 12.26 (a)(1) Subject to paragraphs (a)(2) and (a)(3), income from 12.27 labor or personal or professional services is assigned to this 12.28 state if, and to the extent that, the labor or services are 12.29 performed within it; all other income from such sources is 12.30 treated as income from sources without this state. 12.31 Severance pay shall be considered income from labor or 12.32 personal or professional services. 12.33 (2) In the case of an individual who is a nonresident of 12.34 Minnesota and who is an athlete or entertainer, income from 12.35 compensation for labor or personal services performed within 12.36 this state shall be determined in the following manner: 13.1 (i) The amount of income to be assigned to Minnesota for an 13.2 individual who is a nonresident salaried athletic team employee 13.3 shall be determined by using a fraction in which the denominator 13.4 contains the total number of days in which the individual is 13.5 under a duty to perform for the employer, and the numerator is 13.6 the total number of those days spent in Minnesota; and 13.7 (ii) The amount of income to be assigned to Minnesota for 13.8 an individual who is a nonresident, and who is an athlete or 13.9 entertainer not listed in clause (i), for that person's athletic 13.10 or entertainment performance in Minnesota shall be determined by 13.11 assigning to this state all income from performances or athletic 13.12 contests in this state. 13.13 (3) For purposes of this section, amounts received by a 13.14 nonresident from the United States, its agencies or 13.15 instrumentalities, the Federal Reserve Bank, the state of 13.16 Minnesota or any of its political or governmental subdivisions, 13.17 or a Minnesota volunteer firefighters' relief association, by 13.18 way of payment as a pension, public employee retirement benefit, 13.19 or any combination of these, or as a retirement or survivor's 13.20 benefit made from a plan qualifying under section 401, 403, 408, 13.21 or 409, or as defined in section 403(b) or 457 of the Internal 13.22 Revenue Code, are not considered income derived from carrying on 13.23 a trade or business or from performing personal or professional 13.24 services in Minnesota, and are not taxable under this chapter. 13.25 (b) Income or gains from tangible property located in this 13.26 state that is not employed in the business of the recipient of 13.27 the income or gains must be assigned to this state. 13.28 (c) Income or gains from intangible personal property not 13.29 employed in the business of the recipient of the income or gains 13.30 must be assigned to this state if the recipient of the income or 13.31 gains is a resident of this state or is a resident trust or 13.32 estate. 13.33 Gain on the sale of a partnership interest is allocable to 13.34 this state in the ratio of the original cost of partnership 13.35 tangible property in this state to the original cost of 13.36 partnership tangible property everywhere, determined at the time 14.1 of the sale. If more than 50 percent of the value of the 14.2 partnership's assets consists of intangibles, gain or loss from 14.3 the sale of the partnership interest is allocated to this state 14.4 in accordance with the sales factor of the partnership for its 14.5 first full tax period immediately preceding the tax period of 14.6 the partnership during which the partnership interest was sold. 14.7 Gain on the sale of goodwill or income from a covenant not 14.8 to compete that is connected with a business operating all or 14.9 partially in Minnesota is allocated to this state to the extent 14.10 that the income from the business in the year preceding the year 14.11 of sale was assignable to Minnesota under subdivision 3. 14.12 When an employer pays an employee for a covenant not to 14.13 compete, the income allocated to this state is in the ratio of 14.14 the employee's service in Minnesota in the calendar year 14.15 preceding leaving the employment of the employer over the total 14.16 services performed by the employee for the employer in that year. 14.17 (d) Income from the operation of a farm shall be assigned 14.18 to this state if the farm is located within this state and to 14.19 other states only if the farm is not located in this state. 14.20 (e) Income from winnings on Minnesota pari-mutuel betting 14.21 tickets, the Minnesota state lottery, and lawful gambling as 14.22 defined in section 349.12, subdivision 24, conducted within the 14.23 boundaries of the state of Minnesota shall be assigned to this 14.24 state. 14.25 (f) All items of gross income not covered in paragraphs (a) 14.26 to (e) and not part of the taxpayer's income from a trade or 14.27 business shall be assigned to the taxpayer's domicile. 14.28 Sec. 9. Minnesota Statutes 1995 Supplement, section 14.29 290.191, subdivision 5, is amended to read: 14.30 Subd. 5. [DETERMINATION OF SALES FACTOR.] For purposes of 14.31 this section, the following rules apply in determining the sales 14.32 factor. 14.33 (a) The sales factor includes all sales, gross earnings, or 14.34 receipts received in the ordinary course of the business, except 14.35 that the following types of income are not included in the sales 14.36 factor: 15.1 (1) interest; 15.2 (2) dividends; 15.3 (3) sales of capital assets as defined in section 1221 of 15.4 the Internal Revenue Code; 15.5 (4) sales of property used in the trade or business, except 15.6 sales of leased property of a type which is regularly sold as 15.7 well as leased; 15.8 (5) sales of debt instruments as defined in section 15.9 1275(a)(1) of the Internal Revenue Code or sales of stock; and 15.10 (6) royalties, fees, or other like income of a type which 15.11 qualify for a subtraction from federal taxable income under 15.12 section 290.01, subdivision 19(d)(11). 15.13 (b) Sales of tangible personal property are made within 15.14 this state if the property is received by a purchaser at a point 15.15 within this state, and the taxpayer is taxable in this state, 15.16 regardless of the f.o.b. point, other conditions of the sale, or 15.17 the ultimate destination of the property. 15.18 (c) Tangible personal property delivered to a common or 15.19 contract carrier or foreign vessel for delivery to a purchaser 15.20 in another state or nation is a sale in that state or nation, 15.21 regardless of f.o.b. point or other conditions of the sale. 15.22 (d) Notwithstanding paragraphs (b) and (c), when 15.23 intoxicating liquor, wine, fermented malt beverages, cigarettes, 15.24 or tobacco products are sold to a purchaser who is licensed by a 15.25 state or political subdivision to resell this property only 15.26 within the state of ultimate destination, the sale is made in 15.27 that state. 15.28 (e) Sales made by or through a corporation that is 15.29 qualified as a domestic international sales corporation under 15.30 section 992 of the Internal Revenue Code are not considered to 15.31 have been made within this state. 15.32 (f) Sales, rents, royalties, and other income in connection 15.33 with real property is attributed to the state in which the 15.34 property is located. 15.35 (g) Receipts from the lease or rental of tangible personal 15.36 property, including finance leases and true leases, must be 16.1 attributed to this state if the property is located in this 16.2 state and to other states if the property is not located in this 16.3 state. Receipts from the lease or rental of moving property 16.4 including, but not limited to, motor vehicles, rolling stock, 16.5 aircraft, vessels, or mobile equipmentis located in this state16.6ifare included in the numerator of the receipts factor to the 16.7 extent that the property is used in this state. The extent of 16.8 the use of moving property is determined as follows: 16.9 (1)the operation of the property is entirely within this16.10state; orA motor vehicle is used wholly in the state in which 16.11 it is registered. 16.12 (2)the operation of the property is in two or more states16.13and the principal base of operations from which the property is16.14sent out is in this state.The extent that rolling stock is 16.15 used in this state is determined by multiplying the receipts 16.16 from the lease or rental of the rolling stock by a fraction, the 16.17 numerator of which is the miles traveled within this state by 16.18 the leased or rented rolling stock and the denominator of which 16.19 is the total miles traveled by the leased or rented rolling 16.20 stock. 16.21 (3) The extent that an aircraft is used in this state is 16.22 determined by multiplying the receipts from the lease or rental 16.23 of the aircraft by a fraction, the numerator of which is the 16.24 number of landings of the aircraft in this state and the 16.25 denominator of which is the total number of landings of the 16.26 aircraft. 16.27 (4) The extent that a vessel, mobile equipment, or other 16.28 mobile property is used in the state is determined by 16.29 multiplying the receipts from the lease or rental of the 16.30 property by a fraction, the numerator of which is the number of 16.31 days during the taxable year the property was in this state and 16.32 the denominator of which is the total days in the taxable year. 16.33 (h) Royalties and other income not described in paragraph 16.34 (a), clause (6), received for the use of or for the privilege of 16.35 using intangible property, including patents, know-how, 16.36 formulas, designs, processes, patterns, copyrights, trade names, 17.1 service names, franchises, licenses, contracts, customer lists, 17.2 or similar items, must be attributed to the state in which the 17.3 property is used by the purchaser. If the property is used in 17.4 more than one state, the royalties or other income must be 17.5 apportioned to this state pro rata according to the portion of 17.6 use in this state. If the portion of use in this state cannot 17.7 be determined, the royalties or other income must be excluded 17.8 from both the numerator and the denominator. Intangible 17.9 property is used in this state if the purchaser uses the 17.10 intangible property or the rights therein in the regular course 17.11 of its business operations in this state, regardless of the 17.12 location of the purchaser's customers. 17.13 (i) Sales of intangible property are made within the state 17.14 in which the property is used by the purchaser. If the property 17.15 is used in more than one state, the sales must be apportioned to 17.16 this state pro rata according to the portion of use in this 17.17 state. If the portion of use in this state cannot be 17.18 determined, the sale must be excluded from both the numerator 17.19 and the denominator of the sales factor. Intangible property is 17.20 used in this state if the purchaser used the intangible property 17.21 in the regular course of its business operations in this state. 17.22 (j) Receipts from the performance of services must be 17.23 attributed to the state where the services are received. For 17.24 the purposes of this section, receipts from the performance of 17.25 services provided to a corporation, partnership, or trust may 17.26 only be attributed to a state where it has a fixed place of 17.27 doing business. If the state where the services are received is 17.28 not readily determinable or is a state where the corporation, 17.29 partnership, or trust receiving the service does not have a 17.30 fixed place of doing business, the services shall be deemed to 17.31 be received at the location of the office of the customer from 17.32 which the services were ordered in the regular course of the 17.33 customer's trade or business. If the ordering office cannot be 17.34 determined, the services shall be deemed to be received at the 17.35 office of the customer to which the services are billed. 17.36 Sec. 10. Minnesota Statutes 1995 Supplement, section 18.1 290.191, subdivision 6, is amended to read: 18.2 Subd. 6. [DETERMINATION OF RECEIPTS FACTOR FOR FINANCIAL 18.3 INSTITUTIONS.] (a) For purposes of this section, the rules in 18.4 this subdivision and subdivision 8 apply in determining the 18.5 receipts factor for financial institutions. 18.6 (b) "Receipts" for this purpose means gross income, 18.7 including net taxable gain on disposition of assets, including 18.8 securities and money market instruments, when derived from 18.9 transactions and activities in the regular course of the 18.10 taxpayer's trade or business. 18.11 (c) "Money market instruments" means federal funds sold and 18.12 securities purchased under agreements to resell, commercial 18.13 paper, banker's acceptances, and purchased certificates of 18.14 deposit and similar instruments to the extent that the 18.15 instruments are reflected as assets under generally accepted 18.16 accounting principles. 18.17 (d) "Securities" means United States Treasury securities, 18.18 obligations of United States government agencies and 18.19 corporations, obligations of state and political subdivisions, 18.20 corporate stock, bonds, and other securities, participations in 18.21 securities backed by mortgages held by United States or state 18.22 government agencies, loan-backed securities and similar 18.23 investments to the extent the investments are reflected as 18.24 assets under generally accepted accounting principles. 18.25 (e) Receipts from the lease or rental of real or tangible 18.26 personal property, including both finance leases and true 18.27 leases, must be attributed to this state if the property is 18.28 located in this state. Receipts from the lease or rental of 18.29 tangible personal property that is characteristically moving 18.30 property,such asincluding, but not limited to, motor vehicles, 18.31 rolling stock, aircraft, vessels, or mobile equipment, and the18.32like, is considered to be located in a state ifare included in 18.33 the numerator of the receipts factor to the extent that the 18.34 property is used in this state. The extent of the use of moving 18.35 property is determined as follows: 18.36 (1)the operation of the property is entirely within the19.1state; orA motor vehicle is used wholly in the state in which 19.2 it is registered. 19.3 (2)the operation of the property is in two or more states,19.4but the principal base of operations from which the property is19.5sent out is in the state.The extent that rolling stock is used 19.6 in this state is determined by multiplying the receipts from the 19.7 lease or rental of the rolling stock by a fraction, the 19.8 numerator of which is the miles traveled within this state by 19.9 the leased or rented rolling stock and the denominator of which 19.10 is the total miles traveled by the leased or rented rolling 19.11 stock. 19.12 (3) The extent that an aircraft is used in this state is 19.13 determined by multiplying the receipts from the lease or rental 19.14 of the aircraft by a fraction, the numerator of which is the 19.15 number of landings of the aircraft in this state and the 19.16 denominator of which is the total number of landings of the 19.17 aircraft. 19.18 (4) The extent that a vessel, mobile equipment, or other 19.19 mobile property is used in the state is determined by 19.20 multiplying the receipts from the lease or rental of property by 19.21 a fraction, the numerator of which is the number of days during 19.22 the taxable year the property was in this state and the 19.23 denominator of which is the total days in the taxable year. 19.24 (f) Interest income and other receipts from assets in the 19.25 nature of loans that are secured primarily by real estate or 19.26 tangible personal property must be attributed to this state if 19.27 the security property is located in this state under the 19.28 principles stated in paragraph (e). 19.29 (g) Interest income and other receipts from consumer loans 19.30 not secured by real or tangible personal property that are made 19.31 to residents of this state, whether at a place of business, by 19.32 traveling loan officer, by mail, by telephone or other 19.33 electronic means, must be attributed to this state. 19.34 (h) Interest income and other receipts from commercial 19.35 loans and installment obligations that are unsecured by real or 19.36 tangible personal property or secured by intangible property 20.1 must be attributed to this state if the proceeds of the loan are 20.2 to be applied in this state. If it cannot be determined where 20.3 the funds are to be applied, the income and receipts are 20.4 attributed to the state in which the office of the borrower from 20.5 which the application would be made in the regular course of 20.6 business is located. If this cannot be determined, the 20.7 transaction is disregarded in the apportionment formula. 20.8 (i) Interest income and other receipts from a participating 20.9 financial institution's portion of participation and syndication 20.10 loans must be attributed under paragraphs (e) to (h). A 20.11 participation loan is an arrangement in which a lender makes a 20.12 loan to a borrower and then sells, assigns, or otherwise 20.13 transfers all or a part of the loan to a purchasing financial 20.14 institution. A syndication loan is a loan transaction involving 20.15 multiple financial institutions in which all the lenders are 20.16 named as parties to the loan documentation, are known to the 20.17 borrower, and have privity of contract with the borrower. 20.18 (j) Interest income and other receipts including service 20.19 charges from financial institution credit card and travel and 20.20 entertainment credit card receivables and credit card holders' 20.21 fees must be attributed to the state to which the card charges 20.22 and fees are regularly billed. 20.23 (k) Merchant discount income derived from financial 20.24 institution credit card holder transactions with a merchant must 20.25 be attributed to the state in which the merchant is located. In 20.26 the case of merchants located within and outside the state, only 20.27 receipts from merchant discounts attributable to sales made from 20.28 locations within the state are attributed to this state. It is 20.29 presumed, subject to rebuttal, that the location of a merchant 20.30 is the address shown on the invoice submitted by the merchant to 20.31 the taxpayer. 20.32 (l) Receipts from the performance of fiduciary and other 20.33 services must be attributed to the state in which the services 20.34 are received. For the purposes of this section, services 20.35 provided to a corporation, partnership, or trust must be 20.36 attributed to a state where it has a fixed place of doing 21.1 business. If the state where the services are received is not 21.2 readily determinable or is a state where the corporation, 21.3 partnership, or trust does not have a fixed place of doing 21.4 business, the services shall be deemed to be received at the 21.5 location of the office of the customer from which the services 21.6 were ordered in the regular course of the customer's trade or 21.7 business. If the ordering office cannot be determined, the 21.8 services shall be deemed to be received at the office of the 21.9 customer to which the services are billed. 21.10 (m) Receipts from the issuance of travelers checks and 21.11 money orders must be attributed to the state in which the checks 21.12 and money orders are purchased. 21.13 (n) Receipts from investments of a financial institution in 21.14 securities and from money market instruments must be apportioned 21.15 to this state based on the ratio that total deposits from this 21.16 state, its residents, including any business with an office or 21.17 other place of business in this state, its political 21.18 subdivisions, agencies, and instrumentalities bear to the total 21.19 deposits from all states, their residents, their political 21.20 subdivisions, agencies, and instrumentalities. In the case of 21.21 an unregulated financial institution subject to this section, 21.22 these receipts are apportioned to this state based on the ratio 21.23 that its gross business income, excluding such receipts, earned 21.24 from sources within this state bears to gross business income, 21.25 excluding such receipts, earned from sources within all states. 21.26 For purposes of this subdivision, deposits made by this state, 21.27 its residents, its political subdivisions, agencies, and 21.28 instrumentalities must be attributed to this state, whether or 21.29 not the deposits are accepted or maintained by the taxpayer at 21.30 locations within this state. 21.31 (o) A financial institution's interest in property 21.32 described in section 290.015, subdivision 3, paragraph (b), is 21.33 included in the receipts factor in the same manner as assets in 21.34 the nature of securities or money market instruments are 21.35 included in paragraph (n). 21.36 Sec. 11. Minnesota Statutes 1994, section 383B.51, is 22.1 amended to read: 22.2 383B.51 [NO ASSIGNMENT OR GARNISHMENT.] 22.3 The right of a participant who has shares to the credit of 22.4 the participant's share account record to redeem all or any 22.5 portion of the shares is a personal right only and shall be in 22.6 the state of Minnesota or the state board of investment or the 22.7 nominee of either, subject to the rights of the county of 22.8 Hennepin. Any assignment or attempted assignment of shares to 22.9 the credit of a participant's share account record by any person 22.10 is null and void. The shares are exempt from garnishment or 22.11 levy under attachment or execution or other legal process, 22.12 except as provided in section 518.58, 518.581, or 518.611. The 22.13 shares are also exempt from all taxation, except individual 22.14 income taxation, by the state of Minnesota. 22.15 Sec. 12. Minnesota Statutes 1994, section 458A.32, 22.16 subdivision 4, is amended to read: 22.17 Subd. 4. Revenue bonds of the authority shall be deemed 22.18 and treated as instrumentalities of a public government agency;22.19and as such, together with interest thereon, exempt from22.20taxation. 22.21 Sec. 13. [EFFECTIVE DATE.] 22.22 Sections 1, 4, 6, and 8 are effective for tax years 22.23 beginning after December 31, 1995. 22.24 Sections 2 and 12 are effective for income earned after 22.25 July 1, 1983, in taxable years beginning after December 31, 1982. 22.26 Sections 9 and 10 are effective for taxable years beginning 22.27 after December 31, 1997. 22.28 Section 11 is a clarification of the law and is effective 22.29 the day following final enactment. 22.30 ARTICLE 2 22.31 SALES AND SPECIAL TAXES 22.32 Section 1. Minnesota Statutes 1995 Supplement, section 22.33 115B.48, is amended by adding a subdivision to read: 22.34 Subd. 7. [FACILITY.] "Facility" means one or more 22.35 buildings or parts of a building and the equipment, 22.36 installations, and structures contained in the building, located 23.1 on a single site or on contiguous or adjacent sites. Facility 23.2 includes any site or area where a hazardous substance, or a 23.3 pollutant or contaminant, has been deposited, stored, disposed 23.4 of, or placed, or otherwise comes to be located. 23.5 Sec. 2. Minnesota Statutes 1995 Supplement, section 23.6 115B.48, is amended by adding a subdivision to read: 23.7 Subd. 8. [FULL-TIME EQUIVALENCE.] "Full-time equivalence" 23.8 means 2,000 hours worked by employees, owners, and others, at 23.9 duties related to the drycleaning operation in a drycleaning 23.10 facility during a 12-month period beginning July 1 of the 23.11 preceding year and running through June 30 of the year in which 23.12 the annual registration fee is due. For those drycleaning 23.13 facilities that were in business less than the 12-month period, 23.14 full-time equivalence means the total of all of the hours worked 23.15 at duties related to the drycleaning operation in the 23.16 drycleaning facility, divided by 2,000 and multiplied by a 23.17 fraction, the numerator of which is 50 and the denominator of 23.18 which is the number of weeks in business during the reporting 23.19 period. 23.20 Sec. 3. Minnesota Statutes 1995 Supplement, section 23.21 115B.49, subdivision 2, is amended to read: 23.22 Subd. 2. [REVENUE SOURCES.] Revenue from the following 23.23 sources must be deposited in the state treasury and credited to 23.24 the account: 23.25 (1) the proceeds of the fees imposed by subdivision 4; 23.26 (2) interest attributable to investment of money in the 23.27 account; 23.28 (3) penalties and interest collected under subdivision 4, 23.29paragraphs (e) and (f)paragraph (d); and 23.30 (4) money received by the commissioner for deposit in the 23.31 account in the form of gifts, grants, and appropriations. 23.32 Sec. 4. Minnesota Statutes 1995 Supplement, section 23.33 115B.49, subdivision 4, is amended to read: 23.34 Subd. 4. [REGISTRATION; FEES.] (a) The owner or operator 23.35 of a drycleaning facility shall register on or before July 1 of 23.36 each year with the commissioner of revenue in a manner 24.1 prescribed by the commissioner of revenue and pay a registration 24.2 fee for the facility. The amount of the fee is: 24.3 (1) $500, for facilities withup to four full-time24.4equivalent employeesa full-time equivalence of fewer than five; 24.5 (2) $1,000, for facilities with a full-time equivalence of 24.6 five to tenfull-time equivalent employees; and 24.7 (3) $1,500, for facilities with a full-time equivalence of 24.8 more than tenfull-time equivalent employees. 24.9 (b) A person who sells drycleaning solvents for use by 24.10 drycleaning facilities in the state shall collect and remit to 24.11 the commissioner of revenue in a manner prescribed by the 24.12 commissioner of revenue, on or before the 20th day of the month 24.13 following the month in which the sales of drycleaning solvents 24.14 are made, a fee of: 24.15 (1) $3.50 for each gallon of perchloroethylene sold for use 24.16 by drycleaning facilities in the state; and 24.17 (2) 70 cents for each gallon of hydrocarbon-based 24.18 drycleaning solvent sold for use by drycleaning facilities in 24.19 the state. 24.20 (c)The commissioner of revenue shall provide each person24.21who pays a registration fee under paragraph (a) with a receipt.24.22The receipt or a copy of the receipt must be produced for24.23inspection at the request of any authorized representative of24.24the commissioner of revenue.24.25(d)The commissioner shall, after a public hearing but 24.26 notwithstanding section 16A.1285, subdivision 4, annually adjust 24.27 the fees in this subdivision as necessary to maintain an 24.28 unencumbered balance in the account of at least $1,000,000. Any 24.29 adjustment under this paragraph must be prorated among all the 24.30 fees in this subdivision. Fees adjusted under this paragraph 24.31 may not exceed 200 percent of the fees in this subdivision. The 24.32 commissioner shall notify the commissioner of revenue of an 24.33 adjustment under this paragraph no later than March 1 of the 24.34 year in which the adjustment is to become effective. The 24.35 adjustment is effective for sales of drycleaning solvents made, 24.36 and annual registration fees due, beginning on July 1 of the 25.1 same year. 25.2(e) An owner of a drycleaning facility who fails to pay a25.3fee under paragraph (a) when due is subject to a penalty of $5025.4per facility for each day the fee is not paid.25.5(f)(d) To enforce this subdivision, the commissioner of 25.6 revenue may examine documents, assess and collect fees, conduct 25.7 investigations, issue subpoenas, grant extensions to file 25.8 returns and pay fees, imposesales and use taxpenalties and 25.9 interest on the annual registration fee under paragraph (a) and 25.10 the monthly fee under paragraph (b), abate penalties and 25.11 interest, and administer appeals, in the manner provided in 25.12 chapters 270 and 289A. The penalties and interest imposed on 25.13 taxes under chapter 297A apply to the fees imposed under this 25.14 subdivision. Disclosure of data collected by the commissioner 25.15 of revenue under this subdivision is governed by chapter 270B. 25.16 Sec. 5. [115B.491] [DRYCLEANING FACILITY USE FEE; 25.17 FACILITIES TO FILE RETURN.] 25.18 Subdivision 1. [USE FEE.] A drycleaning facility that 25.19 purchases drycleaning solvents for use in Minnesota without 25.20 paying the seller of drycleaning solvents the fee under section 25.21 115B.49, subdivision 4, paragraph (b), is subject to an 25.22 equivalent fee. Liability for the fee is incurred when 25.23 drycleaning solvents are received in Minnesota by the 25.24 drycleaning facility. 25.25 Subd. 2. [RETURN REQUIRED.] On or before the 20th of each 25.26 calendar month, every drycleaning facility that has purchased 25.27 drycleaning solvents for use in this state during the preceding 25.28 calendar month, upon which the fee imposed by section 115B.49, 25.29 subdivision 4, paragraph (b), has not been paid to the seller of 25.30 the drycleaning solvents, shall file a return with the 25.31 commissioner of revenue showing the quantity of solvents 25.32 purchased and a computation of the fee under section 115B.49, 25.33 subdivision 4, paragraph (d). The fee must accompany the 25.34 return. The return must be made upon a form furnished and 25.35 prescribed by the commissioner of revenue and must contain such 25.36 other information as the commissioner of revenue may require. 26.1 Subd. 3. [APPLICABILITY.] All of the provisions of section 26.2 115B.49, subdivision 4, paragraph (d), apply to this section. 26.3 Sec. 6. [115B.492] [ALLOCATION OF PAYMENT.] 26.4 In the discretion of the commissioner of revenue, payments 26.5 received for fees may be credited first to the oldest liability 26.6 not secured by a judgment or lien. For liabilities to which 26.7 payments are applied, the commissioner of revenue may credit 26.8 payments first to penalties, next to interest, and then to the 26.9 fee due. 26.10 Sec. 7. Minnesota Statutes 1995 Supplement, section 26.11 289A.40, subdivision 1, is amended to read: 26.12 Subdivision 1. [TIME LIMIT; GENERALLY.] Unless otherwise 26.13 provided in this chapter, a claim for a refund of an overpayment 26.14 of state tax must be filed within 3-1/2 years from the date 26.15 prescribed for filing the return, plus any extension of time 26.16 granted for filing the return, but only if filed within the 26.17 extended time, or one year from the date of an order assessing 26.18 tax under section 289A.37, subdivision 1, upon payment in full 26.19 of the tax, penalties, and interest shown on the order, 26.20 whichever period expires later. Claims for refund, except for 26.21 taxes under chapter 297A, filed after the 3-1/2 year period but 26.22 within the one-year period are limited to the amount of the tax, 26.23 penalties, and interest on the order and to issues determined by 26.24 the order. 26.25 In the case of assessments under section 289A.38, 26.26 subdivisions 5 or 6, claims for refund under chapter 297A filed 26.27 after the 3-1/2 year period but within the one-year period are 26.28 limited to the amount of the tax, penalties, and interest on the 26.29 order that are due for the period before the 3-1/2 year period. 26.30 Sec. 8. Minnesota Statutes 1994, section 289A.50, is 26.31 amended by adding a subdivision to read: 26.32 Subd. 2a. [REFUND OF SALES TAX TO PURCHASERS.] If a vendor 26.33 has collected from a purchaser a tax on a transaction that is 26.34 not subject to the tax imposed by chapter 297A, the purchaser 26.35 may apply directly to the commissioner for a refund under this 26.36 section if: 27.1 (a) the purchaser is currently registered to collect and 27.2 remit the sales and use tax; and 27.3 (b) the amount of the refund applied for exceeds $500. 27.4 The purchaser may not file more than two applications for 27.5 refund under this subdivision in a calendar year. 27.6 Sec. 9. Minnesota Statutes 1994, section 289A.56, 27.7 subdivision 4, is amended to read: 27.8 Subd. 4. [CAPITAL EQUIPMENT REFUNDS; REFUNDS TO 27.9 PURCHASERS.] Notwithstanding subdivision 3, for refunds payable 27.10 undersectionsections 297A.15, subdivision 5, and 289A.50, 27.11 subdivision 2a, interest is computed from the date the refund 27.12 claim is filed with the commissioner. 27.13 Sec. 10. Minnesota Statutes 1994, section 297.04, 27.14 subdivision 9, is amended to read: 27.15 Subd. 9. [APPLICATION DENIAL; LICENSE SUSPENSION AND 27.16 REVOCATION.] (a) The commissioner may revoke, cancel,or suspend 27.17 the license or licenses of any distributor or subjobber for 27.18 violation of sections 297.01 to 297.13, or any other act 27.19 applicable to the sale of cigarettes, or any rule promulgated by 27.20 the commissioner, and may also revoke any such license or 27.21 licenses of any distributor or subjobber for the violation of 27.22 sections 297.31 to 297.39, or any other act applicable to the 27.23 sale of tobacco products, or any rule promulgated by the 27.24 commissioner in furtherance of sections 297.31 to 297.39. The 27.25 commissioner may revoke, cancel,or suspend the license or 27.26 licenses of any distributor or subjobber for violation of 27.27 sections 325D.31 to 325D.42. 27.28 (b) The department must not issue or renew a license under 27.29 this chapter, and may revoke a license under this chapter, if 27.30 the applicant or licensee: 27.31 (1) owes $500 or more in delinquent taxes as defined in 27.32 section 270.72; 27.33 (2) after demand, has not filed tax returns required by the 27.34 commissioner of revenue; 27.35 (3) had a cigarette or tobacco license revoked by the 27.36 commissioner of revenue within the past two years; 28.1 (4) had a sales and use tax permit revoked by the 28.2 commissioner of revenue within the past two years; or 28.3 (5) has been convicted of a crime involving cigarettes, 28.4 including but not limited to: selling stolen cigarettes or 28.5 tobacco items, receiving stolen cigarettes or tobacco items, or 28.6 involvement in the smuggling of cigarettes or tobacco items. 28.7 (c) No license shall be revoked, canceled,or suspended 28.8 under this chapter, and no application for a license shall be 28.9 denied under this chapter, except after 20 days' noticeand28.10 specifying the commissioner's allegations against the licensee 28.11 or applicant, and the right to request, in writing within 20 28.12 days, a contested case hearingby the commissioneras provided 28.13 insection 297.09chapter 14. If a written request for a 28.14 hearing is received by the department of revenue within 20 days 28.15 of the date of the initial notice, the hearing must be held 28.16 within 45 days after referral to the office of administrative 28.17 hearings, and no earlier than 20 days after notice to the 28.18 licensee or applicant of the hearing time and place. A license 28.19 is revoked or suspended, and an application is denied, when the 28.20 commissioner serves notice of revocation, suspension, or denial 28.21 after 20 days have passed following the initial notice under 28.22 this paragraph without a request for hearing being made, or if a 28.23 hearing is held, after the commissioner serves an order of 28.24 revocation, suspension, or denial under section 14.62, 28.25 subdivision 1. All notices under this paragraph may be served 28.26 personally or by mail. 28.27 Sec. 11. Minnesota Statutes 1995 Supplement, section 28.28 297A.02, subdivision 4, is amended to read: 28.29 Subd. 4. [MANUFACTURED HOUSING AND PARK TRAILERS.] 28.30 Notwithstanding the provisions of subdivision 1, for sales at 28.31 retail ofnewmanufactured homes used for residential purposes 28.32 and new or used park trailers, as defined in section 168.011, 28.33 subdivision 8, paragraph (b), the excise tax is imposed upon 65 28.34 percent of the sales price of the home or park trailer. 28.35 Sec. 12. [297A.023] [REMITTANCE OF AMOUNTS COLLECTED AS 28.36 TAXES.] 29.1 Any amounts collected, even if erroneously or illegally 29.2 collected, from a purchaser under a representation that they are 29.3 taxes imposed under this chapter are state funds from the time 29.4 of collection and must be reported on a return filed with the 29.5 commissioner and are not subject to refund without proof that 29.6 such amounts have been refunded or credited to the purchaser by 29.7 the seller. 29.8 Sec. 13. Minnesota Statutes 1994, section 297A.14, is 29.9 amended by adding a subdivision to read: 29.10 Subd. 4. [DE MINIMIS EXEMPTION.] Purchases subject to use 29.11 tax under this section are exempt if (1) the purchase is made by 29.12 an individual for personal use, and (2) the total purchases that 29.13 are subject to the use tax do not exceed $770 in the calendar 29.14 year. For purposes of this subdivision, "personal use" includes 29.15 purchases for gifts. If an individual makes purchases, which 29.16 are subject to use tax, of more than $770 in the calendar year 29.17 the individual must pay the use tax on the entire amount. 29.18 Sec. 14. Minnesota Statutes 1994, section 297A.15, 29.19 subdivision 4, is amended to read: 29.20 Subd. 4. [SEIZURE; COURT REVIEW.] The commissioner of 29.21 revenue or the commissioner's duly authorized agents are 29.22 empowered to seize and confiscate in the name of the state any 29.23 truck, automobile or means of transportation not owned or 29.24 operated by a common carrier, used in the illegal importation 29.25 and transportation of any article or articles of tangible 29.26 personal property by a retailer or the retailer's agent or 29.27 employee who does not have a sales or use tax permit and has 29.28 been engaging in transporting personal property into the state 29.29 without payment of the tax. The commissioner may demand the 29.30 forfeiture and sale of the truck, automobile or other means of 29.31 transportation together with the property being transported 29.32 illegally, unless the owner establishes to the satisfaction of 29.33 the commissioner or the court that the owner had no notice or 29.34 knowledge or reason to believe that the vehicle was used or 29.35 intended to be used in any such violation. Within two days 29.36 after the seizure, the person making the seizure shall deliver 30.1 an inventory of the vehicle and property seized to the person 30.2 from whom the seizure was made, if known, and to any person 30.3 known or believed to have any right, title, interest or lien on 30.4 the vehicle or property, and shall also file a copy with the 30.5 commissioner. Within ten days after the date of service of the 30.6 inventory, the person from whom the vehicle and property was 30.7 seized or any person claiming an interest in the vehicle or 30.8 property may file with the commissioner a demand for a judicial 30.9 determination of the question as to whether the vehicle or 30.10 property was lawfully subject to seizure and forfeiture. The 30.11 commissioner, within 30 days, shall institute an action in the 30.12 district court of the county where the seizure was made to 30.13 determine the issue of forfeiture. The action shall be brought 30.14 in the name of the state and shall be prosecuted by the county 30.15 attorney or by the attorney general. The court shall hear the 30.16 action without a jury and shall try and determine the issues of 30.17 fact and law involved. Whenever a judgment of forfeiture is 30.18 entered, the commissioner may, unless the judgment is stayed 30.19 pending an appeal, cause the forfeited vehicle and property to 30.20 be sold at public auction as provided by law. If a demand for 30.21 judicial determination is made and no action is commenced as 30.22 provided in this subdivision, the vehicle and property shall be 30.23 released by the commissioner and redelivered to the person 30.24 entitled to it. If no demand is made, the vehicle and property 30.25 seized shall be deemed forfeited to the state by operation of 30.26 law and may be disposed of by the commissioner as provided where 30.27 there has been a judgment of forfeiture. The forfeiture and 30.28 sale of the automobile, truck or other means of transportation, 30.29 and of the property being transported illegally in it, is a 30.30 penalty for the violation of this chapter. After deducting the 30.31 expense of keeping the vehicle and property, the fee for 30.32 seizure, and the costs of the sale, the commissioner shall pay 30.33 from the funds collected all liens according to their priority, 30.34 which are established at the hearing as being bona fide and as 30.35 existing without the lienor having any notice or knowledge that 30.36 the vehicle or property was being used or was intended to be 31.1 used for or in connection with any such violation as specified 31.2 in the order of the court, and shall pay the balance of the 31.3 proceeds into the state treasury to be credited to the general 31.4 fund. The state shall not be liable for any liens in excess of 31.5 the proceeds from the sale after deductions provided. Any sale 31.6 under the provisions of this section shall operate to free the 31.7 vehicle and property sold from any and all liens on it, and 31.8 appeal from the order of the district court will lie as in other 31.9 civil cases. 31.10 For the purposes of this section, "common carrier" means 31.11 any person engaged in transportation for hire of tangible 31.12 personal property by motor vehicle, limited to (1) a person 31.13 possessing a certificate or permitauthorizingor having 31.14 completed a registration process that authorizes for-hire 31.15 transportation of property from theinterstate commerce31.16commission or the public utilities commissionUnited States 31.17 Department of Transportation, the transportation regulation 31.18 board, or the department of transportation; or (2) any person 31.19 transporting commodities defined as "exempt" in for-hire 31.20 transportation; or (3) any person who pursuant to a contract 31.21 with a person described in (1) or (2) above transports tangible 31.22 personal property. 31.23 Sec. 15. Minnesota Statutes 1994, section 297A.211, 31.24 subdivision 1, is amended to read: 31.25 Subdivision 1. Every person, as defined in this chapter, 31.26 who is engaged in interstate for-hire transportation of tangible 31.27 personal property or passengers by motor vehicle may at their 31.28 option, under rules prescribed by the commissioner, register as 31.29 retailers and pay the taxes imposed by this chapter in 31.30 accordance with this section. Persons referred to herein are: 31.31 (1) persons possessing a certificate or permitauthorizingor 31.32 having completed a registration process that authorizes for-hire 31.33 transportation of property or passengers from theinterstate31.34commerce commission or the Minnesota public utilities commission31.35 United States Department of Transportation, the transportation 31.36 regulation board, or the department of transportation; or (2) 32.1 persons transporting commodities defined as "exempt" in for-hire 32.2 transportation in interstate commerce; or (3) persons who, 32.3 pursuant to contracts with persons described in clauses (1) or 32.4 (2) above, transport tangible personal property in interstate 32.5 commerce. Persons qualifying under clauses (2) and (3) must 32.6 maintain on a current basis the same type of mileage records 32.7 that are required by persons specified in clause (1) by 32.8 theinterstate commerce commissionUnited States Department of 32.9 Transportation. Persons who in the course of their business are 32.10 transporting solely their own goods in interstate commerce may 32.11 also register as retailers pursuant to rules prescribed by the 32.12 commissioner and pay the taxes imposed by this chapter in 32.13 accordance with this section. 32.14 Sec. 16. Minnesota Statutes 1994, section 297A.25, 32.15 subdivision 14, is amended to read: 32.16 Subd. 14. [AIRFLIGHT EQUIPMENT.] The gross receipts from 32.17 sales of airflight equipment to, and the storage, use or other 32.18 consumption of such property by airline companiestaxed under32.19the provisions of sections 270.071 to 270.079, as defined in 32.20 section 270.071, subdivision 4, are exempt. For purposes of 32.21 this subdivision, "airflight equipment" includes airplanes and 32.22 parts necessary for the repair and maintenance of such airflight 32.23 equipment, and flight simulators, but does not include airplanes 32.24 with a gross weight of less than 30,000 pounds that are used on 32.25 intermittent or irregularly timed flights. 32.26 Sec. 17. Minnesota Statutes 1994, section 297A.25, 32.27 subdivision 28, is amended to read: 32.28 Subd. 28. [WASTE PROCESSING EQUIPMENT.] The gross receipts 32.29 from the sale of equipment used for processing solid or 32.30 hazardous waste at a resource recovery facility, as defined in 32.31 section 115A.03, subdivision 28, are exempt, including pollution 32.32 control equipment at a resource recovery facility that burns 32.33 refuse-derived fuel or mixed municipal solid waste as its 32.34 primary fuel. 32.35 Sec. 18. Minnesota Statutes 1994, section 297A.25, 32.36 subdivision 37, is amended to read: 33.1 Subd. 37. [YMCAAND, YWCA, AND JCC MEMBERSHIPS.] The gross 33.2 receipts from the sale of memberships, including both one-time 33.3 initiation fees and periodic membership dues, to an association 33.4 incorporated under section 315.44 or an organization defined 33.5 under section 315.51, are exempt. However, all separate charges 33.6 made for the privilege of having access to and the use of the 33.7 association's sports and athletic facilities are taxable. 33.8 Sec. 19. Minnesota Statutes 1995 Supplement, section 33.9 297A.25, subdivision 57, is amended to read: 33.10 Subd. 57. [HORSES; RELATED MATERIALS.] (a) The gross 33.11 receipts from the sale of horses, including racehorses, and33.12allare exempt. 33.13 (b) Salesto persons who raise or board horses,of all 33.14 materials, including feed and bedding, used or consumed in the 33.15 breeding, raising, owning, boarding, and keeping of horses, are 33.16 exempt. Machinery, equipment, implements, tools, appliances, 33.17 furniture, and fixtures, used in the breeding, raising, owning, 33.18 boarding, and keeping of horses, are not included within this 33.19 exemption. 33.20 Sec. 20. Minnesota Statutes 1995 Supplement, section 33.21 297A.25, subdivision 59, is amended to read: 33.22 Subd. 59. [FARM MACHINERY.] From July 1, 1994, until June 33.23 30,19961997, the gross receipts from the sale of used farm 33.24 machinery are exempt. 33.25 Sec. 21. Minnesota Statutes 1995 Supplement, section 33.26 297A.25, subdivision 61, is amended to read: 33.27 Subd. 61. [CONSTRUCTION MATERIALS FOR INDOOR ICE ARENAS.] 33.28 The gross receipts from the sale of construction materials and 33.29 supplies are exempt if: 33.30 (1) the materials and supplies are to be used in 33.31 constructing an indoor ice arena intended to be used 33.32 predominantly for youth athletic activities; and 33.33 (2)a school district is a party to a joint powers33.34agreement that governs the ownership, operation, and maintenance33.35of the facilitythe construction project is financed in whole or 33.36 in part from a grant under sections 240A.09 and 240A.10 or the 34.1 proceeds of obligations issued under section 373.43 or 475.58, 34.2 subdivision 3. 34.3 This exemption applies regardless of whether the purchases 34.4 are made by the owner of the facility or a contractor. 34.5 Sec. 22. Minnesota Statutes 1994, section 297A.256, 34.6 subdivision 1, is amended to read: 34.7 Subdivision 1. [FUNDRAISING SALES BY NONPROFIT GROUPS.] 34.8 Notwithstanding the provisions of this chapter, the following 34.9 sales made by a "nonprofit organization" are exempt from the 34.10 sales and use tax. 34.11 (a)(1) All sales made by an organization for fundraising 34.12 purposes if that organization exists solely for the purpose of 34.13 providing educational or social activities for young people 34.14 primarily age 18 and under. This exemption shall apply only if 34.15 the gross annual sales receipts of the organization from 34.16 fundraising do not exceed $10,000. 34.17 (2) A club, association, or other organization of 34.18 elementary or secondary school students organized for the 34.19 purpose of carrying on sports, educational, or other 34.20 extracurricular activities is a separate organization from the 34.21 school district or school for purposes of applying the $10,000 34.22 limit. This paragraph does not apply if the sales are derived 34.23 from admission charges or from activities for which the money 34.24 must be deposited with the school district treasurer under 34.25 section 123.38, subdivision 2, or be recorded in the same manner 34.26 as other revenues or expenditures of the school district under 34.27 section 123.38, subdivision 2b. 34.28 (b) All sales made by an organization for fundraising 34.29 purposes if that organization is a senior citizen group or 34.30 association of groups that in general limits membership to 34.31 persons age 55 or older and is organized and operated 34.32 exclusively for pleasure, recreation and other nonprofit 34.33 purposes and no part of the net earnings inure to the benefit of 34.34 any private shareholders. This exemption shall apply only if 34.35 the gross annual sales receipts of the organization from 34.36 fundraising do not exceed $10,000. 35.1 (c) The gross receipts from the sales of tangible personal 35.2 property at, admission charges for, and sales of food, meals, or 35.3 drinks at fundraising events sponsored by a nonprofit 35.4 organization when the entire proceeds, except for the necessary 35.5 expenses therewith, will be used solely and exclusively for 35.6 charitable, religious, or educational purposes. This exemption 35.7 does not apply to admission charges for events involving bingo 35.8 or other gambling activities or to charges for use of amusement 35.9 devices involving bingo or other gambling activities. For 35.10 purposes of thisclauseparagraph, a "nonprofit organization" 35.11 means any unit of government, corporation, society, association, 35.12 foundation, or institution organized and operated for 35.13 charitable, religious, educational, civic, fraternal, senior 35.14 citizens' or veterans' purposes, no part of the net earnings of 35.15 which enures to the benefit of a private individual. 35.16 If the profits are not used solely and exclusively for 35.17 charitable, religious, or educational purposes, the entire gross 35.18 receipts are subject to tax. 35.19 Each nonprofit organization shall keep a separate 35.20 accounting record, including receipts and disbursements from 35.21 each fundraising event. All deductions from gross receipts must 35.22 be documented with receipts and other records. If records are 35.23 not maintained as required, the entire gross receipts are 35.24 subject to tax. 35.25 The exemption provided by thissectionparagraph does not 35.26 apply to any sale made by or in the name of a nonprofit 35.27 corporation as the active or passive agent of a person that is 35.28 not a nonprofit corporation. 35.29 The exemption for fundraising events under thissection35.30 paragraph is limited to no more than 24 days a year. 35.31 Fundraising events conducted on premises leasedor occupiedfor 35.32 more than four days but less than 30 days do not qualify for 35.33 this exemption. 35.34 (d) The gross receipts from the sale or use of tickets or 35.35 admissions to a golf tournament held in Minnesota are exempt if 35.36 the beneficiary of the tournament's net proceeds qualifies as a 36.1 tax-exempt organization under section 501(c)(3) of the Internal 36.2 Revenue Code, including a tournament conducted on premises 36.3 leased or occupied for more than four days. 36.4 Sec. 23. Minnesota Statutes 1995 Supplement, section 36.5 297B.01, subdivision 8, is amended to read: 36.6 Subd. 8. [PURCHASE PRICE.] "Purchase price" means the 36.7 total consideration valued in money for a sale, whether paid in 36.8 money or otherwise. The purchase price excludes the amount of a 36.9 manufacturer's rebate paid or payable to the purchaser. If a 36.10 motor vehicle is taken in trade as a credit or as part payment 36.11 on a motor vehicle taxable under this chapter, the credit or 36.12 trade-in value allowed by the person selling the motor vehicle 36.13 shall be deducted from the total selling price to establish the 36.14 purchase price of the vehicle being sold and the trade-in 36.15 allowance allowed by the seller shall constitute the purchase 36.16 price of the motor vehicle accepted as a trade-in. The purchase 36.17 price in those instances where the motor vehicle is acquired by 36.18 gift or by any other transfer for a nominal or no monetary 36.19 consideration shall also include the average value of similar 36.20 motor vehicles, established by standards and guides as 36.21 determined by the motor vehicle registrar. The purchase price 36.22 in those instances where a motor vehicle is manufactured by a 36.23 person who registers it under the laws of this state shall mean 36.24 the manufactured cost of such motor vehicle and manufactured 36.25 cost shall mean the amount expended for materials, labor and 36.26 other properly allocable costs of manufacture, except that in 36.27 the absence of actual expenditures for the manufacture of a part 36.28 or all of the motor vehicle, manufactured costs shall mean the 36.29 reasonable value of the completed motor vehicle. 36.30 The term "purchase price" shall not include the portion of 36.31 the value of a motor vehicle due solely to modifications 36.32 necessary to make the motor vehicle handicapped accessible. The 36.33 term "purchase price" shall not include the transfer of a motor 36.34 vehicle by way of gift between a husband and wife or parent and 36.35 child, nor shall it include the transfer of a motor vehicle by a 36.36 guardian to a ward when there is no monetary consideration and 37.1 the title to such vehicle was registered in the name of the 37.2 guardian, as guardian, only because the ward was a minor. There 37.3 shall not be included in "purchase price" the amount of any tax 37.4 imposed by the United States upon or with respect to retail 37.5 sales whether imposed upon the retailer or the consumer. 37.6 The term "purchase price" shall not include the transfer of 37.7 a motor vehicle as a gift between a foster parent and foster 37.8 child. For purposes of this subdivision, a foster relationship 37.9 exists, regardless of the age of the child, if (1) a foster 37.10 parent's home is or was licensed as a foster family home under 37.11 Minnesota Rules, parts 9545.0010 to 9545.0260, and (2) the 37.12 county verifies that the child was a state ward or in permanent 37.13 foster care. 37.14 Sec. 24. [315.51] [JCC; DEFINITION.] 37.15 A "JCC" means a nonprofit religious organization under 37.16 section 501(c)(3) of the Internal Revenue Code of 1986 known as 37.17 the Jewish Community Center of Greater Minneapolis or the Jewish 37.18 Community Center of Greater St. Paul and organized for the 37.19 purpose of serving the cultural, educational, and recreational 37.20 needs of the Jewish community. 37.21 Sec. 25. Laws 1991, chapter 291, article 8, section 27, is 37.22 amended by adding a subdivision to read: 37.23 Subd. 9. [ADDITIONAL AUTHORITY; MANKATO MUNICIPAL 37.24 AIRPORT.] (a) In addition to the uses of revenues authorized in 37.25 subdivision 3, the city may use revenues received from taxes 37.26 authorized by subdivisions 1 and 2 to pay for rehabilitation, 37.27 expansion, improvement, and operation of the Mankato municipal 37.28 airport and related facilities, including securing or paying 37.29 debt service on bonds or other obligations issued to finance the 37.30 improvements. 37.31 (b) The city may issue general obligation bonds of the city 37.32 for the Mankato municipal airport and related facilities without 37.33 election under Minnesota Statutes, chapter 475, on the question 37.34 of issuance of the bonds or a tax to pay them. The debt 37.35 represented by bonds issued for the Mankato municipal airport 37.36 and related facilities shall not be included in computing any 38.1 levy or debt limits applicable to the city. 38.2 (c) The total capital, administrative, and operating 38.3 expenses authorized in paragraph (a) payable from bond proceeds 38.4 and from the taxes authorized in subdivisions 1 and 2, excluding 38.5 investment earnings on bond proceeds and revenues, shall not 38.6 exceed $500,000 in any year, unless the city has dedicated in a 38.7 reserve fund sufficient funds to pay or secure payment of 38.8 principal and interest on bonds issued under subdivision 5 for a 38.9 period of at least one year. The total amount of general 38.10 obligation bonds of the city issued for the Mankato municipal 38.11 airport and related facilities may not exceed $4,500,000. 38.12 (d) Notwithstanding the provisions of subdivision 4, the 38.13 authority of the city to impose taxes under subdivisions 1 and 2 38.14 shall not expire until the principal and interest on any bonds 38.15 or obligations issued to finance the Mankato municipal airport 38.16 and related facilities have been paid, or the city determines by 38.17 ordinance an earlier expiration date. 38.18 (e) This subdivision is effective the day after compliance 38.19 with Minnesota Statutes, section 645.021, subdivision 3, by the 38.20 governing body of the city of Mankato. 38.21 Sec. 26. Laws 1995, chapter 264, article 2, section 42, 38.22 subdivision 1, is amended to read: 38.23 Subdivision 1. [CREATION; MEMBERSHIP.] (a) A state 38.24 advisory council is established to study the general and motor 38.25 vehicle sales and use taxes under Minnesota Statutes 1994, 38.26 chapters 297A and 297B, and to make recommendations to the 1996 38.27 legislature and the 1997 legislature.The study shall be38.28completed andInterim findings shall be reported to the 38.29 legislature by February 1, 1996. The study shall be completed 38.30 and a final report submitted to the legislature by January 1, 38.31 1997. 38.32 (b) The advisory council consists of 17 members who serve 38.33 at the pleasure of the appointing authority as follows: 38.34 (1) ten legislators; five members of the senate, including 38.35 two members of the minority party, appointed by the subcommittee 38.36 on committees of the committee on rules and administration and 39.1 five members of the house of representatives, including two 39.2 members of the minority party, appointed by the speaker; 39.3 (2) the commissioner of revenue or the commissioner's 39.4 designee; and 39.5 (3) six members of the public; two appointed by the 39.6 subcommittee on committees of the committee on rules and 39.7 administration of the senate, two appointed by the speaker of 39.8 the house, and two appointed by the governor. At least one 39.9 member of the public that is appointed by each entity must 39.10 represent a consumer interest group or other private citizen 39.11 group, public policy organization, or university department of 39.12 public policy or economics. 39.13 Sec. 27. Laws 1995, chapter 264, article 2, section 44, is 39.14 amended to read: 39.15 Sec. 44. [EFFECTIVE DATE.] 39.16 Section 1 is effective the day following final enactment. 39.17 Sections 3 and 4 are effective June 1, 1995. Section 4 is 39.18 repealed June 1, 2000. 39.19 Sections 5 to 21 and 43, paragraph (a), are effective July 39.20 1, 1995. 39.21 Sections 23, 28, 33, 40, 42, and the part of section 22 39.22 amending language in paragraph (i), clause (vii), are effective 39.23 the day following final enactment. 39.24 Sections 24 and 34 are effective for sales made after 39.25 December 31, 1996. 39.26 Section 25 is effective beginning with leases or rentals 39.27 made after June 30, 1995. 39.28 Section 26 is effective retroactively for sales after May 39.29 31, 1992. 39.30 Section 27 is effective for sales made after June 30, 1995. 39.31 Section 29 and the part of section 22 striking the language 39.32 after paragraph (h) are effective for sales after June 30, 1995. 39.33 Section 32 is effective for sales made after June 30, 1995, 39.34 and before July 1,19961998. 39.35 Sections 35 and 36 are effective for sales or transfers 39.36 made after June 30, 1995. 40.1 Section 38 is effective the day after the governing body of 40.2 the city of Winona complies with Minnesota Statutes, section 40.3 645.021, subdivision 3. 40.4 Section 39 is effective upon compliance by the Minneapolis 40.5 city council with Minnesota Statutes, section 645.021, 40.6 subdivision 3. 40.7 Section 43, paragraph (b), is effective for sales of 900 40.8 information services made after June 30, 1995. 40.9 Sec. 28. [SOLID WASTE MANAGEMENT TAXES.] 40.10 Subdivision 1. [MORATORIUM EXTENDED.] The commissioner of 40.11 revenue shall not initiate or continue any action to collect any 40.12 underpayment from political subdivisions, or to reimburse any 40.13 overpayment to any political subdivisions of taxes on solid 40.14 waste management services under Minnesota Statutes, section 40.15 297A.45, until June 1, 1997. The statute of limitations for 40.16 assessing, collecting, or refunding taxes subject to the 40.17 provisions of this subdivision and Laws 1995, chapter 264, 40.18 article 2, section 40, is tolled from the date of enactment of 40.19 this law, if enacted, until June 1, 1997. 40.20 Subd. 2. [CONTINUE EVALUATION; REPORT.] (a) The 40.21 commissioner of revenue shall continue the evaluation to 40.22 determine the taxes paid by all affected political subdivisions 40.23 on solid waste management services as required by Minnesota 40.24 Statutes, section 297A.45. This is a continuation of the 40.25 evaluation provided for under Laws 1995, chapter 264, article 2, 40.26 section 40, except that the evaluation under this subdivision 40.27 includes all political subdivisions subject to the tax under 40.28 Minnesota Statutes, section 297A.45. The political subdivisions 40.29 shall cooperate fully and shall supply the commissioner of 40.30 revenue with whatever information the commissioner of revenue 40.31 deems necessary for compliance under the law. 40.32 (b) By May 1, 1996, the commissioner of revenue shall 40.33 notify all counties of the opportunity to correct the 40.34 information provided under Laws 1995, chapter 264, article 2, 40.35 section 40. A county must submit their corrections in writing 40.36 to the department of revenue by July 1, 1996. 41.1 (c) The commissioner of revenue shall report by January 15, 41.2 1997, the results of the evaluation under this subdivision to 41.3 the chairs of the house committee on taxes and the senate 41.4 committee on taxes and tax laws. The final results of the 41.5 evaluation are classified as public data. 41.6 Subd. 3. [TASK FORCE; SCOPE.] (a) The director of the 41.7 office of environmental assistance shall establish and staff a 41.8 task force to study implementation of the sales and use taxes on 41.9 solid waste management services under Minnesota Statutes, 41.10 section 297A.45, and the solid waste generator assessment under 41.11 Minnesota Statutes, section 116.07, subdivision 10. The task 41.12 force shall make recommendations to the sales tax advisory 41.13 council and to the chairs of the house environment and natural 41.14 resources committee, and the senate environment and natural 41.15 resources committee of the legislature: 41.16 (1) by November 30, 1996, for the goals itemized in 41.17 paragraph (c), clauses (1)(i) and (ii); 41.18 (2) by January 15, 1997, for the goals itemized in 41.19 paragraph (c), clauses (1)(iii) to (vii); and 41.20 (3) by February 15, 1997, for the goal itemized in 41.21 paragraph (c), clause (2). 41.22 (b) The task force shall consist of 14 voting members with 41.23 expertise in the areas of taxation or waste management, as 41.24 provided in this subdivision: 41.25 (1) four legislators, or their designees, including two 41.26 members of the senate, one from the minority party and one from 41.27 the majority party, appointed by the subcommittee on committees 41.28 of the committee on rules and administration and two members of 41.29 the house of representatives, one from the minority party and 41.30 one from the majority party, appointed by the speaker; 41.31 (2) two representatives from the department of revenue, 41.32 appointed by the commissioner of revenue; 41.33 (3) one representative from the office of environmental 41.34 assistance, appointed by the director of the office; 41.35 (4) one representative from the pollution control agency, 41.36 appointed by the commissioner of the agency; 42.1 (5) three persons representing political subdivisions, at 42.2 least one of which must represent county government, appointed 42.3 by the director of the office of environmental assistance; and 42.4 (6) three persons representing the private waste collection 42.5 industry, appointed by the director of the office of 42.6 environmental assistance, at least one of which is knowledgeable 42.7 on how taxing and pricing of waste collection services interact. 42.8 (c) The goals of the task force are: 42.9 (1) relating to solid waste management taxes: 42.10 (i) to monitor the evaluation conducted under subdivision 2 42.11 and to provide input to the commissioner of revenue if questions 42.12 of interpretations arise during the evaluation; 42.13 (ii) to discuss the tax base principles and possible 42.14 options to use for the tax period from January 1, 1990, to 42.15 December 31, 1995; 42.16 (iii) to discuss the base to which the tax applies 42.17 beginning January 1, 1996, taking into consideration the impact 42.18 on political subdivisions and private haulers, resulting from 42.19 recent court decisions regarding government control over the 42.20 flow of waste and the effect of these decisions on waste 42.21 management fee structures; 42.22 (iv) to examine the impact on total revenues from various 42.23 funding sources including tipping fees, service charges, 42.24 assessments, or subsidizing through the property tax system; 42.25 (v) to identify ways to simplify or restructure the current 42.26 tax system for ease of collection and administration; 42.27 (vi) to discuss methods to ensure that the taxes due to the 42.28 state are paid either by the haulers or the political 42.29 subdivisions; and 42.30 (vii) to recommend a procedure for keeping open 42.31 communication between the various entities on any future issues 42.32 relating to this tax; and 42.33 (2) relating to the solid waste generator assessment: 42.34 (i) to discuss the distinction between "residential" and 42.35 "nonresidential" for purposes of the solid waste generator 42.36 assessment under Minnesota Statutes, section 116.07, subdivision 43.1 10; and 43.2 (ii) to examine ways to simplify or restructure the current 43.3 assessment system for ease of collection and administration. 43.4 Subd. 4. [USE OF TAX PROCEEDS.] It is the legislature's 43.5 intent that the total amount of tax proceeds collected under 43.6 Minnesota Statutes, section 297A.45, less the department of 43.7 revenue's costs of administering the program including the cost 43.8 of conducting the evaluation under subdivision 2, be used for 43.9 administration of programs and functions related to reducing the 43.10 quantity and toxicity of solid waste, recycling, household 43.11 hazardous waste management, and other similarly related 43.12 programs. Appropriations may be made in block grants or 43.13 competitive grants to political subdivisions. Money may also be 43.14 used by the office of environmental assistance and the pollution 43.15 control agency in helping to administer and enforce the programs 43.16 and functions identified in this subdivision. Appropriations 43.17 may also be made to the state attorney general's office for 43.18 providing legal assistance to political subdivisions relating to 43.19 solid waste management. 43.20 Subd. 5. [DEPARTMENT OF REVENUE GUIDELINES.] The 43.21 commissioner of revenue shall prepare a single set of guidelines 43.22 for complying with Minnesota Statutes, section 297A.45, 43.23 including all existing rules, and shall send a copy of these 43.24 guidelines on or before May 1, 1996, to all known political 43.25 subdivisions subject to the tax under Minnesota Statutes, 43.26 section 297A.45. Notwithstanding taxes collected prior to 43.27 January 1, 1996, political subdivisions and persons responsible 43.28 for collecting the tax under Minnesota Statutes, section 43.29 297A.45, must follow these guidelines for all taxes collected on 43.30 solid waste management services beginning January 1, 1996. The 43.31 commissioner shall send a copy of the guidelines to the chairs 43.32 of the house committee on taxes and the senate committee on 43.33 taxes and tax laws by April 22, 1996, for their review and 43.34 comment. 43.35 Subd. 6. [SEPARATE REPORTING; ADDITIONAL PENALTY.] (a) In 43.36 order to determine the total amount of sales and use taxes 44.1 collected under Minnesota Statutes, section 297A.45, the 44.2 department of revenue shall reexamine the present method of 44.3 having this tax reported on the sales tax return. The 44.4 department must also consider other options including requiring 44.5 the sales and use tax amounts to be reported on a separate form. 44.6 (b) In addition to the penalties and interest that apply to 44.7 taxes under Minnesota Statutes, section 297A.45, a penalty equal 44.8 to the specified penalty of the taxpayer's tax liability is 44.9 imposed on any person or political subdivision who fails to 44.10 separately report the amount of the taxes due under Minnesota 44.11 Statutes, section 297A.45. The specified penalties are: 44.12 First violation ten percent 44.13 Second and subsequent 44.14 violations 20 percent 44.15 The additional penalties apply only to that portion of the 44.16 sales and use tax which should have been reported on the 44.17 separate line for taxes under Minnesota Statutes, section 44.18 297A.45, and that was included on other lines of the sales tax 44.19 return. 44.20 Subd. 7. [APPROPRIATION.] The amount necessary to conduct 44.21 the evaluation under subdivision 2, but not to exceed $250,000, 44.22 is appropriated for fiscal years 1996 and 1997, to the 44.23 commissioner of revenue from money deposited in the general fund 44.24 from the solid waste collection and disposal tax under Minnesota 44.25 Statutes, section 297A.45. 44.26 Subd. 8. [EFFECTIVE DATE.] Subdivisions 1 to 3, 6, 44.27 paragraph (a), and 7, are effective the day following final 44.28 enactment. Subdivisions 4 and 5 are effective for taxes 44.29 collected January 1, 1996, and thereafter. Subdivision 6, 44.30 paragraph (b), is effective for returns filed after September 1, 44.31 1996. 44.32 Sec. 29. [CITY OF HERMANTOWN; SALES TAX.] 44.33 Subdivision 1. [SALES TAX AUTHORIZED.] Notwithstanding 44.34 Minnesota Statutes, section 477A.016, or any other contrary 44.35 provision of law, ordinance, or city charter, the city of 44.36 Hermantown may, by ordinance, impose an additional sales tax of 45.1 up to one percent on sales transactions taxable pursuant to 45.2 Minnesota Statutes, chapter 297A, that occur within the city. 45.3 The proceeds of the tax imposed under this section must be used 45.4 to meet the costs of: 45.5 (1) extending a sewer interceptor line; 45.6 (2) construction of a booster pump station, reservoirs, and 45.7 related improvements to the water system; and 45.8 (3) construction of a police and fire station. 45.9 Subd. 2. [REFERENDUM.] If the Hermantown city council 45.10 proposes to impose the sales tax authorized by this section, it 45.11 shall conduct a referendum on the issue. The question of 45.12 imposing the tax must be submitted to the voters at a special or 45.13 general election. The tax may not be imposed unless a majority 45.14 of votes cast on the question of imposing the tax are in the 45.15 affirmative. The commissioner of revenue shall prepare a 45.16 suggested form of question to be presented at the election. 45.17 This subdivision applies notwithstanding any city charter 45.18 provision to the contrary. 45.19 Subd. 3. [ENFORCEMENT; COLLECTION; AND ADMINISTRATION OF 45.20 TAXES.] A sales tax imposed under this section must be reported 45.21 and paid to the commissioner of revenue with the state sales 45.22 taxes, and be subject to the same penalties, interest, and 45.23 enforcement provisions. The proceeds of the tax, less refunds 45.24 and a proportionate share of the cost of collection, shall be 45.25 remitted at least quarterly to the city. The commissioner shall 45.26 deduct from the proceeds remitted an amount that equals the 45.27 indirect statewide cost as well as the direct and indirect 45.28 department costs necessary to administer, audit, and collect the 45.29 tax. The amount deducted shall be deposited in the state 45.30 general fund. 45.31 Subd. 4. [TERMINATION.] The tax authorized under this 45.32 section terminates at the later of (1) ten years after the date 45.33 of initial imposition of the tax, or (2) on the first day of the 45.34 second month next succeeding a determination by the city council 45.35 that sufficient funds have been received from the tax to finance 45.36 the improvements described in subdivision 1, clauses (1) to (3), 46.1 and to prepay or retire at maturity the principal, interest, and 46.2 premium due on any bonds issued for the improvements. Any funds 46.3 remaining after completion of the improvements and retirement or 46.4 redemption of the bonds may be placed in the general fund of the 46.5 city. 46.6 Subd. 5. [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 46.7 effective the day after final enactment, upon compliance with 46.8 Minnesota Statutes, section 645.021, subdivision 3, by the city 46.9 of Hermantown. 46.10 Sec. 30. [CITY OF LITTLE FALLS; TAX AUTHORIZED.] 46.11 Subdivision 1. [SALES OF FOOD; TAX.] The city of Little 46.12 Falls may by ordinance impose a tax of one-half percent on the 46.13 gross receipts from the retail sale of food and nonalcoholic 46.14 beverages sold by the operator of a restaurant or place of 46.15 refreshment within the city. The tax imposed may be effective 46.16 at any time after July 1, 1996. 46.17 Subd. 2. [DEFINITIONS.] For purposes of this section: 46.18 (1) "restaurant" means every building or other structure or 46.19 enclosure, or any part thereof and all buildings in connection, 46.20 kept, used or maintained as, or held out to the public to be an 46.21 enclosure where meals or lunches are served or prepared for 46.22 service elsewhere, except schools; 46.23 (2) "place of refreshment" means every building, structure, 46.24 vehicle, sidewalk cart or any part thereof, used as, maintained 46.25 as, or advertised as, or held out to be a place where 46.26 confectionery, ice cream, or drinks of various kinds are made, 46.27 sold, or served at retail, excepting schools and school 46.28 sponsored events; and 46.29 (3) "operator" means the person who is the proprietor of 46.30 the restaurant, or place of refreshment, whether in the capacity 46.31 of owner, lessee, subleases, licensee, or an other capacity. 46.32 Subd. 3. [USE OF PROCEEDS.] The ordinance adopted by the 46.33 city shall provide for distribution of the proceeds of the tax. 46.34 The proceeds of the tax must be used for tourism purposes, 46.35 including operating and maintaining the activities and programs 46.36 of the tourism and convention bureau. 47.1 Subd. 4. [ENFORCEMENT, COLLECTION, AND ADMINISTRATION OF 47.2 TAXES.] The tax imposed under this section shall be enforced, 47.3 administered, and collected by the city of Little Falls provided 47.4 that the city may contract with the commissioner of revenue to 47.5 perform audits of the tax on behalf of the city. The 47.6 commissioner shall charge the city an amount that equals the 47.7 direct and indirect costs incurred by the department that are 47.8 necessary to audit the tax. 47.9 Subd. 5. [EXPIRATION OF TAXING AUTHORITY.] The tax imposed 47.10 under this section shall expire 15 years after it first becomes 47.11 effective. 47.12 Subd. 6. [EFFECTIVE DATE.] This section is effective the 47.13 day following compliance by the governing body of the city of 47.14 Little Falls with Minnesota Statutes, section 645.021, 47.15 subdivision 3. 47.16 Sec. 31. [EFFECTIVE DATES.] 47.17 Sections 1 to 7, 10, 12, 16 to 20, 22, 26, and 27 are 47.18 effective the day after final enactment. 47.19 Sections 8 and 9 are effective for refunds applied for 47.20 after December 31, 1996. 47.21 Sections 11 and 13 are effective for sales made after 47.22 December 31, 1996. 47.23 Section 23 is effective for transfers of motor vehicles 47.24 after June 30, 1996. 47.25 Section 21 is effective for purchases made after June 30, 47.26 1996. 47.27 ARTICLE 3 47.28 PROPERTY TAXES 47.29 Section 1. Minnesota Statutes 1994, section 103E.611, 47.30 subdivision 7, is amended to read: 47.31 Subd. 7. [COLLECTION AND ENFORCEMENT OF DRAINAGE LIENS.] 47.32 Theprovisions of law that exist relating to theenforcement, 47.33 collectionof, penalty, and interest provisions relating to real 47.34 estate taxesare adoptedapply toenforcethe payment of 47.35 drainage liens.If there is a default, a penalty may not be47.36added to an installment of principal and interest, but each48.1defaulted payment, principal, and interest draws interest from48.2the date of default until paid at the rate determined by the48.3state court administrator for judgments under section 549.09.48.4 Sec. 2. Minnesota Statutes 1995 Supplement, section 48.5 124A.03, subdivision 2, is amended to read: 48.6 Subd. 2. [REFERENDUM REVENUE.] (a) The revenue authorized 48.7 by section 124A.22, subdivision 1, may be increased in the 48.8 amount approved by the voters of the district at a referendum 48.9 called for the purpose. The referendum may be called by the 48.10 school board or shall be called by the school board upon written 48.11 petition of qualified voters of the district. The referendum 48.12 shall be conducted one or two calendar years before the 48.13 increased levy authority, if approved, first becomes payable. 48.14 Only one election to approve an increase may be held in a 48.15 calendar year. Unless the referendum is conducted by mail under 48.16 paragraph (g), the referendum must be held on the first Tuesday 48.17 after the first Monday in November. The ballot shall state the 48.18 maximum amount of the increased revenue per actual pupil unit, 48.19 the estimated referendum tax rate as a percentage of market 48.20 value in the first year it is to be levied, and that the revenue 48.21 shall be used to finance school operations. The ballot may 48.22 state that existing referendum levy authority is expiring. In 48.23 this case, the ballot may also compare the proposed levy 48.24 authority to the existing expiring levy authority, and express 48.25 the proposed increase as the amount, if any, over the expiring 48.26 referendum levy authority. The ballot shall designate the 48.27 specific number of years, not to exceed ten, for which the 48.28 referendum authorization shall apply. The notice required under 48.29 section 275.60 may be modified to read, in cases of renewing 48.30 existing levies: 48.31 "BY VOTING "YES" ON THIS BALLOT QUESTION, YOU MAY BE VOTING 48.32 FOR A PROPERTY TAX INCREASE." 48.33 The ballot may contain a textual portion with the 48.34 information required in this subdivision and a question stating 48.35 substantially the following: 48.36 "Shall the increase in the revenue proposed by (petition 49.1 to) the board of ........., School District No. .., be approved?" 49.2 If approved, an amount equal to the approved revenue per 49.3 actual pupil unit times the actual pupil units for the school 49.4 year beginning in the year after the levy is certified shall be 49.5 authorized for certification for the number of years approved, 49.6 if applicable, or until revoked or reduced by the voters of the 49.7 district at a subsequent referendum. 49.8 (b) The school board shall prepare and deliver by first 49.9 class mail at least 15 days but no more than 30 days prior to 49.10 the day of the referendum to each taxpayer a notice of the 49.11 referendum and the proposed revenue increase. The school board 49.12 need not mail more than one notice to any taxpayer. For the 49.13 purpose of giving mailed notice under this subdivision, owners 49.14 shall be those shown to be owners on the records of the county 49.15 auditor or, in any county where tax statements are mailed by the 49.16 county treasurer, on the records of the county treasurer. Every 49.17 property owner whose name does not appear on the records of the 49.18 county auditor or the county treasurer shall be deemed to have 49.19 waived this mailed notice unless the owner has requested in 49.20 writing that the county auditor or county treasurer, as the case 49.21 may be, include the name on the records for this purpose. The 49.22 notice must project the anticipated amount of tax increase in 49.23 annual dollars and annual percentage for typical residential 49.24 homesteads, agricultural homesteads, apartments, and 49.25 commercial-industrial property within the school district. 49.26 The notice for a referendum may state that an existing 49.27 referendum levy is expiring and project the anticipated amount 49.28 of increase over the existing referendum levy, if any, in annual 49.29 dollars and annual percentage for typical residential 49.30 homesteads, agricultural homesteads, apartments, and 49.31 commercial-industrial property within the school district. 49.32 The notice must include the following statement: "Passage 49.33 of this referendum will result in an increase in your property 49.34 taxes." However, in cases of renewing existing levies, the 49.35 notice may include the following statement: "Passage of this 49.36 referendum may result in an increase in your property taxes." 50.1 (c) A referendum on the question of revoking or reducing 50.2 the increased revenue amount authorized pursuant to paragraph 50.3 (a) may be called by the school board and shall be called by the 50.4 school board upon the written petition of qualified voters of 50.5 the district. A referendum to revoke or reduce the levy amount 50.6 must be based upon the dollar amount, local tax rate, or amount 50.7 per actual pupil unit, that was stated to be the basis for the 50.8 initial authorization. Revenue approved by the voters of the 50.9 district pursuant to paragraph (a) must be received at least 50.10 once before it is subject to a referendum on its revocation or 50.11 reduction for subsequent years. Only one revocation or 50.12 reduction referendum may be held to revoke or reduce referendum 50.13 revenue for any specific year and for years thereafter. 50.14 (d) A petition authorized by paragraph (a) or (c) shall be 50.15 effective if signed by a number of qualified voters in excess of 50.16 15 percent of the registered voters of the school district on 50.17 the day the petition is filed with the school board. A 50.18 referendum invoked by petition shall be held on the date 50.19 specified in paragraph (a). 50.20 (e) The approval of 50 percent plus one of those voting on 50.21 the question is required to pass a referendum authorized by this 50.22 subdivision. 50.23 (f) At least 15 days prior to the day of the referendum, 50.24 the district shall submit a copy of the notice required under 50.25 paragraph (b) to the commissioner of children, families, and 50.26 learning and to the county auditor of each county in which the 50.27 school district is located. Within 15 days after the results of 50.28 the referendum have been certified by the school board, or in 50.29 the case of a recount, the certification of the results of the 50.30 recount by the canvassing board, the district shall notify the 50.31 commissioner of children, families, and learning of the results 50.32 of the referendum. 50.33 (g) Except for a referendum held under subdivision 2b, any 50.34 referendum under this section held on a day other than the first 50.35 Tuesday after the first Monday in November must be conducted by 50.36 mail in accordance with section 204B.46. Notwithstanding 51.1 paragraph (b) to the contrary, in the case of a referendum 51.2 conducted by mail under this paragraph, the notice required by 51.3 paragraph (b) shall be prepared and delivered by first class 51.4 mail at least 20 days before the referendum. 51.5 Sec. 3. Minnesota Statutes 1994, section 270.07, 51.6 subdivision 1, is amended to read: 51.7 Subdivision 1. [POWERS OF COMMISSIONER; APPLICATION FOR 51.8 ABATEMENT; ORDERS.] (a) The commissioner of revenue shall 51.9 prescribe the form of all blanks and books required under this 51.10 chapter and shall hear and determine all matters of grievance 51.11 relating to taxation. Except for matters delegated to the 51.12 various boards of county commissioners under section 375.192, 51.13 and except as otherwise provided by law, the commissioner shall 51.14 have power to grant such reduction or abatement of net tax 51.15 capacities or taxes and of any costs, penalties or interest 51.16 thereon as the commissioner may deem just and equitable, and to 51.17 order the refundment, in whole or in part, of any taxes, costs, 51.18 penalties or interest thereon which have been erroneously or 51.19 unjustly paid. Application therefor shall be submitted with a 51.20 statement of facts in the case and the favorable recommendation 51.21 of the county board or of the board of abatement of any city 51.22 where any such board exists, and the county auditor of the 51.23 county wherein such tax was levied or paid. In the case of taxes 51.24 other than gross earnings taxes, the order may be made only on 51.25 application and approval as provided in this paragraph. No 51.26 reduction, abatement, or refundment of any special assessments 51.27 made or levied by any municipality for local improvements shall 51.28 be made unless it is also approved by the board of review or 51.29 similar taxing authority of such municipality. 51.30 (b) The commissioner has the power to grant reductions or 51.31 abatements of gross earnings tax. An application for reduction 51.32 of gross earnings taxes may be made directly to the commissioner 51.33 without the favorable action of the county board and county 51.34 auditor. The commissioner shall direct that any gross earnings 51.35 taxes that may have been erroneously or unjustly paid be applied 51.36 against unpaid taxes due from the applicant. 52.1 (c) The commissioner shall forward to the county auditor a 52.2 copy of the order made by the commissioner in all cases in which 52.3 the approval of the county board is required. 52.4 (d) The commissioner may refer any question that may arise 52.5 in reference to the true construction of this chapter to the 52.6 attorney general, and the decision thereon shall be in force and 52.7 effect until annulled by the judgment of a court of competent 52.8 jurisdiction. 52.9 (e) The commissioner may by written order abate, reduce, or 52.10 refund any penalty or interest imposed by any law relating to 52.11 taxation, if in the commissioner's opinion the failure to timely 52.12 pay the tax or failure to timely file the return is due to 52.13 reasonable cause. The order shall be made on application of the 52.14 taxpayer to the commissioner. 52.15 (f) If an order issued under this subdivision is for an 52.16 abatement, reduction, or refund of over $5,000, it shall be 52.17 valid only if approved in writing by the attorney general. 52.18 (g) An appeal may not be taken to the tax court from any 52.19 order of the commissioner of revenue made in the exercise of the 52.20 discretionary authority granted in paragraph (a) with respect to 52.21 the reduction or abatement of real or personal property taxes in 52.22 response to a taxpayer's application for an abatement, 52.23 reduction, or refund of taxes, net tax capacities, costs, 52.24 penalties, or interest. 52.25 Sec. 4. Minnesota Statutes 1994, section 273.02, 52.26 subdivision 3, is amended to read: 52.27 Subd. 3. [WHAT RIGHTS NOT AFFECTED.] Nothing in 52.28 subdivisions 1 to 3 shall affect any rights in undervalued or 52.29 erroneously classified property, acquired for value in good 52.30 faith prior to the correction of the net tax capacity thereof by 52.31 the county auditor as provided in this section. Any person 52.32 whose rights are adversely affected by any action of the county 52.33 auditor as provided in this subdivision may apply for a 52.34 reduction of the net tax capacity under the provisions of 52.35 section270.07, relating to the powers of the commissioner of52.36revenue375.192. 53.1 Sec. 5. Minnesota Statutes 1995 Supplement, section 53.2 273.11, subdivision 16, is amended to read: 53.3 Subd. 16. [VALUATION EXCLUSION FOR CERTAIN IMPROVEMENTS.] 53.4 Improvements to homestead property made before January 2, 2003, 53.5 shall be fully or partially excluded from the value of the 53.6 property for assessment purposes provided that (1) the house is 53.7 at least 35 years old at the time of the improvement and (2) 53.8 either 53.9 (a) the assessor's estimated market value of the house on 53.10 January 2 of the current year is equal to or less than $150,000, 53.11 or 53.12 (b) if the estimated market value of the house is over 53.13 $150,000 market value but is less than $300,000 on January 2 of 53.14 the current year, the property qualifies if 53.15 (i) it is located in a city or town in which 50 percent or 53.16 more of the owner-occupied housing units were constructed before 53.17 1960 based upon the 1990 federal census, and 53.18 (ii) the city or town's median family income based upon the 53.19 1990 federal census is less than the statewide median family 53.20 income based upon the 1990 federal census, or 53.21 (c) if the estimated market value of the house is $300,000 53.22 or more on January 2 of the current year, the property qualifies 53.23 if 53.24 (i) it is located in a city or town in which 45 percent or 53.25 more of the homes were constructed before 1940 based upon the 53.26 1990 federal census, and 53.27 (ii) it is located in a city or town in which 45 percent or 53.28 more of the housing units were rental based upon the 1990 53.29 federal census, and 53.30 (iii) the city or town's median value of owner occupied 53.31 housing units based upon the 1990 federal census is less than 53.32 the statewide median value of owner occupied housing units based 53.33 upon the 1990 federal census. 53.34Any house which has an estimated market value of $300,00053.35or more on January 2 of the current year is not eligible to53.36receive any property valuation exclusion under this section.54.1 For purposes of determining this eligibility, "house" means land 54.2 and buildings. 54.3 The age of a residence is the number of years that the 54.4 residence has existed at its present site. In the case of an 54.5 owner-occupied duplex or triplex, the improvement is eligible 54.6 regardless of which portion of the property was improved. 54.7 If the property lies in a jurisdiction which is subject to 54.8 a building permit process, a building permit must have been 54.9 issued prior to commencement of the improvement. Any 54.10 improvement must add at least $1,000 to the value of the 54.11 property to be eligible for exclusion under this subdivision. 54.12 Only improvements to the structure which is the residence of the 54.13 qualifying homesteader or construction of or improvements to no 54.14 more than one two-car garage per residence qualify for the 54.15 provisions of this subdivision. If an improvement was begun 54.16 between January 2, 1992, and January 2, 1993, any value added 54.17 from that improvement for the January 1994 and subsequent 54.18 assessments shall qualify for exclusion under this subdivision 54.19 provided that a building permit was obtained for the improvement 54.20 between January 2, 1992, and January 2, 1993. Whenever a 54.21 building permit is issued for property currently classified as 54.22 homestead, the issuing jurisdiction shall notify the property 54.23 owner of the possibility of valuation exclusion under this 54.24 subdivision. The assessor shall require an application, 54.25 including documentation of the age of the house from the owner, 54.26 if unknown by the assessor. The application may be filed 54.27 subsequent to the date of the building permit provided that the 54.28 application must be filedprior to July 1 of the assessment year54.29in which the market value from the qualifying improvement is54.30added to that property's assessmentwithin three years of the 54.31 date the building permit was issued for the improvement. If the 54.32 property lies in a jurisdiction which is not subject to a 54.33 building permit process, the application must be filed within 54.34 three years of the date the improvement was made. The assessor 54.35 may require proof from the taxpayer of the date the improvement 54.36 was made. Applications must be received prior to July 1 of any 55.1 year in order to be effective for taxes payable in the following 55.2 year. 55.3After the adjournment of the 1994 county board of55.4equalization meetings,No exclusion may be granted for an 55.5 improvement by a local board of review or county board of 55.6 equalization and no abatement of the taxes for qualifying 55.7 improvements may be granted by the county board unless (1) a 55.8 building permit was issued prior to the commencement of the 55.9 improvement if the jurisdiction requires a building permit, and 55.10 (2) an application was completedon a timely basis. No55.11abatement of the taxes for qualifying improvements may be55.12granted by a county board unless (1) a building permit was55.13issued prior to commencement of the improvement if the55.14jurisdiction requires a building permit, and (2) an application55.15was completed on a timely basis. 55.16 The assessor shall note the qualifying value of each 55.17 improvement on the property's record, and the sum of those 55.18 amounts shall be subtracted from the value of the property in 55.19 each year for ten years after the improvement has been made, at 55.20 which time an amount equal to 20 percent of the qualifying value 55.21 shall be added back in each of the five subsequent assessment 55.22 years. If an application is filed after the first assessment 55.23 date at which an improvement could have been subject to the 55.24 valuation exclusion under this subdivision, the ten-year period 55.25 during which the value is subject to exclusion is reduced by the 55.26 number of years that have elapsed since the property would have 55.27 qualified initially. The valuation exclusion shall terminate 55.28 whenever (1) the property is sold, or (2) the property is 55.29 reclassified to a class which does not qualify for treatment 55.30 under this subdivision. Improvements made by an occupant who is 55.31 the purchaser of the property under a conditional purchase 55.32 contract do not qualify under this subdivision unless the seller 55.33 of the property is a governmental entity. The qualifying value 55.34 of the property shall be computed based upon the increase from 55.35 that structure's market value as of January 2 preceding the 55.36 acquisition of the property by the governmental entity. 56.1 The total qualifying value for a homestead may not exceed 56.2 $50,000. The total qualifying value for a homestead with a 56.3 house that is less than 70 years old may not exceed $25,000. 56.4 The term "qualifying value" means the increase in estimated 56.5 market value resulting from the improvement if the improvement 56.6 occurs when the house is at least 70 years old, or one-half of 56.7 the increase in estimated market value resulting from the 56.8 improvement otherwise. The $25,000 and $50,000 maximum 56.9 qualifying value under this subdivision may result from up to 56.10 three separate improvements to the homestead. The application 56.11 shall state, in clear language, that if more than three 56.12 improvements are made to the qualifying property, a taxpayer may 56.13 choose which three improvements are eligible, provided that 56.14 after the taxpayer has made the choice and any valuation 56.15 attributable to those improvements has been excluded from 56.16 taxation, no further changes can be made by the taxpayer. 56.17 If 50 percent or more of the square footage of a structure 56.18 is voluntarily razed or removed, the valuation increase 56.19 attributable to any subsequent improvements to the remaining 56.20 structure does not qualify for the exclusion under this 56.21 subdivision. If a structure is unintentionally or accidentally 56.22 destroyed by a natural disaster, the property is eligible for an 56.23 exclusion under this subdivision provided that the structure was 56.24 not completely destroyed. The qualifying value on property 56.25 destroyed by a natural disaster shall be computed based upon the 56.26 increase from that structure's market value as determined on 56.27 January 2 of the year in which the disaster occurred. A 56.28 property receiving benefits under the homestead disaster 56.29 provisions under section 273.123 is not disqualified from 56.30 receiving an exclusion under this subdivision. If any 56.31 combination of improvements made to a structure after January 1, 56.32 1993, increases the size of the structure by 100 percent or 56.33 more, the valuation increase attributable to the portion of the 56.34 improvement that causes the structure's size to exceed 100 56.35 percent does not qualify for exclusion under this subdivision. 56.36 Sec. 6. Minnesota Statutes 1994, section 273.111, 57.1 subdivision 3, is amended to read: 57.2 Subd. 3. (a) Real estate consisting of ten acres or more 57.3 or a nursery or greenhouse, and qualifying for classification as 57.4 class 1b, 2a, or 2b under section 273.13, subdivision 23, 57.5 paragraph (d), shall be entitled to valuation and tax deferment 57.6 under this section only if it is actively and exclusively 57.7 devoted to agricultural use as defined in subdivision 6 and 57.8 either: 57.9 (1) is the homestead of the owner, or of a surviving 57.10 spouse, child, or sibling of the owner or is real estate which 57.11 is farmed with the real estate which contains the homestead 57.12 property; or 57.13 (2) has been in possession of the applicant, the 57.14 applicant's spouse, parent, or sibling, or any combination 57.15 thereof, for a period of at least seven years prior to 57.16 application for benefits under the provisions of this section, 57.17 or is real estate which is farmed with the real estate which 57.18 qualifies under this clause and is within two townships or 57.19 cities or combination thereof from the qualifying real estate; 57.20 or 57.21 (3) is the homestead of a shareholder in a family farm 57.22 corporation as defined in section 500.24, notwithstanding the 57.23 fact that legal title to the real estate may be held in the name 57.24 of the family farm corporation; or 57.25 (4) is in the possession of a nursery or greenhouse or an 57.26 entity owned by a proprietor, partnership, or corporation which 57.27 also owns the nursery or greenhouse operations on the parcel or 57.28 parcels. 57.29 (b) Valuation of real estate under this section is limited 57.30 to parcels the ownership of which is in noncorporate entities 57.31 except for: 57.32 (1) family farm corporations organized pursuant to section 57.33 500.24; and 57.34 (2) corporations that derive 80 percent or more of their 57.35 gross receipts from the wholesale or retail sale of 57.36 horticultural or nursery stock. 58.1 Corporate entities who previously qualified for tax 58.2 deferment pursuant to this section and who continue to otherwise 58.3 qualify under subdivisions 3 and 6 for a period of at least 58.4 three years following the effective date of Laws 1983, chapter 58.5 222, section 8, will not be required to make payment of the 58.6 previously deferred taxes, notwithstanding the provisions of 58.7 subdivision 9.Sale of the land prior to the expiration of the58.8three-year period shall result in payment of deferred taxes as58.9follows: sale within the first year requires payment of payable58.101980, 1981, and 1982 deferred taxes; sale during the second year58.11requires payment of payable 1981 and 1982 taxes deferred; and58.12sale at any time during the third year will require payment of58.13payable 1983 taxes deferred. Deferred taxes shall be paid even58.14if the land qualifies pursuant to subdivision 11a.Special 58.15 assessments are payable at the end of the three-year period or 58.16 at time of sale, whichever comes first. 58.17 (c) Land that previously qualified for tax deferment 58.18 pursuant to this section and no longer qualifies because it is 58.19 not classified as agricultural land but would otherwise qualify 58.20 under subdivisions 3 and 6 for a period of at least three years 58.21 will not be required to make payment of the previously deferred 58.22 taxes, notwithstanding the provisions of subdivision 9. Sale of 58.23 the land prior to the expiration of the three-year period 58.24 requires payment of deferred taxes as follows: sale in the year 58.25 the land no longer qualifies requires payment of the current 58.26 year's deferred taxes plus payment of deferred taxes for the two 58.27 prior years; sale during the second year the land no longer 58.28 qualifies requires payment of the current year's deferred taxes 58.29 plus payment of the deferred taxes for the prior year; and sale 58.30 during the third year the land no longer qualifies requires 58.31 payment of the current year's deferred taxes. Deferred taxes 58.32 shall be paid even if the land qualifies pursuant to subdivision 58.33 11a. When such property is sold or no longer qualifies under 58.34 this paragraph, or at the end of the three-year period, 58.35 whichever comes first, all deferred special assessments plus 58.36 interest are payable in equal installments spread over the time 59.1 remaining until the last maturity date of the bonds issued to 59.2 finance the improvement for which the assessments were levied. 59.3 If the bonds have matured, the deferred special assessments plus 59.4 interest are payable within 90 days. The provisions of section 59.5 429.061, subdivision 2, apply to the collection of these 59.6 installments. Penalties are not imposed on any such special 59.7 assessments if timely paid. 59.8 Sec. 7. Minnesota Statutes 1995 Supplement, section 59.9 273.124, subdivision 1, is amended to read: 59.10 Subdivision 1. [GENERAL RULE.] (a) Residential real estate 59.11 that is occupied and used for the purposes of a homestead by its 59.12 owner, who must be a Minnesota resident, is a residential 59.13 homestead. 59.14 Agricultural land, as defined in section 273.13, 59.15 subdivision 23, that is occupied and used as a homestead by its 59.16 owner, who must be a Minnesota resident, is an agricultural 59.17 homestead. 59.18 Dates for establishment of a homestead and homestead 59.19 treatment provided to particular types of property are as 59.20 provided in this section. 59.21 Property of a trustee, beneficiary, or grantor of a trust 59.22 is not disqualified from receiving homestead benefits if the 59.23 homestead requirements under this chapter are satisfied. 59.24 The assessor shall require proof, as provided in 59.25 subdivision 13, of the facts upon which classification as a 59.26 homestead may be determined. Notwithstanding any other law, the 59.27 assessor may at any time require a homestead application to be 59.28 filed in order to verify that any property classified as a 59.29 homestead continues to be eligible for homestead status. 59.30 Notwithstanding any other law to the contrary, the department of 59.31 revenue may, upon request from an assessor, verify whether an 59.32 individual who is requesting or receiving homestead 59.33 classification has filed a Minnesota income tax return as a 59.34 resident for the most recent taxable year for which the 59.35 information is available. 59.36 When there is a name change or a transfer of homestead 60.1 property, the assessor may reclassify the property in the next 60.2 assessment unless a homestead application is filed to verify 60.3 that the property continues to qualify for homestead 60.4 classification. 60.5 (b) For purposes of this section, homestead property shall 60.6 include property which is used for purposes of the homestead but 60.7 is separated from the homestead by a road, street, lot, 60.8 waterway, or other similar intervening property. The term "used 60.9 for purposes of the homestead" shall include but not be limited 60.10 to uses for gardens, garages, or other outbuildings commonly 60.11 associated with a homestead, but shall not include vacant land 60.12 held primarily for future development. In order to receive 60.13 homestead treatment for the noncontiguous property, the owner 60.14 shall apply for it to the assessor by July 1 of the year when 60.15 the treatment is initially sought. After initial qualification 60.16 for the homestead treatment, additional applications for 60.17 subsequent years are not required. 60.18 (c) Residential real estate that is occupied and used for 60.19 purposes of a homestead by a relative of the owner is a 60.20 homestead but only to the extent of the homestead treatment that 60.21 would be provided if the related owner occupied the property. 60.22 For purposes of this paragraph and paragraph (f), "relative" 60.23 means a parent, stepparent, child, stepchild, grandparent, 60.24 grandchild, brother, sister, uncle, or aunt. This relationship 60.25 may be by blood or marriage. Property that has been classified 60.26 as seasonal recreational residential property at any time during 60.27 which it has been owned by the current owner or spouse of the 60.28 current owner will not be reclassified as a homestead unless it 60.29 is occupied as a homestead by the owner; this prohibition also 60.30 applies to property that, in the absence of this paragraph, 60.31 would have been classified as seasonal recreational residential 60.32 property at the time when the residence was constructed. 60.33 Neither the related occupant nor the owner of the property may 60.34 claim a property tax refund under chapter 290A for a homestead 60.35 occupied by a relative. In the case of a residence located on 60.36 agricultural land, only the house, garage, and immediately 61.1 surrounding one acre of land shall be classified as a homestead 61.2 under this paragraph, except as provided in paragraph (d). 61.3 (d) Agricultural property that is occupied and used for 61.4 purposes of a homestead by a relative of the owner, is a 61.5 homestead, only to the extent of the homestead treatment that 61.6 would be provided if the related owner occupied the property, 61.7 and only if all of the following criteria are met: 61.8 (1) the relative who is occupying the agricultural property 61.9 is a son, daughter, father, or mother of the owner of the 61.10 agricultural property or a son or daughter of the spouse of the 61.11 owner of the agricultural property, 61.12 (2) the owner of the agricultural property must be a 61.13 Minnesota resident, 61.14 (3) the owner of the agricultural property must not receive 61.15 homestead treatment on any other agricultural property in 61.16 Minnesota, and 61.17 (4) the owner of the agricultural property is limited to 61.18 only one agricultural homestead per family under this paragraph. 61.19 Neither the related occupant nor the owner of the property 61.20 may claim a property tax refund under chapter 290A for a 61.21 homestead occupied by a relative qualifying under this 61.22 paragraph. For purposes of this paragraph, "agricultural 61.23 property" means the house, garage, other farm buildings and 61.24 structures, and agricultural land. 61.25 Application must be made to the assessor by the owner of 61.26 the agricultural property to receive homestead benefits under 61.27 this paragraph. The assessor may require the necessary proof 61.28 that the requirements under this paragraph have been met. 61.29 (e) In the case of property owned by a property owner who 61.30 is married, the assessor must not deny homestead treatment in 61.31 whole or in part if only one of the spouses occupies the 61.32 property and the other spouse is absent due to: (1) marriage 61.33 dissolution proceedings, (2) legal separation, (3) employment or 61.34 self-employment in another location, (4) residence in a nursing 61.35 home or boarding care facility, or (5) other personal 61.36 circumstances causing the spouses to live separately, not 62.1 including an intent to obtain two homestead classifications for 62.2 property tax purposes. To qualify under clause (3), the 62.3 spouse's place of employment or self-employment must be at least 62.4 50 miles distant from the other spouse's place of employment, 62.5 and the homesteads must be at least 50 miles distant from each 62.6 other. Homestead treatment, in whole or in part, shall not be 62.7 denied to the spouse of an owner if he or she previously 62.8 occupied the residence with the owner and the absence of the 62.9 owner is due to one of the exceptions provided in this paragraph. 62.10 (f) If an individual is purchasing property with the intent 62.11 of claiming it as a homestead and is required by the terms of 62.12 the financing agreement to have a relative shown on the deed as 62.13 a coowner, the assessor shall allow a full homestead 62.14 classification. This provision only applies to first-time 62.15 purchasers, whether married or single, or to a person who had 62.16 previously been married and is purchasing as a single individual 62.17 for the first time. The application for homestead benefits must 62.18 be on a form prescribed by the commissioner and must contain the 62.19 data necessary for the assessor to determine if full homestead 62.20 benefits are warranted. 62.21 Sec. 8. Minnesota Statutes 1995 Supplement, section 62.22 273.124, subdivision 3, is amended to read: 62.23 Subd. 3. [COOPERATIVES AND CHARITABLE CORPORATIONS; 62.24 HOMESTEAD AND OTHER PROPERTY.] (a) Whenone or more dwellings,62.25or one or more buildings which each contain several dwelling62.26units, areproperty is owned by a corporation or association 62.27 organized under chapter 308A, and each person who owns a share 62.28 or shares in the corporation or association is entitled to 62.29 occupy adwellingbuilding on the property, ordwellinga unit 62.30in thewithin a building on the property, the corporation or 62.31 association may claim homestead treatment for each dwelling, or 62.32 for each unit in the case of a building containing several 62.33 dwelling units,for the dwellingor for the part of the value of 62.34 the building occupied by a shareholder. Eachdwellingbuilding 62.35 or unit must be designated by legal description or number, and. 62.36 The net tax capacity of eachdwellingbuilding or unit that 63.1 qualifies for assessment as a homestead under this subdivision 63.2 must include not more than one-half acre of land, if platted, 63.3 nor more than 80 acres if unplatted. The net tax capacity of 63.4 thebuilding or buildings containing several dwelling63.5unitsproperty is the sum of the net tax capacities of each of 63.6 the respective buildings or units comprising thebuilding63.7 property, including the net tax capacity of each unit's or 63.8 building's proportionate share of the land and any common 63.9 buildings. To qualify for the treatment provided by this 63.10 subdivision, the corporation or association must be wholly owned 63.11 by persons having a right to occupy adwellingbuilding or 63.12dwellingunit owned by the corporation or association. A 63.13 charitable corporation organized under the laws of Minnesota and 63.14 not otherwise exempt thereunder with no outstanding stock 63.15 qualifies for homestead treatment with respect to member 63.16 residents of the dwelling units who have purchased and hold 63.17 residential participation warrants entitling them to occupy the 63.18 units. 63.19 (b) To the extent provided in paragraph (a), a cooperative 63.20 or corporation organized under chapter 308A may obtain separate 63.21 assessment and valuation, and separate property tax statements 63.22 for each residential homestead, residential nonhomestead, or for 63.23 each seasonal residential recreational building or unit not used 63.24 for commercial purposes. The appropriate class rates under 63.25 section 273.13 shall be applicable as if each building or unit 63.26 were a separate tax parcel; provided, however, that the tax 63.27 parcel which exists at the time the cooperative or corporation 63.28 makes application under this subdivision shall be a single 63.29 parcel for purposes of property taxes or the enforcement and 63.30 collection thereof, other than as provided in paragraph (a) or 63.31 (b). 63.32 (c) A member of a corporation or association may initially 63.33 obtain the separate assessment and valuation and separate 63.34 property tax statements, as provided in paragraph (b), by 63.35 applying to the assessor by June 30 of the assessment year. 63.36 (d) When a building, or dwelling units within a building, 64.1 no longer qualify underthis subdivisionparagraph (a) or (b), 64.2 the current owner must notify the assessor within6030 days. 64.3 Failure to notify the assessor within6030 days shall result in 64.4 the loss of benefits underthis subdivisionparagraph (a) or (b) 64.5 for taxes payable in the year that the failure is discovered. 64.6 For these purposes, "benefits underthis subdivisionparagraph 64.7 (a) or (b)" means the difference in the net tax capacity of 64.8 the building or units which no longer qualify as computed 64.9 underthis subdivisionparagraph (a) or (b) and as computed 64.10 under the otherwise applicable law, times the local tax rate 64.11 applicable to the building for that taxes payable year. Upon 64.12 discovery of a failure to notify, the assessor shall inform the 64.13 auditor of the difference in net tax capacity for the building 64.14 or buildings in which units no longer qualify, and the auditor 64.15 shall calculate the benefits underthis subdivisionparagraph 64.16 (a) or (b). Such amount, plus a penalty equal to 100 percent of 64.17 that amount, shall then be demanded of the building's owner. 64.18 The property owner may appeal the county's determination by 64.19 serving copies of a petition for review with county officials as 64.20 provided in section 278.01 and filing a proof of service as 64.21 provided in section 278.01 with the Minnesota tax court within 64.22 60 days of the date of the notice from the county. The appeal 64.23 shall be governed by the tax court procedures provided in 64.24 chapter 271, for cases relating to the tax laws as defined in 64.25 section 271.01, subdivision 5; disregarding sections 273.125, 64.26 subdivision 5, and 278.03, but including section 278.05, 64.27 subdivision 2. If the amount of the benefits underthis64.28subdivisionparagraph (a) or (b) and penalty are not paid within 64.29 60 days, and if no appeal has been filed, the county auditor 64.30 shall certify the amount of the benefit and penalty to the 64.31 succeeding year's tax list to be collected as part of the 64.32 property taxes on the affectedbuildingsproperty. 64.33 Sec. 9. Minnesota Statutes 1995 Supplement, section 64.34 273.124, subdivision 13, is amended to read: 64.35 Subd. 13. [HOMESTEAD APPLICATION.] (a) A person who meets 64.36 the homestead requirements under subdivision 1 must file a 65.1 homestead application with the county assessor to initially 65.2 obtain homestead classification. 65.3 (b) On or before January 2, 1993, each county assessor 65.4 shall mail a homestead application to the owner of each parcel 65.5 of property within the county which was classified as homestead 65.6 for the 1992 assessment year. The format and contents of a 65.7 uniform homestead application shall be prescribed by the 65.8 commissioner of revenue. The commissioner shall consult with 65.9 the chairs of the house and senate tax committees on the 65.10 contents of the homestead application form. The application 65.11 must clearly inform the taxpayer that this application must be 65.12 signed by all owners who occupy the property or by the 65.13 qualifying relative and returned to the county assessor in order 65.14 for the property to continue receiving homestead treatment. The 65.15 envelope containing the homestead application shall clearly 65.16 identify its contents and alert the taxpayer of its necessary 65.17 immediate response. 65.18 (c) Every property owner applying for homestead 65.19 classification must furnish to the county assessor the social 65.20 security number of each occupant who is listed as an owner of 65.21 the property on the deed of record, the name and address of each 65.22 owner who does not occupy the property, and the name and social 65.23 security number of each owner's spouse who occupies the 65.24 property. The application must be signed by each owner who 65.25 occupies the property and by each owner's spouse who occupies 65.26 the property, or, in the case of property that qualifies as a 65.27 homestead under subdivision 1, paragraph (c), by the qualifying 65.28 relative. 65.29 If a property owner occupies a homestead, the property 65.30 owner's spouse may not claim another property as a homestead 65.31 unless the property owner and the property owner's spouse file 65.32 with the assessor an affidavit or other proof required by the 65.33 assessor stating that the property qualifies as a homestead 65.34 under subdivision 1, paragraph (e). 65.35 Owners or spouses occupying residences owned by their 65.36 spouses and previously occupied with the other spouse, either of 66.1 whom fail to include the other spouse's name and social security 66.2 number on the homestead application or provide the affidavits or 66.3 other proof requested, will be deemed to have elected to receive 66.4 only partial homestead treatment of their residence. The 66.5 remainder of the residence will be classified as nonhomestead 66.6 residential. When an owner or spouse's name and social security 66.7 number appear on homestead applications for two separate 66.8 residences and only one application is signed, the owner or 66.9 spouse will be deemed to have elected to homestead the residence 66.10 for which the application was signed. 66.11 The social security numbers or affidavits or other proofs 66.12 of the property owners and spouses are private data on 66.13 individuals as defined by section 13.02, subdivision 12, but, 66.14 notwithstanding that section, the private data may be disclosed 66.15 to the commissioner of revenue, or, for purposes of proceeding 66.16 under the revenue recapture act to recover personal property 66.17 taxes owing, to the county treasurer. 66.18 (d) If residential real estate is occupied and used for 66.19 purposes of a homestead by a relative of the owner and qualifies 66.20 for a homestead under subdivision 1, paragraph (c), in order for 66.21 the property to receive homestead status, a homestead 66.22 application must be filed with the assessor. The social 66.23 security number of each relative occupying the property and the 66.24 social security number of each owner who is related to an 66.25 occupant of the property shall be required on the homestead 66.26 application filed under this subdivision. If a different 66.27 relative of the owner subsequently occupies the property, the 66.28 owner of the property must notify the assessor within 30 days of 66.29 the change in occupancy. The social security number of a 66.30 relative occupying the property is private data on individuals 66.31 as defined by section 13.02, subdivision 12, but may be 66.32 disclosed to the commissioner of revenue. 66.33 (e) The homestead application shall also notify the 66.34 property owners that the application filed under this section 66.35 will not be mailed annually and that if the property is granted 66.36 homestead status for the 1993 assessment, or any assessment year 67.1 thereafter, that same property shall remain classified as 67.2 homestead until the property is sold or transferred to another 67.3 person, or the owners, the spouse of the owner, or the relatives 67.4 no longer use the property as their homestead. Upon the sale or 67.5 transfer of the homestead property, a certificate of value must 67.6 be timely filed with the county auditor as provided under 67.7 section 272.115. Failure to notify the assessor within 30 days 67.8 that the property has been sold, transferred, or that the owner, 67.9 the spouse of the owner, or the relative is no longer occupying 67.10 the property as a homestead, shall result in the penalty 67.11 provided under this subdivision and the property will lose its 67.12 current homestead status. 67.13 (f) If the homestead application is not returned within 30 67.14 days, the county will send a second application to the present 67.15 owners of record. The notice of proposed property taxes 67.16 prepared under section 275.065, subdivision 3, shall reflect the 67.17 property's classification. Beginning with assessment year 1993 67.18 for all properties, If a homestead application has not been 67.19 filed with the county by December 15, the assessor shall 67.20 classify the property as nonhomestead for the current assessment 67.21 year for taxes payable in the following year, provided that the 67.22 owner may be entitled to receive the homestead classification by 67.23 proper application under section 375.192. 67.24 (g) At the request of the commissioner, each county must 67.25 give the commissioner a list that includes the name and social 67.26 security number of each property owner and the property owner's 67.27 spouse occupying the property, or relative of a property owner, 67.28 applying for homestead classification under this subdivision. 67.29 The commissioner shall use the information provided on the lists 67.30 as appropriate under the law, including for the detection of 67.31 improper claims by owners, or relatives of owners, under chapter 67.32 290A. 67.33 (h) If, in comparing the lists supplied by the counties,67.34 the commissioner finds that a property owner may be claiming a 67.35 fraudulent homestead, the commissioner shall notify the 67.36 appropriate counties. Within 90 days of the notification, the 68.1 county assessor shall investigate to determine if the homestead 68.2 classification was properly claimed. If the property owner does 68.3 not qualify, the county assessor shall notify the county auditor 68.4 who will determine the amount of homestead benefits that had 68.5 been improperly allowed. For the purpose of this section, 68.6 "homestead benefits" means the tax reduction resulting from the 68.7 classification as a homestead under section 273.13, the taconite 68.8 homestead credit under section 273.135, and the supplemental 68.9 homestead credit under section 273.1391. 68.10 The county auditor shall send a notice to the person who 68.11 owned theowners of theaffected property at the time the 68.12 homestead application related to the improper homestead was 68.13 filed, demanding reimbursement of the homestead benefits plus a 68.14 penalty equal to 100 percent of the homestead benefits. 68.15 Theproperty ownersperson notified may appeal the county's 68.16 determination byfiling a notice of appealserving copies of a 68.17 petition for review with county officials as provided in section 68.18 278.01 and filing proof of service as provided in section 278.01 68.19 with the Minnesota tax court within 60 days of the date of the 68.20 notice from the county. Procedurally, the appeal is governed by 68.21 the provisions in chapter 271 which apply to the appeal of a 68.22 property tax assessment or levy, but without requiring any 68.23 prepayment of the amount in controversy. If the amount of 68.24 homestead benefits and penalty is not paid within 60 days, and 68.25 if no appeal has been filed, the county auditor shall certify 68.26 the amount of taxes and penalty to thesucceeding year's tax68.27list to be collected as part of the property taxes. In the case68.28of a manufactured home, the amount shall be certified to the68.29current year's tax list for collectioncounty treasurer. The 68.30 county treasurer will add interest to the unpaid homestead 68.31 benefits and penalty amounts at the rate provided for delinquent 68.32 personal property taxes for the period beginning 60 days after 68.33 demand for payment was made until payment. If the person 68.34 notified is the current owner of the property, the treasurer may 68.35 add the total amount of benefits, penalty, interest, and costs 68.36 to the real estate taxes otherwise payable on the property in 69.1 the following year. If the person notified is not the current 69.2 owner of the property, the treasurer may collect the amounts due 69.3 under the revenue recapture act in chapter 270A, or use any of 69.4 the powers granted in sections 277.20 and 277.21 without 69.5 exclusion, to enforce payment of the benefits, penalty, 69.6 interest, and costs, as if those amounts were delinquent tax 69.7 obligations of the person who owned the property at the time the 69.8 application related to the improperly allowed homestead was 69.9 filed. The treasurer may relieve a prior owner of personal 69.10 liability for the benefits, penalty, interest, and costs, and 69.11 instead extend those amounts on the tax lists against the 69.12 property for taxes payable in the following year to the extent 69.13 that the current owner agrees in writing. 69.14 (i) Any amount of homestead benefits recovered by the 69.15 county from the property owner shall be distributed to the 69.16 county, city or town, and school district where the property is 69.17 located in the same proportion that each taxing district's levy 69.18 was to the total of the three taxing districts' levy for the 69.19 current year. Any amount recovered attributable to taconite 69.20 homestead credit shall be transmitted to the St. Louis county 69.21 auditor to be deposited in the taconite property tax relief 69.22 account. Any amount recovered that is attributable to 69.23 supplemental homestead credit is to be transmitted to the 69.24 commissioner of revenue for deposit in the general fund of the 69.25 state treasury. The total amount of penalty collected must be 69.26 deposited in the county general fund. 69.27 (j) If a property owner has applied for more than one 69.28 homestead and the county assessors cannot determine which 69.29 property should be classified as homestead, the county assessors 69.30 will refer the information to the commissioner. The 69.31 commissioner shall make the determination and notify the 69.32 counties within 60 days. 69.33 (k) In addition to lists of homestead properties, the 69.34 commissioner may ask the counties to furnish lists of all 69.35 properties and the record owners. 69.36 Sec. 10. Minnesota Statutes 1994, section 273.13, 70.1 subdivision 22, is amended to read: 70.2 Subd. 22. [CLASS 1.] (a) Except as provided in subdivision 70.3 23, real estate which is residential and used for homestead 70.4 purposes is class 1. The market value of class 1a property must 70.5 be determined based upon the value of the house, garage, and 70.6 land. 70.7 The first $72,000 of market value of class 1a property has 70.8 a net class rate of one percent of its market value and a gross 70.9 class rate of 2.17 percent of its market value. For taxes 70.10 payable in 1992, the market value of class 1a property that 70.11 exceeds $72,000 but does not exceed $115,000 has a class rate of 70.12 two percent of its market value; and the market value of class 70.13 1a property that exceeds $115,000 has a class rate of 2.5 70.14 percent of its market value. For taxes payable in 1993 and 70.15 thereafter, the market value of class 1a property that exceeds 70.16 $72,000 has a class rate of two percent. 70.17 (b) Class 1b property includes homestead real estate or 70.18 homestead manufactured homes used for the purposes of a 70.19 homestead by 70.20 (1) any blind person, or the blind person and the blind 70.21 person's spouse; or 70.22 (2) any person, hereinafter referred to as "veteran," who: 70.23 (i) served in the active military or naval service of the 70.24 United States; and 70.25 (ii) is entitled to compensation under the laws and 70.26 regulations of the United States for permanent and total 70.27 service-connected disability due to the loss, or loss of use, by 70.28 reason of amputation, ankylosis, progressive muscular 70.29 dystrophies, or paralysis, of both lower extremities, such as to 70.30 preclude motion without the aid of braces, crutches, canes, or a 70.31 wheelchair; and 70.32 (iii) has acquired a special housing unit with special 70.33 fixtures or movable facilities made necessary by the nature of 70.34 the veteran's disability, or the surviving spouse of the 70.35 deceased veteran for as long as the surviving spouse retains the 70.36 special housing unit as a homestead; or 71.1 (3) any person who: 71.2 (i) is permanently and totally disabled and 71.3 (ii) receives 90 percent or more of total income from 71.4 (A) aid from any state as a result of that disability; or 71.5 (B) supplemental security income for the disabled; or 71.6 (C) workers' compensation based on a finding of total and 71.7 permanent disability; or 71.8 (D) social security disability, including the amount of a 71.9 disability insurance benefit which is converted to an old age 71.10 insurance benefit and any subsequent cost of living increases; 71.11 or 71.12 (E) aid under the federal Railroad Retirement Act of 1937, 71.13 United States Code Annotated, title 45, section 228b(a)5; or 71.14 (F) a pension from any local government retirement fund 71.15 located in the state of Minnesota as a result of that 71.16 disability; or 71.17 (G) pension, annuity, or other income paid as a result of 71.18 that disability from a private pension or disability plan, 71.19 including employer, employee, union, and insurance plans and 71.20 (iii) has household income as defined in section 290A.03, 71.21 subdivision 5, of $50,000 or less; or 71.22 (4) any person who is permanently and totally disabled and 71.23 whose household income as defined in section 290A.03, 71.24 subdivision 5, is 150 percent or less of the federal poverty 71.25 level. 71.26 Property is classified and assessed under clause (4) only 71.27 if the government agency or income-providing source certifies, 71.28 upon the request of the homestead occupant, that the homestead 71.29 occupant satisfies the disability requirements of this paragraph. 71.30 Property is classified and assessed pursuant to clause (1) 71.31 only if the commissioner of economic security certifies to the 71.32 assessor that the homestead occupant satisfies the requirements 71.33 of this paragraph. 71.34 Permanently and totally disabled for the purpose of this 71.35 subdivision means a condition which is permanent in nature and 71.36 totally incapacitates the person from working at an occupation 72.1 which brings the person an income. The first $32,000 market 72.2 value of class 1b property has a net class rate of .45 percent 72.3 of its market value and a gross class rate of .87 percent of its 72.4 market value. The remaining market value of class 1b property 72.5 has a gross or net class rate using the rates for class 1 or 72.6 class 2a property, whichever is appropriate, of similar market 72.7 value. 72.8 (c) Class 1c property is commercial use real property that 72.9 abuts a lakeshore line and is devoted to temporary and seasonal 72.10 residential occupancy for recreational purposes but not devoted 72.11 to commercial purposes for more than 250 days in the year 72.12 preceding the year of assessment, and that includes a portion 72.13 used as a homestead by the owner, which includes a dwelling 72.14 occupied as a homestead by a shareholder of a corporation that 72.15 owns the resort or a partner in a partnership that owns the 72.16 resort, even if the title to the homestead is held by the 72.17 corporation or partnership. For purposes of this clause, 72.18 property is devoted to a commercial purpose on a specific day if 72.19 any portion of the property, excluding the portion used 72.20 exclusively as a homestead, is used for residential occupancy 72.21 and a fee is charged for residential occupancy. Class 1c 72.22 property has a class rate of one percent of total market value 72.23 for taxes payable in 1993 and thereafter with the following 72.24 limitation: the area of the property must not exceed 100 feet 72.25 of lakeshore footage for each cabin or campsite located on the 72.26 property up to a total of 800 feet and 500 feet in depth, 72.27 measured away from the lakeshore. 72.28 Sec. 11. Minnesota Statutes 1994, section 273.13, 72.29 subdivision 23, is amended to read: 72.30 Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural 72.31 land including any improvements that is homesteaded. The market 72.32 value of the house and garage and immediately surrounding one 72.33 acre of land has the same class rates as class 1a property under 72.34 subdivision 22. The value of the remaining land including 72.35 improvements up to $115,000 has a net class rate of .45 percent 72.36 of market value and a gross class rate of 1.75 percent of market 73.1 value. The remaining value of class 2a property over $115,000 73.2 of market value that does not exceed 320 acres has a net class 73.3 rate of one percent of market value, and a gross class rate of 73.4 2.25 percent of market value. The remaining property over the 73.5 $115,000 market value in excess of 320 acres has a class rate of 73.6 1.5 percent of market value, and a gross class rate of 2.25 73.7 percent of market value. 73.8 (b) Class 2b property is (1) real estate, rural in 73.9 character and used exclusively for growing trees for timber, 73.10 lumber, and wood and wood products; (2) real estate that is not 73.11 improved with a structure and is used exclusively for growing 73.12 trees for timber, lumber, and wood and wood products, if the 73.13 owner has participated or is participating in a cost-sharing 73.14 program for afforestation, reforestation, or timber stand 73.15 improvement on that particular property, administered or 73.16 coordinated by the commissioner of natural resources; (3) real 73.17 estate that is nonhomestead agricultural land; or (4) a landing 73.18 area or public access area of a privately owned public use 73.19 airport. Class 2b property has a net class rate of 1.5 percent 73.20 of market value, and a gross class rate of 2.25 percent of 73.21 market value. 73.22 (c) Agricultural land as used in this section means 73.23 contiguous acreage of ten acres or more, primarily used during 73.24 the preceding year for agricultural purposes. Agricultural use 73.25 may include pasture, timber, waste, unusable wild land, and land 73.26 included in state or federal farm or conservation programs. 73.27 "Agricultural purposes" as used in this section means the 73.28 raising or cultivation of agricultural products. Land enrolled 73.29 in the Reinvest in Minnesota program under sections 103F.505 to 73.30 103F.531 or the federal Conservation Reserve Program as 73.31 contained in Public Law Number 99-198, and consisting of a 73.32 minimum of ten contiguous acres, shall be classified as 73.33 agricultural. Agricultural classification for property shall be 73.34 determined with respect to the use of the whole parcel, and not 73.35 based upon the market value of any residential structures on the 73.36 parcel or contiguous parcels under the same ownership. 74.1 (d) Real estate of less than ten acres used principally for 74.2 raising or cultivating agricultural products, shall be 74.3 considered as agricultural land, if it is not used primarily for 74.4 residential purposes. 74.5 (e) The term "agricultural products" as used in this 74.6 subdivision includes: 74.7 (1) livestock, dairy animals, dairy products, poultry and 74.8 poultry products, fur-bearing animals, horticultural and nursery 74.9 stock described in sections 18.44 to 18.61, fruit of all kinds, 74.10 vegetables, forage, grains, bees, and apiary products by the 74.11 owner; 74.12 (2) fish bred for sale and consumption if the fish breeding 74.13 occurs on land zoned for agricultural use; 74.14 (3) the commercial boarding of horses if the boarding is 74.15 done in conjunction with raising or cultivating agricultural 74.16 products as defined in clause (1); 74.17 (4) property which is owned and operated by nonprofit 74.18 organizations used for equestrian activities, excluding racing; 74.19 and 74.20 (5) game birds and waterfowl bred and raised for use on a 74.21 shooting preserve licensed under section 97A.115. 74.22 (f) If a parcel used for agricultural purposes is also used 74.23 for commercial or industrial purposes, including but not limited 74.24 to: 74.25 (1) wholesale and retail sales; 74.26 (2) processing of raw agricultural products or other goods; 74.27 (3) warehousing or storage of processed goods; and 74.28 (4) office facilities for the support of the activities 74.29 enumerated in clauses (1), (2), and (3), 74.30 the assessor shall classify the part of the parcel used for 74.31 agricultural purposes as class 1b, 2a, or 2b, whichever is 74.32 appropriate, and the remainder in the class appropriate to its 74.33 use. The grading, sorting, and packaging of raw agricultural 74.34 products for first sale is considered an agricultural purpose. 74.35 A greenhouse or other building where horticultural or nursery 74.36 products are grown that is also used for the conduct of retail 75.1 sales must be classified as agricultural if it is primarily used 75.2 for the growing of horticultural or nursery products from seed, 75.3 cuttings, or roots and occasionally as a showroom for the retail 75.4 sale of those products. Use of a greenhouse or building only 75.5 for the display of already grown horticultural or nursery 75.6 products does not qualify as an agricultural purpose. 75.7 The assessor shall determine and list separately on the 75.8 records the market value of the homestead dwelling and the one 75.9 acre of land on which that dwelling is located. If any farm 75.10 buildings or structures are located on this homesteaded acre of 75.11 land, their market value shall not be included in this separate 75.12 determination. 75.13 (g) To qualify for classification under paragraph (b), 75.14 clause (4), a privately owned public use airport must be 75.15 licensed as a public airport under section 360.018. For 75.16 purposes of paragraph (b), clause (4), "landing area" means that 75.17 part of a privately owned public use airport properly cleared, 75.18 regularly maintained, and made available to the public for use 75.19 by aircraft and includes runways, taxiways, aprons, and sites 75.20 upon which are situated landing or navigational aids. A landing 75.21 area also includes land underlying both the primary surface and 75.22 the approach surfaces that comply with all of the following: 75.23 (i) the land is properly cleared and regularly maintained 75.24 for the primary purposes of the landing, taking off, and taxiing 75.25 of aircraft; but that portion of the land that contains 75.26 facilities for servicing, repair, or maintenance of aircraft is 75.27 not included as a landing area; 75.28 (ii) the land is part of the airport property; and 75.29 (iii) the land is not used for commercial or residential 75.30 purposes. 75.31 The land contained in a landing area under paragraph (b), clause 75.32 (4), must be described and certified by the commissioner of 75.33 transportation. The certification is effective until it is 75.34 modified, or until the airport or landing area no longer meets 75.35 the requirements of paragraph (b), clause (4). For purposes of 75.36 paragraph (b), clause (4), "public access area" means property 76.1 used as an aircraft parking ramp, apron, or storage hangar, or 76.2 an arrival and departure building in connection with the airport. 76.3 Sec. 12. Minnesota Statutes 1995 Supplement, section 76.4 273.13, subdivision 25, is amended to read: 76.5 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 76.6 estate containing four or more units and used or held for use by 76.7 the owner or by the tenants or lessees of the owner as a 76.8 residence for rental periods of 30 days or more. Class 4a also 76.9 includes hospitals licensed under sections 144.50 to 144.56, 76.10 other than hospitals exempt under section 272.02, and contiguous 76.11 property used for hospital purposes, without regard to whether 76.12 the property has been platted or subdivided. Class 4a property 76.13 in a city with a population of 5,000 or less, that is (1) 76.14 located outside of the metropolitan area, as defined in section 76.15 473.121, subdivision 2, or outside any county contiguous to the 76.16 metropolitan area, and (2) whose city boundary is at least 15 76.17 miles from the boundary of any city with a population greater 76.18 than 5,000 has a class rate of 2.3 percent of market value for 76.19 taxes payable in 1996 and thereafter. All other class 4a 76.20 property has a class rate of 3.4 percent of market value for 76.21 taxes payable in 1996 and thereafter. For purposes of this 76.22 paragraph, population has the same meaning given in section 76.23 477A.011, subdivision 3. 76.24 (b) Class 4b includes: 76.25 (1) residential real estate containing less than four 76.26 units, other than seasonal residential, and recreational; 76.27 (2) manufactured homes not classified under any other 76.28 provision; 76.29 (3) a dwelling, garage, and surrounding one acre of 76.30 property on a nonhomestead farm classified under subdivision 23, 76.31 paragraph (b). 76.32 Class 4b property has a class rate of 2.8 percent of market 76.33 value for taxes payable in 1992, 2.5 percent of market value for 76.34 taxes payable in 1993, and 2.3 percent of market value for taxes 76.35 payable in 1994 and thereafter. 76.36 (c) Class 4c property includes: 77.1 (1) a structure that is: 77.2 (i) situated on real property that is used for housing for 77.3 the elderly or for low- and moderate-income families as defined 77.4 in Title II, as amended through December 31, 1990, of the 77.5 National Housing Act or the Minnesota housing finance agency law 77.6 of 1971, as amended, or rules promulgated by the agency and 77.7 financed by a direct federal loan or federally insured loan made 77.8 pursuant to Title II of the Act; or 77.9 (ii) situated on real property that is used for housing the 77.10 elderly or for low- and moderate-income families as defined by 77.11 the Minnesota housing finance agency law of 1971, as amended, or 77.12 rules adopted by the agency pursuant thereto and financed by a 77.13 loan made by the Minnesota housing finance agency pursuant to 77.14 the provisions of the act. 77.15 This clause applies only to property of a nonprofit or 77.16 limited dividend entity. Property is classified as class 4c 77.17 under this clause for 15 years from the date of the completion 77.18 of the original construction or substantial rehabilitation, or 77.19 for the original term of the loan. 77.20 (2) a structure that is: 77.21 (i) situated upon real property that is used for housing 77.22 lower income families or elderly or handicapped persons, as 77.23 defined in section 8 of the United States Housing Act of 1937, 77.24 as amended; and 77.25 (ii) owned by an entity which has entered into a housing 77.26 assistance payments contract under section 8 which provides 77.27 assistance for 100 percent of the dwelling units in the 77.28 structure, other than dwelling units intended for management or 77.29 maintenance personnel. Property is classified as class 4c under 77.30 this clause for the term of the housing assistance payments 77.31 contract, including all renewals, or for the term of its 77.32 permanent financing, whichever is shorter; and 77.33 (3) a qualified low-income building as defined in section 77.34 42(c)(2) of the Internal Revenue Code of 1986, as amended 77.35 through December 31, 1990, that (i) receives a low-income 77.36 housing credit under section 42 of the Internal Revenue Code of 78.1 1986, as amended through December 31, 1990; or (ii) meets the 78.2 requirements of that section and receives public financing, 78.3 except financing provided under sections 469.174 to 469.179, 78.4 which contains terms restricting the rents; or (iii) meets the 78.5 requirements of section 273.1317. Classification pursuant to 78.6 this clause is limited to a term of 15 years. The public 78.7 financing received must be from at least one of the following 78.8 sources: government issued bonds exempt from taxes under 78.9 section 103 of the Internal Revenue Code of 1986, as amended 78.10 through December 31, 1993, the proceeds of which are used for 78.11 the acquisition or rehabilitation of the building; programs 78.12 under section 221(d)(3), 202, or 236, of Title II of the 78.13 National Housing Act; rental housing program funds under Section 78.14 8 of the United States Housing Act of 1937 or the market rate 78.15 family graduated payment mortgage program funds administered by 78.16 the Minnesota housing finance agency that are used for the 78.17 acquisition or rehabilitation of the building; public financing 78.18 provided by a local government used for the acquisition or 78.19 rehabilitation of the building, including grants or loans from 78.20 federal community development block grants, HOME block grants, 78.21 or residential rental bonds issued under chapter 474A; or other 78.22 rental housing program funds provided by the Minnesota housing 78.23 finance agency for the acquisition or rehabilitation of the 78.24 building. 78.25 For all properties described in clauses (1), (2), and (3) 78.26 and in paragraph (d), the market value determined by the 78.27 assessor must be based on the normal approach to value using 78.28 normal unrestricted rents unless the owner of the property 78.29 elects to have the property assessed under Laws 1991, chapter 78.30 291, article 1, section 55. If the owner of the property elects 78.31 to have the market value determined on the basis of the actual 78.32 restricted rents, as provided in Laws 1991, chapter 291, article 78.33 1, section 55, the property will be assessed at the rate 78.34 provided for class 4a or class 4b property, as appropriate. 78.35 Properties described in clauses (1)(ii), (3), and (4) may apply 78.36 to the assessor for valuation under Laws 1991, chapter 291, 79.1 article 1, section 55. The land on which these structures are 79.2 situated has the class rate given in paragraph (b) if the 79.3 structure contains fewer than four units, and the class rate 79.4 given in paragraph (a) if the structure contains four or more 79.5 units. This clause applies only to the property of a nonprofit 79.6 or limited dividend entity. 79.7 (4) a parcel of land, not to exceed one acre, and its 79.8 improvements or a parcel of unimproved land, not to exceed one 79.9 acre, if it is owned by a neighborhood real estate trust and at 79.10 least 60 percent of the dwelling units, if any, on all land 79.11 owned by the trust are leased to or occupied by lower income 79.12 families or individuals. This clause does not apply to any 79.13 portion of the land or improvements used for nonresidential 79.14 purposes. For purposes of this clause, a lower income family is 79.15 a family with an income that does not exceed 65 percent of the 79.16 median family income for the area, and a lower income individual 79.17 is an individual whose income does not exceed 65 percent of the 79.18 median individual income for the area, as determined by the 79.19 United States Secretary of Housing and Urban Development. For 79.20 purposes of this clause, "neighborhood real estate trust" means 79.21 an entity which is certified by the governing body of the 79.22 municipality in which it is located to have the following 79.23 characteristics: 79.24 (a) it is a nonprofit corporation organized under chapter 79.25 317A; 79.26 (b) it has as its principal purpose providing housing for 79.27 lower income families in a specific geographic community 79.28 designated in its articles or bylaws; 79.29 (c) it limits membership with voting rights to residents of 79.30 the designated community; and 79.31 (d) it has a board of directors consisting of at least 79.32 seven directors, 60 percent of whom are members with voting 79.33 rights and, to the extent feasible, 25 percent of whom are 79.34 elected by resident members of buildings owned by the trust; and 79.35 (5) except as provided in subdivision 22, paragraph (c), 79.36 real property devoted to temporary and seasonal residential 80.1 occupancy for recreation purposes, including real property 80.2 devoted to temporary and seasonal residential occupancy for 80.3 recreation purposes and not devoted to commercial purposes for 80.4 more than 250 days in the year preceding the year of 80.5 assessment. For purposes of this clause, property is devoted to 80.6 a commercial purpose on a specific day if any portion of the 80.7 property is used for residential occupancy, and a fee is charged 80.8 for residential occupancy. Class 4c also includes commercial 80.9 use real property used exclusively for recreational purposes in 80.10 conjunction with class 4c property devoted to temporary and 80.11 seasonal residential occupancy for recreational purposes, up to 80.12 a total of two acres, provided the property is not devoted to 80.13 commercial recreational use for more than 250 days in the year 80.14 preceding the year of assessment and is located within two miles 80.15 of the class 4c property with which it is used. Class 4c 80.16 property classified in this clause also includes the remainder 80.17 of class 1c resorts. Owners of real property devoted to 80.18 temporary and seasonal residential occupancy for recreation 80.19 purposes and all or a portion of which was devoted to commercial 80.20 purposes for not more than 250 days in the year preceding the 80.21 year of assessment desiring classification as class 1c or 4c, 80.22 must submit a declaration to the assessor designating the cabins 80.23 or units occupied for 250 days or less in the year preceding the 80.24 year of assessment by January 15 of the assessment year. Those 80.25 cabins or units and a proportionate share of the land on which 80.26 they are located will be designated class 1c or 4c as otherwise 80.27 provided. The remainder of the cabins or units and a 80.28 proportionate share of the land on which they are located will 80.29 be designated as class 3a. The first $100,000 of the market 80.30 value of the remainder of the cabins or units and a 80.31 proportionate share of the land on which they are located shall 80.32 have a class rate of three percent. The owner of property 80.33 desiring designation as class 1c or 4c property must provide 80.34 guest registers or other records demonstrating that the units 80.35 for which class 1c or 4c designation is sought were not occupied 80.36 for more than 250 days in the year preceding the assessment if 81.1 so requested. The portion of a property operated as a (1) 81.2 restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 81.3 facility operated on a commercial basis not directly related to 81.4 temporary and seasonal residential occupancy for recreation 81.5 purposes shall not qualify for class 1c or 4c; 81.6 (6) real property up to a maximum of one acre of land owned 81.7 by a nonprofit community service oriented organization; provided 81.8 that the property is not used for a revenue-producing activity 81.9 for more than six days in the calendar year preceding the year 81.10 of assessment and the property is not used for residential 81.11 purposes on either a temporary or permanent basis. For purposes 81.12 of this clause, a "nonprofit community service oriented 81.13 organization" means any corporation, society, association, 81.14 foundation, or institution organized and operated exclusively 81.15 for charitable, religious, fraternal, civic, or educational 81.16 purposes, and which is exempt from federal income taxation 81.17 pursuant to section 501(c)(3), (10), or (19) of the Internal 81.18 Revenue Code of 1986, as amended through December 31, 1990. For 81.19 purposes of this clause, "revenue-producing activities" shall 81.20 include but not be limited to property or that portion of the 81.21 property that is used as an on-sale intoxicating liquor or 3.2 81.22 percent malt liquor establishment licensed under chapter 340A, a 81.23 restaurant open to the public, bowling alley, a retail store, 81.24 gambling conducted by organizations licensed under chapter 349, 81.25 an insurance business, or office or other space leased or rented 81.26 to a lessee who conducts a for-profit enterprise on the 81.27 premises. Any portion of the property which is used for 81.28 revenue-producing activities for more than six days in the 81.29 calendar year preceding the year of assessment shall be assessed 81.30 as class 3a. The use of the property for social events open 81.31 exclusively to members and their guests for periods of less than 81.32 24 hours, when an admission is not charged nor any revenues are 81.33 received by the organization shall not be considered a 81.34 revenue-producing activity; 81.35 (7) post-secondary student housing of not more than one 81.36 acre of land that is owned by a nonprofit corporation organized 82.1 under chapter 317A and is used exclusively by a student 82.2 cooperative, sorority, or fraternity for on-campus housing or 82.3 housing located within two miles of the border of a college 82.4 campus; and 82.5 (8) manufactured home parks as defined in section 327.14, 82.6 subdivision 3. 82.7 Class 4c property has a class rate of 2.3 percent of market 82.8 value, except that (i) for each parcel of seasonal residential 82.9 recreational property not used for commercial purposes under 82.10 clause (5) the first $72,000 of market value on each parcel has 82.11 a class rate of1.91.75 percent for taxes payable in 1997 and 82.121.81.5 percent for taxes payable in 1998 and thereafter, and 82.13 the market value of each parcel that exceeds $72,000 has a class 82.14 rate of 2.5 percent, and (ii) manufactured home parks assessed 82.15 under clause (8) have a class rate of two percent for taxes 82.16 payable in 1996, and thereafter. 82.17 (d) Class 4d property includes: 82.18 (1) a structure that is: 82.19 (i) situated on real property that is used for housing for 82.20 the elderly or for low and moderate income families as defined 82.21 by the Farmers Home Administration; 82.22 (ii) located in a municipality of less than 10,000 82.23 population; and 82.24 (iii) financed by a direct loan or insured loan from the 82.25 Farmers Home Administration. Property is classified under this 82.26 clause for 15 years from the date of the completion of the 82.27 original construction or for the original term of the loan. 82.28 The class rates in paragraph (c), clauses (1), (2), and (3) 82.29 and this clause apply to the properties described in them, only 82.30 in proportion to occupancy of the structure by elderly or 82.31 handicapped persons or low and moderate income families as 82.32 defined in the applicable laws unless construction of the 82.33 structure had been commenced prior to January 1, 1984; or the 82.34 project had been approved by the governing body of the 82.35 municipality in which it is located prior to June 30, 1983; or 82.36 financing of the project had been approved by a federal or state 83.1 agency prior to June 30, 1983. For those properties, 4c or 4d 83.2 classification is available only for those units meeting the 83.3 requirements of section 273.1318. 83.4 Classification under this clause is only available to 83.5 property of a nonprofit or limited dividend entity. 83.6 In the case of a structure financed or refinanced under any 83.7 federal or state mortgage insurance or direct loan program 83.8 exclusively for housing for the elderly or for housing for the 83.9 handicapped, a unit shall be considered occupied so long as it 83.10 is actually occupied by an elderly or handicapped person or, if 83.11 vacant, is held for rental to an elderly or handicapped person. 83.12 (2) For taxes payable in 1992, 1993, and 1994, only, 83.13 buildings and appurtenances, together with the land upon which 83.14 they are located, leased by the occupant under the community 83.15 lending model lease-purchase mortgage loan program administered 83.16 by the Federal National Mortgage Association, provided the 83.17 occupant's income is no greater than 60 percent of the county or 83.18 area median income, adjusted for family size and the building 83.19 consists of existing single family or duplex housing. The lease 83.20 agreement must provide for a portion of the lease payment to be 83.21 escrowed as a nonrefundable down payment on the housing. To 83.22 qualify under this clause, the taxpayer must apply to the county 83.23 assessor by May 30 of each year. The application must be 83.24 accompanied by an affidavit or other proof required by the 83.25 assessor to determine qualification under this clause. 83.26 (3) Qualifying buildings and appurtenances, together with 83.27 the land upon which they are located, leased for a period of up 83.28 to five years by the occupant under a lease-purchase program 83.29 administered by the Minnesota housing finance agency or a 83.30 housing and redevelopment authority authorized under sections 83.31 469.001 to 469.047, provided the occupant's income is no greater 83.32 than 80 percent of the county or area median income, adjusted 83.33 for family size, and the building consists of two or less 83.34 dwelling units. The lease agreement must provide for a portion 83.35 of the lease payment to be escrowed as a nonrefundable down 83.36 payment on the housing. The administering agency shall verify 84.1 the occupants income eligibility and certify to the county 84.2 assessor that the occupant meets the income criteria under this 84.3 paragraph. To qualify under this clause, the taxpayer must 84.4 apply to the county assessor by May 30 of each year. For 84.5 purposes of this section, "qualifying buildings and 84.6 appurtenances" shall be defined as one or two unit residential 84.7 buildings which are unoccupied and have been abandoned and 84.8 boarded for at least six months. 84.9 Class 4d property has a class rate of two percent of market 84.10 value except that property classified under clause (3), shall 84.11 have the same class rate as class 1a property. 84.12 (e) Residential rental property that would otherwise be 84.13 assessed as class 4 property under paragraph (a); paragraph (b), 84.14 clauses (1) and (3); paragraph (c), clause (1), (2), (3), or 84.15 (4), is assessed at the class rate applicable to it under 84.16 Minnesota Statutes 1988, section 273.13, if it is found to be a 84.17 substandard building under section 273.1316. Residential rental 84.18 property that would otherwise be assessed as class 4 property 84.19 under paragraph (d) is assessed at 2.3 percent of market value 84.20 if it is found to be a substandard building under section 84.21 273.1316. 84.22 (f) Class 4e property consists of the residential portion 84.23 of any structure located within a city that was converted from 84.24 nonresidential use to residential use, provided that: 84.25 (1) the structure had formerly been used as a warehouse; 84.26 (2) the structure was originally constructed prior to 1940; 84.27 (3) the conversion was done after December 31, 1995, but 84.28 before January 1, 2003; and 84.29 (4) the conversion involved an investment of at least 84.30 $25,000 per residential unit. 84.31 Class 4e property has a class rate of 2.3 percent, provided 84.32 that a structure is eligible for class 4e classification only in 84.33 the 12 assessment years immediately following the conversion. 84.34 Sec. 13. Minnesota Statutes 1995 Supplement, section 84.35 273.1398, subdivision 1, is amended to read: 84.36 Subdivision 1. [DEFINITIONS.] (a) In this section, the 85.1 terms defined in this subdivision have the meanings given them. 85.2 (b) "Unique taxing jurisdiction" means the geographic area 85.3 subject to the same set of local tax rates. 85.4 (c)"Net tax capacity" means the product of (i) the85.5appropriate net class rates for the year in which the aid is85.6payable, except that for aid payable in 1996 the class rate85.7applicable to all class 4a shall be 3.4 percent; and (ii)85.8estimated market values for the assessment two years prior to85.9that in which aid is payable. "Total net tax capacity" means85.10the net tax capacities for all property within the unique taxing85.11jurisdiction. The total net tax capacity used shall be reduced85.12by the sum of (1) the unique taxing jurisdiction's net tax85.13capacity of commercial industrial property as defined in section85.14473F.02, subdivision 3, multiplied by the ratio determined85.15pursuant to section 473F.08, subdivision 6, for the85.16municipality, as defined in section 473F.02, subdivision 8, in85.17which the unique taxing jurisdiction is located, (2) the net tax85.18capacity of the captured value of tax increment financing85.19districts as defined in section 469.177, subdivision 2, and (3)85.20the net tax capacity of transmission lines deducted from a local85.21government's total net tax capacity under section 273.425. For85.22purposes of determining the net tax capacity of property85.23referred to in clauses (1), (2), and (3), the net tax capacity85.24shall be multiplied by the ratio of the highest class rate for85.25class 3a property for taxes payable in the year in which the aid85.26is payable to the highest class rate for class 3a property in85.27the prior year. Net tax capacity cannot be less than zero.85.28(d)"Previous net tax capacity" means the product of the 85.29 appropriate net class rates for the year previous to the year in 85.30 which the aid is payable, and estimated market values for the 85.31 assessment two years prior to that in which aid is payable. 85.32 "Total previous net tax capacity" means the previous net tax 85.33 capacities for all property within the unique taxing 85.34 jurisdiction. The total previous net tax capacity shall be 85.35 reduced by the sum of (1) the unique taxing jurisdiction's 85.36 previous net tax capacity of commercial-industrial property as 86.1 defined in section 473F.02, subdivision 3, multiplied by the 86.2 ratio determined pursuant to section 473F.08, subdivision 6, for 86.3 the municipality, as defined in section 473F.02, subdivision 8, 86.4 in which the unique taxing jurisdiction is located, (2) the 86.5 previous net tax capacity of the captured value of tax increment 86.6 financing districts as defined in section 469.177, subdivision 86.7 2, and (3) the previous net tax capacity of transmission lines 86.8 deducted from a local government's total net tax capacity under 86.9 section 273.425. Previous net tax capacity cannot be less than 86.10 zero. 86.11(e)(d) "Equalized market values" are market values that 86.12 have been equalized by dividing the assessor's estimated market 86.13 value for the second year prior to that in which the aid is 86.14 payable by the assessment sales ratios determined by class in 86.15 the assessment sales ratio study conducted by the department of 86.16 revenue pursuant to section 124.2131 in the second year prior to 86.17 that in which the aid is payable. The equalized market values 86.18 shall equal the unequalized market values divided by the 86.19 assessment sales ratio. 86.20(f)(e) "Equalized school levies" means the amounts levied 86.21 for: 86.22 (1) general education under section 124A.23, subdivision 2; 86.23 (2) supplemental revenue under section 124A.22, subdivision 86.24 8a; 86.25 (3)capital expenditure facilities revenue under section86.26124.243, subdivision 3transition revenue under section 124A.22, 86.27 subdivision 13c; 86.28 (4)capital expenditure equipment revenue under section86.29124.244, subdivision 2;86.30(5)basic transportation under section 124.226, subdivision 86.31 1; and 86.32(6)(5) referendum revenue under section 124A.03. 86.33(g)(f) "Current local tax rate" means the quotient derived 86.34 by dividing the taxes levied within a unique taxing jurisdiction 86.35 for taxes payable in the year prior to that for which aids are 86.36 being calculated by the total previous net tax capacity of the 87.1 unique taxing jurisdiction. 87.2(h)(g) For purposes of calculating and allocating 87.3 homestead and agricultural credit aid authorized pursuant to 87.4 subdivision 2 and the disparity reduction aid authorized in 87.5 subdivision 3, "gross taxes levied on all properties," "gross 87.6 taxes," or "taxes levied" means the total net tax capacity based 87.7 taxes levied on all properties except that levied on the 87.8 captured value of tax increment districts as defined in section 87.9 469.177, subdivision 2, and that levied on the portion of 87.10 commercial industrial properties' assessed value or gross tax 87.11 capacity, as defined in section 473F.02, subdivision 3, subject 87.12 to the areawide tax as provided in section 473F.08, subdivision 87.13 6, in a unique taxing jurisdiction. "Gross taxes" are before 87.14 any reduction for disparity reduction aid but "taxes levied" are 87.15 after any reduction for disparity reduction aid. Gross taxes 87.16 levied or taxes levied cannot be less than zero. 87.17 "Taxes levied" excludes equalized school levies. 87.18(i) "Human services aids" means:87.19(1) aid to families with dependent children under sections87.20256.82, subdivision 1, and 256.935, subdivision 1;87.21(2) medical assistance under sections 256B.041, subdivision87.225, and 256B.19, subdivision 1;87.23(3) general assistance medical care under section 256D.03,87.24subdivision 6;87.25(4) general assistance under section 256D.03, subdivision87.262;87.27(5) work readiness under section 256D.03, subdivision 2;87.28(6) emergency assistance under section 256.871, subdivision87.296;87.30(7) Minnesota supplemental aid under section 256D.36,87.31subdivision 1;87.32(8) preadmission screening and alternative care grants;87.33(9) work readiness services under section 256D.051;87.34(10) case management services under section 256.736,87.35subdivision 13;87.36(11) general assistance claims processing, medical88.1transportation and related costs; and88.2(12) medical assistance, medical transportation and related88.3costs.88.4(j)(h) "Household adjustment factor" means the number of 88.5 households for the second most recent year preceding that in 88.6 which the aids are payable divided by the number of households 88.7 for the third most recent year. The household adjustment factor 88.8 cannot be less than one. 88.9(k)(i) "Growth adjustment factor" means the household 88.10 adjustment factor in the case of counties. In the case of 88.11 cities, towns, school districts, and special taxing districts, 88.12 the growth adjustment factor equals one. The growth adjustment 88.13 factor cannot be less than one. 88.14(l) For aid payable in 1992 and subsequent years,(j) 88.15 "Homestead and agricultural credit base" means the previous 88.16 year's certified homestead and agricultural credit aid 88.17 determined under subdivision 2 less any permanent aid reduction 88.18 in the previous year to homestead and agricultural credit aid 88.19under section 477A.0132, plus, for aid payable in 1992, fiscal88.20disparity homestead and agricultural credit aid under88.21subdivision 2b. 88.22(m)(k) "Net tax capacity adjustment" means (1) thetotal88.23previous net tax capacity minus the total net tax capacitytax 88.24 base differential defined in subdivision 1a, multiplied by (2) 88.25 the unique taxing jurisdiction's current local tax rate. The 88.26 net tax capacity adjustment cannot be less than zero. 88.27(n)(l) "Fiscal disparity adjustment" meansthe difference88.28between (1)a taxing jurisdiction's fiscal disparity 88.29 distribution levy under section 473F.08, subdivision 3, clause 88.30 (a), for taxes payable in the year prior to that for which aids 88.31 are being calculated,and (2) the same distribution levy88.32 multiplied by the ratio of the tax base differential percent 88.33 referenced in subdivision 1a for the highest class rate for 88.34 class 3 property for taxes payable in the year prior to that for 88.35 which aids are being calculated to the highest class rate for 88.36 class 3 property for taxes payable in the second prior year to 89.1 that for which aids are being calculated. In the case of school 89.2 districts, the fiscal disparity distribution levy shall exclude 89.3 that part of the levy attributable to equalized school levies. 89.4 Sec. 14. Minnesota Statutes 1994, section 273.1398, is 89.5 amended by adding a subdivision to read: 89.6 Subd. 1a. [TAX BASE DIFFERENTIAL.] (a) For aids payable in 89.7 1997, the tax base differential is 0.25 percent of the 89.8 assessment year 1995 taxable market value of class 4c 89.9 noncommercial seasonal recreational residential property up to 89.10 $72,000. 89.11 (b) For aids payable in 1998, the tax base differential is 89.12 0.25 percent of the assessment year 1996 taxable market value of 89.13 class 4c noncommercial seasonal recreational residential 89.14 property up to $72,000. 89.15 Sec. 15. Minnesota Statutes 1994, section 273.1398, 89.16 subdivision 4, is amended to read: 89.17 Subd. 4. [DISPARITY REDUCTION CREDIT.] (a) Beginning with 89.18 taxes payable in 1989, class 4a, class 3a, and class 3b property 89.19 qualifies for a disparity reduction credit if: (1) the property 89.20 is located in a border city that has an enterprise zone 89.21 designated pursuant to section 469.168, subdivision 4; (2) the 89.22 property is located in a city with a population greater than 89.23 2,500 and less than 35,000 according to the 1980 decennial 89.24 census; (3) the city is adjacent to a city in another state or 89.25 immediately adjacent to a city adjacent to a city in another 89.26 state; and (4) the adjacent city in the other state has a 89.27 population of greater than 5,000 and less than 75,000. 89.28 (b) The credit is an amount sufficient to reduce (i) the 89.29 taxes levied on class 4a property tothree2.3 percent of the 89.30 property's market value and (ii) the tax on class 3a and class 89.31 3b property to 3.3 percent of market value. 89.32 (c) The county auditor shall annually certify the costs of 89.33 the credits to the department of revenue. The department shall 89.34 reimburse local governments for the property taxes foregone as 89.35 the result of the credits in proportion to their total levies. 89.36 Sec. 16. Minnesota Statutes 1995 Supplement, section 90.1 275.065, subdivision 3, is amended to read: 90.2 Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 90.3 county auditor shall prepare and the county treasurer shall 90.4 deliver after November 10 and on or before November 24 each 90.5 year, by first class mail to each taxpayer at the address listed 90.6 on the county's current year's assessment roll, a notice of 90.7 proposed property taxes and, in the case of a town, final 90.8 property taxes. 90.9 (b) The commissioner of revenue shall prescribe the form of 90.10 the notice. 90.11 (c) The notice must inform taxpayers that it contains the 90.12 amount of property taxes each taxing authority other than a town 90.13 proposes to collect for taxes payable the following year and, 90.14 for a town, the amount of its final levy. It must clearly state 90.15 that each taxing authority, including regional library districts 90.16 established under section 134.201, and including the 90.17 metropolitan taxing districts as defined in paragraph (i), but 90.18 excluding all other special taxing districts and towns, will 90.19 hold a public meeting to receive public testimony on the 90.20 proposed budget and proposed or final property tax levy, or, in 90.21 case of a school district, on the current budget and proposed 90.22 property tax levy. It must clearly state the time and place of 90.23 each taxing authority's meeting and an address where comments 90.24 will be received by mail. 90.25 (d) The notice must state for each parcel: 90.26 (1) the market value of the property as determined under 90.27 section 273.11, and used for computing property taxes payable in 90.28 the following year and for taxes payable in the current year; 90.29 and, in the case of residential property, whether the property 90.30 is classified as homestead or nonhomestead. The notice must 90.31 clearly inform taxpayers of the years to which the market values 90.32 apply and that the values are final values; 90.33 (2) by county, city or town, school district excess 90.34 referenda levy, remaining school district levy, regional library 90.35 district, if in existence, the total of the metropolitan special 90.36 taxing districts as defined in paragraph (i) and the sum of the 91.1 remaining special taxing districts, and as a total of the taxing 91.2 authorities, including all special taxing districts, the 91.3 proposed or, for a town, final net tax on the property for taxes 91.4 payable the following year and the actual tax for taxes payable 91.5 the current year. If a school district has certified under 91.6 section 124A.03, subdivision 2, that a referendum will be held 91.7 in the school district at the November general election, the 91.8 county auditor must note next to the school district's proposed 91.9 amount that a referendum is pending and that, if approved by the 91.10 voters, the tax amount may be higher than shown on the notice. 91.11 For the purposes of this subdivision, "school district excess 91.12 referenda levy" means school district taxes for operating 91.13 purposes approved at referendums, including those taxes based on 91.14 net tax capacity as well as those based on market value. 91.15 "School district excess referenda levy" does not include school 91.16 district taxes for capital expenditures approved at referendums 91.17 or school district taxes to pay for the debt service on bonds 91.18 approved at referenda. In the case of the city of Minneapolis, 91.19 the levy for the Minneapolis library board and the levy for 91.20 Minneapolis park and recreation shall be listed separately from 91.21 the remaining amount of the city's levy. In the case of a 91.22 parcel where tax increment or the fiscal disparities areawide 91.23 tax applies, the proposed tax levy on the captured value or the 91.24 proposed tax levy on the tax capacity subject to the areawide 91.25 tax must each be stated separately and not included in the sum 91.26 of the special taxing districts; and 91.27 (3) the increase or decrease in the amounts in clause (2) 91.28 from taxes payable in the current year to proposed or, for a 91.29 town, final taxes payable the following year, expressed as a 91.30 dollar amount and as a percentage. 91.31 (e) The notice must clearly state that the proposed or 91.32 final taxes do not include the following: 91.33 (1) special assessments; 91.34 (2) levies approved by the voters after the date the 91.35 proposed taxes are certified, including bond referenda, school 91.36 district levy referenda, and levy limit increase referenda; 92.1 (3) amounts necessary to pay cleanup or other costs due to 92.2 a natural disaster occurring after the date the proposed taxes 92.3 are certified; 92.4 (4) amounts necessary to pay tort judgments against the 92.5 taxing authority that become final after the date the proposed 92.6 taxes are certified; and 92.7 (5) the contamination tax imposed on properties which 92.8 received market value reductions for contamination. 92.9 (f) Except as provided in subdivision 7, failure of the 92.10 county auditor to prepare or the county treasurer to deliver the 92.11 notice as required in this section does not invalidate the 92.12 proposed or final tax levy or the taxes payable pursuant to the 92.13 tax levy. 92.14 (g) If the notice the taxpayer receives under this section 92.15 lists the property as nonhomestead and the homeowner provides 92.16 satisfactory documentation to the county assessor that the 92.17 property is owned andhas beenused as the owner's homestead 92.18prior to June 1 of that year, the assessor shall reclassify the 92.19 property to homestead for taxes payable in the following year. 92.20 (h) In the case of class 4 residential property used as a 92.21 residence for lease or rental periods of 30 days or more, the 92.22 taxpayer must either: 92.23 (1) mail or deliver a copy of the notice of proposed 92.24 property taxes to each tenant, renter, or lessee; or 92.25 (2) post a copy of the notice in a conspicuous place on the 92.26 premises of the property. 92.27 The notice must be mailed or posted by the taxpayer by 92.28 November 27 or within three days of receipt of the notice, 92.29 whichever is later. A taxpayer may notify the county treasurer 92.30 of the address of the taxpayer, agent, caretaker, or manager of 92.31 the premises to which the notice must be mailed in order to 92.32 fulfill the requirements of this paragraph. 92.33 (i) For purposes of this subdivision, subdivisions 5a and 92.34 6, "metropolitan special taxing districts" means the following 92.35 taxing districts in the seven-county metropolitan area that levy 92.36 a property tax for any of the specified purposes listed below: 93.1 (1) metropolitan council under section 473.132, 473.167, 93.2 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 93.3 (2) metropolitan airports commission under section 473.667, 93.4 473.671, or 473.672; and 93.5 (3) metropolitan mosquito control commission under section 93.6 473.711. 93.7 For purposes of this section, any levies made by the 93.8 regional rail authorities in the county of Anoka, Carver, 93.9 Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 93.10 398A shall be included with the appropriate county's levy and 93.11 shall be discussed at that county's public hearing. 93.12 Sec. 17. Minnesota Statutes 1994, section 275.065, 93.13 subdivision 5a, is amended to read: 93.14 Subd. 5a. [PUBLIC ADVERTISEMENT.] (a) A city that has a 93.15 population of more than1,0002,500, county, a metropolitan 93.16 special taxing district as defined in subdivision 3, paragraph 93.17 (i), a regional library district established under section 93.18 134.201, or school district shall advertise in a newspaper a 93.19 notice of its intent to adopt a budget and property tax levy or, 93.20 in the case of a school district, to review its current budget 93.21 and proposed property taxes payable in the following year, at a 93.22 public hearing. The notice must be published not less than two 93.23 business days nor more than six business days before the hearing. 93.24 The advertisement must be at least one-eighth page in size 93.25 of a standard-size or a tabloid-size newspaper. The 93.26 advertisement must not be placed in the part of the newspaper 93.27 where legal notices and classified advertisements appear. The 93.28 advertisement must be published in an official newspaper of 93.29 general circulation in the taxing authority. The newspaper 93.30 selected must be one of general interest and readership in the 93.31 community, and not one of limited subject matter. The 93.32 advertisement must appear in a newspaper that is published at 93.33 least once per week. 93.34 For purposes of this section, the metropolitan special 93.35 taxing district's advertisement must only be published in the 93.36 Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 94.1 (b) The advertisement must be in the following form, except 94.2 that the notice for a school district may include references to 94.3 the current budget in regard to proposed property taxes. 94.4 "NOTICE OF 94.5 PROPOSED PROPERTY TAXES 94.6 (City/County/School District/Metropolitan 94.7 Special Taxing District/Regional 94.8 Library District) of ......... 94.9 The governing body of ........ will soon hold budget hearings 94.10 and vote on the property taxes for (city/county/metropolitan 94.11 special taxing district/regional library district services that 94.12 will be provided in 199_/school district services that will be 94.13 provided in 199_ and 199_). 94.14 NOTICE OF PUBLIC HEARING: 94.15 All concerned citizens are invited to attend a public hearing 94.16 and express their opinions on the proposed (city/county/school 94.17 district/metropolitan special taxing district/regional library 94.18 district) budget and property taxes, or in the case of a school 94.19 district, its current budget and proposed property taxes, 94.20 payable in the following year. The hearing will be held on 94.21 (Month/Day/Year) at (Time) at (Location, Address)." 94.22 (c) A city with a population of1,000 or lessover 500 but 94.23 not more than 2,500 must advertise by posted notice as defined 94.24 in section 645.12, subdivision 1. The advertisement must be 94.25 posted at the time provided in paragraph (a). It must be in the 94.26 form required in paragraph (b). 94.27 (d) For purposes of this subdivision, the population of a 94.28 city is the most recent population as determined by the state 94.29 demographer under section 4A.02. 94.30 (e) The commissioner of revenue, subject to the approval of 94.31 the chairs of the house and senate tax committees, shall 94.32 prescribe the form and format of the advertisement. 94.33 (f) For calendar year 1993, each taxing authority required 94.34 to publish an advertisement must include on the advertisement a 94.35 statement that information on the increases or decreases of the 94.36 total budget, including employee and independent contractor 95.1 compensation in the prior year, current year, and proposed 95.2 budget year will be discussed at the hearing. 95.3 (g) Notwithstanding paragraph (f), for 1993, the 95.4 commissioner of revenue shall prescribe the form, format, and 95.5 content of an advertisement comparing current and proposed 95.6 expense budgets for the metropolitan council, the metropolitan 95.7 airports commission, and the metropolitan mosquito control 95.8 commission. The expense budget must include occupancy, 95.9 personnel, contractual and capital improvement expenses. The 95.10 form, format, and content of the advertisement must be approved 95.11 by the chairs of the house and senate tax committees prior to 95.12 publication. 95.13 Sec. 18. Minnesota Statutes 1995 Supplement, section 95.14 275.065, subdivision 6, is amended to read: 95.15 Subd. 6. [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 95.16 Between November 29 and December 20, the governing bodies ofthe95.17 a city that has a population over 500, county, metropolitan 95.18 special taxing districts as defined in subdivision 3, paragraph 95.19 (i), and regional library districts shall each hold a public 95.20 hearing to discuss and seek public comment on its final budget 95.21 and property tax levy for taxes payable in the following year, 95.22 and the governing body of the school district shall hold a 95.23 public hearing to review its current budget and proposed 95.24 property tax levy for taxes payable in the following year. The 95.25 metropolitan special taxing districts shall be required to hold 95.26 only a single joint public hearing, the location of which will 95.27 be determined by the affected metropolitan agencies. 95.28 At a subsequent hearing, each county, school district, 95.29 city, and metropolitan special taxing district may amend its 95.30 proposed property tax levy and must adopt a final property tax 95.31 levy. Each county, city, and metropolitan special taxing 95.32 district may also amend its proposed budget and must adopt a 95.33 final budget at the subsequent hearing. A school district is 95.34 not required to adopt its final budget at the subsequent 95.35 hearing. The subsequent hearing of a taxing authority must be 95.36 held on a date subsequent to the date of the taxing authority's 96.1 initial public hearing, or subsequent to the date of its 96.2 continuation hearing if a continuation hearing is held. The 96.3 subsequent hearing may be held at a regularly scheduled board or 96.4 council meeting or at a special meeting scheduled for the 96.5 purposes of the subsequent hearing. The subsequent hearing of a 96.6 taxing authority does not have to be coordinated by the county 96.7 auditor to prevent a conflict with an initial hearing, a 96.8 continuation hearing, or a subsequent hearing of any other 96.9 taxing authority. All subsequent hearings must be held prior to 96.10 five working days after December 20 of the levy year. 96.11 The time and place of the subsequent hearing must be 96.12 announced at the initial public hearing or at the continuation 96.13 hearing. 96.14 The property tax levy certified under section 275.07 by a 96.15 city, county, metropolitan special taxing district, regional 96.16 library district, or school district must not exceed the 96.17 proposed levy determined under subdivision 1, except by an 96.18 amount up to the sum of the following amounts: 96.19 (1) the amount of a school district levy whose voters 96.20 approved a referendum to increase taxes under section 124.82, 96.21 subdivision 3, 124A.03, subdivision 2, 124B.03, subdivision 2, 96.22 or 136C.411, after the proposed levy was certified; 96.23 (2) the amount of a city or county levy approved by the 96.24 voters after the proposed levy was certified; 96.25 (3) the amount of a levy to pay principal and interest on 96.26 bondsissued orapproved by the voters under section 475.58 96.27 after the proposed levy was certified; 96.28 (4) the amount of a levy to pay costs due to a natural 96.29 disaster occurring after the proposed levy was certified, if 96.30 that amount is approved by the commissioner of revenue under 96.31 subdivision 6a; 96.32 (5) the amount of a levy to pay tort judgments against a 96.33 taxing authority that become final after the proposed levy was 96.34 certified, if the amount is approved by the commissioner of 96.35 revenue under subdivision 6a; 96.36 (6) the amount of an increase in levy limits certified to 97.1 the taxing authority by the commissioner of children, families, 97.2 and learning after the proposed levy was certified; and 97.3 (7) the amount required under section 124.755. 97.4 At the hearing under this subdivision, the percentage 97.5 increase in property taxes proposed by the taxing authority, if 97.6 any, and the specific purposes for which property tax revenues 97.7 are being increased must be discussed. 97.8 During the discussion, the governing body shall hear 97.9 comments regarding a proposed increase and explain the reasons 97.10 for the proposed increase. The public shall be allowed to speak 97.11 and to ask questions. At the subsequent hearing held as 97.12 provided in this subdivision, the governing body, other than the 97.13 governing body of a school district, shall adopt its final 97.14 property tax levy prior to adopting its final budget. 97.15 If the hearing is not completed on its scheduled date, the 97.16 taxing authority must announce, prior to adjournment of the 97.17 hearing, the date, time, and place for the continuation of the 97.18 hearing. The continued hearing must be held at least five 97.19 business days but no more than 14 business days after the 97.20 original hearing. 97.21 The hearing must be held after 5:00 p.m. if scheduled on a 97.22 day other than Saturday. No hearing may be held on a Sunday. 97.23 The governing body of a county shall hold a hearing on the 97.24 second Tuesday in December each year, and may hold additional 97.25 hearings on other dates before December 20 if necessary for the 97.26 convenience of county residents. If the county needs a 97.27 continuation of its hearing, the continued hearing shall be held 97.28 on the third Tuesday in December. If the third Tuesday in 97.29 December falls on December 21, the county's continuation hearing 97.30 shall be held on Monday, December 20. The county auditor shall 97.31 provide for the coordination of hearing dates for all cities and 97.32 school districts within the county. 97.33 The metropolitan special taxing districts shall hold a 97.34 joint public hearing on the first Monday of December. A 97.35 continuation hearing, if necessary, shall be held on the second 97.36 Monday of December. 98.1 By August 10, each school board and the board of the 98.2 regional library district shall certify to the county auditors 98.3 of the counties in which the school district or regional library 98.4 district is located the dates on which it elects to hold its 98.5 hearings and any continuations. If a school board or regional 98.6 library district does not certify the dates by August 10, the 98.7 auditor will assign the hearing date. The dates elected or 98.8 assigned must not conflict with the hearing dates of the county 98.9 or the metropolitan special taxing districts. By August 20, the 98.10 county auditor shall notify the clerks of the cities within the 98.11 county of the dates on which school districts and regional 98.12 library districts have elected to hold their hearings. At the 98.13 time a city certifies its proposed levy under subdivision 1 it 98.14 shall certify the dates on which it elects to hold its hearings 98.15 and any continuations. For its initial hearing and for the 98.16 subsequent hearing at which the final property tax levy will be 98.17 adopted, the city must not select dates that conflict with the 98.18 county hearing dates, metropolitan special taxing district 98.19 dates, or with those elected by or assigned to the school 98.20 districts or regional library district in which the city is 98.21 located. For continuation hearings, the city may select dates 98.22 that conflict with other taxing authorities' dates if the city 98.23 deems it necessary. 98.24 The county hearing dates and the city, metropolitan special 98.25 taxing district, regional library district, and school district 98.26 hearing dates must be designated on the notices required under 98.27 subdivision 3. The continuation dates need not be stated on the 98.28 notices. 98.29 This subdivision does not apply to towns and special taxing 98.30 districts other than regional library districts and metropolitan 98.31 special taxing districts. 98.32 Notwithstanding the requirements of this section, the 98.33 employer is required to meet and negotiate over employee 98.34 compensation as provided for in chapter 179A. 98.35 Sec. 19. Minnesota Statutes 1994, section 275.07, 98.36 subdivision 4, is amended to read: 99.1 Subd. 4. [REPORT TO COMMISSIONER.] On or beforeSeptember99.230 for taxes payable in 1994, and thereafterOctober 8 of each 99.3 year, the county auditor shall report to the commissioner of 99.4 revenue the proposed levy certified by local units of government 99.5 under section 275.065, subdivision 1. On or before January 15,99.6for taxes levied in 1989 and thereafterof each year, the county 99.7 auditor shall report to the commissioner of revenue the final 99.8 levy certified by local units of government under subdivision 99.9 1. The levies must be reported in the manner prescribed by the 99.10 commissioner. The reports must show a total levy and the amount 99.11 of each special levy. 99.12 Sec. 20. Minnesota Statutes 1995 Supplement, section 99.13 275.08, subdivision 1b, is amended to read: 99.14 Subd. 1b. [COMPUTATION OF TAX RATES.] The amounts 99.15 certified to be levied against net tax capacity under section 99.16 275.07 by an individual local government unit, except for any99.17amounts certified under sections 124A.03, subdivision 2a, and99.18275.61,shall be divided by the total net tax capacity of all 99.19 taxable properties within the local government unit's taxing 99.20 jurisdiction. The resulting ratio, the local government's local 99.21 tax rate, multiplied by each property's net tax capacity shall 99.22 be each property's net tax capacity tax for that local 99.23 government unit before reduction by any credits. 99.24 Any amount certified to the county auditorunder section99.25124A.03, subdivision 2a, or 275.61, after the dates given in99.26those sections,to be levied against market value shall be 99.27 divided by the totalestimatedreferendum market value of all 99.28 taxable properties within the taxing district. The resulting 99.29 ratio, the taxing district's new referendum tax rate, multiplied 99.30 by each property'sestimatedreferendum market value shall be 99.31 each property's new referendum tax before reduction by any 99.32 credits. For the purposes of this subdivision, "referendum 99.33 market value" means the market value as defined in section 99.34 124A.02, subdivision 3b. 99.35 Sec. 21. Minnesota Statutes 1994, section 275.61, is 99.36 amended to read: