HF 2163

2nd Engrossment - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to the financing and operation of state and 
  1.3             local government; providing for property tax reform; 
  1.4             providing for education financing; limiting education 
  1.5             revenue referenda for 1997; changing property tax 
  1.6             refunds for homeowners and renters; changing 
  1.7             truth-in-taxation requirements; providing for joint 
  1.8             truth-in-taxation hearings; imposing levy limits on 
  1.9             cities and counties; changing fiscal note requirements 
  1.10            for state mandates; providing for reimbursement for 
  1.11            costs of state mandates; providing for certain 
  1.12            property tax exemptions; establishing a property tax 
  1.13            reform account; providing a refundable credit for 1997 
  1.14            property taxes; making miscellaneous property tax 
  1.15            changes; providing a senior citizens property tax 
  1.16            deferral program; changing aids to local governments; 
  1.17            changing tax increment financing provisions; 
  1.18            authorizing certain tax increment districts; exempting 
  1.19            certain tax increment districts from certain 
  1.20            requirements; authorizing local taxes, levies, and 
  1.21            abatements; conforming certain income tax laws with 
  1.22            changes in federal law; providing income tax credits; 
  1.23            modifying the application of sales and excise taxes; 
  1.24            exempting certain purchases from the sales tax; 
  1.25            modifying waste management tax and taconite tax 
  1.26            provisions; increasing the budget reserve; revising 
  1.27            the law governing regional development commissions; 
  1.28            providing for certain payments to counties; making 
  1.29            miscellaneous technical changes and corrections; 
  1.30            requiring studies; appropriating money; amending 
  1.31            Minnesota Statutes 1996, sections 6.76; 16A.152, 
  1.32            subdivision 2; 69.021, subdivision 7; 93.41; 103D.905, 
  1.33            subdivisions 4, 5, and by adding a subdivision; 
  1.34            115A.554; 116.07, subdivision 10; 117.155; 121.15, by 
  1.35            adding a subdivision; 122.247, subdivision 3; 122.45, 
  1.36            subdivision 3a; 122.531, subdivisions 4a and 9; 
  1.37            122.533; 122.535, subdivision 6; 124.2131, subdivision 
  1.38            1; 124.239, subdivision 5, and by adding subdivisions; 
  1.39            124.2601, subdivisions 2 and 3; 124.2711, subdivisions 
  1.40            1 and 5; 124.2713, subdivision 1; 124.2714; 124.2715, 
  1.41            subdivision 1; 124.2716, subdivision 2; 124.2725, 
  1.42            subdivisions 2, 6, 13, and 14; 124.2726, subdivisions 
  1.43            1 and 3; 124.2727, subdivision 6a; 124.312, 
  1.44            subdivision 5; 124.313; 124.4945; 124.83, subdivision 
  1.45            3; 124.91, subdivisions 1, 2, 5, and 7; 124.912, 
  1.46            subdivisions 1, 3, 6, and 7; 124.914, subdivisions 1, 
  2.1             2, 3, and 4; 124.916, subdivisions 1, 3, and 4; 
  2.2             124.918, subdivision 8; 124.95, subdivision 1; 
  2.3             124A.03, subdivision 1g; 124A.23, subdivision 1; 
  2.4             124A.292, subdivision 2; 161.45, by adding a 
  2.5             subdivision; 216B.16, by adding subdivisions; 270.60, 
  2.6             by adding a subdivision; 270B.02, by adding a 
  2.7             subdivision; 270B.12, by adding a subdivision; 271.01, 
  2.8             subdivision 5; 271.19; 272.02, subdivision 1, and by 
  2.9             adding a subdivision; 272.115; 273.11, subdivisions 
  2.10            1a, 16, and by adding a subdivision; 273.111, 
  2.11            subdivisions 3 and 6; 273.112, by adding a 
  2.12            subdivision; 273.121; 273.124, subdivisions 1, 14, and 
  2.13            by adding a subdivision; 273.13, subdivisions 1, 22, 
  2.14            23, 24, 25, 31, and by adding subdivisions; 273.135, 
  2.15            subdivision 2; 273.1391, subdivision 2; 273.1398, 
  2.16            subdivisions 1, 1a, 6, 8, and by adding subdivisions; 
  2.17            273.18; 274.01; 274.13, by adding subdivisions; 
  2.18            275.065, subdivisions 1, 3, 5a, 6, 8, and by adding 
  2.19            subdivisions; 275.07, subdivision 4; 275.08, 
  2.20            subdivision 1b; 276.04, subdivision 2; 276A.04; 
  2.21            276A.05, subdivisions 1 and 5; 276A.06, subdivisions 
  2.22            2, 3, 5, and 9; 278.07; 281.13; 281.23, subdivision 6; 
  2.23            281.273; 281.276; 282.01, subdivision 8; 282.04, 
  2.24            subdivision 1; 287.22; 289A.02, subdivision 7; 
  2.25            289A.26, subdivisions 2, 3, 6, and 7; 289A.56, 
  2.26            subdivision 4; 290.01, subdivisions 19, 19a, 19b, 19c, 
  2.27            19d, 19g, and 31; 290.014, subdivisions 2 and 3; 
  2.28            290.015, subdivision 5; 290.06, subdivision 22, and by 
  2.29            adding subdivisions; 290.067, subdivision 1; 290.068, 
  2.30            subdivision 1; 290.0922, subdivision 1; 290.17, 
  2.31            subdivision 1; 290.371, subdivision 2; 290.92, by 
  2.32            adding a subdivision; 290.9725; 290.9727, subdivision 
  2.33            1; 290.9728, subdivision 1; 290A.03, subdivisions 6, 
  2.34            7, 11, and 13; 290A.04, subdivisions 1, 2, 6, and by 
  2.35            adding a subdivision; 290A.19; 291.005, subdivision 1; 
  2.36            295.50, subdivision 6; 295.58; 296.141, subdivision 4; 
  2.37            296.18, subdivision 1; 297A.01, subdivisions 3, 4, 7, 
  2.38            11, 15, and 16; 297A.02, subdivision 2; 297A.14, 
  2.39            subdivision 4; 297A.211, subdivision 1; 297A.25, 
  2.40            subdivisions 2, 3, 7, 11, 56, 59, and by adding 
  2.41            subdivisions; 297A.45; 297B.01, subdivisions 7 and 8; 
  2.42            297E.02, subdivision 6; 297E.04, subdivision 3; 
  2.43            298.24, subdivision 1; 298.28, subdivisions 2, 3, 4, 
  2.44            5, 9a, and by adding subdivisions; 298.2961, 
  2.45            subdivision 1; 298.75, subdivisions 1, 4, and by 
  2.46            adding a subdivision; 325D.33, subdivision 3; 349.12, 
  2.47            subdivision 26a; 349.154, subdivision 2; 349.163, 
  2.48            subdivision 8; 349.19, subdivision 2a; 349.191, 
  2.49            subdivision 1b; 373.40, subdivision 7; 398A.04, 
  2.50            subdivision 1; 462.381; 462.383; 462.384, subdivision 
  2.51            5; 462.385; 462.386, subdivision 1; 462.387; 462.388; 
  2.52            462.389, subdivisions 1, 3, and 4; 462.39, 
  2.53            subdivisions 2 and 3; 462.391, subdivision 5, and by 
  2.54            adding subdivisions; 462.393; 462.394; 462.396; 
  2.55            462.398; 469.012, subdivision 1; 469.033, subdivision 
  2.56            6; 469.040, subdivision 3, and by adding a 
  2.57            subdivision; 469.174, subdivisions 10, 19, and by 
  2.58            adding subdivisions; 469.175, subdivision 3, and by 
  2.59            adding subdivisions; 469.176, subdivisions 1b, 2, 4c, 
  2.60            4g, 4j, and 6; 469.177, subdivisions 1, 3, and 4; 
  2.61            473F.06; 473F.07, subdivisions 1 and 5; 473F.08, 
  2.62            subdivisions 2, 3, 5, and 8a; 477A.011, subdivisions 
  2.63            20, 34, 35, 36, 37, and by adding subdivisions; 
  2.64            477A.013, subdivisions 1 and 9; 477A.03, subdivision 
  2.65            2; and 477A.05; Laws 1992, chapter 511, article 2, 
  2.66            section 52; Laws 1993, chapter 375, article 9, section 
  2.67            45, subdivisions 2, 3, 4, and by adding a subdivision; 
  2.68            Laws 1995, chapter 264, article 5, sections 44, 
  2.69            subdivision 4, as amended; and 45, subdivision 1, as 
  2.70            amended; Laws 1997, chapter 34, section 2; proposing 
  2.71            coding for new law in Minnesota Statutes, chapters 3; 
  3.1             14; 16A; 124; 124A; 270; 273; 275; 290; 297A; 383A; 
  3.2             383B; 458D; 462A; 469; 477A; proposing coding for new 
  3.3             law as Minnesota Statutes, chapter 290B; repealing 
  3.4             Minnesota Statutes 1996, sections 3.982; 124.2131, 
  3.5             subdivision 3a; 124.2134; 124.225, subdivisions 1, 3a, 
  3.6             7a, 7b, 7d, 7e, 7f, 8a, 8k, 8l, 8m, 9, 10, 13, 14, 15, 
  3.7             16, and 17; 124.226; 124.2442; 124.2601, subdivisions 
  3.8             4, 5, and 6; 124.2711, subdivisions 2a and 3; 
  3.9             124.2713, subdivisions 6, 6a, 6b, and 7; 124.2715, 
  3.10            subdivisions 2 and 3; 124.2716, subdivisions 3 and 4; 
  3.11            124.2725, subdivisions 3, 4, 5, and 7; 124.2727, 
  3.12            subdivisions 6b, 6c, and 9; 124.314, subdivision 2; 
  3.13            124.321; 124.91, subdivisions 2, 4, and 7; 124.912, 
  3.14            subdivision 2; 124A.029; 124A.03, subdivisions 2a and 
  3.15            3b; 124A.0311; 124A.22, subdivisions 4a, 4b, 8a, 8b, 
  3.16            13d, and 13e; 124A.23, subdivisions 1, 2, 3, and 4; 
  3.17            124A.26, subdivisions 2 and 3; 124A.292, subdivisions 
  3.18            3 and 4; 270B.12, subdivision 11; 273.13, subdivisions 
  3.19            21a and 32; 273.1315; 273.1317; 273.1318; 273.1398, 
  3.20            subdivisions 2, 2c, 2d, 3, and 3a; 273.1399; 273.166; 
  3.21            275.08, subdivisions 1c and 1d; 275.61; 276.012; 
  3.22            276A.06, subdivision 9; 290A.03, subdivisions 12a and 
  3.23            14; 290A.055; 290A.26; 297A.01, subdivisions 20 and 
  3.24            21; 297A.02, subdivision 5; 297A.25, subdivision 29; 
  3.25            462.384, subdivision 7; 462.385, subdivision 2; 
  3.26            462.389, subdivision 5; 462.391, subdivisions 1, 2, 3, 
  3.27            4, 6, 7, 8, and 9; 462.392; 469.176, subdivisions 1a 
  3.28            and 5; 469.1782, subdivision 1; 469.181; 473F.08, 
  3.29            subdivision 8a; and 645.34; Laws 1995, chapter 264, 
  3.30            article 4, as amended. 
  3.31  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  3.32                             ARTICLE 1 
  3.33                        PROPERTY TAX REFORM 
  3.34     Section 1.  Minnesota Statutes 1996, section 273.124, is 
  3.35  amended by adding a subdivision to read: 
  3.36     Subd. 19.  [LEASE-PURCHASE PROGRAM.] Qualifying buildings 
  3.37  and appurtenances, together with the land on which they are 
  3.38  located, are classified as homesteads, if the following 
  3.39  qualifications are met: 
  3.40     (1) the property is leased for up to a five-year period by 
  3.41  the occupant under a lease-purchase program administered by the 
  3.42  Minnesota housing finance agency or a housing and redevelopment 
  3.43  authority under sections 469.001 to 469.047; 
  3.44     (2) the occupant's income is no greater than 80 percent of 
  3.45  the county or area median income, adjusted for family size; 
  3.46     (3) the building consists of one or two dwelling units; 
  3.47     (4) the lease agreement provides that part of the lease 
  3.48  payment is escrowed as a nonrefundable down payment on the 
  3.49  housing; 
  3.50     (5) the administering agency verifies the occupant's income 
  4.1   eligibility and certifies to the county assessor that the 
  4.2   occupant meets the income standards; and 
  4.3      (6) the property owner applies to the county assessor by 
  4.4   May 30 of each year. 
  4.5      For purposes of this subdivision, "qualifying buildings and 
  4.6   appurtenances" means a one- or two-unit residential building 
  4.7   which was unoccupied, abandoned, and boarded for at least six 
  4.8   months.  
  4.9      Sec. 2.  [273.126] [QUALIFYING LOW-INCOME RENTAL HOUSING.] 
  4.10     Subdivision 1.  [QUALIFYING RULES.] The market value of a 
  4.11  rental housing unit qualifies for assessment under class 4d if: 
  4.12     (1) it is occupied by individuals meeting the income limits 
  4.13  under subdivision 2; 
  4.14     (2) a rent restriction agreement under subdivision 3 
  4.15  applies; 
  4.16     (3) the unit meets the minimum housing quality standards 
  4.17  under subdivision 4; and 
  4.18     (4) the Minnesota housing finance agency certifies to the 
  4.19  local assessor that the unit qualifies. 
  4.20     Subd. 2.  [INCOME LIMITS.] (a) In order to qualify under 
  4.21  class 4d, a unit must be occupied by an individual or 
  4.22  individuals whose income is at or below 60 percent of the median 
  4.23  area gross income.  If the resident's income met the requirement 
  4.24  when the resident first occupied the unit, the income of the 
  4.25  resident continues to qualify.  If an individual first occupied 
  4.26  a unit before January 1, 1998, the individual's income for 
  4.27  purposes of the preceding sentence is the income for calendar 
  4.28  year 1996. 
  4.29     (b) For purposes of this section, "median area gross income"
  4.30  means the greater of (1) the median gross income for the area 
  4.31  determined under section 42 of the Internal Revenue Code of 
  4.32  1986, as amended through December 31, 1996, or (2) the median 
  4.33  gross income for the state. 
  4.34     (c) The median gross income must be adjusted for family 
  4.35  size. 
  4.36     (d) Vacant units qualify as meeting the requirements of 
  5.1   this subdivision in the same proportion that total units in the 
  5.2   building are subject to rent restriction agreements under 
  5.3   subdivision 3 and meet minimum housing standards under 
  5.4   subdivision 4.  This paragraph applies only to the extent that 
  5.5   units subject to a rent restriction agreement and meeting the 
  5.6   minimum housing quality standards are vacant. 
  5.7      (e) The owner or manager of the property may comply with 
  5.8   this subdivision by obtaining written statements from the 
  5.9   residents that their incomes are at or below the limit.  
  5.10     Subd. 3.  [RENT RESTRICTIONS.] (a) In order to qualify 
  5.11  under class 4d, a unit must be subject to a rent restriction 
  5.12  agreement with the housing finance agency for a period of at 
  5.13  least five years.  The agreement must be in effect and apply to 
  5.14  the rents to be charged for the year in which the property taxes 
  5.15  are payable.  The agreement must provide that the restrictions 
  5.16  apply to each year of the period, regardless of whether the unit 
  5.17  is occupied by an individual with qualifying income or whether 
  5.18  class 4d applies.  The rent restriction agreement must provide 
  5.19  for rents for the unit to be no higher than 30 percent of 60 
  5.20  percent of the median gross income.  The definition of median 
  5.21  gross income specified in this section applies.  "Rent" means 
  5.22  "gross rent" as defined in section 42(g)(2)(B) of the Internal 
  5.23  Revenue Code of 1986, as amended through December 31, 1996.  
  5.24     (b) Notwithstanding maximum rent levels permitted, an owner 
  5.25  or manager must make available to families with section 8 
  5.26  certificates on property located in the metropolitan area as 
  5.27  defined in section 473.121, subdivision 2, the greater of (i) 
  5.28  one unit, or (ii) ten percent of all units qualifying under 
  5.29  class 4d; or in the case of property located in the remaining 80 
  5.30  nonmetropolitan counties, the greater of (i) one unit, or (ii) 
  5.31  five percent of all units qualifying under class 4d. 
  5.32     (c) The rent restriction agreement runs with the land and 
  5.33  binds any successor to title to the property, without regard to 
  5.34  whether the successor had actual notice or knowledge of the 
  5.35  agreement.  The owner must promptly record the agreement in the 
  5.36  office of the county recorder or must file it in the office of 
  6.1   the registrar of titles, in the county where the property is 
  6.2   located.  If the agreement is not recorded, class 4d does not 
  6.3   apply to the property. 
  6.4      Subd. 4.  [MINIMUM HOUSING STANDARDS.] In order to qualify 
  6.5   under class 4d, a unit must be certified by the housing finance 
  6.6   agency to meet the minimum housing standards established under 
  6.7   section 462A.071. 
  6.8      Subd. 5.  [MONITORING RENT LEVELS.] The housing finance 
  6.9   agency is directed to monitor changes in rent levels and the use 
  6.10  of section 8 certificates in units qualifying under class 4d. 
  6.11     Subd. 6.  [ADDITIONAL TAXES.] (a) Notwithstanding the 
  6.12  provisions of section 273.01, 274.01, or any other law, if the 
  6.13  Minnesota housing finance agency notifies the assessor that the 
  6.14  provisions of this section have not been met for any period 
  6.15  during which a unit was classified under class 4d, an additional 
  6.16  tax is imposed.  The additional tax equals, as certified by the 
  6.17  housing finance agency, either (1) a dollar amount, or (2) the 
  6.18  increased tax which would have been imposed if the property had 
  6.19  not been classified under class 4d, and the tax actually 
  6.20  imposed, during the period of noncompliance. 
  6.21     (b) The additional tax must be extended against the 
  6.22  property on the tax list for the current year.  No interest or 
  6.23  penalties may be levied on additional taxes if timely paid.  The 
  6.24  tax imposed by this subdivision is a lien upon the property 
  6.25  assessed to the same extent and for the same duration as other 
  6.26  taxes imposed on the property. 
  6.27     Sec. 3. [273.127] [TRANSITION CLASS RATES.] 
  6.28     Subdivision 1.  [APPLICATION.] (a) The class rates under 
  6.29  this section apply for property taxes payable in 1999 for the 
  6.30  market value of properties: 
  6.31     (1)(i) which were classified as class 4c or class 4d for 
  6.32  taxes payable in 1998; or 
  6.33     (ii) which are constructed or substantially rehabilitated 
  6.34  during calendar year 1997 and would qualify as class 4c or class 
  6.35  4d for taxes payable in 1999; and 
  6.36     (2) which do not qualify as class 4d property as a result 
  7.1   of the eligibility criteria specified in section 273.126.  
  7.2      (b) To qualify for the class rates under this section, the 
  7.3   building's owner must annually certify to the assessor in 
  7.4   writing that the property, building, or unit continues to 
  7.5   qualify under the laws in effect and applicable to its 
  7.6   classification for taxes payable in 1998. 
  7.7      (c) A property no longer qualifies under this section: 
  7.8      (1) if it is transferred or sold; or 
  7.9      (2) if loans, that have a principal amount equal to more 
  7.10  than 25 percent of the property's market value and that are 
  7.11  secured by the property, are refinanced. 
  7.12     Subd. 2.  [CLASS 4C PROPERTIES.] For the market value of 
  7.13  properties that were classified as class 4c for taxes payable in 
  7.14  1998 and which no longer qualify as a result of the eligibility 
  7.15  criteria specified in section 273.126, a class rate of 2.4 
  7.16  percent applies for taxes payable in 1999. 
  7.17     Subd. 3.  [CLASS 4D PROPERTIES.] For the market value of 
  7.18  properties that were classified as class 4d for taxes payable in 
  7.19  1998 and which no longer qualify as a result of the eligibility 
  7.20  criteria specified in section 273.126, a class rate of 2.2 
  7.21  percent applies for taxes payable in 1999. 
  7.22     Sec. 4.  Minnesota Statutes 1996, section 273.13, 
  7.23  subdivision 22, is amended to read: 
  7.24     Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
  7.25  23, real estate which is (i) residential and used for homestead 
  7.26  purposes; and (ii) other residential real estate containing one 
  7.27  unit, other than seasonal residential recreational; and (iii) a 
  7.28  dwelling, garage, and surrounding one acre of property on a 
  7.29  nonhomestead farm classified under subdivision 23, paragraph 
  7.30  (b), is class 1 1a.  The market value of class 1a property must 
  7.31  be determined based upon the value of the house, garage, and 
  7.32  land.  
  7.33     For taxes payable in 1998 and thereafter, the first 
  7.34  $72,000 $80,000 of market value of class 1a property has a net 
  7.35  class rate of one percent of its market value and a gross class 
  7.36  rate of 2.17 percent of its market value.  For taxes payable in 
  8.1   1992,; and the market value of class 1a property that 
  8.2   exceeds $72,000 but does not exceed $115,000 $80,000 has a class 
  8.3   rate of two percent of its market value; and the market value of 
  8.4   class 1a property that exceeds $115,000 has a class rate of 2.5 
  8.5   percent of its market value.  For taxes payable in 1993 and 
  8.6   thereafter, the market value of class 1a property that exceeds 
  8.7   $72,000 has a class rate of two percent. 
  8.8      (b) Real estate that would otherwise qualify under 
  8.9   paragraph (a), clause (ii), only qualifies as class 1a property 
  8.10  if it is in compliance with all rental licensing requirements 
  8.11  and codes applicable to housing on the property at the time of 
  8.12  payment of the property taxes.  If the property is found to be 
  8.13  out of compliance, the class rates that apply are the rates that 
  8.14  would have applied if the property were not included in class 
  8.15  1a.  Any tax delinquency is subject to penalties and interest. 
  8.16     (b) (c) Class 1b property includes homestead real estate or 
  8.17  homestead manufactured homes used for the purposes of a 
  8.18  homestead by 
  8.19     (1) any blind person, or the blind person and the blind 
  8.20  person's spouse; or 
  8.21     (2) any person, hereinafter referred to as "veteran," who: 
  8.22     (i) served in the active military or naval service of the 
  8.23  United States; and 
  8.24     (ii) is entitled to compensation under the laws and 
  8.25  regulations of the United States for permanent and total 
  8.26  service-connected disability due to the loss, or loss of use, by 
  8.27  reason of amputation, ankylosis, progressive muscular 
  8.28  dystrophies, or paralysis, of both lower extremities, such as to 
  8.29  preclude motion without the aid of braces, crutches, canes, or a 
  8.30  wheelchair; and 
  8.31     (iii) has acquired a special housing unit with special 
  8.32  fixtures or movable facilities made necessary by the nature of 
  8.33  the veteran's disability, or the surviving spouse of the 
  8.34  deceased veteran for as long as the surviving spouse retains the 
  8.35  special housing unit as a homestead; or 
  8.36     (3) any person who: 
  9.1      (i) is permanently and totally disabled and 
  9.2      (ii) receives 90 percent or more of total income from 
  9.3      (A) aid from any state as a result of that disability; or 
  9.4      (B) supplemental security income for the disabled; or 
  9.5      (C) workers' compensation based on a finding of total and 
  9.6   permanent disability; or 
  9.7      (D) social security disability, including the amount of a 
  9.8   disability insurance benefit which is converted to an old age 
  9.9   insurance benefit and any subsequent cost of living increases; 
  9.10  or 
  9.11     (E) aid under the federal Railroad Retirement Act of 1937, 
  9.12  United States Code Annotated, title 45, section 228b(a)5; or 
  9.13     (F) a pension from any local government retirement fund 
  9.14  located in the state of Minnesota as a result of that 
  9.15  disability; or 
  9.16     (G) pension, annuity, or other income paid as a result of 
  9.17  that disability from a private pension or disability plan, 
  9.18  including employer, employee, union, and insurance plans and 
  9.19     (iii) has household income as defined in section 290A.03, 
  9.20  subdivision 5, of $50,000 or less; or 
  9.21     (4) any person who is permanently and totally disabled and 
  9.22  whose household income as defined in section 290A.03, 
  9.23  subdivision 5, is 150 275 percent or less of the federal poverty 
  9.24  level. 
  9.25     Property is classified and assessed under clause (4) only 
  9.26  if the government agency or income-providing source certifies, 
  9.27  upon the request of the homestead occupant, that the homestead 
  9.28  occupant satisfies the disability requirements of this paragraph.
  9.29     Property is classified and assessed pursuant to clause (1) 
  9.30  only if the commissioner of economic security certifies to the 
  9.31  assessor that the homestead occupant satisfies the requirements 
  9.32  of this paragraph.  
  9.33     Permanently and totally disabled for the purpose of this 
  9.34  subdivision means a condition which is permanent in nature and 
  9.35  totally incapacitates the person from working at an occupation 
  9.36  which brings the person an income.  The first $32,000 market 
 10.1   value of class 1b property has a net class rate of .45 percent 
 10.2   of its market value and a gross class rate of .87 percent of its 
 10.3   market value.  The remaining market value of class 1b property 
 10.4   has a gross or net class rate using the rates for class 1 or 
 10.5   class 2a property, whichever is appropriate, of similar market 
 10.6   value.  
 10.7      (c) (d) Class 1c property is commercial use real property 
 10.8   that abuts a lakeshore line and is devoted to temporary and 
 10.9   seasonal residential occupancy for recreational purposes but not 
 10.10  devoted to commercial purposes for more than 250 days in the 
 10.11  year preceding the year of assessment, and that includes a 
 10.12  portion used as a homestead by the owner, which includes a 
 10.13  dwelling occupied as a homestead by a shareholder of a 
 10.14  corporation that owns the resort or a partner in a partnership 
 10.15  that owns the resort, even if the title to the homestead is held 
 10.16  by the corporation or partnership.  For purposes of this clause, 
 10.17  property is devoted to a commercial purpose on a specific day if 
 10.18  any portion of the property, excluding the portion used 
 10.19  exclusively as a homestead, is used for residential occupancy 
 10.20  and a fee is charged for residential occupancy.  Class 1c 
 10.21  property has a class rate of one percent of total market value 
 10.22  for taxes payable in 1993 and thereafter with the following 
 10.23  limitation:  the area of the property must not exceed 100 feet 
 10.24  of lakeshore footage for each cabin or campsite located on the 
 10.25  property up to a total of 800 feet and 500 feet in depth, 
 10.26  measured away from the lakeshore.  
 10.27     Sec. 5.  Minnesota Statutes 1996, section 273.13, 
 10.28  subdivision 24, is amended to read: 
 10.29     Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
 10.30  property and utility real and personal property, except class 5 
 10.31  property as identified in subdivision 31, clause (1), is class 
 10.32  3a.  It Each parcel has a class rate of three 2.8 percent of the 
 10.33  first $100,000 tier of market value for taxes payable in 1993 
 10.34  1998 and thereafter, and 5.06.  Commercial and industrial 
 10.35  property has a class rate of 4.3 percent of the remaining market 
 10.36  value over $100,000, except that in the case of contiguous 
 11.1   parcels of commercial and industrial property owned by the same 
 11.2   person or entity, only the value equal to the first-tier value 
 11.3   of the contiguous parcels qualifies for the reduced class rate.  
 11.4   Utility real and personal property has a class rate of 4.5 
 11.5   percent of the remaining market value.  For the purposes of this 
 11.6   subdivision, the first tier means the first $150,000 of market 
 11.7   value.  In the case of state-assessed commercial, industrial, 
 11.8   and utility property owned by one person or entity, only one 
 11.9   parcel has a reduced class rate on the first $100,000 of market 
 11.10  value.  In the case of other commercial, industrial, and utility 
 11.11  property owned by one person or entity, only one parcel in each 
 11.12  county has a reduced class rate on the first $100,000 tier of 
 11.13  market value, except that:. 
 11.14     (1) if the market value of the parcel is less than 
 11.15  $100,000, and additional parcels are owned by the same person or 
 11.16  entity in the same city or town within that county, the reduced 
 11.17  class rate shall be applied up to a combined total market value 
 11.18  of $100,000 for all parcels owned by the same person or entity 
 11.19  in the same city or town within the county; 
 11.20     (2) in the case of grain, fertilizer, and feed elevator 
 11.21  facilities, as defined in section 18C.305, subdivision 1, or 
 11.22  232.21, subdivision 8, the limitation to one parcel per owner 
 11.23  per county for the reduced class rate shall not apply, but there 
 11.24  shall be a limit of $100,000 of preferential value per site of 
 11.25  contiguous parcels owned by the same person or entity.  Only the 
 11.26  value of the elevator portion of each parcel shall qualify for 
 11.27  treatment under this clause.  For purposes of this subdivision, 
 11.28  contiguous parcels include parcels separated only by a railroad 
 11.29  or public road right-of-way; and 
 11.30     (3) in the case of property owned by a nonprofit charitable 
 11.31  organization that qualifies for tax exemption under section 
 11.32  501(c)(3) of the Internal Revenue Code of 1986, as amended 
 11.33  through December 31, 1993, if the property is used as a business 
 11.34  incubator, the limitation to one parcel per owner per county for 
 11.35  the reduced class rate shall not apply, provided that the 
 11.36  reduced rate applies only to the first $100,000 of value per 
 12.1   parcel owned by the organization.  As used in this clause, a 
 12.2   "business incubator" is a facility used for the development of 
 12.3   nonretail businesses, offering access to equipment, space, 
 12.4   services, and advice to the tenant businesses, for the purpose 
 12.5   of encouraging economic development, diversification, and job 
 12.6   creation in the area served by the organization. 
 12.7      To receive the reduced class rate on additional parcels 
 12.8   under clause (1), (2), or (3), the taxpayer must notify the 
 12.9   county assessor that the taxpayer owns more than one parcel that 
 12.10  qualifies under clause (1), (2), or (3). 
 12.11     For purposes of this paragraph, parcels are considered to 
 12.12  be contiguous even if they are separated from each other by a 
 12.13  road, street, vacant lot, waterway, or other similar intervening 
 12.14  type of property. 
 12.15     (b) Employment property defined in section 469.166, during 
 12.16  the period provided in section 469.170, shall constitute class 
 12.17  3b and has a class rate of 2.3 percent of the first $50,000 of 
 12.18  market value and 3.6 percent of the remainder, except that for 
 12.19  employment property located in a border city enterprise zone 
 12.20  designated pursuant to section 469.168, subdivision 4, paragraph 
 12.21  (c), the class rate of the first $100,000 tier of market value 
 12.22  and the class rate of the remainder is determined under 
 12.23  paragraph (a), unless the governing body of the city designated 
 12.24  as an enterprise zone determines that a specific parcel shall be 
 12.25  assessed pursuant to the first clause of this sentence.  The 
 12.26  governing body may provide for assessment under the first clause 
 12.27  of the preceding sentence only for property which is located in 
 12.28  an area which has been designated by the governing body for the 
 12.29  receipt of tax reductions authorized by section 469.171, 
 12.30  subdivision 1. 
 12.31     (c) Structures which are (i) located on property classified 
 12.32  as class 3a, (ii) constructed under an initial building permit 
 12.33  issued after January 2, 1996, (iii) located in a transit zone as 
 12.34  defined under section 473.3915, subdivision 3, (iv) located 
 12.35  within the boundaries of a school district, and (v) not 
 12.36  primarily used for retail or transient lodging purposes, shall 
 13.1   have a class rate of four percent on that any portion of the 
 13.2   market value in excess of $100,000 and any market value under 
 13.3   $100,000 that does not qualify for the three percent first tier 
 13.4   class rate under paragraph (a).  As used in item (v), a 
 13.5   structure is primarily used for retail or transient lodging 
 13.6   purposes if over 50 percent of its square footage is used for 
 13.7   those purposes.  The four percent rate shall also apply to 
 13.8   improvements to existing structures that meet the requirements 
 13.9   of items (i) to (v) if the improvements are constructed under an 
 13.10  initial building permit issued after January 2, 1996, even if 
 13.11  the remainder of the structure was constructed prior to January 
 13.12  2, 1996.  For the purposes of this paragraph, a structure shall 
 13.13  be considered to be located in a transit zone if any portion of 
 13.14  the structure lies within the zone.  If any property once 
 13.15  eligible for treatment under this paragraph ceases to remain 
 13.16  eligible due to revisions in transit zone boundaries, the 
 13.17  property shall continue to receive treatment under this 
 13.18  paragraph for a period of three years. 
 13.19     Sec. 6.  Minnesota Statutes 1996, section 273.13, 
 13.20  subdivision 25, is amended to read: 
 13.21     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
 13.22  estate containing four or more units and used or held for use by 
 13.23  the owner or by the tenants or lessees of the owner as a 
 13.24  residence for rental periods of 30 days or more.  Class 4a also 
 13.25  includes hospitals licensed under sections 144.50 to 144.56, 
 13.26  other than hospitals exempt under section 272.02, and contiguous 
 13.27  property used for hospital purposes, without regard to whether 
 13.28  the property has been platted or subdivided.  Class 4a property 
 13.29  in a city with a population of 5,000 or less, that is (1) 
 13.30  located outside of the metropolitan area, as defined in section 
 13.31  473.121, subdivision 2, or outside any county contiguous to the 
 13.32  metropolitan area, and (2) whose city boundary is at least 15 
 13.33  miles from the boundary of any city with a population greater 
 13.34  than 5,000 has a class rate of 2.3 percent of market value for 
 13.35  taxes payable in 1996 and thereafter.  All other class 4a 
 13.36  property has a class rate of 3.4 2.8 percent of market value for 
 14.1   taxes payable in 1996 1998 and thereafter.  For purposes of this 
 14.2   paragraph, population has the same meaning given in section 
 14.3   477A.011, subdivision 3. 
 14.4      (b) Class 4b includes: 
 14.5      (1) residential real estate containing less than four two 
 14.6   or three units, other than seasonal residential, and 
 14.7   recreational; 
 14.8      (2) manufactured homes not classified under any other 
 14.9   provision; 
 14.10     (3) a dwelling, garage, and surrounding one acre of 
 14.11  property on a nonhomestead farm classified under subdivision 23, 
 14.12  paragraph (b) unimproved property that is classified residential 
 14.13  as determined under section 273.13, subdivision 33.  
 14.14     Class 4b property has a class rate of 2.8 percent of market 
 14.15  value for taxes payable in 1992, 2.5 percent of market value for 
 14.16  taxes payable in 1993, and 2.3 percent of market value for taxes 
 14.17  payable in 1994 1998, and thereafter. 
 14.18     (c) Class 4c property includes: 
 14.19     (1) a structure that is:  
 14.20     (i) situated on real property that is used for housing for 
 14.21  the elderly or for low- and moderate-income families as defined 
 14.22  in Title II, as amended through December 31, 1990, of the 
 14.23  National Housing Act or the Minnesota housing finance agency law 
 14.24  of 1971, as amended, or rules promulgated by the agency and 
 14.25  financed by a direct federal loan or federally insured loan made 
 14.26  pursuant to Title II of the Act; or 
 14.27     (ii) situated on real property that is used for housing the 
 14.28  elderly or for low- and moderate-income families as defined by 
 14.29  the Minnesota housing finance agency law of 1971, as amended, or 
 14.30  rules adopted by the agency pursuant thereto and financed by a 
 14.31  loan made by the Minnesota housing finance agency pursuant to 
 14.32  the provisions of the act.  
 14.33     This clause applies only to property of a nonprofit or 
 14.34  limited dividend entity.  Property is classified as class 4c 
 14.35  under this clause for 15 years from the date of the completion 
 14.36  of the original construction or substantial rehabilitation, or 
 15.1   for the original term of the loan.  
 15.2      (2) a structure that is: 
 15.3      (i) situated upon real property that is used for housing 
 15.4   lower income families or elderly or handicapped persons, as 
 15.5   defined in section 8 of the United States Housing Act of 1937, 
 15.6   as amended; and 
 15.7      (ii) owned by an entity which has entered into a housing 
 15.8   assistance payments contract under section 8 which provides 
 15.9   assistance for 100 percent of the dwelling units in the 
 15.10  structure, other than dwelling units intended for management or 
 15.11  maintenance personnel.  Property is classified as class 4c under 
 15.12  this clause for the term of the housing assistance payments 
 15.13  contract, including all renewals, or for the term of its 
 15.14  permanent financing, whichever is shorter; and 
 15.15     (3) a qualified low-income building as defined in section 
 15.16  42(c)(2) of the Internal Revenue Code of 1986, as amended 
 15.17  through December 31, 1990, that (i) receives a low-income 
 15.18  housing credit under section 42 of the Internal Revenue Code of 
 15.19  1986, as amended through December 31, 1990; or (ii) meets the 
 15.20  requirements of that section and receives public financing, 
 15.21  except financing provided under sections 469.174 to 469.179, 
 15.22  which contains terms restricting the rents; or (iii) meets the 
 15.23  requirements of section 273.1317.  Classification pursuant to 
 15.24  this clause is limited to a term of 15 years.  The public 
 15.25  financing received must be from at least one of the following 
 15.26  sources:  government issued bonds exempt from taxes under 
 15.27  section 103 of the Internal Revenue Code of 1986, as amended 
 15.28  through December 31, 1993, the proceeds of which are used for 
 15.29  the acquisition or rehabilitation of the building; programs 
 15.30  under section 221(d)(3), 202, or 236, of Title II of the 
 15.31  National Housing Act; rental housing program funds under Section 
 15.32  8 of the United States Housing Act of 1937 or the market rate 
 15.33  family graduated payment mortgage program funds administered by 
 15.34  the Minnesota housing finance agency that are used for the 
 15.35  acquisition or rehabilitation of the building; public financing 
 15.36  provided by a local government used for the acquisition or 
 16.1   rehabilitation of the building, including grants or loans from 
 16.2   federal community development block grants, HOME block grants, 
 16.3   or residential rental bonds issued under chapter 474A; or other 
 16.4   rental housing program funds provided by the Minnesota housing 
 16.5   finance agency for the acquisition or rehabilitation of the 
 16.6   building. 
 16.7      For all properties described in clauses (1), (2), and (3) 
 16.8   and in paragraph (d), the market value determined by the 
 16.9   assessor must be based on the normal approach to value using 
 16.10  normal unrestricted rents unless the owner of the property 
 16.11  elects to have the property assessed under Laws 1991, chapter 
 16.12  291, article 1, section 55.  If the owner of the property elects 
 16.13  to have the market value determined on the basis of the actual 
 16.14  restricted rents, as provided in Laws 1991, chapter 291, article 
 16.15  1, section 55, the property will be assessed at the rate 
 16.16  provided for class 4a or class 4b property, as appropriate.  
 16.17  Properties described in clauses (1)(ii), (3), and (4) may apply 
 16.18  to the assessor for valuation under Laws 1991, chapter 291, 
 16.19  article 1, section 55.  The land on which these structures are 
 16.20  situated has the class rate given in paragraph (b) if the 
 16.21  structure contains fewer than four units, and the class rate 
 16.22  given in paragraph (a) if the structure contains four or more 
 16.23  units.  This clause applies only to the property of a nonprofit 
 16.24  or limited dividend entity.  
 16.25     (4) a parcel of land, not to exceed one acre, and its 
 16.26  improvements or a parcel of unimproved land, not to exceed one 
 16.27  acre, if it is owned by a neighborhood real estate trust and at 
 16.28  least 60 percent of the dwelling units, if any, on all land 
 16.29  owned by the trust are leased to or occupied by lower income 
 16.30  families or individuals.  This clause does not apply to any 
 16.31  portion of the land or improvements used for nonresidential 
 16.32  purposes.  For purposes of this clause, a lower income family is 
 16.33  a family with an income that does not exceed 65 percent of the 
 16.34  median family income for the area, and a lower income individual 
 16.35  is an individual whose income does not exceed 65 percent of the 
 16.36  median individual income for the area, as determined by the 
 17.1   United States Secretary of Housing and Urban Development.  For 
 17.2   purposes of this clause, "neighborhood real estate trust" means 
 17.3   an entity which is certified by the governing body of the 
 17.4   municipality in which it is located to have the following 
 17.5   characteristics: 
 17.6      (a) it is a nonprofit corporation organized under chapter 
 17.7   317A; 
 17.8      (b) it has as its principal purpose providing housing for 
 17.9   lower income families in a specific geographic community 
 17.10  designated in its articles or bylaws; 
 17.11     (c) it limits membership with voting rights to residents of 
 17.12  the designated community; and 
 17.13     (d) it has a board of directors consisting of at least 
 17.14  seven directors, 60 percent of whom are members with voting 
 17.15  rights and, to the extent feasible, 25 percent of whom are 
 17.16  elected by resident members of buildings owned by the trust; and 
 17.17     (5) except as provided in subdivision 22, paragraph (c), 
 17.18  real property devoted to temporary and seasonal residential 
 17.19  occupancy for recreation purposes, including real property 
 17.20  devoted to temporary and seasonal residential occupancy for 
 17.21  recreation purposes and not devoted to commercial purposes for 
 17.22  more than 250 days in the year preceding the year of 
 17.23  assessment.  For purposes of this clause, property is devoted to 
 17.24  a commercial purpose on a specific day if any portion of the 
 17.25  property is used for residential occupancy, and a fee is charged 
 17.26  for residential occupancy.  Class 4c also includes commercial 
 17.27  use real property used exclusively for recreational purposes in 
 17.28  conjunction with class 4c property devoted to temporary and 
 17.29  seasonal residential occupancy for recreational purposes, up to 
 17.30  a total of two acres, provided the property is not devoted to 
 17.31  commercial recreational use for more than 250 days in the year 
 17.32  preceding the year of assessment and is located within two miles 
 17.33  of the class 4c property with which it is used.  Class 4c 
 17.34  property classified in this clause also includes the remainder 
 17.35  of class 1c resorts.  Owners of real property devoted to 
 17.36  temporary and seasonal residential occupancy for recreation 
 18.1   purposes and all or a portion of which was devoted to commercial 
 18.2   purposes for not more than 250 days in the year preceding the 
 18.3   year of assessment desiring classification as class 1c or 4c, 
 18.4   must submit a declaration to the assessor designating the cabins 
 18.5   or units occupied for 250 days or less in the year preceding the 
 18.6   year of assessment by January 15 of the assessment year.  Those 
 18.7   cabins or units and a proportionate share of the land on which 
 18.8   they are located will be designated class 1c or 4c as otherwise 
 18.9   provided.  The remainder of the cabins or units and a 
 18.10  proportionate share of the land on which they are located will 
 18.11  be designated classified as class 3a.  The first $100,000 of the 
 18.12  market value of the remainder of the cabins or units and a 
 18.13  proportionate share of the land on which they are located shall 
 18.14  have a class rate of three percent.  The owner of property 
 18.15  desiring designation as class 1c or 4c property must provide 
 18.16  guest registers or other records demonstrating that the units 
 18.17  for which class 1c or 4c designation is sought were not occupied 
 18.18  for more than 250 days in the year preceding the assessment if 
 18.19  so requested.  The portion of a property operated as a (1) 
 18.20  restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 
 18.21  facility operated on a commercial basis not directly related to 
 18.22  temporary and seasonal residential occupancy for recreation 
 18.23  purposes shall not qualify for class 1c or 4c; 
 18.24     (6) (2) real property up to a maximum of one acre of land 
 18.25  owned by a nonprofit community service oriented organization; 
 18.26  provided that the property is not used for a revenue-producing 
 18.27  activity for more than six days in the calendar year preceding 
 18.28  the year of assessment and the property is not used for 
 18.29  residential purposes on either a temporary or permanent basis.  
 18.30  For purposes of this clause, a "nonprofit community service 
 18.31  oriented organization" means any corporation, society, 
 18.32  association, foundation, or institution organized and operated 
 18.33  exclusively for charitable, religious, fraternal, civic, or 
 18.34  educational purposes, and which is exempt from federal income 
 18.35  taxation pursuant to section 501(c)(3), (10), or (19) of the 
 18.36  Internal Revenue Code of 1986, as amended through December 31, 
 19.1   1990.  For purposes of this clause, "revenue-producing 
 19.2   activities" shall include but not be limited to property or that 
 19.3   portion of the property that is used as an on-sale intoxicating 
 19.4   liquor or 3.2 percent malt liquor establishment licensed under 
 19.5   chapter 340A, a restaurant open to the public, bowling alley, a 
 19.6   retail store, gambling conducted by organizations licensed under 
 19.7   chapter 349, an insurance business, or office or other space 
 19.8   leased or rented to a lessee who conducts a for-profit 
 19.9   enterprise on the premises.  Any portion of the property which 
 19.10  is used for revenue-producing activities for more than six days 
 19.11  in the calendar year preceding the year of assessment shall be 
 19.12  assessed as class 3a.  The use of the property for social events 
 19.13  open exclusively to members and their guests for periods of less 
 19.14  than 24 hours, when an admission is not charged nor any revenues 
 19.15  are received by the organization shall not be considered a 
 19.16  revenue-producing activity; 
 19.17     (7) (3) post-secondary student housing of not more than one 
 19.18  acre of land that is owned by a nonprofit corporation organized 
 19.19  under chapter 317A and is used exclusively by a student 
 19.20  cooperative, sorority, or fraternity for on-campus housing or 
 19.21  housing located within two miles of the border of a college 
 19.22  campus; and 
 19.23     (8) (4) manufactured home parks as defined in section 
 19.24  327.14, subdivision 3; and 
 19.25     (5) real property devoted to a seasonal golf operation, 
 19.26  which is privately owned and open to the public on a daily fee 
 19.27  basis.  Any portion of the real estate used for commercial 
 19.28  purposes beyond the length of the golf season in the year 
 19.29  preceding the year of assessment shall be classified as class 3a 
 19.30  property under subdivision 24, paragraph (a).  In order to 
 19.31  qualify for class 4c under this paragraph, the golf course must 
 19.32  be open to the public and can charge membership fees or dues, 
 19.33  but a membership is not required in order to use the property 
 19.34  for golfing.  To qualify under this paragraph, the property must 
 19.35  meet the requirements of section 273.112, subdivision 3, 
 19.36  paragraph (d).  
 20.1      Class 4c property has a class rate of 2.3 percent of market 
 20.2   value, except that (i) for each parcel of seasonal residential 
 20.3   recreational property not used for commercial purposes under 
 20.4   clause (5) (1) the first $72,000 $80,000 of market value on each 
 20.5   parcel has a class rate of 1.75 percent for taxes payable in 
 20.6   1997 and 1.5 percent for taxes payable in 1998 and thereafter, 
 20.7   and the market value of each parcel that exceeds $72,000 $80,000 
 20.8   has a class rate of 2.5 percent for taxes payable in 1997, 2.25 
 20.9   percent for taxes payable in 1998, and two percent for taxes 
 20.10  payable in 1999 and thereafter, and (ii) manufactured home parks 
 20.11  assessed under clause (8) (4) have a class rate of two 
 20.12  percent for taxes payable in 1996, and thereafter.  
 20.13     (d) Class 4d property includes: 
 20.14     (1) a structure that is: 
 20.15     (i) situated on real property that is used for housing for 
 20.16  the elderly or for low and moderate income families as defined 
 20.17  by the Farmers Home Administration; 
 20.18     (ii) located in a municipality of less than 10,000 
 20.19  population; and 
 20.20     (iii) financed by a direct loan or insured loan from the 
 20.21  Farmers Home Administration.  Property is classified under this 
 20.22  clause for 15 years from the date of the completion of the 
 20.23  original construction or for the original term of the loan.  
 20.24     The class rates in paragraph (c), clauses (1), (2), and (3) 
 20.25  and this clause apply to the properties described in them, only 
 20.26  in proportion to occupancy of the structure by elderly or 
 20.27  handicapped persons or low and moderate income families as 
 20.28  defined in the applicable laws unless construction of the 
 20.29  structure had been commenced prior to January 1, 1984; or the 
 20.30  project had been approved by the governing body of the 
 20.31  municipality in which it is located prior to June 30, 1983; or 
 20.32  financing of the project had been approved by a federal or state 
 20.33  agency prior to June 30, 1983.  For those properties, 4c or 4d 
 20.34  classification is available only for those units meeting the 
 20.35  requirements of section 273.1318. 
 20.36     Classification under this clause is only available to 
 21.1   property of a nonprofit or limited dividend entity. 
 21.2      In the case of a structure financed or refinanced under any 
 21.3   federal or state mortgage insurance or direct loan program 
 21.4   exclusively for housing for the elderly or for housing for the 
 21.5   handicapped, a unit shall be considered occupied so long as it 
 21.6   is actually occupied by an elderly or handicapped person or, if 
 21.7   vacant, is held for rental to an elderly or handicapped person. 
 21.8      (2) For taxes payable in 1992, 1993, and 1994, only, 
 21.9   buildings and appurtenances, together with the land upon which 
 21.10  they are located, leased by the occupant under the community 
 21.11  lending model lease-purchase mortgage loan program administered 
 21.12  by the Federal National Mortgage Association, provided the 
 21.13  occupant's income is no greater than 60 percent of the county or 
 21.14  area median income, adjusted for family size and the building 
 21.15  consists of existing single family or duplex housing.  The lease 
 21.16  agreement must provide for a portion of the lease payment to be 
 21.17  escrowed as a nonrefundable down payment on the housing.  To 
 21.18  qualify under this clause, the taxpayer must apply to the county 
 21.19  assessor by May 30 of each year.  The application must be 
 21.20  accompanied by an affidavit or other proof required by the 
 21.21  assessor to determine qualification under this clause. 
 21.22     (3) Qualifying buildings and appurtenances, together with 
 21.23  the land upon which they are located, leased for a period of up 
 21.24  to five years by the occupant under a lease-purchase program 
 21.25  administered by the Minnesota housing finance agency or a 
 21.26  housing and redevelopment authority authorized under sections 
 21.27  469.001 to 469.047, provided the occupant's income is no greater 
 21.28  than 80 percent of the county or area median income, adjusted 
 21.29  for family size, and the building consists of two or less 
 21.30  dwelling units.  The lease agreement must provide for a portion 
 21.31  of the lease payment to be escrowed as a nonrefundable down 
 21.32  payment on the housing.  The administering agency shall verify 
 21.33  the occupants income eligibility and certify to the county 
 21.34  assessor that the occupant meets the income criteria under this 
 21.35  paragraph.  To qualify under this clause, the taxpayer must 
 21.36  apply to the county assessor by May 30 of each year.  For 
 22.1   purposes of this section, "qualifying buildings and 
 22.2   appurtenances" shall be defined as one or two unit residential 
 22.3   buildings which are unoccupied and have been abandoned and 
 22.4   boarded for at least six months is qualifying low-income rental 
 22.5   housing certified to the assessor by the housing finance agency 
 22.6   under sections 273.126 and 462A.071.  Class 4d includes land in 
 22.7   proportion to the total market value of the building that is 
 22.8   qualifying low-income rental housing.  For all properties 
 22.9   qualifying as class 4d, the market value determined by the 
 22.10  assessor must be based on the normal approach to value using 
 22.11  normal unrestricted rents. 
 22.12     Class 4d property has a class rate of two 1.5 percent of 
 22.13  market value except that property classified under clause (3), 
 22.14  shall have the same class rate as class 1a property. 
 22.15     (e) Residential rental property that would otherwise be 
 22.16  assessed as class 4 property under paragraph (a); paragraph (b), 
 22.17  clauses (1) and (3); paragraph (c), clause (1), (2), (3), or 
 22.18  (4), is assessed at the class rate applicable to it under 
 22.19  Minnesota Statutes 1988, section 273.13, if it is found to be a 
 22.20  substandard building under section 273.1316.  Residential rental 
 22.21  property that would otherwise be assessed as class 4 property 
 22.22  under paragraph (d) is assessed at 2.3 percent of market value 
 22.23  if it is found to be a substandard building under section 
 22.24  273.1316. 
 22.25     (f) Class 4e property consists of the residential portion 
 22.26  of any structure located within a city that was converted from 
 22.27  nonresidential use to residential use, provided that: 
 22.28     (1) the structure had formerly been used as a warehouse; 
 22.29     (2) the structure was originally constructed prior to 1940; 
 22.30     (3) the conversion was done after December 31, 1995, but 
 22.31  before January 1, 2003; and 
 22.32     (4) the conversion involved an investment of at least 
 22.33  $25,000 per residential unit. 
 22.34     Class 4e property has a class rate of 2.3 percent, provided 
 22.35  that a structure is eligible for class 4e classification only in 
 22.36  the 12 assessment years immediately following the conversion. 
 23.1      Sec. 7.  Minnesota Statutes 1996, section 273.13, 
 23.2   subdivision 31, is amended to read: 
 23.3      Subd. 31.  [CLASS 5.] Class 5 property includes:  
 23.4      (1) tools, implements, and machinery of an electric 
 23.5   generating, transmission, or distribution system or a pipeline 
 23.6   system transporting or distributing water, gas, crude oil, or 
 23.7   petroleum products or mains and pipes used in the distribution 
 23.8   of steam or hot or chilled water for heating or cooling 
 23.9   buildings, which are fixtures; 
 23.10     (2) unmined iron ore and low-grade iron-bearing formations 
 23.11  as defined in section 273.14; and 
 23.12     (3) all other property not otherwise classified. 
 23.13     Class 5 property has a class rate of 5.06 4.5 percent of 
 23.14  market value for taxes payable in 1998 and thereafter. 
 23.15     Sec. 8.  Minnesota Statutes 1996, section 273.1398, 
 23.16  subdivision 1, is amended to read: 
 23.17     Subdivision 1.  [DEFINITIONS.] (a) In this section, the 
 23.18  terms defined in this subdivision have the meanings given them. 
 23.19     (b) "Unique taxing jurisdiction" means the geographic area 
 23.20  subject to the same set of local tax rates. 
 23.21     (c) "Previous net tax capacity" means the product of the 
 23.22  appropriate net class rates for the year previous to the year in 
 23.23  which the aid is payable, and estimated market values for the 
 23.24  assessment two years prior to that in which aid is payable.  
 23.25  "Total previous net tax capacity" means the previous net tax 
 23.26  capacities for all property within the unique taxing 
 23.27  jurisdiction.  The total previous net tax capacity shall be 
 23.28  reduced by the sum of (1) the unique taxing jurisdiction's 
 23.29  previous net tax capacity of commercial-industrial property as 
 23.30  defined in section 473F.02, subdivision 3, or 276A.02, 
 23.31  subdivision 3, multiplied by the ratio determined pursuant to 
 23.32  section 473F.08, subdivision 6, or 276A.06, subdivision 7, for 
 23.33  the municipality, as defined in section 473F.02, subdivision 8, 
 23.34  or 276A.06, subdivision 7, in which the unique taxing 
 23.35  jurisdiction is located, (2) the previous net tax capacity of 
 23.36  the captured value of tax increment financing districts as 
 24.1   defined in section 469.177, subdivision 2, and (3) the previous 
 24.2   net tax capacity of transmission lines deducted from a local 
 24.3   government's total net tax capacity under section 273.425.  
 24.4   Previous net tax capacity cannot be less than zero. 
 24.5      (d) "Equalized market values" are market values that have 
 24.6   been equalized by dividing the assessor's estimated market value 
 24.7   for the second year prior to that in which the aid is payable by 
 24.8   the assessment sales ratios determined by class in the 
 24.9   assessment sales ratio study conducted by the department of 
 24.10  revenue pursuant to section 124.2131 in the second year prior to 
 24.11  that in which the aid is payable.  The equalized market values 
 24.12  shall equal the unequalized market values divided by the 
 24.13  assessment sales ratio. 
 24.14     (e) "Equalized school levies" means the amounts levied for: 
 24.15     (1) general education under section 124A.23, subdivision 2; 
 24.16     (2) supplemental revenue under section 124A.22, subdivision 
 24.17  8a; 
 24.18     (3) transition revenue under section 124A.22, subdivision 
 24.19  13c; 
 24.20     (4) basic transportation under section 124.226, subdivision 
 24.21  1; and 
 24.22     (5) referendum revenue under section 124A.03. 
 24.23     (f) "Current local tax rate" means the quotient derived by 
 24.24  dividing the taxes levied within a unique taxing jurisdiction 
 24.25  for taxes payable in the year prior to that for which aids are 
 24.26  being calculated by the total previous net tax capacity of the 
 24.27  unique taxing jurisdiction.  
 24.28     (g) For purposes of calculating and allocating homestead 
 24.29  and agricultural credit aid authorized pursuant to subdivision 2 
 24.30  and the disparity reduction aid authorized in subdivision 3, 
 24.31  "gross taxes levied on all properties," "gross taxes," or "taxes 
 24.32  levied" means the total net tax capacity based taxes levied on 
 24.33  all properties except that levied on the captured value of tax 
 24.34  increment districts as defined in section 469.177, subdivision 
 24.35  2, and that levied on the portion of commercial industrial 
 24.36  properties' assessed value or gross tax capacity, as defined in 
 25.1   section 473F.02, subdivision 3, subject to the areawide tax as 
 25.2   provided in section 473F.08, subdivision 6, in a unique taxing 
 25.3   jurisdiction.  "Gross taxes" are before any reduction for 
 25.4   disparity reduction aid but "taxes levied" are after any 
 25.5   reduction for disparity reduction aid.  Gross taxes levied or 
 25.6   taxes levied cannot be less than zero.  
 25.7      "Taxes levied" excludes equalized school levies. 
 25.8      (h) "Household adjustment factor" means the number of 
 25.9   households for the second most recent year preceding that in 
 25.10  which the aids are payable divided by the number of households 
 25.11  for the third most recent year.  The household adjustment factor 
 25.12  cannot be less than one.  
 25.13     (i) "Growth adjustment factor" means the household 
 25.14  adjustment factor in the case of counties.  In the case of 
 25.15  cities, towns, school districts, and special taxing districts, 
 25.16  the growth adjustment factor equals one.  The growth adjustment 
 25.17  factor cannot be less than one.  
 25.18     (j) "Homestead and agricultural credit base" means the 
 25.19  previous year's certified homestead and agricultural credit aid 
 25.20  determined under subdivision 2 less any permanent aid reduction 
 25.21  in the previous year to homestead and agricultural credit aid.  
 25.22     (k) "Net tax capacity adjustment" means (1) the tax base 
 25.23  differential defined in subdivision 1a, multiplied by (2) the 
 25.24  unique taxing jurisdiction's current local tax rate.  The net 
 25.25  tax capacity adjustment cannot be less than zero. 
 25.26     (l) "Fiscal disparity adjustment" means a taxing 
 25.27  jurisdiction's fiscal disparity distribution levy under section 
 25.28  473F.08, subdivision 3, clause (a), or 276A.06, subdivision 3, 
 25.29  clause (a), for taxes payable in the year prior to that for 
 25.30  which aids are being calculated, multiplied by the ratio of the 
 25.31  tax base differential percent referenced in subdivision 1a for 
 25.32  the highest class rate for class 3 property for taxes payable in 
 25.33  the year prior to that for which aids are being calculated to 
 25.34  the highest class rate for class 3 property for taxes payable in 
 25.35  the second prior year prior to that for which aids are being 
 25.36  calculated.  In the case of school districts, the fiscal 
 26.1   disparity distribution levy shall exclude that part of the levy 
 26.2   attributable to equalized school levies. 
 26.3      Sec. 9.  Minnesota Statutes 1996, section 273.1398, 
 26.4   subdivision 1a, is amended to read: 
 26.5      Subd. 1a.  [TAX BASE DIFFERENTIAL.] (a) For aids payable in 
 26.6   1997, the tax base differential is 0.25 percent of the 
 26.7   assessment year 1995 taxable market value of class 4c 
 26.8   noncommercial seasonal recreational residential property up to 
 26.9   $72,000.  
 26.10     (b) For aids payable in 1998, the tax base differential is 
 26.11  0.25 percent the sum of the following percentages of the 
 26.12  assessment year 1996 taxable market value of the following 
 26.13  classes of property, excluding that portion of any property's 
 26.14  value which is captured value of a tax increment financing 
 26.15  district as defined in section 469.177, subdivision 2: 
 26.16     (i) 0.25 percent of class 4c noncommercial seasonal 
 26.17  recreational residential property up to $72,000.; 
 26.18     (ii) 0.2 percent of all class 3a and class 5 
 26.19  commercial/industrial/public utility property which has a class 
 26.20  rate of three percent for taxes payable in 1997; 
 26.21     (iii) 0.3 percent of all class 3a commercial/industrial 
 26.22  property which has a class rate of 4.6 percent for taxes payable 
 26.23  in 1997; 
 26.24     (iv) 0.1 percent of all class 3a public utility property 
 26.25  and all class 5 property which has a class rate of 4.6 percent 
 26.26  for taxes payable in 1997; 
 26.27     (v) 0.1 percent of all class 2 property which has a class 
 26.28  rate of 1.5 percent for taxes payable in 1997; 
 26.29     (vi) 0.25 percent of class 4c noncommercial seasonal 
 26.30  recreational residential property over $72,000; and 
 26.31     (vii) 0.6 percent of all class 4a apartment property which 
 26.32  has a class rate of 3.4 percent for taxes payable in 1997. 
 26.33     For properties lying within the area defined in section 
 26.34  473F.02, subdivision 2, the value of properties in clauses (ii) 
 26.35  through (iv) must be reduced by the ratio determined under 
 26.36  section 473F.08, subdivision 6.  
 27.1      For properties lying within the area defined in section 
 27.2   276A.01, subdivision 2, the value of properties in clauses (ii) 
 27.3   through (iv) must be reduced by the ratio determined under 
 27.4   section 276A.06, subdivision 7. 
 27.5      (c) For aids payable in 1999, the tax base differential is 
 27.6   0.25 percent of the assessment year 1997 taxable market value of 
 27.7   class 4c noncommercial seasonal recreational residential 
 27.8   property over $80,000. 
 27.9      Sec. 10.  Minnesota Statutes 1996, section 273.1398, is 
 27.10  amended by adding a subdivision to read: 
 27.11     Subd. 2e.  [STATE GENERAL EDUCATION HOMESTEAD AND 
 27.12  AGRICULTURAL CREDIT AID.] (a) Each year, a state general 
 27.13  education homestead and agricultural credit aid adjustment shall 
 27.14  be computed for each school district in the state equal to (1) 
 27.15  the district's current local tax rate for equalized school 
 27.16  levies multiplied by the tax rate differential defined in 
 27.17  subdivision 1a, plus (2) an amount computed analogously to the 
 27.18  fiscal disparity adjustment, utilizing the portion of the levy 
 27.19  attributable to equalized school levies.  The sum of the amounts 
 27.20  determined for each district shall be the state general 
 27.21  education homestead and agricultural credit aid adjustment. 
 27.22     (b) Each county's calendar year 1998 homestead and 
 27.23  agricultural credit aid under subdivision 2 shall be permanently 
 27.24  reduced by an amount equal to three percent of the county's 1996 
 27.25  adjusted net tax capacity.  Each city's and town's calendar year 
 27.26  1998 homestead and agricultural credit aid under subdivision 2 
 27.27  shall be permanently reduced by an amount equal to two percent 
 27.28  of the jurisdiction's 1996 adjusted net tax capacity.  The 
 27.29  reductions shall be made after all other computations, except 
 27.30  for the reduction in subdivision 2f, for calendar year 1998 
 27.31  homestead and agricultural credit aid have been made.  State 
 27.32  general education homestead and agricultural credit aid shall be 
 27.33  permanently increased by an amount equal to the reductions in 
 27.34  county, city, and town homestead and agricultural credit aid.  
 27.35  For the purposes of this paragraph, adjusted net tax capacity 
 27.36  for a county, city, or town is computed in the same way as it is 
 28.1   computed for school districts under section 124.2131.  
 28.2      (c) The state general education homestead and agricultural 
 28.3   credit aid adjustment for the current year shall be added to the 
 28.4   sum of the adjustment amounts from previous years to derive 
 28.5   total state general education homestead and agricultural credit 
 28.6   aid.  By June 25 of each year, the commissioner of revenue shall 
 28.7   certify to the commissioner of children, families, and learning 
 28.8   the amount of total state general education homestead and 
 28.9   agricultural credit aid for taxes payable in the following 
 28.10  year.  The amount certified shall be subtracted from the general 
 28.11  education levy amount stated in section 124A.23, subdivision 1, 
 28.12  in determining the general education tax rate. 
 28.13     Sec. 11.  Minnesota Statutes 1996, section 273.1398, is 
 28.14  amended by adding a subdivision to read: 
 28.15     Subd. 2f.  [REDUCTION FOR INCREASED CITY LOCAL GOVERNMENT 
 28.16  AID FUNDING.] In 1998, each city's homestead and agricultural 
 28.17  credit aid shall be permanently reduced by an amount equal to 
 28.18  (a) the product of its calendar year 1998 homestead and 
 28.19  agricultural credit aid after all other computations for 
 28.20  calendar year 1998 homestead and agricultural credit aid have 
 28.21  been made and (b) the ratio of $17,967,225 to the total calendar 
 28.22  year 1998 homestead and agricultural credit aid for all cities 
 28.23  after all other computations. 
 28.24     Sec. 12.  Minnesota Statutes 1996, section 273.1398, 
 28.25  subdivision 8, is amended to read: 
 28.26     Subd. 8.  [APPROPRIATION.] An amount sufficient to pay the 
 28.27  aids and credits provided under this section for the state, 
 28.28  school districts, intermediate school districts, or any group of 
 28.29  school districts levying as a single taxing entity, is annually 
 28.30  appropriated from the general fund to the commissioner of 
 28.31  children, families, and learning.  An amount sufficient to pay 
 28.32  the aids and credits provided under this section for counties, 
 28.33  cities, towns, and special taxing districts is annually 
 28.34  appropriated from the general fund to the commissioner of 
 28.35  revenue.  A jurisdiction's aid amount may be increased or 
 28.36  decreased based on any prior year adjustments for homestead 
 29.1   credit or other property tax credit or aid programs. 
 29.2      Sec. 13.  Minnesota Statutes 1996, section 276A.06, 
 29.3   subdivision 9, is amended to read: 
 29.4      Subd. 9.  [FISCAL DISPARITIES ADJUSTMENT.] In any year in 
 29.5   which the highest class rate for class 3a property changes from 
 29.6   the rate in the previous year, the following adjustments shall 
 29.7   be made to the procedures described in sections 276A.04 to 
 29.8   276A.06: 
 29.9      (1) An initial contribution tax capacity shall be 
 29.10  determined for each municipality based on the previous year's 
 29.11  class rates. 
 29.12     (2) Each jurisdiction's distribution tax capacity shall be 
 29.13  determined based upon the areawide tax base determined by 
 29.14  summing the tax capacities computed under clause (1) for all 
 29.15  municipalities and apportioning the resulting sum pursuant to 
 29.16  section 276A.05, subdivision 5. 
 29.17     (3) Each jurisdiction's distribution levy shall be 
 29.18  determined by applying the procedures described in subdivision 
 29.19  3, clause (a), to the distribution tax capacity determined 
 29.20  pursuant to clause (2). 
 29.21     (4) Each municipality's final contribution tax capacity 
 29.22  shall be determined equal to its initial contribution tax 
 29.23  capacity multiplied by the ratio of the new highest class rate 
 29.24  for class 3a property for the forthcoming tax year to the 
 29.25  previous year's highest class rate for class 3a property in the 
 29.26  current year. 
 29.27     (5) For the purposes of computing education aids and any 
 29.28  other state aids requiring the addition of the fiscal 
 29.29  disparities distribution tax capacity to the local tax capacity, 
 29.30  each municipality's final distribution tax capacity shall be 
 29.31  determined equal to its initial distribution tax capacity 
 29.32  multiplied by the ratio of the new highest class rate for class 
 29.33  3a property to the previous year's highest class rate for class 
 29.34  3a property. 
 29.35     (6) The areawide tax rate shall be determined by dividing 
 29.36  the sum of the amounts determined in clause (3) by the sum of 
 30.1   the values determined in clause (4). 
 30.2      (7) The final contribution tax capacity determined in 
 30.3   clause (4) shall also be used to determine the portion of each 
 30.4   commercial-industrial property's tax capacity subject to the 
 30.5   areawide tax rate pursuant to subdivision 7. 
 30.6      (3) All other computations shall be made as described in 
 30.7   sections 276A.04 to 276A.06, using the final contribution tax 
 30.8   capacity amounts determined in paragraph (2). 
 30.9      Sec. 14.  Minnesota Statutes 1996, section 290.06, is 
 30.10  amended by adding a subdivision to read: 
 30.11     Subd. 25.  [PROPERTY TAX CREDIT.] (a) A credit is allowed 
 30.12  against the tax imposed on an individual under this chapter 
 30.13  equal to 8.5 percent of the qualified property tax paid in 
 30.14  calendar year 1997. 
 30.15     (b) For property owned and occupied by the taxpayer, 
 30.16  qualified tax means property taxes payable as defined in section 
 30.17  290A.03, subdivision 11, assessed in 1996 and payable in 1997.  
 30.18  In the case of property classified as class 2a under section 
 30.19  273.13, the qualified tax is limited to the tax on the house, 
 30.20  garage, and immediately surrounding one acre of land. 
 30.21     (c) For a renter, the qualified property tax means the 
 30.22  amount of rent constituting property taxes under section 
 30.23  290A.03, subdivision 11, based on rent paid in 1997. 
 30.24     (d) For an individual who both owned and rented principal 
 30.25  residences in calendar year 1997, qualified taxes are sum of the 
 30.26  amounts under paragraphs (a) and (b). 
 30.27     (e) If the amount of the credit under this subdivision 
 30.28  exceeds the taxpayer's tax liability under this chapter, the 
 30.29  commissioner shall refund the excess. 
 30.30     (f) To claim a credit under this subdivision, the taxpayer 
 30.31  must attach a copy of the property tax statement and certificate 
 30.32  of rent paid, as applicable, and provide any additional 
 30.33  information the commissioner requires. 
 30.34     (g) An amount sufficient to pay refunds under this 
 30.35  subdivision is appropriated to the commissioner from the 
 30.36  property tax reform account. 
 31.1      (h) This credit applies to taxable years beginning after 
 31.2   December 31, 1996, and before January 1, 1998. 
 31.3      Sec. 15.  Minnesota Statutes 1996, section 290.06, is 
 31.4   amended by adding a subdivision to read: 
 31.5      Subd. 26.  [CREDIT FOR PROPERTY TAXES PAID ON SEASONAL 
 31.6   RESIDENTIAL RECREATIONAL PROPERTY.] A taxpayer may take as a 
 31.7   credit against the tax due from the taxpayer and a spouse, if 
 31.8   any, under this chapter the credit allowed under section 
 31.9   290A.04, subdivision 2j.  The credit allowed may not exceed the 
 31.10  tax due under this chapter.  In the case of a nonresident, or a 
 31.11  part-year resident, the credit must be allocated based on the 
 31.12  ratio in subdivision 2c. 
 31.13     Sec. 16.  Minnesota Statutes 1996, section 290.067, 
 31.14  subdivision 1, is amended to read: 
 31.15     Subdivision 1.  [AMOUNT OF CREDIT.] (a) A taxpayer may take 
 31.16  as a credit against the tax due from the taxpayer and a spouse, 
 31.17  if any, under this chapter an amount equal to the dependent care 
 31.18  credit for which the taxpayer is eligible pursuant to the 
 31.19  provisions of section 21 of the Internal Revenue Code subject to 
 31.20  the limitations provided in subdivision 2 except that in 
 31.21  determining whether the child qualified as a dependent, income 
 31.22  received as an aid to families with dependent children grant or 
 31.23  allowance to or on behalf of the child, or as a grant or 
 31.24  allowance to or on behalf of the child under the successor 
 31.25  program pursuant to Public Law 104-193, must not be taken into 
 31.26  account in determining whether the child received more than half 
 31.27  of the child's support from the taxpayer, and the provisions of 
 31.28  section 32(b)(1)(D) of the Internal Revenue Code do not apply. 
 31.29     (b) If a child who has not attained the age of six years at 
 31.30  the close of the taxable year is cared for at a licensed family 
 31.31  day care home operated by the child's parent, the taxpayer is 
 31.32  deemed to have paid employment-related expenses.  If the child 
 31.33  is 16 months old or younger at the close of the taxable year, 
 31.34  the amount of expenses deemed to have been paid equals the 
 31.35  maximum limit for one qualified individual under section 21(c) 
 31.36  and (d) of the Internal Revenue Code.  If the child is older 
 32.1   than 16 months of age but has not attained the age of six years 
 32.2   at the close of the taxable year, the amount of expenses deemed 
 32.3   to have been paid equals the amount the licensee would charge 
 32.4   for the care of a child of the same age for the same number of 
 32.5   hours of care.  
 32.6      (c) If a married couple: 
 32.7      (1) has a child who has not attained the age of one year at 
 32.8   the close of the taxable year; 
 32.9      (2) files a joint tax return for the taxable year; and 
 32.10     (3) does not participate in a dependent care assistance 
 32.11  program as defined in section 129 of the Internal Revenue Code, 
 32.12  in lieu of the actual employment related expenses paid for that 
 32.13  child under paragraph (a) or the deemed amount under paragraph 
 32.14  (b), the lesser of (i) the combined earned income of the couple 
 32.15  or (ii) $2,400 will be deemed to be the employment related 
 32.16  expense paid for that child.  The earned income limitation of 
 32.17  section 21(d) of the Internal Revenue Code shall not apply to 
 32.18  this deemed amount.  These deemed amounts apply regardless of 
 32.19  whether any employment-related expenses have been paid.  
 32.20     (d) If the taxpayer is not required and does not file a 
 32.21  federal individual income tax return for the tax year, no credit 
 32.22  is allowed for any amount paid to any person unless: 
 32.23     (1) the name, address, and taxpayer identification number 
 32.24  of the person are included on the return claiming the credit; or 
 32.25     (2) if the person is an organization described in section 
 32.26  501(c)(3) of the Internal Revenue Code and exempt from tax under 
 32.27  section 501(a) of the Internal Revenue Code, the name and 
 32.28  address of the person are included on the return claiming the 
 32.29  credit.  
 32.30  In the case of a failure to provide the information required 
 32.31  under the preceding sentence, the preceding sentence does not 
 32.32  apply if it is shown that the taxpayer exercised due diligence 
 32.33  in attempting to provide the information required. 
 32.34     In the case of a nonresident, part-year resident, or a 
 32.35  person who has earned income not subject to tax under this 
 32.36  chapter, the credit determined under section 21 of the Internal 
 33.1   Revenue Code must be allocated based on the ratio by which the 
 33.2   earned income of the claimant and the claimant's spouse from 
 33.3   Minnesota sources bears to the total earned income of the 
 33.4   claimant and the claimant's spouse. 
 33.5      Sec. 17.  Minnesota Statutes 1996, section 290A.03, 
 33.6   subdivision 7, is amended to read: 
 33.7      Subd. 7.  [DEPENDENT.] "Dependent" means any person who is 
 33.8   considered a dependent under sections 151 and 152 of the 
 33.9   Internal Revenue Code.  In the case of a son, stepson, daughter, 
 33.10  or stepdaughter of the claimant, amounts received as an aid to 
 33.11  families with dependent children grant, allowance to or on 
 33.12  behalf of the child, or as a grant or allowance to or on behalf 
 33.13  of the child under the successor program pursuant to Public Law 
 33.14  Number 104-193, surplus food, or other relief in kind supplied 
 33.15  by a governmental agency must not be taken into account in 
 33.16  determining whether the child received more than half of the 
 33.17  child's support from the claimant.  
 33.18     Sec. 18.  Minnesota Statutes 1996, section 290A.03, 
 33.19  subdivision 11, is amended to read: 
 33.20     Subd. 11.  [RENT CONSTITUTING PROPERTY TAXES.] "Rent 
 33.21  constituting property taxes" means the amount of gross rent 
 33.22  actually paid in cash, or its equivalent, which is attributable 
 33.23  (a) to the property tax paid on the unit or (b) to the 
 33.24  amount for claims based on rent paid in calendar years 1997 and 
 33.25  1998, 17 percent and 20 percent thereafter of the gross rent 
 33.26  actually paid in cash, or its equivalent, or the portion of rent 
 33.27  paid in lieu of property taxes, in any calendar year by a 
 33.28  claimant for the right of occupancy of the claimant's Minnesota 
 33.29  homestead in the calendar year, and which rent constitutes the 
 33.30  basis, in the succeeding calendar year of a claim for relief 
 33.31  under this chapter by the claimant.  The amount of rent 
 33.32  attributable to property taxes paid or payments in lieu made on 
 33.33  the unit shall be determined by multiplying the gross rent paid 
 33.34  by the claimant for the calendar year for the unit by a 
 33.35  fraction, the numerator of which is the net tax on the property 
 33.36  where the unit is located and the denominator of which is the 
 34.1   total scheduled rent.  In no case may the rent constituting 
 34.2   property taxes exceed 50 percent of the gross rent paid by the 
 34.3   claimant during that calendar year.  In the case of a claimant 
 34.4   who resides in a unit for which (1) a rent subsidy is paid to, 
 34.5   or for, the claimant based on the income of the claimant or the 
 34.6   claimant's family, or (2) a subsidy is paid to a public housing 
 34.7   authority that owns or operates the claimant's rental unit, 
 34.8   pursuant to United States Code, title 42, section 1437c, 20 
 34.9   percent of gross rent actually paid in cash or its equivalent 
 34.10  shall be the claimant's "rent constituting property taxes 
 34.11  paid."  For purposes of this subdivision, "rent subsidy" does 
 34.12  not include any housing assistance received under aid to 
 34.13  families with dependent children, general assistance, Minnesota 
 34.14  supplemental assistance, supplemental security income, or 
 34.15  similar income maintenance programs. 
 34.16     Sec. 19.  Minnesota Statutes 1996, section 290A.03, 
 34.17  subdivision 13, is amended to read: 
 34.18     Subd. 13.  [PROPERTY TAXES PAYABLE.] "Property taxes 
 34.19  payable" means the property tax exclusive of special 
 34.20  assessments, penalties, and interest payable on a claimant's 
 34.21  homestead before reductions made under section 273.13 but after 
 34.22  deductions made under sections 273.135, 273.1391, 273.42, 
 34.23  subdivision 2, and any other state paid property tax credits in 
 34.24  any calendar year.  In the case of a claimant who makes ground 
 34.25  lease payments, "property taxes payable" includes the amount of 
 34.26  the payments directly attributable to the property taxes 
 34.27  assessed against the parcel on which the house is located.  No 
 34.28  apportionment or reduction of the "property taxes payable" shall 
 34.29  be required for the use of a portion of the claimant's homestead 
 34.30  for a business purpose if the claimant does not deduct any 
 34.31  business depreciation expenses for the use of a portion of the 
 34.32  homestead in the determination of federal adjusted gross 
 34.33  income.  For homesteads which are manufactured homes as defined 
 34.34  in section 273.125, subdivision 8, and for homesteads which are 
 34.35  park trailers taxed as manufactured homes under section 168.012, 
 34.36  subdivision 9, "property taxes payable" shall also include the 
 35.1   amount for claims based on rent paid in calendar years 1997 and 
 35.2   1998, 17 percent and 20 percent thereafter of the gross rent 
 35.3   paid in the preceding year for the site on which the homestead 
 35.4   is located, which is attributable to the net tax paid on the 
 35.5   site.  The amount attributable to property taxes shall be 
 35.6   determined by multiplying the net tax on the parcel by a 
 35.7   fraction, the numerator of which is the gross rent paid for the 
 35.8   calendar year for the site and the denominator of which is the 
 35.9   gross rent paid for the calendar year for the parcel.  When a 
 35.10  homestead is owned by two or more persons as joint tenants or 
 35.11  tenants in common, such tenants shall determine between them 
 35.12  which tenant may claim the property taxes payable on the 
 35.13  homestead.  If they are unable to agree, the matter shall be 
 35.14  referred to the commissioner of revenue whose decision shall be 
 35.15  final.  Property taxes are considered payable in the year 
 35.16  prescribed by law for payment of the taxes. 
 35.17     In the case of a claim relating to "property taxes 
 35.18  payable," the claimant must have owned and occupied the 
 35.19  homestead on January 2 of the year in which the tax is payable 
 35.20  and (i) the property must have been classified as homestead 
 35.21  property pursuant to section 273.13, subdivision 22 or 23 
 35.22  273.124, on or before December 15 of the assessment year to 
 35.23  which the "property taxes payable" relate; or (ii) the claimant 
 35.24  must provide documentation from the local assessor that 
 35.25  application for homestead classification has been made on or 
 35.26  before December 15 of the year in which the "property taxes 
 35.27  payable" were payable and that the assessor has approved the 
 35.28  application. 
 35.29     Sec. 20.  Minnesota Statutes 1996, section 290A.19, is 
 35.30  amended to read: 
 35.31     290A.19 [OWNER OR MANAGING AGENT TO FURNISH RENT 
 35.32  CERTIFICATE.] 
 35.33     (a) The owner or managing agent of any property for which 
 35.34  rent is paid for occupancy as a homestead must furnish a 
 35.35  certificate of rent constituting property tax paid to a person 
 35.36  who is a renter on December 31, in the form prescribed by the 
 36.1   commissioner.  If the renter moves before December 31, the owner 
 36.2   or managing agent may give the certificate to the renter at the 
 36.3   time of moving, or mail the certificate to the forwarding 
 36.4   address if an address has been provided by the renter.  The 
 36.5   certificate must be made available to the renter before February 
 36.6   1 of the year following the year in which the rent was paid.  
 36.7   The owner or managing agent must retain a duplicate of each 
 36.8   certificate or an equivalent record showing the same information 
 36.9   for a period of three years.  The duplicate or other record must 
 36.10  be made available to the commissioner upon request.  For the 
 36.11  purposes of this section, "owner" includes a park owner as 
 36.12  defined under section 327C.01, subdivision 6, and "property" 
 36.13  includes a lot as defined under section 327C.01, subdivision 3. 
 36.14     (b) The certificate of rent constituting property taxes 
 36.15  must include the address of the property, including the county, 
 36.16  and the property tax parcel identification number and any 
 36.17  additional information that the commissioner determines is 
 36.18  appropriate. 
 36.19     (c) If the owner or managing agent fails to provide the 
 36.20  renter with a certificate of rent constituting property taxes, 
 36.21  the commissioner shall allocate the net tax on the building to 
 36.22  the unit on a square footage basis or other appropriate basis as 
 36.23  the commissioner determines.  The renter shall supply the 
 36.24  commissioner with a statement from the county treasurer that 
 36.25  gives the amount of property tax on the parcel, the address and 
 36.26  property tax parcel identification number of the property, and 
 36.27  the number of units in the building. 
 36.28     (d) By January 31 of the year following the year in which 
 36.29  the rent was collected, each owner or managing agent shall 
 36.30  report to the commissioner on a form prescribed by the 
 36.31  commissioner the net tax pertaining to the rental residential 
 36.32  part of the property, the total scheduled rent, and the fraction 
 36.33  computed under section 290A.03, subdivision 11.  A copy of the 
 36.34  property tax statement for taxes payable in that year must be 
 36.35  attached. 
 36.36     Sec. 21.  Minnesota Statutes 1996, section 290A.04, is 
 37.1   amended by adding a subdivision to read: 
 37.2      Subd. 2j.  [SEASONAL RESIDENTIAL RECREATIONAL CREDIT.] If 
 37.3   the net property taxes payable on a seasonal residential 
 37.4   recreational property not used for commercial purposes, 
 37.5   classified under section 273.13, subdivision 25, increase more 
 37.6   than ten percent over its net property taxes payable in the 
 37.7   previous year, and if the amount of the increase is $100 or 
 37.8   more, a claimant who is an owner of the property in both years 
 37.9   is allowed a credit under section 290.06, subdivision 26, equal 
 37.10  to 75 percent of the first $300 of the excess of the increase 
 37.11  over ten percent.  This subdivision does not apply to the 
 37.12  portion of an increase in taxes payable that are attributable to 
 37.13  improvements to the property.  
 37.14     In addition to the other proofs required by this chapter, 
 37.15  each claimant under this subdivision shall file with the 
 37.16  application a copy of the property tax statement for property 
 37.17  taxes payable in the current year and the previous year and any 
 37.18  other documents required by the commissioner. 
 37.19     For purposes of this subdivision, "net property taxes 
 37.20  payable" means property taxes payable minus credit amounts for 
 37.21  which a claimant qualify's under this subdivision for the 
 37.22  previous year. 
 37.23     The credit under this subdivision is effective for property 
 37.24  taxes payable in 1998, for credits under section 290.06, 
 37.25  subdivision 26, for tax year 1998, income tax returns filed in 
 37.26  1999; and for property taxes payable in 1999, for credits under 
 37.27  section 290.06, subdivision 26, for tax year 1999, income tax 
 37.28  returns filed in 2000. 
 37.29     Sec. 22.  [462A.071] [CERTIFICATION OF HOUSING QUALIFYING 
 37.30  FOR REDUCED PROPERTY TAX RATE.] 
 37.31     Subdivision 1.  [CERTIFICATION.] By June 30 of each year, 
 37.32  the agency must certify to local assessors the units of 
 37.33  low-income rental properties that qualify for class 4d under 
 37.34  sections 273.126 and 273.13.  In making these certifications, 
 37.35  the agency may rely on the application and supporting 
 37.36  information supplied by the property owner as to compliance with 
 38.1   the income limits under section 273.126, subdivision 2, and 
 38.2   satisfaction of the minimum housing quality standards under 
 38.3   subdivision 4. 
 38.4      Subd. 2.  [APPLICATION.] (a) In order to qualify for 
 38.5   certification under subdivision 1, the owner or manager of the 
 38.6   property must annually apply to the agency.  The application 
 38.7   must be in the form prescribed by the agency, contain the 
 38.8   information required by the agency, and be submitted by the date 
 38.9   and time specified by the agency. 
 38.10     (b) Each application must include: 
 38.11     (1) the property tax identification number; 
 38.12     (2) the number, type, and size of units the applicant seeks 
 38.13  to qualify as low-income housing under class 4d; 
 38.14     (3) the number, type, and size of units in the property for 
 38.15  which the applicant is not seeking qualification, if any; 
 38.16     (4) a certification that the property has been inspected by 
 38.17  a qualified inspector within the past three years and meets the 
 38.18  minimum housing quality standards or is exempt from the 
 38.19  inspection requirement under subdivision 4; 
 38.20     (5) a statement indicating the building is in compliance 
 38.21  with the income limits; 
 38.22     (6) an executed agreement to restrict rents meeting the 
 38.23  requirements specified by the agency or executed leases for the 
 38.24  units for which qualification as low-income housing as class 4d 
 38.25  under section 273.13 is sought and the rent schedule; and 
 38.26     (7) any additional information the agency deems appropriate 
 38.27  to require. 
 38.28     (c) The applicant must pay a per-unit application fee to be 
 38.29  set by the agency.  The application fee charged by the agency 
 38.30  must approximately equal the costs of processing and reviewing 
 38.31  the applications.  The fee must be deposited in the general fund.
 38.32     Subd. 3.  [AGREEMENT TO RESTRICT RENTS.] The agency may 
 38.33  prescribe one or more standard form agreements to restrict rents 
 38.34  that meet the requirements of section 273.126, subdivision 3.  
 38.35  The agreements must be in recordable form.  The agency may 
 38.36  require applicants to execute a rent restriction agreement in 
 39.1   this form as a condition of entering an agreement to restrict 
 39.2   rents. 
 39.3      Subd. 4.  [MINIMUM HOUSING QUALITY STANDARDS.] (a) To 
 39.4   qualify for taxation under class 4d under section 273.13, a unit 
 39.5   must meet both the housing maintenance code of the local unit of 
 39.6   government in which the unit is located, if such a code has been 
 39.7   adopted, and the housing quality standards adopted by the United 
 39.8   States Department of Housing and Urban Development. 
 39.9      (b) In order to meet the minimum housing quality standards, 
 39.10  a building must be inspected by an independent designated 
 39.11  inspector at least once every three years.  The inspector must 
 39.12  certify that the building complies with the minimum standards.  
 39.13  The property owner must pay the cost of the inspection. 
 39.14     (c) The agency may exempt from the inspection requirement 
 39.15  housing units that are financed by a governmental entity and 
 39.16  subject to regular inspection or other compliance checks with 
 39.17  regard to minimum housing quality.  Written certification must 
 39.18  be available, however, showing that these exempt units have been 
 39.19  inspected within the last three years and comply with the 
 39.20  requirements under the public financing or local requirements. 
 39.21     Subd. 5.  [HOUSING INSPECTORS.] (a) Housing inspections 
 39.22  required by this section may be conducted only by persons 
 39.23  designated by the agency.  The agency may designate one or more 
 39.24  persons to conduct inspections for all or part of the state.  A 
 39.25  designated inspector may charge a fee for an inspection up to a 
 39.26  maximum amount approved by the agency.  The inspector must be 
 39.27  independent of the owner or manager of the inspected property. 
 39.28     (b) The agency must maintain a list of persons eligible to 
 39.29  conduct housing inspections under this section. 
 39.30     Subd. 6.  [SECTION 8 AND TAX CREDIT UNITS.] (a) The agency 
 39.31  may deem units as meeting the requirements of section 273.126 
 39.32  and this section, if the units either: 
 39.33     (1) are subject to a housing assistance payments contract 
 39.34  under section 8 of the United States Housing Act of 1937, as 
 39.35  amended; or 
 39.36     (2) are rent and income restricted units of a qualified 
 40.1   low-income housing project receiving tax credits under section 
 40.2   42(g) of the Internal Revenue Code of 1986, as amended. 
 40.3      (b) The agency may certify these deemed units under 
 40.4   subdivision 1 based on a simplified application procedure that 
 40.5   verifies the unit's qualifications under paragraph (a). 
 40.6      Subd. 7.  [MONITORING COMPLIANCE.] (a) The agency must 
 40.7   monitor compliance by building owners with the requirements of 
 40.8   section 273.126 and this section.  The agency must annually 
 40.9   conduct on-site examinations of a sample of the buildings 
 40.10  receiving class 4d taxation to monitor compliance.  The agency 
 40.11  may contract with third parties to monitor compliance. 
 40.12     (b) An inspector, designated by the agency under 
 40.13  subdivision 5, shall notify the agency if, in conducting an 
 40.14  inspection under subdivision 4, the inspector finds that: 
 40.15     (1) a unit is receiving class 4d taxation; 
 40.16     (2) the unit is not in compliance with the requirements of 
 40.17  subdivision 4; and 
 40.18     (3) the owner or manager fails or refuses to cure the 
 40.19  violations within a reasonable time after receiving notification 
 40.20  of the violation. 
 40.21     Subd. 8.  [PENALTIES.] (a) The penalties provided by this 
 40.22  subdivision apply to each unit that received class 4d taxation 
 40.23  for a year and failed to meet the requirements of section 
 40.24  273.126 and this section. 
 40.25     (b) If the owner or manager does not comply with the rent 
 40.26  restriction agreement, a penalty applies equal to the lesser of: 
 40.27     (1) the increased taxes that would have been imposed, if 
 40.28  the property had not been classified under class 4d for any year 
 40.29  in which the agreement was violated; or 
 40.30     (2) 150 percent of the rent charged in excess of the rent 
 40.31  restriction agreement. 
 40.32     (c) If the owner or manager does not comply with the income 
 40.33  restrictions or minimum housing quality standards, a penalty 
 40.34  applies equal to the increased taxes that would have been 
 40.35  imposed, if the property had not been classified under class 4d 
 40.36  for any year in which restrictions were violated. 
 41.1      (d) If the agency finds that the violations were 
 41.2   inadvertent and insubstantial, a penalty of $....... per unit 
 41.3   per year applies in lieu of the penalties specified under 
 41.4   paragraphs (b) and (c).  In order to qualify under this 
 41.5   paragraph, violations of the minimum housing quality standards 
 41.6   must be corrected within a reasonable period of time and rent 
 41.7   charged in excess of the agreement must be rebated to the 
 41.8   tenants. 
 41.9      (e) The agency may abate the penalties under this 
 41.10  subdivision for reasonable cause. 
 41.11     (f) Penalties assessed under paragraph (d) are payable to 
 41.12  the agency and must be deposited in the general fund.  If an 
 41.13  owner or manager fails to timely pay a penalty imposed under 
 41.14  paragraph (d), the agency may choose to: 
 41.15     (1) impose the penalty under paragraph (b) or (c); or 
 41.16     (2) certify the penalty under paragraph (d) to the assessor 
 41.17  to be added to and collected under section 273.126. 
 41.18  The agency shall certify to the assessor and county auditor 
 41.19  penalties assessed under paragraphs (b) and (c) and clause (2).  
 41.20  The assessor or auditor shall impose and collect the certified 
 41.21  penalties as additional taxes under section 273.126.  Any 
 41.22  penalty collected under section 273.126 as additional taxes must 
 41.23  be distributed to taxing districts in the same manner as 
 41.24  property taxes on the property. 
 41.25     Subd. 9.  [TAX COURT REVIEW.] (a) An owner may appeal to 
 41.26  tax court as provided in section 271.06: 
 41.27     (1) a denial of a request for certification of a property 
 41.28  as qualifying for class 4d taxation; 
 41.29     (2) imposition of a penalty under this section; or 
 41.30     (3) denial of a request to abate a penalty. 
 41.31     (b) The county attorney shall represent the public in 
 41.32  opposing the appeal. 
 41.33     Subd. 10.  [RULEMAKING.] (a) The agency may adopt 
 41.34  administrative rules under chapter 14 to carry out the 
 41.35  provisions of this section, including establishing standards for 
 41.36  abating penalties, violations that are inadvertent and 
 42.1   insubstantial, selection of inspectors, selection of persons to 
 42.2   monitor compliance, establishing rent restriction agreement 
 42.3   terms, or any other purpose. 
 42.4      (b) The agency may adopt emergency rules under chapter 14.  
 42.5   Any emergency rules adopted under this authority expire on 
 42.6   January 1, 1999. 
 42.7      Sec. 23.  Minnesota Statutes 1996, section 469.040, is 
 42.8   amended by adding a subdivision to read: 
 42.9      Subd. 1a.  [LIMITS FOR EXEMPT HOUSING PROJECTS.] (a) The 
 42.10  provisions of this subdivision apply to housing projects and 
 42.11  housing development projects acquired, constructed, financed, or 
 42.12  refinanced after December 31, 1997. 
 42.13     (b) For a project to qualify for the property tax exemption 
 42.14  under this section, the authority must establish income 
 42.15  guidelines meeting the requirements of paragraph (c). 
 42.16     (c) The housing authority must establish and make good 
 42.17  faith efforts to abide by one of the following income limits for 
 42.18  the housing project: 
 42.19     (1) at least 20 percent of the housing units are occupied 
 42.20  by individuals whose incomes are 50 percent or less of the area 
 42.21  median gross income; or 
 42.22     (2) at least 40 percent of the housing units are occupied 
 42.23  by individuals whose incomes are 60 percent or less of the area 
 42.24  median gross income. 
 42.25     For purposes of this paragraph, the terms defined in 
 42.26  section 42 of the Internal Revenue Code of 1986 apply, except 
 42.27  "median area gross income" means the greater of (1) the median 
 42.28  gross income for the area determined under section 42 of the 
 42.29  Internal Revenue Code of 1986, as amended, or (2) the median 
 42.30  gross income for the state. 
 42.31     (d) The provisions of this subdivision do not apply to all 
 42.32  or part of a housing project that is subject to the requirements 
 42.33  of section 5 of the United States Housing Act of 1937.  
 42.34     Sec. 24.  Minnesota Statutes 1996, section 469.040, 
 42.35  subdivision 3, is amended to read: 
 42.36     Subd. 3.  [STATEMENT FILED WITH ASSESSOR; PERCENTAGE TAX ON 
 43.1   RENTALS.] Notwithstanding the provisions of subdivision 1, after 
 43.2   a housing project or a housing development project carried on 
 43.3   under sections 469.016 to 469.026 has become occupied, in whole 
 43.4   or in part, an authority shall file with the assessor, on or 
 43.5   before April 15 of each year, a statement of the aggregate 
 43.6   shelter rentals of that project collected during the preceding 
 43.7   calendar year.  Unless a greater amount has been agreed upon 
 43.8   between the authority and the governing body or bodies for which 
 43.9   the authority was created, in whose jurisdiction the project is 
 43.10  located, five percent of the aggregate shelter rentals shall be 
 43.11  charged to the authority as a service charge for the services 
 43.12  and facilities to be furnished with respect to that project.  
 43.13  The service charge shall be collected from the authority in the 
 43.14  manner provided by law for the assessment and collection of 
 43.15  taxes.  The amount so collected shall be distributed to the 
 43.16  several taxing bodies in the same proportion as the tax rate of 
 43.17  each bears to the total tax rate of those taxing bodies.  The 
 43.18  governing body or bodies for which the authority has been 
 43.19  created, in whose jurisdiction the project is located, may agree 
 43.20  with the authority for the payment of a service charge for a 
 43.21  housing project or a housing development project in an amount 
 43.22  greater than five percent of the aggregate annual shelter 
 43.23  rentals of any project, upon the basis of shelter rentals or 
 43.24  upon another basis agreed upon.  The service charge may not 
 43.25  exceed the amount which would be payable in taxes were the 
 43.26  property not exempt.  If such an agreement is made, the service 
 43.27  charge so agreed upon shall be collected and distributed in the 
 43.28  manner above provided.  If the project has become occupied, or 
 43.29  if the land upon which the project is to be constructed has been 
 43.30  acquired, the agreement shall specify the location of the 
 43.31  project for which the agreement is made.  "Shelter rental" means 
 43.32  the total rentals of a housing project exclusive of any charge 
 43.33  for utilities and special services such as heat, water, 
 43.34  electricity, gas, sewage disposal, or garbage removal.  "Service 
 43.35  charge" means payment in lieu of taxes.  The records of each 
 43.36  housing project shall be open to inspection by the proper 
 44.1   assessing officer. 
 44.2      Sec. 25.  Minnesota Statutes 1996, section 473F.08, 
 44.3   subdivision 8a, is amended to read: 
 44.4      Subd. 8a.  [FISCAL DISPARITIES ADJUSTMENT.] In any year in 
 44.5   which the highest class rate for class 3a property changes from 
 44.6   the rate in the previous year, the following adjustments shall 
 44.7   be made to the procedures described in sections 473F.06 to 
 44.8   473F.08. 
 44.9      (1) An initial contribution tax capacity shall be 
 44.10  determined for each municipality based on the previous year's 
 44.11  class rates. 
 44.12     (2) Each jurisdiction's distribution tax capacity shall be 
 44.13  determined based upon the areawide tax base determined by 
 44.14  summing the tax capacities computed under clause (1) for all 
 44.15  municipalities and apportioning the resulting sum pursuant to 
 44.16  section 473F.07, subdivision 5. 
 44.17     (3) Each jurisdiction's distribution levy shall be 
 44.18  determined by applying the procedures described in subdivision 
 44.19  3, clause (a), to the distribution tax capacity determined 
 44.20  pursuant to clause (2). 
 44.21     (4) Each municipality's final contribution tax capacity 
 44.22  shall be determined equal to its initial contribution tax 
 44.23  capacity multiplied by the ratio of the new highest class rate 
 44.24  for class 3a property for the forthcoming tax year to the 
 44.25  previous year's highest class rate for class 3a property in the 
 44.26  current year. 
 44.27     (5) For the purposes of computing education aids and any 
 44.28  other state aids requiring the addition of the fiscal 
 44.29  disparities distribution tax capacity to the local tax capacity, 
 44.30  each municipality's final distribution tax capacity shall be 
 44.31  determined equal to its initial distribution tax capacity 
 44.32  multiplied by the ratio of the new highest class rate for class 
 44.33  3a property to the previous year's highest class rate for class 
 44.34  3a property. 
 44.35     (6) The areawide tax rate shall be determined by dividing 
 44.36  the sum of the amounts determined in clause (3) by the sum of 
 45.1   the values determined in clause (4). 
 45.2      (7) The final contribution tax capacity determined in 
 45.3   clause (4) shall also be used to determined the portion of each 
 45.4   commercial/industrial property's tax capacity subject to the 
 45.5   areawide tax rate pursuant to subdivision 6. 
 45.6      (3) All other computations shall be made as described in 
 45.7   sections 473.06 to 473F.08, using the final contribution tax 
 45.8   capacity amounts determined in paragraph (2). 
 45.9      Sec. 26.  Minnesota Statutes 1996, section 477A.011, 
 45.10  subdivision 34, is amended to read: 
 45.11     Subd. 34.  [CITY REVENUE NEED.] (a) For a city with a 
 45.12  population equal to or greater than 2,500, "city revenue need" 
 45.13  is the sum of (1) 3.462312 times the pre-1940 housing 
 45.14  percentage; plus (2) 2.093826 times the commercial industrial 
 45.15  percentage; plus (3) 6.862552 times the population decline 
 45.16  percentage; plus (4) .00026 times the city population; plus (5) 
 45.17  152.0141. 
 45.18     (b) For a city with a population less than 2,500, "city 
 45.19  revenue need" is the average of (a) the sum of (1) 1.795919 
 45.20  times the pre-1940 housing percentage; plus (2) 1.562138 times 
 45.21  the commercial industrial percentage; plus (3) 4.177568 times 
 45.22  the population decline percentage; plus (4) 1.04013 times the 
 45.23  transformed population; minus (5) 107.475, and (b) the sum of 
 45.24  the city's revenue base for 1996, 1997, and 1998 divided by 
 45.25  three, multiplied by 1.06 and divided by its population. 
 45.26     (c) The city revenue need cannot be less than zero. 
 45.27     (d) The city revenue need for a city under paragraphs (a) 
 45.28  and (b) is increased by 15 percent if the city is either (i) a 
 45.29  city in the metropolitan area that is contiguous to a city of 
 45.30  the first class or contiguous to a city that is contiguous to a 
 45.31  city of the first class and the city has a median income of 
 45.32  $50,000 or less as reported in the most recent federal census, 
 45.33  or (ii) a city outside the metropolitan area with a population 
 45.34  of 5,000 or more.  Cities of the first class do not qualify for 
 45.35  the adjustment under this clause.  
 45.36     (e) For calendar year 1995 1998 and subsequent years, the 
 46.1   city revenue need for a city, as determined in paragraphs (a) 
 46.2   to (c) (d), is multiplied by the ratio of the annual implicit 
 46.3   price deflator for state and local government purchases, as 
 46.4   prepared by the United States Department of Commerce, for the 
 46.5   most recently available year to the 1993 implicit price deflator 
 46.6   for state and local government purchases. 
 46.7      Sec. 27.  Minnesota Statutes 1996, section 477A.011, 
 46.8   subdivision 37, is amended to read: 
 46.9      Subd. 37.  [BASE REDUCTION PERCENTAGE.] "Base reduction 
 46.10  percentage" is (1) the difference between (a) the amount 
 46.11  available for city aid under section 477A.03 for the year for 
 46.12  which aid is being calculated and (b) the sum of the amount 
 46.13  available for city aid under section 477A.03 for calendar 
 46.14  year 1994 1997 and the total amount of the homestead and 
 46.15  agricultural credit aid reduction under section 273.1398, 
 46.16  subdivision 2f, (2) divided by the sum of the city aid base for 
 46.17  all cities and (3) multiplied by 100.  The reduction percentage 
 46.18  for any year may not be less than the reduction percentage from 
 46.19  the previous year.  For aid paid in calendar year 1994, the 
 46.20  reduction percentage is zero.  The reduction percentage may not 
 46.21  be more than 100 percent. 
 46.22     Sec. 28.  Minnesota Statutes 1996, section 477A.013, 
 46.23  subdivision 9, is amended to read: 
 46.24     Subd. 9.  [CITY AID DISTRIBUTION.] (a) In calendar year 
 46.25  1994 1998 and thereafter, each city shall receive an aid 
 46.26  distribution equal to the sum of (1) the city formula aid under 
 46.27  subdivision 8, and (2) its city aid base multiplied by a 
 46.28  percentage equal to 100 minus the base reduction percentage. 
 46.29     (b) The percentage increase for a first class city in 
 46.30  calendar year 1995 and thereafter shall not exceed the 
 46.31  percentage increase in the sum of the aid to all cities under 
 46.32  this section in the current calendar year compared to the sum of 
 46.33  the aid to all cities in the previous year. 
 46.34     (c) The total aid for any city, except a first class city, 
 46.35  shall not exceed the sum of (1) ten percent of the city's net 
 46.36  levy for the year prior to the aid distribution plus (2) its 
 47.1   total aid in the previous year before any increases or decreases 
 47.2   under sections 16A.711, subdivision 5, and 477A.0132. 
 47.3      (d) Notwithstanding paragraph (c), in 1995 only, for cities 
 47.4   which in 1992 or 1993 transferred an amount from governmental 
 47.5   funds to their sewer and water fund in an amount greater than 
 47.6   their net levy for taxes payable in the year in which the 
 47.7   transfer occurred, the total aid shall not exceed the sum of (1) 
 47.8   20 percent of the city's net levy for the year prior to the aid 
 47.9   distribution plus (2) its total aid in the previous year before 
 47.10  any increases or decreases under sections 16A.711, subdivision 
 47.11  5, and 477A.0132 No city may receive an aid distribution that is 
 47.12  less than $5 multiplied by the city's population. 
 47.13     Sec. 29.  Minnesota Statutes 1996, section 477A.03, 
 47.14  subdivision 2, is amended to read: 
 47.15     Subd. 2.  [ANNUAL APPROPRIATION.] A sum sufficient to 
 47.16  discharge the duties imposed by sections 477A.011 to 477A.014 is 
 47.17  annually appropriated from the general fund to the commissioner 
 47.18  of revenue.  For aids payable in 1996 1998 and thereafter, the 
 47.19  total aids paid under sections 477A.013, subdivision 9 
 47.20  477A.0121, and 477A.0122 are the amounts certified to be paid in 
 47.21  the previous year, adjusted for inflation as provided under 
 47.22  subdivision 3.  Aid payments to counties under section 477A.0121 
 47.23  are limited to $20,265,000 in 1996.  Aid payments to counties 
 47.24  under section 477A.0121 are limited to $27,571,625 in 
 47.25  1997 cities under section 477A.013, subdivision 9 are limited to 
 47.26  the sum of (a) the amount certified in the previous year 
 47.27  adjusted for twice the inflation provided for under subdivision 
 47.28  3 and (b) the total amount of the homestead and agricultural 
 47.29  credit aid reduction under section 273.1398, subdivision 2f for 
 47.30  aids payable in 1998.  For aid payable in 1998 1999 and 
 47.31  thereafter, the total aids paid under section 477A.0121 
 47.32  477A.013, subdivision 9, are the amounts certified to be paid in 
 47.33  the previous year, adjusted for inflation as provided under 
 47.34  subdivision 3. 
 47.35     Sec. 30.  [TEMPORARY EXEMPTIONS FROM INSPECTION 
 47.36  REQUIREMENTS.] 
 48.1      (a) The Minnesota housing finance agency may provide a 
 48.2   temporary exemption to the inspection requirement under 
 48.3   Minnesota Statutes, sections 273.126, subdivision 4, and 
 48.4   462A.071, if the agency finds that: 
 48.5      (1) the property owner made a good faith effort to obtain 
 48.6   an inspection; and 
 48.7      (2) the owner was unable to obtain an inspection in time to 
 48.8   apply because the designated inspectors were unable to conduct 
 48.9   all the requested inspections. 
 48.10     (b) If a unit that is exempted under this section does not 
 48.11  ultimately obtain a certification from a designated inspector 
 48.12  that it is in compliance with the minimum housing quality 
 48.13  standards, the additional taxes under Minnesota Statutes, 
 48.14  section 273.126, subdivision 5, apply. 
 48.15     (c) Procedures or rules for granting exemptions under this 
 48.16  section are not subject to the administrative rulemaking under 
 48.17  Minnesota Statutes, chapter 14. 
 48.18     (d) The authority under this section expires December 31, 
 48.19  2000. 
 48.20     Sec. 31.  [YEAR 2000 READY.] 
 48.21     Any computer software or hardware that is purchased by the 
 48.22  state or a political subdivision with money appropriated in this 
 48.23  bill must be year 2000 ready. 
 48.24     Sec. 32.  [APPROPRIATION.] 
 48.25     (a) $500,000 is appropriated for fiscal years 1998 and 1999 
 48.26  from the general fund to the housing finance agency for purposes 
 48.27  of administering the certification of qualifying low-income 
 48.28  residential properties for property taxation under class 4d. 
 48.29     (b) $2,000,000 is appropriated for fiscal year 1998 to the 
 48.30  commissioner of revenue for distribution to the 87 counties for 
 48.31  implementing the various provisions of this act, including the 
 48.32  added expenses of the truth in taxation provisions.  The 
 48.33  commissioner shall develop a formula for distribution of the 
 48.34  total amount to the counties. 
 48.35     Sec. 33.  [REPEALER.] 
 48.36     (a) Minnesota Statutes 1996, section 124.2134, is repealed. 
 49.1      (b) Minnesota Statutes 1996, section 273.13, subdivision 
 49.2   32, is repealed. 
 49.3      (c) Minnesota Statutes 1996, sections 273.1317; and 
 49.4   273.1318, are repealed. 
 49.5      (d) Minnesota Statutes 1996, section 290A.03, subdivisions 
 49.6   12a and 14, are repealed. 
 49.7      Sec. 34.  [EFFECTIVE DATE.] 
 49.8      Sections 1, 2, and 33, paragraph (c), are effective for 
 49.9   property taxes payable in 1999.  Sections 4, 5 to 7, 13, and 33, 
 49.10  paragraph (b), are effective for taxes payable in 1998 and 
 49.11  thereafter, except the low-income housing provisions in class 4c 
 49.12  and 4d are effective for taxes payable in 1999 and thereafter.  
 49.13  Sections 8 to 12, 26 to 29, and 33, paragraph (a), are effective 
 49.14  for aids payable in 1998 and subsequent years.  
 49.15     Sections 18 to 20 and 33, paragraph (d) are effective 
 49.16  beginning for property tax refunds based on rent paid after 
 49.17  December 31, 1996.  Sections 22, 30, and 31 are effective the 
 49.18  day following final enactment.  Sections 23 and 24 are effective 
 49.19  August 1, 1997. 
 49.20                             ARTICLE 2 
 49.21                      EDUCATION FINANCE REFORM 
 49.22     Section 1.  Minnesota Statutes 1996, section 124.239, is 
 49.23  amended by adding a subdivision to read: 
 49.24     Subd. 4a.  [ALTERNATIVE FACILITIES REVENUE.] A district's 
 49.25  alternative facilities revenue for a fiscal year equals its 
 49.26  costs related to an approved facility plan as follows: 
 49.27     (1) if the district has indicated to the commissioner that 
 49.28  bonds will be issued, the principal and interest payments on 
 49.29  outstanding bonds issued according to subdivision 3; or 
 49.30     (2) if the district has indicated to the commissioner that 
 49.31  the plan will be funded on a pay-as-you-go basis, the district's 
 49.32  costs according to the schedule approved in the plan. 
 49.33     Sec. 2.  Minnesota Statutes 1996, section 124.239, 
 49.34  subdivision 5, is amended to read: 
 49.35     Subd. 5.  [LEVY AUTHORIZED.] A district, after local board 
 49.36  approval, may levy for costs related to an approved facility 
 50.1   plan as follows:  
 50.2      (a) if the district has indicated to the commissioner that 
 50.3   bonds will be issued, the district may levy for the principal 
 50.4   and interest payments on outstanding bonds issued according to 
 50.5   subdivision 3; or 
 50.6      (b) if the district has indicated to the commissioner that 
 50.7   the plan will be funded through levy, the district may levy 
 50.8   according to the schedule approved in the plan To obtain 
 50.9   alternative facilities revenue, a school district may levy an 
 50.10  amount equal to the district's alternative facilities revenue as 
 50.11  defined in subdivision 4a, multiplied by the lesser of one, or 
 50.12  the ratio of the quotient derived by dividing the adjusted net 
 50.13  tax capacity of the district for the year before the year the 
 50.14  levy is certified by the actual pupil units in the district for 
 50.15  the school year to which the levy is attributable, to the 
 50.16  equalizing factor under section 124A.02. 
 50.17     Sec. 3.  Minnesota Statutes 1996, section 124.239, is 
 50.18  amended by adding a subdivision to read: 
 50.19     Subd. 5a.  [ALTERNATIVE FACILITIES AID.] A district's 
 50.20  alternative facilities aid is the difference between its 
 50.21  alternative facilities revenue and its alternative facilities 
 50.22  levy.  If a district does not levy the entire amount permitted, 
 50.23  alternative facilities aid must be reduced in proportion to the 
 50.24  actual amount levied. 
 50.25     Sec. 4.  Minnesota Statutes 1996, section 124.2601, 
 50.26  subdivision 2, is amended to read: 
 50.27     Subd. 2.  [PROGRAMS FUNDED.] Adult basic education programs 
 50.28  established under section 124.26 and approved by the 
 50.29  commissioner are eligible for revenue aid under this section. 
 50.30     Sec. 5.  Minnesota Statutes 1996, section 124.2601, 
 50.31  subdivision 3, is amended to read: 
 50.32     Subd. 3.  [AID.] Adult basic education aid for each 
 50.33  approved program equals the sum of 65 percent of the general 
 50.34  education formula allowance times the number of full-time 
 50.35  equivalent students in its adult basic education program and an 
 50.36  amount equal to .12 percent times the district's adjusted net 
 51.1   tax capacity for assessment year 1997. 
 51.2      Sec. 6.  Minnesota Statutes 1996, section 124.2711, 
 51.3   subdivision 1, is amended to read: 
 51.4      Subdivision 1.  [REVENUE AID.] The revenue State aid for 
 51.5   early childhood family education programs for a school district 
 51.6   equals $101.25 for 1993 and later fiscal years times the greater 
 51.7   of: 
 51.8      (1) 150; or 
 51.9      (2) the number of people under five years of age residing 
 51.10  in the school district on October 1 of the previous school year. 
 51.11     Sec. 7.  Minnesota Statutes 1996, section 124.2711, 
 51.12  subdivision 5, is amended to read: 
 51.13     Subd. 5.  [HOME VISITING LEVY AID.] A school district that 
 51.14  enters into a collaborative agreement to provide education 
 51.15  services and social services to families with young children may 
 51.16  levy an amount is eligible for state aid equal to $1.60 times 
 51.17  the number of people under five years of age residing in the 
 51.18  district on September 1 of the last school year.  Levy revenue 
 51.19  under this subdivision shall not be included as revenue under 
 51.20  subdivision 1.  The revenue shall be used for home visiting 
 51.21  programs under section 121.882, subdivision 2b. 
 51.22     Sec. 8.  Minnesota Statutes 1996, section 124.2713, 
 51.23  subdivision 1, is amended to read: 
 51.24     Subdivision 1.  [TOTAL COMMUNITY EDUCATION REVENUE.] 
 51.25  Community education revenue equals the sum of a district's 
 51.26  general community education revenue and youth service program 
 51.27  revenue.  Community education revenue is provided entirely 
 51.28  through state aid. 
 51.29     Sec. 9.  Minnesota Statutes 1996, section 124.2714, is 
 51.30  amended to read: 
 51.31     124.2714 [ADDITIONAL COMMUNITY EDUCATION REVENUE.] 
 51.32     (a) A district that is eligible under section 124.2713, 
 51.33  subdivision 2, may levy an amount up is eligible for aid equal 
 51.34  to the amount of revenue authorized by Minnesota Statutes 1986, 
 51.35  section 275.125, subdivision 8, clause (2).  
 51.36     (b) Beginning with levies revenue for fiscal year 1995, 
 52.1   this levy revenue must be reduced each year by the amount of any 
 52.2   increase in the levying district's general community education 
 52.3   revenue under section 124.2713, subdivision 3, for that fiscal 
 52.4   year over the amount received by the district under section 
 52.5   124.2713, subdivision 3, for fiscal year 1994. 
 52.6      (c) The proceeds of the levy revenue may be used for the 
 52.7   purposes set forth in section 124.2713, subdivision 8. 
 52.8      Sec. 10.  Minnesota Statutes 1996, section 124.2715, 
 52.9   subdivision 1, is amended to read: 
 52.10     Subdivision 1.  [REVENUE AMOUNT.] A district that is 
 52.11  eligible according to section 124.2713, subdivision 2, may 
 52.12  receive revenue for a program for adults with disabilities.  
 52.13  Revenue for the program for adults with disabilities for a 
 52.14  district or a group of districts equals the lesser of:  
 52.15     (1) the actual expenditures for approved programs and 
 52.16  budgets; or 
 52.17     (2) $60,000.  
 52.18     Revenue is provided through state aid. 
 52.19     Sec. 11.  Minnesota Statutes 1996, section 124.2716, 
 52.20  subdivision 2, is amended to read: 
 52.21     Subd. 2.  [EXTENDED DAY REVENUE.] The extended day revenue 
 52.22  for an eligible school district equals the approved additional 
 52.23  cost of providing services to children with disabilities or 
 52.24  children experiencing family or related problems of a temporary 
 52.25  nature who participate in the extended day program.  Extended 
 52.26  day revenue is provided through state aid. 
 52.27     Sec. 12.  [124.913] [LEASE PURCHASE; INSTALLMENT BUYS.] 
 52.28     Subdivision 1.  [LEASE PURCHASE; INSTALLMENT BUYS.] (a) 
 52.29  Upon application to, and approval by, the commissioner in 
 52.30  accordance with the procedures and limits in section 124.91, 
 52.31  subdivision 1, a district, as defined in this subdivision, may: 
 52.32     (1) purchase real or personal property under an installment 
 52.33  contract; or 
 52.34     (2) may lease real or personal property with an option to 
 52.35  purchase under a lease purchase agreement, by which installment 
 52.36  contract or lease purchase agreement title is kept by the seller 
 53.1   or vendor or assigned to a third party as security for the 
 53.2   purchase price, including interest, if any. 
 53.3      (b) The obligation created by the installment contract or 
 53.4   the lease purchase agreement must not be included in the 
 53.5   calculation of net debt for purposes of section 475.53, and does 
 53.6   not constitute debt under other law.  An election is not 
 53.7   required in connection with the execution of the installment 
 53.8   contract or the lease purchase agreement. 
 53.9      (c) The proceeds of the revenue authorized by this section 
 53.10  must not be used to acquire a facility to be primarily used for 
 53.11  athletic or school administration purposes. 
 53.12     (d) For purposes of this subdivision, "district" means: 
 53.13     (1) a school district required to have a comprehensive plan 
 53.14  for the elimination of segregation whose plan has been 
 53.15  determined by the commissioner to be in compliance with the 
 53.16  state board of education rules relating to equality of 
 53.17  educational opportunity and school desegregation; or 
 53.18     (2) a school district that participates in a joint program 
 53.19  for interdistrict desegregation with a district defined in 
 53.20  clause (1), if the facility acquired under this subdivision is 
 53.21  to be primarily used for the joint program. 
 53.22     (e) Notwithstanding section 124.91, subdivision 1, the 
 53.23  prohibition against a levy by a district to lease or rent a 
 53.24  district-owned building to itself does not apply to levies 
 53.25  otherwise authorized by this subdivision. 
 53.26     (f) For the purposes of this subdivision, any references in 
 53.27  section 124.91, subdivision 1, to building or land shall include 
 53.28  personal property. 
 53.29     Subd. 2.  [LEASE PURCHASE; INSTALLMENT BUYS REVENUE.] A 
 53.30  district's lease purchase and installment buys revenue for a 
 53.31  fiscal year equals the amount needed to make payments required 
 53.32  by a lease purchase agreement, installment purchase agreement, 
 53.33  or other deferred payment agreement: 
 53.34     (1) that was authorized by Minnesota Statutes 1989 
 53.35  Supplement, section 465.71, if: 
 53.36     (i) the agreement was approved by the commissioner before 
 54.1   July 1, 1990, according to Minnesota Statutes 1989 Supplement, 
 54.2   section 275.125, subdivision 11d; or 
 54.3      (ii) the district levied in 1989 for the payments; or 
 54.4      (2) authorized by subdivision 1, or Minnesota Statutes 
 54.5   1996, section 124.91, subdivision 7. 
 54.6      Subd. 3.  [LEASE PURCHASE AND INSTALLMENT BUYS LEVY.] To 
 54.7   receive lease purchase and installment buys revenue, a school 
 54.8   district may levy an amount equal to the district's lease 
 54.9   purchase and installment buys revenue as defined in subdivision 
 54.10  2, multiplied by the lesser of one, or the ratio of the quotient 
 54.11  derived by dividing the adjusted net tax capacity of the 
 54.12  district for the year before the year the levy is certified by 
 54.13  the actual pupil units in the district for the school year to 
 54.14  which the levy is attributable, to the equalizing factor under 
 54.15  section 124A.02. 
 54.16     Subd. 4.  [LEASE PURCHASE AND INSTALLMENT BUYS AID.] A 
 54.17  district's lease purchase and installment buys aid is the 
 54.18  difference between its lease purchase and installment buys 
 54.19  revenue and its lease purchase and installment buys levy.  If a 
 54.20  district does not levy the entire amount permitted, lease 
 54.21  purchase and installment buys aid must be reduced in proportion 
 54.22  to the actual amount levied. 
 54.23     Sec. 13.  Minnesota Statutes 1996, section 124.95, 
 54.24  subdivision 1, is amended to read: 
 54.25     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 54.26  section, the eligible debt service revenue of a district is 
 54.27  defined as follows: 
 54.28     (1) the amount needed to produce between five and six 
 54.29  percent in excess of the amount needed to meet when due the 
 54.30  principal and interest payments on the obligations of the 
 54.31  district for eligible projects according to subdivision 2, 
 54.32  including the amounts necessary for repayment of energy loans 
 54.33  according to section 216C.37 or sections 298.292 to 298.298, 
 54.34  debt service loans and capital loans, lease purchase payments 
 54.35  under section 124.91, subdivisions 2 and 3, alternative 
 54.36  facilities levies under section 124.239, subdivision 5, minus 
 55.1      (2) the amount of debt service excess levy reduction for 
 55.2   that school year calculated according to the procedure 
 55.3   established by the commissioner. 
 55.4      (b) The obligations in this paragraph are excluded from 
 55.5   eligible debt service revenue: 
 55.6      (1) obligations under section 124.2445; 
 55.7      (2) the part of debt service principal and interest paid 
 55.8   from the taconite environmental protection fund or northeast 
 55.9   Minnesota economic protection trust; 
 55.10     (3) obligations issued under Laws 1991, chapter 265, 
 55.11  article 5, section 18, as amended by Laws 1992, chapter 499, 
 55.12  article 5, section 24; and 
 55.13     (4) obligations under section 124.2455. 
 55.14     (c) For purposes of this section, if a preexisting school 
 55.15  district reorganized under section 122.22, 122.23, or 122.241 to 
 55.16  122.248 is solely responsible for retirement of the preexisting 
 55.17  district's bonded indebtedness, capital loans or debt service 
 55.18  loans, debt service equalization aid must be computed separately 
 55.19  for each of the preexisting school districts. 
 55.20     Sec. 14.  Minnesota Statutes 1996, section 124A.23, 
 55.21  subdivision 1, is amended to read: 
 55.22     Subdivision 1.  [GENERAL EDUCATION TAX RATE.] The 
 55.23  commissioner shall establish the general education tax rate by 
 55.24  July 1 of each year for levies payable in the following year.  
 55.25  The general education tax capacity rate shall be a rate, rounded 
 55.26  up to the nearest tenth of a percent, that, when applied to the 
 55.27  adjusted net tax capacity for all districts, raises the amount 
 55.28  specified in this subdivision.  The general education tax rate 
 55.29  shall be the rate that raises $1,054,000,000 for fiscal year 
 55.30  1996 and $1,359,000,000 for fiscal year 1997 1998 and 
 55.31  $1,368,000,000 for fiscal year 1999, and $1,482,300,000 for 
 55.32  fiscal year 2000 and later fiscal years.  The general education 
 55.33  tax rate may not be changed due to changes or corrections made 
 55.34  to a district's adjusted net tax capacity after the tax rate has 
 55.35  been established.  
 55.36     Sec. 15.  [GENERAL EDUCATION LEVY REDUCTION.] 
 56.1      Notwithstanding the provisions of Minnesota Statutes, 
 56.2   section 124A.23, subdivision 1, the general education levy shall 
 56.3   be reduced by $210,000,000 for taxes payable in 1998 and 
 56.4   $250,000,000 for taxes payable in 1999.  $82,500,000 in fiscal 
 56.5   year 1999 and $123,000,000 in fiscal year 2000 is appropriated 
 56.6   from the property tax reform account established in article 12, 
 56.7   section 2, to the commissioner of children, families, and 
 56.8   learning to offset a portion of the costs of the levy reductions 
 56.9   contained in this section.  $106,500,000 in fiscal year 1999 and 
 56.10  $102,000,000 in fiscal year 2000 is appropriated from the 
 56.11  general fund to the commissioner of children, families, and 
 56.12  learning to offset the remaining costs of the levy reductions 
 56.13  contained in this section. 
 56.14     Sec. 16.  [FISCAL YEAR 1998 SHIFT COST.] 
 56.15     $30,800,000 is appropriated in fiscal year 1998 from the 
 56.16  general fund to the commissioner of children, families, and 
 56.17  learning for additional general education aid as a result of the 
 56.18  property tax revenue recognition shift and the reduction of the 
 56.19  general education levy for property taxes payable in 1998. 
 56.20     Sec. 17.  [CALENDAR YEAR 1997 REFERENDUM REVENUE LIMIT.] 
 56.21     (a) Notwithstanding any law to the contrary, a school 
 56.22  district may not conduct a referendum under section 124A.03 from 
 56.23  the effective date of this act to December 31, 1997 unless the 
 56.24  commissioner of children, families and learning has authorized 
 56.25  the election. 
 56.26     (b) Elections to renew existing referendum revenue 
 56.27  authority in amounts not to exceed the current level of 
 56.28  referendum revenue authority per pupil unit are exempt from the 
 56.29  limit and requirements of this section. 
 56.30     (c) The aggregate amount of referendum revenue authorized 
 56.31  for referendum elections by the commissioner under this section 
 56.32  may not exceed $16,500,000. 
 56.33     (d) A school district that desires to hold an election 
 56.34  under Minnesota Statutes, section 124A.03, must submit an 
 56.35  application to the commissioner by August 1, 1997. 
 56.36     (e) The commissioner shall prioritize applications and 
 57.1   grant authority to hold an election to districts in the 
 57.2   following order: 
 57.3      (1) districts without authority for an operating referendum 
 57.4   under Minnesota Statutes, section 124A.03 or districts that can 
 57.5   document a financial hardship; and 
 57.6      (2) districts that are in statutory operating debt and have 
 57.7   an approved plan or have received an extension from the 
 57.8   commissioner to file a plan to eliminate the statutory operating 
 57.9   debt. 
 57.10     (f) The commissioner must approve, deny or modify each 
 57.11  district's application for authority to hold a referendum 
 57.12  election authority by August 31, 1997.  Copies of each 
 57.13  application shall be forwarded to the chairs of the house and 
 57.14  senate education finance committees and the chairs of the house 
 57.15  and senate tax committees, with a notation as to whether the 
 57.16  commissioner approved, denied, or modified the application. 
 57.17     Sec. 18.  [REPEALER.] 
 57.18     (a) Minnesota Statutes 1996, section 124.91, subdivisions 2 
 57.19  and 7, are repealed. 
 57.20     (b) Minnesota Statutes 1996, sections 124.2601, 
 57.21  subdivisions 4, 5, and 6; 124.2711, subdivisions 2a and 3; 
 57.22  124.2713, subdivisions 6, 6a, 6b, and 7; 124.2715, subdivisions 
 57.23  2 and 3; 124.2716, subdivisions 3 and 4, are repealed for 
 57.24  revenue for fiscal year 2000 and later. 
 57.25     Sec. 19.  [EFFECTIVE DATE.] 
 57.26     Sections 1, 2, 3, 12, 13, 15, and 18, paragraph (a), are 
 57.27  effective beginning in fiscal year 1999.  Sections 4 to 11, 14, 
 57.28  and 18, paragraph (b), are effective beginning in fiscal year 
 57.29  2000.  Section 16 is effective for fiscal year 1998. 
 57.30                             ARTICLE 3
 57.31                            PROPERTY TAX
 57.32     Section 1.  Minnesota Statutes 1996, section 69.021, 
 57.33  subdivision 7, is amended to read: 
 57.34     Subd. 7.  [APPORTIONMENT OF FIRE STATE AID TO 
 57.35  MUNICIPALITIES AND RELIEF ASSOCIATIONS.] (a) The commissioner 
 57.36  shall apportion the fire state aid relative to the premiums 
 58.1   reported on the Minnesota Firetown Premium Reports filed under 
 58.2   this chapter to each municipality and/or firefighters' relief 
 58.3   association.  
 58.4      (b) The commissioner shall calculate an initial fire state 
 58.5   aid allocation amount for each municipality or fire department 
 58.6   under paragraph (c) and a minimum fire state aid allocation 
 58.7   amount for each municipality or fire department under paragraph 
 58.8   (d).  The municipality or fire department must receive the 
 58.9   larger fire state aid amount. 
 58.10     (c) The initial fire state aid allocation amount is the 
 58.11  amount available for apportionment as fire state aid under 
 58.12  subdivision 5, without inclusion of any additional funding 
 58.13  amount to support a minimum fire state aid amount under section 
 58.14  423A.02, subdivision 3, allocated one-half in proportion to the 
 58.15  population as shown in the last official statewide federal 
 58.16  census for each fire town and one-half in proportion to the 
 58.17  market value of each fire town, including (1) the market value 
 58.18  of tax exempt property and (2) the market value of natural 
 58.19  resources lands receiving in lieu payments under sections 
 58.20  477A.11 to 477A.14, but excluding the market value of minerals.  
 58.21  In the case of incorporated or municipal fire departments 
 58.22  furnishing fire protection to other cities, towns, or townships 
 58.23  as evidenced by valid fire service contracts filed with the 
 58.24  commissioner, the distribution must be adjusted proportionately 
 58.25  to take into consideration the crossover fire protection 
 58.26  service.  Necessary adjustments shall be made to subsequent 
 58.27  apportionments.  In the case of municipalities or independent 
 58.28  fire departments qualifying for the aid, the commissioner shall 
 58.29  calculate the state aid for the municipality or relief 
 58.30  association on the basis of the population and the market value 
 58.31  of the area furnished fire protection service by the fire 
 58.32  department as evidenced by duly executed and valid fire service 
 58.33  agreements filed with the commissioner.  If one or more fire 
 58.34  departments are furnishing contracted fire service to a city, 
 58.35  town, or township, only the population and market value of the 
 58.36  area served by each fire department may be considered in 
 59.1   calculating the state aid and the fire departments furnishing 
 59.2   service shall enter into an agreement apportioning among 
 59.3   themselves the percent of the population and the market value of 
 59.4   each service area.  The agreement must be in writing and must be 
 59.5   filed with the commissioner. 
 59.6      (d) The minimum fire state aid allocation amount is the 
 59.7   amount in addition to the initial fire state allocation amount 
 59.8   that is derived from any additional funding amount to support a 
 59.9   minimum fire state aid amount under section 423A.02, subdivision 
 59.10  3, and allocated to municipalities with volunteer firefighter 
 59.11  relief associations based on the number of active volunteer 
 59.12  firefighters who are members of the relief association as 
 59.13  reported in the annual financial reporting for the calendar year 
 59.14  1993 to the office of the state auditor, but not to exceed 30 
 59.15  active volunteer firefighters, so that all municipalities or 
 59.16  fire departments with volunteer firefighter relief associations 
 59.17  receive in total at least a minimum fire state aid amount per 
 59.18  1993 active volunteer firefighter to a maximum of 30 
 59.19  firefighters. 
 59.20     (e) The fire state aid must be paid to the treasurer of the 
 59.21  municipality where the fire department is located and the 
 59.22  treasurer of the municipality shall, within 30 days of receipt 
 59.23  of the fire state aid, transmit the aid to the relief 
 59.24  association if the relief association has filed a financial 
 59.25  report with the treasurer of the municipality and has met all 
 59.26  other statutory provisions pertaining to the aid apportionment. 
 59.27     (f) The commissioner may make rules to permit the 
 59.28  administration of the provisions of this section.  Any 
 59.29  adjustments needed to correct prior misallocations must be made 
 59.30  to subsequent apportionments. 
 59.31     Sec. 2.  Minnesota Statutes 1996, section 93.41, is amended 
 59.32  to read: 
 59.33     93.41 [STATE-OWNED IRON-BEARING MATERIALS.] 
 59.34     Subdivision 1.  [USE FOR ROAD CONSTRUCTION AND OTHER 
 59.35  PURPOSES.] In case the commissioner of natural resources shall 
 59.36  determine that any paint rock, taconite, or other iron-bearing 
 60.1   material belonging to the state and containing not more than 45 
 60.2   percent dried iron by analysis is needed and suitable for use in 
 60.3   the construction or maintenance of any road, tailings basin, 
 60.4   settling basin, dike, dam, bank fill, or other works on public 
 60.5   or private property, and that such use would be in the best 
 60.6   interests of the public, the commissioner may authorize the 
 60.7   disposal of such material therefor as hereinafter provided.  
 60.8      Subd. 2.  [MATERIALS SUBJECT TO STATE IRON ORE MINING 
 60.9   LEASE.] If such material is subject to an existing state iron 
 60.10  ore mining lease or located on property subject to an existing 
 60.11  state iron ore mining lease, the commissioner, by written 
 60.12  agreement with the holder of the lease, may authorize the use of 
 60.13  the material for any purpose specified in subdivision 1 that 
 60.14  will facilitate the mining and disposal of the iron ore therein 
 60.15  on such terms as the commissioner may prescribe consistent with 
 60.16  the interests of the state, or may authorize the holder of the 
 60.17  lease to dispose of the material otherwise for any purpose 
 60.18  specified in subdivision 1 upon payment of an amount therefor 
 60.19  equivalent to the royalty that would be payable under the terms 
 60.20  of the lease if the material were shipped or otherwise disposed 
 60.21  of as iron ore, but not less than the applicable minimum rate 
 60.22  prescribed by section 93.20.  
 60.23     Subd. 3.  [ISSUANCE OF LEASES, ROYALTIES.] If such 
 60.24  material, whether in the ground or in stockpile, is not subject 
 60.25  to an existing lease, the commissioner may issue leases for the 
 60.26  taking and removal thereof for the purposes specified in 
 60.27  subdivision 1 in like manner as provided by section 92.50 for 
 60.28  leases for the taking and removal of sand, gravel, and other 
 60.29  materials specified in said section, and subject to all the 
 60.30  provisions thereof, so far as applicable; provided, that the 
 60.31  amount payable for such material shall be at least equivalent to 
 60.32  the minimum royalty that would be payable therefor under the 
 60.33  provisions of section 93.20.  
 60.34     Subd. 4.  [SALE OF STOCKPILED IRON-BEARING MATERIAL IN 
 60.35  PLACE.] If such material is in stockpile and is not subject to 
 60.36  an existing lease, the commissioner may sell stockpiled 
 61.1   iron-bearing material in place.  The sale must be to a person 
 61.2   holding an interest in the surface of the property upon which 
 61.3   the stockpile is located or to a person holding an interest in 
 61.4   publicly or privately owned stockpiled iron-bearing material 
 61.5   located in the same stockpile.  
 61.6      Sec. 3.  Minnesota Statutes 1996, section 103D.905, 
 61.7   subdivision 4, is amended to read: 
 61.8      Subd. 4.  [BOND FUND.] A bond fund consists of the proceeds 
 61.9   of special assessments, storm water charges, loan repayments, 
 61.10  and ad valorem tax levies pledged by the watershed district for 
 61.11  the payment of bonds or notes issued by the watershed district 
 61.12  secured by the property of the watershed district that is 
 61.13  producing or is likely to produce a regular income.  The bond 
 61.14  fund is to be used for the payment of the purchase price of the 
 61.15  property or the value of the property as determined by the court 
 61.16  in proper proceedings and for the improvement and development of 
 61.17  the property principal of, premium or administrative surcharge, 
 61.18  if any, and interest on the bonds and notes issued by the 
 61.19  watershed district and for payments required to be made to the 
 61.20  federal government under section 148(f) of the Internal Revenue 
 61.21  Code of 1986, as amended.  
 61.22     Sec. 4.  Minnesota Statutes 1996, section 103D.905, 
 61.23  subdivision 5, is amended to read: 
 61.24     Subd. 5.  [CONSTRUCTION OR IMPLEMENTATION FUND.] (a) A 
 61.25  construction or implementation fund consists of:  
 61.26     (1) the proceeds of watershed district bonds or notes or of 
 61.27  the sale of county bonds; 
 61.28     (2) construction or implementation loans from the pollution 
 61.29  control agency under sections 103F.701 to 103F.761, or from any 
 61.30  agency of the federal government; and 
 61.31     (3) special assessments, storm water charges, loan 
 61.32  repayments, and ad valorem tax levies levied or to be levied to 
 61.33  supply funds for the construction or implementation of the 
 61.34  projects of the watershed district, including reservoirs, 
 61.35  ditches, dikes, canals, channels, storm water facilities, sewage 
 61.36  treatment facilities, wells, and other works, and the expenses 
 62.1   incident to and connected with the construction or 
 62.2   implementation. 
 62.3      (b) Construction or implementation loans from the pollution 
 62.4   control agency under sections 103F.701 to 103F.761, or from an 
 62.5   agency of the federal government may be repaid from money 
 62.6   collected by the proceeds of watershed district bonds or notes 
 62.7   or from the collections of storm water charges, loan repayments, 
 62.8   ad valorem tax levies, or special assessments on properties 
 62.9   benefited by the project.  
 62.10     Sec. 5.  Minnesota Statutes 1996, section 103D.905, is 
 62.11  amended by adding a subdivision to read: 
 62.12     Subd. 9.  [PROJECT TAX LEVY.] In addition to other tax 
 62.13  levies provided in this section or in any other law, a watershed 
 62.14  district may levy a tax: 
 62.15     (1) to pay the costs of projects undertaken by the 
 62.16  watershed district which are to be funded, in whole or in part, 
 62.17  with the proceeds of grants or construction or implementation 
 62.18  loans from an agency of the state of Minnesota under the 
 62.19  authority of sections 103F.701 to 103F.761; 
 62.20     (2) to pay the principal of, or premium or administrative 
 62.21  surcharge, if any, and interest on, the bonds and notes issued 
 62.22  by the watershed district pursuant to section 103F.725; or 
 62.23     (3) to repay the construction or implementation loans under 
 62.24  sections 103F.701 to 103F.761. 
 62.25     Taxes levied with respect to payment of bonds and notes 
 62.26  shall comply with section 475.61. 
 62.27     Sec. 6.  Minnesota Statutes 1996, section 216B.16, is 
 62.28  amended by adding a subdivision to read: 
 62.29     Subd. 6d.  [WIND ENERGY; PROPERTY TAX.] An owner of a wind 
 62.30  energy conversion facility which is required to pay property 
 62.31  taxes under section 272.02, subdivision 1, paragraph (21), may 
 62.32  petition the public utilities commission to include in any power 
 62.33  purchase agreement between the owner of the facility and a 
 62.34  public utility regulated by the commission the amount of 
 62.35  property taxes paid by the owner of the facility.  The public 
 62.36  utilities commission shall require the public utility to amend 
 63.1   the power purchase agreement to include the property taxes paid 
 63.2   by the owner of the facility in the price paid by the utility 
 63.3   for wind generated electricity only if the commission finds: 
 63.4      (a) the owner of the facility has paid the property taxes 
 63.5   required by this subdivision; 
 63.6      (b) the power purchase agreement between the public utility 
 63.7   and the owner does not already require the utility to pay the 
 63.8   amount of property taxes the owner has paid under this 
 63.9   subdivision; and 
 63.10     (c) the commission has approved a rate schedule containing 
 63.11  provisions for the automatic adjustment of charges for utility 
 63.12  service in direct relation to the charges ordered by the 
 63.13  commission under section 272.02, subdivision 1, paragraph (21). 
 63.14     Sec. 7.  Minnesota Statutes 1996, section 271.01, 
 63.15  subdivision 5, is amended to read: 
 63.16     Subd. 5.  [JURISDICTION.] The tax court shall have 
 63.17  statewide jurisdiction.  Except for an appeal to the supreme 
 63.18  court or any other appeal allowed under this subdivision, the 
 63.19  tax court shall be the sole, exclusive, and final authority for 
 63.20  the hearing and determination of all questions of law and fact 
 63.21  arising under the tax laws of the state, as defined in this 
 63.22  subdivision, in those cases that have been appealed to the tax 
 63.23  court and in any case that has been transferred by the district 
 63.24  court to the tax court.  The tax court shall have no 
 63.25  jurisdiction in any case that does not arise under the tax laws 
 63.26  of the state or in any criminal case or in any case determining 
 63.27  or granting title to real property or in any case that is under 
 63.28  the probate jurisdiction of the district court.  The small 
 63.29  claims division of the tax court shall have no jurisdiction in 
 63.30  any case dealing with property valuation or assessment for 
 63.31  property tax purposes until the taxpayer has appealed the 
 63.32  valuation or assessment to the county board of equalization, and 
 63.33  in those towns and cities which have not transferred their 
 63.34  duties to the county, the town or city board of equalization and 
 63.35  to the county board of equalization, except for those taxpayers 
 63.36  whose original assessments are determined by the commissioner of 
 64.1   revenue.  The tax court shall have no jurisdiction in any case 
 64.2   involving an order of the state board of equalization unless a 
 64.3   taxpayer contests the valuation of property.  Laws governing 
 64.4   taxes, aids, and related matters administered by the 
 64.5   commissioner of revenue, laws dealing with property valuation, 
 64.6   assessment or taxation of property for property tax purposes, 
 64.7   and any other laws that contain provisions authorizing review of 
 64.8   taxes, aids, and related matters by the tax court shall be 
 64.9   considered tax laws of this state subject to the jurisdiction of 
 64.10  the tax court.  This subdivision shall not be construed to 
 64.11  prevent an appeal, as provided by law, to an administrative 
 64.12  agency, board of equalization, review under section 274.13, 
 64.13  subdivision 1c, or to the commissioner of revenue.  Wherever 
 64.14  used in this chapter, the term commissioner shall mean the 
 64.15  commissioner of revenue, unless otherwise specified. 
 64.16     Sec. 8.  Minnesota Statutes 1996, section 272.02, 
 64.17  subdivision 1, is amended to read: 
 64.18     Subdivision 1.  All property described in this section to 
 64.19  the extent herein limited shall be exempt from taxation: 
 64.20     (1) All public burying grounds. 
 64.21     (2) All public schoolhouses. 
 64.22     (3) All public hospitals. 
 64.23     (4) All academies, colleges, and universities, and all 
 64.24  seminaries of learning. 
 64.25     (5) All churches, church property, and houses of worship. 
 64.26     (6) Institutions of purely public charity except parcels of 
 64.27  property containing structures and the structures described in 
 64.28  section 273.13, subdivision 25, paragraph (c), clauses (1), (2), 
 64.29  and (3), or paragraph (d), other than those that qualify for 
 64.30  exemption under clause (25). 
 64.31     (7) All public property exclusively used for any public 
 64.32  purpose. 
 64.33     (8) Except for the taxable personal property enumerated 
 64.34  below, all personal property and the property described in 
 64.35  section 272.03, subdivision 1, paragraphs (c) and (d), shall be 
 64.36  exempt.  
 65.1      The following personal property shall be taxable:  
 65.2      (a) personal property which is part of an electric 
 65.3   generating, transmission, or distribution system or a pipeline 
 65.4   system transporting or distributing water, gas, crude oil, or 
 65.5   petroleum products or mains and pipes used in the distribution 
 65.6   of steam or hot or chilled water for heating or cooling 
 65.7   buildings and structures; 
 65.8      (b) railroad docks and wharves which are part of the 
 65.9   operating property of a railroad company as defined in section 
 65.10  270.80; 
 65.11     (c) personal property defined in section 272.03, 
 65.12  subdivision 2, clause (3); 
 65.13     (d) leasehold or other personal property interests which 
 65.14  are taxed pursuant to section 272.01, subdivision 2; 273.124, 
 65.15  subdivision 7; or 273.19, subdivision 1; or any other law 
 65.16  providing the property is taxable as if the lessee or user were 
 65.17  the fee owner; 
 65.18     (e) manufactured homes and sectional structures, including 
 65.19  storage sheds, decks, and similar removable improvements 
 65.20  constructed on the site of a manufactured home, sectional 
 65.21  structure, park trailer or travel trailer as provided in section 
 65.22  273.125, subdivision 8, paragraph (f); and 
 65.23     (f) flight property as defined in section 270.071.  
 65.24     (9) Personal property used primarily for the abatement and 
 65.25  control of air, water, or land pollution to the extent that it 
 65.26  is so used, and real property which is used primarily for 
 65.27  abatement and control of air, water, or land pollution as part 
 65.28  of an agricultural operation, as a part of a centralized 
 65.29  treatment and recovery facility operating under a permit issued 
 65.30  by the Minnesota pollution control agency pursuant to chapters 
 65.31  115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 
 65.32  and 7045.0020 to 7045.1260, as a wastewater treatment facility 
 65.33  and for the treatment, recovery, and stabilization of metals, 
 65.34  oils, chemicals, water, sludges, or inorganic materials from 
 65.35  hazardous industrial wastes, or as part of an electric 
 65.36  generation system.  For purposes of this clause, personal 
 66.1   property includes ponderous machinery and equipment used in a 
 66.2   business or production activity that at common law is considered 
 66.3   real property. 
 66.4      Any taxpayer requesting exemption of all or a portion of 
 66.5   any real property or any equipment or device, or part thereof, 
 66.6   operated primarily for the control or abatement of air or water 
 66.7   pollution shall file an application with the commissioner of 
 66.8   revenue.  The equipment or device shall meet standards, rules, 
 66.9   or criteria prescribed by the Minnesota pollution control 
 66.10  agency, and must be installed or operated in accordance with a 
 66.11  permit or order issued by that agency.  The Minnesota pollution 
 66.12  control agency shall upon request of the commissioner furnish 
 66.13  information or advice to the commissioner.  On determining that 
 66.14  property qualifies for exemption, the commissioner shall issue 
 66.15  an order exempting the property from taxation.  The equipment or 
 66.16  device shall continue to be exempt from taxation as long as the 
 66.17  permit issued by the Minnesota pollution control agency remains 
 66.18  in effect. 
 66.19     (10) Wetlands.  For purposes of this subdivision, 
 66.20  "wetlands" means:  (i) land described in section 103G.005, 
 66.21  subdivision 15a; (ii) land which is mostly under water, produces 
 66.22  little if any income, and has no use except for wildlife or 
 66.23  water conservation purposes, provided it is preserved in its 
 66.24  natural condition and drainage of it would be legal, feasible, 
 66.25  and economically practical for the production of livestock, 
 66.26  dairy animals, poultry, fruit, vegetables, forage and grains, 
 66.27  except wild rice; or (iii) land in a wetland preservation area 
 66.28  under sections 103F.612 to 103F.616.  "Wetlands" under items (i) 
 66.29  and (ii) include adjacent land which is not suitable for 
 66.30  agricultural purposes due to the presence of the wetlands, but 
 66.31  do not include woody swamps containing shrubs or trees, wet 
 66.32  meadows, meandered water, streams, rivers, and floodplains or 
 66.33  river bottoms.  Exemption of wetlands from taxation pursuant to 
 66.34  this section shall not grant the public any additional or 
 66.35  greater right of access to the wetlands or diminish any right of 
 66.36  ownership to the wetlands. 
 67.1      (11) Native prairie.  The commissioner of the department of
 67.2   natural resources shall determine lands in the state which are 
 67.3   native prairie and shall notify the county assessor of each 
 67.4   county in which the lands are located.  Pasture land used for 
 67.5   livestock grazing purposes shall not be considered native 
 67.6   prairie for the purposes of this clause.  Upon receipt of an 
 67.7   application for the exemption provided in this clause for lands 
 67.8   for which the assessor has no determination from the 
 67.9   commissioner of natural resources, the assessor shall refer the 
 67.10  application to the commissioner of natural resources who shall 
 67.11  determine within 30 days whether the land is native prairie and 
 67.12  notify the county assessor of the decision.  Exemption of native 
 67.13  prairie pursuant to this clause shall not grant the public any 
 67.14  additional or greater right of access to the native prairie or 
 67.15  diminish any right of ownership to it. 
 67.16     (12) Property used in a continuous program to provide 
 67.17  emergency shelter for victims of domestic abuse, provided the 
 67.18  organization that owns and sponsors the shelter is exempt from 
 67.19  federal income taxation pursuant to section 501(c)(3) of the 
 67.20  Internal Revenue Code of 1986, as amended through December 31, 
 67.21  1992, notwithstanding the fact that the sponsoring organization 
 67.22  receives funding under section 8 of the United States Housing 
 67.23  Act of 1937, as amended. 
 67.24     (13) If approved by the governing body of the municipality 
 67.25  in which the property is located, property not exceeding one 
 67.26  acre which is owned and operated by any senior citizen group or 
 67.27  association of groups that in general limits membership to 
 67.28  persons age 55 or older and is organized and operated 
 67.29  exclusively for pleasure, recreation, and other nonprofit 
 67.30  purposes, no part of the net earnings of which inures to the 
 67.31  benefit of any private shareholders; provided the property is 
 67.32  used primarily as a clubhouse, meeting facility, or recreational 
 67.33  facility by the group or association and the property is not 
 67.34  used for residential purposes on either a temporary or permanent 
 67.35  basis. 
 67.36     (14) To the extent provided by section 295.44, real and 
 68.1   personal property used or to be used primarily for the 
 68.2   production of hydroelectric or hydromechanical power on a site 
 68.3   owned by the state or a local governmental unit which is 
 68.4   developed and operated pursuant to the provisions of section 
 68.5   103G.535. 
 68.6      (15) If approved by the governing body of the municipality 
 68.7   in which the property is located, and if construction is 
 68.8   commenced after June 30, 1983:  
 68.9      (a) a "direct satellite broadcasting facility" operated by 
 68.10  a corporation licensed by the federal communications commission 
 68.11  to provide direct satellite broadcasting services using direct 
 68.12  broadcast satellites operating in the 12-ghz. band; and 
 68.13     (b) a "fixed satellite regional or national program service 
 68.14  facility" operated by a corporation licensed by the federal 
 68.15  communications commission to provide fixed satellite-transmitted 
 68.16  regularly scheduled broadcasting services using satellites 
 68.17  operating in the 6-ghz. band. 
 68.18  An exemption provided by clause (15) shall apply for a period 
 68.19  not to exceed five years.  When the facility no longer qualifies 
 68.20  for exemption, it shall be placed on the assessment rolls as 
 68.21  provided in subdivision 4.  Before approving a tax exemption 
 68.22  pursuant to this paragraph, the governing body of the 
 68.23  municipality shall provide an opportunity to the members of the 
 68.24  county board of commissioners of the county in which the 
 68.25  facility is proposed to be located and the members of the school 
 68.26  board of the school district in which the facility is proposed 
 68.27  to be located to meet with the governing body.  The governing 
 68.28  body shall present to the members of those boards its estimate 
 68.29  of the fiscal impact of the proposed property tax exemption.  
 68.30  The tax exemption shall not be approved by the governing body 
 68.31  until the county board of commissioners has presented its 
 68.32  written comment on the proposal to the governing body or 30 days 
 68.33  have passed from the date of the transmittal by the governing 
 68.34  body to the board of the information on the fiscal impact, 
 68.35  whichever occurs first. 
 68.36     (16) Real and personal property owned and operated by a 
 69.1   private, nonprofit corporation exempt from federal income 
 69.2   taxation pursuant to United States Code, title 26, section 
 69.3   501(c)(3), primarily used in the generation and distribution of 
 69.4   hot water for heating buildings and structures.  
 69.5      (17) Notwithstanding section 273.19, state lands that are 
 69.6   leased from the department of natural resources under section 
 69.7   92.46. 
 69.8      (18) Electric power distribution lines and their 
 69.9   attachments and appurtenances, that are used primarily for 
 69.10  supplying electricity to farmers at retail.  
 69.11     (19) Transitional housing facilities.  "Transitional 
 69.12  housing facility" means a facility that meets the following 
 69.13  requirements.  (i) It provides temporary housing to individuals, 
 69.14  couples, or families.  (ii) It has the purpose of reuniting 
 69.15  families and enabling parents or individuals to obtain 
 69.16  self-sufficiency, advance their education, get job training, or 
 69.17  become employed in jobs that provide a living wage.  (iii) It 
 69.18  provides support services such as child care, work readiness 
 69.19  training, and career development counseling; and a 
 69.20  self-sufficiency program with periodic monitoring of each 
 69.21  resident's progress in completing the program's goals.  (iv) It 
 69.22  provides services to a resident of the facility for at least 
 69.23  three months but no longer than three years, except residents 
 69.24  enrolled in an educational or vocational institution or job 
 69.25  training program.  These residents may receive services during 
 69.26  the time they are enrolled but in no event longer than four 
 69.27  years.  (v) It is owned and operated or under lease from a unit 
 69.28  of government or governmental agency under a property 
 69.29  disposition program and operated by one or more organizations 
 69.30  exempt from federal income tax under section 501(c)(3) of the 
 69.31  Internal Revenue Code of 1986, as amended through December 31, 
 69.32  1992.  This exemption applies notwithstanding the fact that the 
 69.33  sponsoring organization receives financing by a direct federal 
 69.34  loan or federally insured loan or a loan made by the Minnesota 
 69.35  housing finance agency under the provisions of either Title II 
 69.36  of the National Housing Act or the Minnesota housing finance 
 70.1   agency law of 1971 or rules promulgated by the agency pursuant 
 70.2   to it, and notwithstanding the fact that the sponsoring 
 70.3   organization receives funding under Section 8 of the United 
 70.4   States Housing Act of 1937, as amended. 
 70.5      (20) Real and personal property, including leasehold or 
 70.6   other personal property interests, owned and operated by a 
 70.7   corporation if more than 50 percent of the total voting power of 
 70.8   the stock of the corporation is owned collectively by:  (i) the 
 70.9   board of regents of the University of Minnesota, (ii) the 
 70.10  University of Minnesota Foundation, an organization exempt from 
 70.11  federal income taxation under section 501(c)(3) of the Internal 
 70.12  Revenue Code of 1986, as amended through December 31, 1992, and 
 70.13  (iii) a corporation organized under chapter 317A, which by its 
 70.14  articles of incorporation is prohibited from providing pecuniary 
 70.15  gain to any person or entity other than the regents of the 
 70.16  University of Minnesota; which property is used primarily to 
 70.17  manage or provide goods, services, or facilities utilizing or 
 70.18  relating to large-scale advanced scientific computing resources 
 70.19  to the regents of the University of Minnesota and others. 
 70.20     (21)(a) Small scale wind energy conversion systems, as 
 70.21  defined in section 216C.06, subdivision 12, installed after 
 70.22  January 1, 1991, and before January 2, 1995, and used as an 
 70.23  electric power source, are exempt. 
 70.24     (b) "Small scale wind energy conversion systems" are wind 
 70.25  energy conversion systems, as defined in section 216C.06, 
 70.26  subdivision 12, installed after January 1, 1995, including the 
 70.27  foundation or support pad, which are (i) used as an electric 
 70.28  power source; (ii) located within one county and owned by the 
 70.29  same owner; and (iii) produce two megawatts or less of 
 70.30  electricity as measured by nameplate ratings, are exempt. 
 70.31     (c) (b) Medium scale wind energy conversion systems, as 
 70.32  defined in section 216C.06, subdivision 12, installed after 
 70.33  January 1, 1995 1991, and used as an electric power source but 
 70.34  not exempt under item (b), are treated as follows:  (i) the 
 70.35  foundation and support pad are taxable; (ii) the associated 
 70.36  supporting and protective structures are exempt for the first 
 71.1   five assessment years after they have been constructed, and 
 71.2   thereafter, 30 percent of the market value of the associated 
 71.3   supporting and protective structures are taxable; and (iii) the 
 71.4   turbines, blades, transformers, and its related equipment, are 
 71.5   exempt.  "Medium scale wind energy conversion systems" are wind 
 71.6   energy conversion systems as defined in section 216C.06, 
 71.7   subdivision 12, including the foundation or support pad, which 
 71.8   are:  (i) used as an electric power source; (ii) located within 
 71.9   one county and owned by the same owner; and (iii) produce more 
 71.10  than two but equal to or less than 12 megawatts of energy as 
 71.11  measured by nameplate ratings. 
 71.12     (c) Large scale wind energy conversion systems installed 
 71.13  after January 1, 1991, are treated as follows:  30 percent of 
 71.14  the market value of all property is taxable, including (i) the 
 71.15  foundation and support pad; (ii) the associated supporting and 
 71.16  protective structures; and (iii) the turbines, blades, 
 71.17  transformers, and its related equipment.  "Large scale wind 
 71.18  energy conversion systems" are wind energy conversion systems as 
 71.19  defined in section 216C.06, subdivision 12, including the 
 71.20  foundation or support pad, which are:  (i) used as an electric 
 71.21  power source; and (ii) produce more than 12 megawatts of energy 
 71.22  as measured by nameplate ratings. 
 71.23     (22) Containment tanks, cache basins, and that portion of 
 71.24  the structure needed for the containment facility used to 
 71.25  confine agricultural chemicals as defined in section 18D.01, 
 71.26  subdivision 3, as required by the commissioner of agriculture 
 71.27  under chapter 18B or 18C. 
 71.28     (23) Photovoltaic devices, as defined in section 216C.06, 
 71.29  subdivision 13, installed after January 1, 1992, and used to 
 71.30  produce or store electric power. 
 71.31     (24) Real and personal property owned and operated by a 
 71.32  private, nonprofit corporation exempt from federal income 
 71.33  taxation pursuant to United States Code, title 26, section 
 71.34  501(c)(3), primarily used for an ice arena or ice rink, and used 
 71.35  primarily for youth and high school programs. 
 71.36     (25) A structure that is situated on real property that is 
 72.1   used for: 
 72.2      (i) housing for the elderly or for low- and moderate-income 
 72.3   families as defined in Title II of the National Housing Act, as 
 72.4   amended through December 31, 1990, and funded by a direct 
 72.5   federal loan or federally insured loan made pursuant to Title II 
 72.6   of the act; or 
 72.7      (ii) housing lower income families or elderly or 
 72.8   handicapped persons, as defined in Section 8 of the United 
 72.9   States Housing Act of 1937, as amended. 
 72.10     In order for a structure to be exempt under (i) or (ii), it 
 72.11  must also meet each of the following criteria: 
 72.12     (A) is owned by an entity which is operated as a nonprofit 
 72.13  corporation organized under chapter 317A; 
 72.14     (B) is owned by an entity which has not entered into a 
 72.15  housing assistance payments contract under Section 8 of the 
 72.16  United States Housing Act of 1937, or, if the entity which owns 
 72.17  the structure has entered into a housing assistance payments 
 72.18  contract under Section 8 of the United States Housing Act of 
 72.19  1937, the contract provides assistance for less than 90 percent 
 72.20  of the dwelling units in the structure, excluding dwelling units 
 72.21  intended for management or maintenance personnel; 
 72.22     (C) operates an on-site congregate dining program in which 
 72.23  participation by residents is mandatory, and provides assisted 
 72.24  living or similar social and physical support services for 
 72.25  residents; and 
 72.26     (D) was not assessed and did not pay tax under chapter 273 
 72.27  prior to the 1991 levy, while meeting the other conditions of 
 72.28  this clause. 
 72.29     An exemption under this clause remains in effect for taxes 
 72.30  levied in each year or partial year of the term of its permanent 
 72.31  financing. 
 72.32     (26) Real and personal property that is located in the 
 72.33  Superior National Forest, and owned or leased and operated by a 
 72.34  nonprofit organization that is exempt from federal income 
 72.35  taxation under section 501(c)(3) of the Internal Revenue Code of 
 72.36  1986, as amended through December 31, 1992, and primarily used 
 73.1   to provide recreational opportunities for disabled veterans and 
 73.2   their families. 
 73.3      (27) Manure pits and appurtenances, which may include 
 73.4   slatted floors and pipes, installed or operated in accordance 
 73.5   with a permit, order, or certificate of compliance issued by the 
 73.6   Minnesota pollution control agency.  The exemption shall 
 73.7   continue for as long as the permit, order, or certificate issued 
 73.8   by the Minnesota pollution control agency remains in effect. 
 73.9      (28) Notwithstanding clause (8), item (a), attached 
 73.10  machinery and other personal property which is part of a 
 73.11  facility containing a cogeneration system as described in 
 73.12  section 216B.166, subdivision 2, paragraph (a), if the 
 73.13  cogeneration system has met the following criteria:  (i) the 
 73.14  system utilizes natural gas as a primary fuel and the 
 73.15  cogenerated steam initially replaces steam generated from 
 73.16  existing thermal boilers utilizing coal; (ii) the facility 
 73.17  developer is selected as a result of a procurement process 
 73.18  ordered by the public utilities commission; and (iii) 
 73.19  construction of the facility is commenced after July 1, 1994, 
 73.20  and before July 1, 1997. 
 73.21     (29) Real property acquired by a home rule charter city, 
 73.22  statutory city, county, town, or school district under a lease 
 73.23  purchase agreement or an installment purchase contract during 
 73.24  the term of the lease purchase agreement as long as and to the 
 73.25  extent that the property is used by the city, county, town, or 
 73.26  school district and devoted to a public use and to the extent it 
 73.27  is not subleased to any private individual, entity, association, 
 73.28  or corporation in connection with a business or enterprise 
 73.29  operated for profit. 
 73.30     Sec. 9.  Minnesota Statutes 1996, section 272.02, is 
 73.31  amended by adding a subdivision to read: 
 73.32     Subd. 9.  [PERSONAL PROPERTY; BIOMASS FACILITY.] (a) 
 73.33  Notwithstanding clause (8), item (a), of subdivision 1, attached 
 73.34  machinery and other personal property that is part of a system 
 73.35  that generates biomass electric energy that satisfies the 
 73.36  mandate, in whole or in part, established in section 216B.2424, 
 74.1   or a system that generates electric energy using waste wood, is 
 74.2   exempt if it meets the requirements of this subdivision. 
 74.3      (b) The governing bodies of the county, city or town, and 
 74.4   school district must each approve by resolution the exemption of 
 74.5   the personal property under this subdivision.  Each of the 
 74.6   governing bodies shall file a copy of the resolution with the 
 74.7   county auditor.  The county auditor shall publish the 
 74.8   resolutions in newspapers of general circulation within the 
 74.9   county.  The voters of the county may request a referendum on 
 74.10  the proposed exemption by filing a petition within 30 days after 
 74.11  the resolutions are published.  The petition must be signed by 
 74.12  voters who reside in the county.  The number of signatures must 
 74.13  equal at least five percent of the number of persons voting in 
 74.14  the county in the last general election.  If such a petition is 
 74.15  timely filed, the resolutions are not effective until they have 
 74.16  been submitted to the voters residing in the county at a general 
 74.17  or special election and a majority of votes cast on the question 
 74.18  of approving the resolution are in the affirmative.  The 
 74.19  commissioner of revenue shall prepare a suggested form of 
 74.20  question to be presented at the referendum. 
 74.21     (c) The exemption under this subdivision is limited to a 
 74.22  maximum of five years, beginning with the assessment year 
 74.23  immediately following when the personal property is put in 
 74.24  operation.  
 74.25     Sec. 10.  Minnesota Statutes 1996, section 273.111, 
 74.26  subdivision 3, is amended to read: 
 74.27     Subd. 3.  (a) Real estate consisting of ten acres or more 
 74.28  or a nursery or greenhouse, and qualifying for classification as 
 74.29  class 1b, 2a, or 2b under section 273.13, subdivision 23, 
 74.30  paragraph (d), shall be entitled to valuation and tax deferment 
 74.31  under this section only if it is actively and exclusively 
 74.32  primarily devoted to agricultural use as defined, and meets the 
 74.33  qualifications in subdivision 6, and either:  
 74.34     (1) is the homestead of the owner, or of a surviving 
 74.35  spouse, child, or sibling of the owner or is real estate which 
 74.36  is farmed with the real estate which contains the homestead 
 75.1   property; or 
 75.2      (2) has been in possession of the applicant, the 
 75.3   applicant's spouse, parent, or sibling, or any combination 
 75.4   thereof, for a period of at least seven years prior to 
 75.5   application for benefits under the provisions of this section, 
 75.6   or is real estate which is farmed with the real estate which 
 75.7   qualifies under this clause and is within two townships or 
 75.8   cities or combination thereof from the qualifying real estate; 
 75.9   or 
 75.10     (3) is the homestead of a shareholder in a family farm 
 75.11  corporation as defined in section 500.24, notwithstanding the 
 75.12  fact that legal title to the real estate may be held in the name 
 75.13  of the family farm corporation; or 
 75.14     (4) is in the possession of a nursery or greenhouse or an 
 75.15  entity owned by a proprietor, partnership, or corporation which 
 75.16  also owns the nursery or greenhouse operations on the parcel or 
 75.17  parcels. 
 75.18     (b) Valuation of real estate under this section is limited 
 75.19  to parcels the ownership of which is in noncorporate entities 
 75.20  except for:  
 75.21     (1) family farm corporations organized pursuant to section 
 75.22  500.24; and 
 75.23     (2) corporations that derive 80 percent or more of their 
 75.24  gross receipts from the wholesale or retail sale of 
 75.25  horticultural or nursery stock.  
 75.26     Corporate entities who previously qualified for tax 
 75.27  deferment pursuant to this section and who continue to otherwise 
 75.28  qualify under subdivisions 3 and 6 for a period of at least 
 75.29  three years following the effective date of Laws 1983, chapter 
 75.30  222, section 8, will not be required to make payment of the 
 75.31  previously deferred taxes, notwithstanding the provisions of 
 75.32  subdivision 9.  Special assessments are payable at the end of 
 75.33  the three-year period or at time of sale, whichever comes first. 
 75.34     (c) Land that previously qualified for tax deferment 
 75.35  pursuant to under this section and no longer qualifies because 
 75.36  it is not classified as primarily used for agricultural land 
 76.1   purposes but would otherwise qualify under subdivisions 3 and 6 
 76.2   for a period of at least three years will not be required to 
 76.3   make payment of the previously deferred taxes, notwithstanding 
 76.4   the provisions of subdivision 9.  Sale of the land prior to the 
 76.5   expiration of the three-year period requires payment of deferred 
 76.6   taxes as follows:  sale in the year the land no longer qualifies 
 76.7   requires payment of the current year's deferred taxes plus 
 76.8   payment of deferred taxes for the two prior years; sale during 
 76.9   the second year the land no longer qualifies requires payment of 
 76.10  the current year's deferred taxes plus payment of the deferred 
 76.11  taxes for the prior year; and sale during the third year the 
 76.12  land no longer qualifies requires payment of the current year's 
 76.13  deferred taxes.  Deferred taxes shall be paid even if the land 
 76.14  qualifies pursuant to subdivision 11a.  When such property is 
 76.15  sold or no longer qualifies under this paragraph, or at the end 
 76.16  of the three-year period, whichever comes first, all deferred 
 76.17  special assessments plus interest are payable in equal 
 76.18  installments spread over the time remaining until the last 
 76.19  maturity date of the bonds issued to finance the improvement for 
 76.20  which the assessments were levied.  If the bonds have matured, 
 76.21  the deferred special assessments plus interest are payable 
 76.22  within 90 days.  The provisions of section 429.061, subdivision 
 76.23  2, apply to the collection of these installments.  Penalties are 
 76.24  not imposed on any such special assessments if timely paid. 
 76.25     Sec. 11.  Minnesota Statutes 1996, section 273.111, 
 76.26  subdivision 6, is amended to read: 
 76.27     Subd. 6.  Real property qualifying under subdivision 3 
 76.28  shall be considered to be in agricultural use provided that 
 76.29  annually: 
 76.30     (1) at least 33-1/3 percent of the total family income of 
 76.31  the owner is derived therefrom, or the total production income 
 76.32  including rental from the property is $300 plus $10 per tillable 
 76.33  acre; and 
 76.34     (2) it is devoted to the production for sale of 
 76.35  agricultural products as defined in section 273.13, subdivision 
 76.36  23, paragraph (e). 
 77.1      Slough, wasteland, and woodland contiguous to or surrounded 
 77.2   by land that is entitled to valuation and tax deferment under 
 77.3   this section is considered to be in agricultural use if under 
 77.4   the same ownership and management. 
 77.5      Sec. 12.  Minnesota Statutes 1996, section 273.112, is 
 77.6   amended by adding a subdivision to read: 
 77.7      Subd. 3a.  Real estate shall be entitled to valuation and 
 77.8   tax deferment under this section only if it is: 
 77.9      (1) nonresidential real estate, excluding the part of the 
 77.10  property that is not used directly for recreational uses, that 
 77.11  has been operated as an amusement park for at least 45 years; 
 77.12  and 
 77.13     (2) the governing bodies of the county, home rule charter 
 77.14  or statutory city or town, and school district in which the real 
 77.15  estate is located have each approved by resolution the valuation 
 77.16  and tax deferment under this section and have each filed a 
 77.17  notice of the approval with the county assessor within the time 
 77.18  limits of subdivision 6. 
 77.19     Sec. 13.  Minnesota Statutes 1996, section 272.115, is 
 77.20  amended to read: 
 77.21     272.115 [CERTIFICATE OF VALUE; FILING.] 
 77.22     Subdivision 1.  [REQUIREMENT.] Except as otherwise provided 
 77.23  in subdivision 5, whenever any real estate is sold for a 
 77.24  consideration in excess of $1,000, whether by warranty deed, 
 77.25  quitclaim deed, contract for deed or any other method of sale, 
 77.26  the grantor, grantee or the legal agent of either shall file a 
 77.27  certificate of value with the county auditor in the county in 
 77.28  which the property is located when the deed or other document is 
 77.29  presented for recording.  Contract for deeds are subject to 
 77.30  recording under section 507.235, subdivision 1.  Value shall, in 
 77.31  the case of any deed not a gift, be the amount of the full 
 77.32  actual consideration thereof, paid or to be paid, including the 
 77.33  amount of any lien or liens assumed.  The items and value of 
 77.34  personal property transferred with the real property must be 
 77.35  listed and deducted from the sale price.  The certificate of 
 77.36  value shall include the classification to which the property 
 78.1   belongs for the purpose of determining the fair market value of 
 78.2   the property.  The certificate shall include financing terms and 
 78.3   conditions of the sale which are necessary to determine the 
 78.4   actual, present value of the sale price for purposes of the 
 78.5   sales ratio study.  The commissioner of revenue shall promulgate 
 78.6   administrative rules specifying the financing terms and 
 78.7   conditions which must be included on the certificate.  Pursuant 
 78.8   to the authority of the commissioner of revenue in section 
 78.9   270.066, the certificate of value must include the social 
 78.10  security number or the federal employer identification number of 
 78.11  the grantors and grantees.  The identification numbers of the 
 78.12  grantors and grantees are private data on individuals or 
 78.13  nonpublic data as defined in section 13.02, subdivisions 9 and 
 78.14  12, but, notwithstanding that section, the private or nonpublic 
 78.15  data may be disclosed to the commissioner of revenue for 
 78.16  purposes of tax administration. 
 78.17     Subd. 2.  [FORM; INFORMATION REQUIRED.] The certificate of 
 78.18  value shall require such facts and information as may be 
 78.19  determined by the commissioner to be reasonably necessary in the 
 78.20  administration of the state education aid formulas.  The form of 
 78.21  the certificate of value shall be prescribed by the department 
 78.22  of revenue which shall provide an adequate supply of forms to 
 78.23  each county auditor. 
 78.24     Subd. 3.  [COPIES TRANSMITTED; HOMESTEAD STATUS.] The 
 78.25  county auditor shall transmit two true copies of the certificate 
 78.26  of value to the assessor who shall insert the most recent market 
 78.27  value and when available, the year of original construction of 
 78.28  each parcel of property on both copies and shall transmit one 
 78.29  copy to the department of revenue.  Upon the request of a city 
 78.30  council located within the county, a copy of each certificate of 
 78.31  value for property located in that city shall be made available 
 78.32  to the governing body of the city.  The assessor shall remove 
 78.33  the homestead classification for the following assessment year 
 78.34  from a property which is sold or transferred, unless the grantee 
 78.35  or the person to whom the property is transferred completes a 
 78.36  homestead application under section 273.124, subdivision 13, and 
 79.1   qualifies for homestead status. 
 79.2      Subd. 4.  [ELIGIBILITY FOR HOMESTEAD STATUS.] No real 
 79.3   estate sold or transferred on or after January 1, 1993, under 
 79.4   subdivision 1 shall be classified as a homestead, unless (1) a 
 79.5   certificate of value has been filed with the county auditor in 
 79.6   accordance with this section, or (2) the real estate was 
 79.7   conveyed by the federal government, the state, a political 
 79.8   subdivision of the state, or combination of them to a person 
 79.9   otherwise eligible to receive homestead classification of the 
 79.10  property. 
 79.11     This subdivision shall apply to any real estate taxes that 
 79.12  are payable the year or years following the sale or transfer of 
 79.13  the property. 
 79.14     Subd. 5.  [EXEMPTION FOR GOVERNMENT BODIES.] A certificate 
 79.15  of real estate value is not required when the real estate is 
 79.16  being conveyed to or by a public authority or agency of the 
 79.17  federal government, the state of Minnesota, a political 
 79.18  subdivision of the state, or any combination of them, provided 
 79.19  that the authority, agency, or governmental unit has agreed to 
 79.20  file a list of the real estate conveyed by or to the authority, 
 79.21  agency, or governmental unit with the commissioner of revenue by 
 79.22  June 1 of the year following the year of the conveyance. 
 79.23     Sec. 14.  Minnesota Statutes 1996, section 273.11, 
 79.24  subdivision 1a, is amended to read: 
 79.25     Subd. 1a.  [LIMITED MARKET VALUE.] In the case of all 
 79.26  property classified as agricultural homestead or nonhomestead, 
 79.27  residential homestead or nonhomestead, or noncommercial seasonal 
 79.28  recreational residential, the assessor shall compare the value 
 79.29  with that determined in the preceding assessment.  The amount of 
 79.30  the increase entered in the current assessment shall not exceed 
 79.31  the greater of (1) ten percent of the value in the preceding 
 79.32  assessment, or (2) one-third one-fourth of the difference 
 79.33  between the current assessment and the preceding assessment.  
 79.34  This limitation shall not apply to increases in value due to 
 79.35  improvements.  For purposes of this subdivision, the term 
 79.36  "assessment" means the value prior to any exclusion under 
 80.1   subdivision 16. 
 80.2      The provisions of this subdivision shall be in effect only 
 80.3   for assessment years 1993 through 1997 2001. 
 80.4      For purposes of the assessment/sales ratio study conducted 
 80.5   under section 124.2131, and the computation of state aids paid 
 80.6   under chapters 124, 124A, and 477A, market values and net tax 
 80.7   capacities determined under this subdivision and subdivision 16, 
 80.8   shall be used. 
 80.9      Sec. 15.  Minnesota Statutes 1996, section 273.11, 
 80.10  subdivision 16, is amended to read: 
 80.11     Subd. 16.  [VALUATION EXCLUSION FOR CERTAIN IMPROVEMENTS.] 
 80.12  Improvements to homestead property made before January 2, 2003, 
 80.13  shall be fully or partially excluded from the value of the 
 80.14  property for assessment purposes provided that (1) the house is 
 80.15  at least 35 years old at the time of the improvement and (2) 
 80.16  either 
 80.17     (a) the assessor's estimated market value of the house on 
 80.18  January 2 of the current year is equal to or less than $150,000, 
 80.19  or 
 80.20     (b) if the estimated market value of the house is over 
 80.21  $150,000 market value but is less than $300,000 on January 2 of 
 80.22  the current year, the property qualifies if 
 80.23     (i) it is located in a city or town in which 50 percent or 
 80.24  more of the owner-occupied housing units were constructed before 
 80.25  1960 based upon the 1990 federal census, and 
 80.26     (ii) the city or town's median family income based upon the 
 80.27  1990 federal census is less than the statewide median family 
 80.28  income based upon the 1990 federal census, or 
 80.29     (c) if the estimated market value of the house is $300,000 
 80.30  or more on January 2 of the current year, the property qualifies 
 80.31  if 
 80.32     (i) it is located in a city or town in which 45 percent or 
 80.33  more of the homes were constructed before 1940 based upon the 
 80.34  1990 federal census, and 
 80.35     (ii) it is located in a city or town in which 45 percent or 
 80.36  more of the housing units were rental based upon the 1990 
 81.1   federal census, and 
 81.2      (iii) the city or town's median value of owner-occupied 
 81.3   housing units based upon the 1990 federal census is less than 
 81.4   the statewide median value of owner-occupied housing units based 
 81.5   upon the 1990 federal census. 
 81.6      For purposes of determining this eligibility, "house" means 
 81.7   land and buildings.  
 81.8      The age of a residence is either (1) the number of years 
 81.9   that the residence has existed at its present site, or, (2) the 
 81.10  original year of its construction if the residence has been 
 81.11  relocated and if the relocation site is in the same city or town 
 81.12  as the original site.  In the case of a qualifying relocated 
 81.13  residence under clause (2), an improvement is eligible for 
 81.14  exclusion under this subdivision only if a building permit was 
 81.15  issued to the homeowner after the residence was relocated to its 
 81.16  present site, and the improvement was undertaken during or after 
 81.17  the year the residence was initially occupied by the homeowner.  
 81.18  In the case of an owner-occupied duplex or triplex, the 
 81.19  improvement is eligible regardless of which portion of the 
 81.20  property was improved. 
 81.21     If the property lies in a jurisdiction which is subject to 
 81.22  a building permit process, a building permit must have been 
 81.23  issued prior to commencement of the improvement.  Any 
 81.24  improvement must add at least $1,000 to the value of the 
 81.25  property to be eligible for exclusion under this subdivision.  
 81.26  Only improvements to the structure which is the residence of the 
 81.27  qualifying homesteader or construction of or improvements to no 
 81.28  more than one two-car garage per residence qualify for the 
 81.29  provisions of this subdivision.  If an improvement was begun 
 81.30  between January 2, 1992, and January 2, 1993, any value added 
 81.31  from that improvement for the January 1994 and subsequent 
 81.32  assessments shall qualify for exclusion under this subdivision 
 81.33  provided that a building permit was obtained for the improvement 
 81.34  between January 2, 1992, and January 2, 1993.  Whenever a 
 81.35  building permit is issued for property currently classified as 
 81.36  homestead, the issuing jurisdiction shall notify the property 
 82.1   owner of the possibility of valuation exclusion under this 
 82.2   subdivision.  The assessor shall require an application, 
 82.3   including documentation of the age of the house from the owner, 
 82.4   if unknown by the assessor.  The application may be filed 
 82.5   subsequent to the date of the building permit provided that the 
 82.6   application must be filed within three years of the date the 
 82.7   building permit was issued for the improvement.  If the property 
 82.8   lies in a jurisdiction which is not subject to a building permit 
 82.9   process, the application must be filed within three years of the 
 82.10  date the improvement was made.  The assessor may require proof 
 82.11  from the taxpayer of the date the improvement was made.  
 82.12  Applications must be received prior to July 1 of any year in 
 82.13  order to be effective for taxes payable in the following year. 
 82.14     No exclusion may be granted for an improvement by a local 
 82.15  board of review or county board of equalization and no abatement 
 82.16  of the taxes for qualifying improvements may be granted by the 
 82.17  county board unless (1) a building permit was issued prior to 
 82.18  the commencement of the improvement if the jurisdiction requires 
 82.19  a building permit, and (2) an application was completed. 
 82.20     The assessor shall note the qualifying value of each 
 82.21  improvement on the property's record, and the sum of those 
 82.22  amounts shall be subtracted from the value of the property in 
 82.23  each year for ten years after the improvement has been made, at 
 82.24  which time an amount equal to 20 percent of the qualifying value 
 82.25  shall be added back in each of the five subsequent assessment 
 82.26  years.  If an application is filed after the first assessment 
 82.27  date at which an improvement could have been subject to the 
 82.28  valuation exclusion under this subdivision, the ten-year period 
 82.29  during which the value is subject to exclusion is reduced by the 
 82.30  number of years that have elapsed since the property would have 
 82.31  qualified initially.  The valuation exclusion shall terminate 
 82.32  whenever (1) the property is sold, or (2) the property is 
 82.33  reclassified to a class which does not qualify for treatment 
 82.34  under this subdivision.  Improvements made by an occupant who is 
 82.35  the purchaser of the property under a conditional purchase 
 82.36  contract do not qualify under this subdivision unless the seller 
 83.1   of the property is a governmental entity.  The qualifying value 
 83.2   of the property shall be computed based upon the increase from 
 83.3   that structure's market value as of January 2 preceding the 
 83.4   acquisition of the property by the governmental entity. 
 83.5      The total qualifying value for a homestead may not exceed 
 83.6   $50,000.  The total qualifying value for a homestead with a 
 83.7   house that is less than 70 years old may not exceed $25,000.  
 83.8   The term "qualifying value" means the increase in estimated 
 83.9   market value resulting from the improvement if the improvement 
 83.10  occurs when the house is at least 70 years old, or one-half of 
 83.11  the increase in estimated market value resulting from the 
 83.12  improvement otherwise.  The $25,000 and $50,000 maximum 
 83.13  qualifying value under this subdivision may result from up to 
 83.14  three separate improvements to the homestead.  The application 
 83.15  shall state, in clear language, that if more than three 
 83.16  improvements are made to the qualifying property, a taxpayer may 
 83.17  choose which three improvements are eligible, provided that 
 83.18  after the taxpayer has made the choice and any valuation 
 83.19  attributable to those improvements has been excluded from 
 83.20  taxation, no further changes can be made by the taxpayer. 
 83.21     If 50 percent or more of the square footage of a structure 
 83.22  is voluntarily razed or removed, the valuation increase 
 83.23  attributable to any subsequent improvements to the remaining 
 83.24  structure does not qualify for the exclusion under this 
 83.25  subdivision.  If a structure is unintentionally or accidentally 
 83.26  destroyed by a natural disaster, the property is eligible for an 
 83.27  exclusion under this subdivision provided that the structure was 
 83.28  not completely destroyed.  The qualifying value on property 
 83.29  destroyed by a natural disaster shall be computed based upon the 
 83.30  increase from that structure's market value as determined on 
 83.31  January 2 of the year in which the disaster occurred.  A 
 83.32  property receiving benefits under the homestead disaster 
 83.33  provisions under section 273.123 is not disqualified from 
 83.34  receiving an exclusion under this subdivision.  If any 
 83.35  combination of improvements made to a structure after January 1, 
 83.36  1993, increases the size of the structure by 100 percent or 
 84.1   more, the valuation increase attributable to the portion of the 
 84.2   improvement that causes the structure's size to exceed 100 
 84.3   percent does not qualify for exclusion under this subdivision. 
 84.4      Sec. 16.  Minnesota Statutes 1996, section 273.11, is 
 84.5   amended by adding a subdivision to read: 
 84.6      Subd. 19.  [VALUATION EXCLUSION FOR IMPROVEMENTS TO CERTAIN 
 84.7   BUSINESS PROPERTY.] Property classified under section 273.13, 
 84.8   subdivision 24, which is eligible for the preferred class rate 
 84.9   on the market value up to $150,000, shall qualify for a 
 84.10  valuation exclusion for assessment purposes, provided all of the 
 84.11  following conditions are met: 
 84.12     (1) the building must be at least 50 years old at the time 
 84.13  of the improvement or damaged by the 1997 floods; 
 84.14     (2) the building must be located in a city or town with a 
 84.15  population of 10,000 or less that is located outside the 
 84.16  seven-county metropolitan area, as defined in section 473.121, 
 84.17  subdivision 2; 
 84.18     (3) the total estimated market value of the land and 
 84.19  buildings must be $100,000 or less prior to the improvement and 
 84.20  prior to the damage caused by the 1997 floods; 
 84.21     (4) the current year's estimated market value of the 
 84.22  property must be equal to or less than the property's estimated 
 84.23  market value in each of the two previous years' assessments; 
 84.24     (5) a building permit must have been issued prior to the 
 84.25  commencement of the improvement, or if the building is located 
 84.26  in a city or town which does not have a building permit process, 
 84.27  the property owner must notify the assessor prior to the 
 84.28  commencement of the improvement; 
 84.29     (6) the property, including its improvements, has received 
 84.30  no public assistance, grants or financing; and 
 84.31     (7) the property is not receiving a property tax abatement 
 84.32  under section 469.1813. 
 84.33     The assessor shall estimate the market value of the 
 84.34  building in the assessment year immediately following the year 
 84.35  that (1) the building permit was taken out, or (2) the taxpayer 
 84.36  notified the assessor that an improvement was to be made.  If 
 85.1   the estimated market value of the building has increased over 
 85.2   the prior year's assessment, the assessor shall note the amount 
 85.3   of the increase on the property's record, and that amount shall 
 85.4   be subtracted from the value of the property in each year for 
 85.5   five years after the improvement has been made, at which time an 
 85.6   amount equal to 20 percent of the excluded value shall be added 
 85.7   back in each of the five subsequent assessment years. 
 85.8      For any property, there can be no more than two 
 85.9   improvements qualifying for exclusion under this subdivision.  
 85.10  The maximum amount of value that can be excluded from any 
 85.11  property under this subdivision is $50,000. 
 85.12     The assessor shall require an application, including 
 85.13  documentation of the age of the building from the owner, if 
 85.14  unknown by the assessor.  Applications must be received prior to 
 85.15  July 1 of any year in order to be effective for taxes payable in 
 85.16  the following year. 
 85.17     For purposes of this subdivision, "population" has the same 
 85.18  meaning given in section 477A.011, subdivision 3. 
 85.19     Sec. 17.  Minnesota Statutes 1996, section 273.121, is 
 85.20  amended to read: 
 85.21     273.121 [VALUATION OF REAL PROPERTY, NOTICE.] 
 85.22     Any county assessor or city assessor having the powers of a 
 85.23  county assessor, valuing or classifying taxable real property 
 85.24  shall in each year notify those persons whose property is to be 
 85.25  assessed or reclassified that year if the person's address is 
 85.26  known to the assessor, otherwise the occupant of the property.  
 85.27  The notice shall be in writing and shall be sent by ordinary 
 85.28  mail at least ten days before the meeting of the local board of 
 85.29  review or equalization under section 274.01 or the review 
 85.30  process established under section 274.13, subdivision 1c.  It 
 85.31  shall contain:  (1) the market value, (2) the limited market 
 85.32  value under section 273.11, subdivision 1a, (3) the qualifying 
 85.33  amount of any improvements under section 273.11, subdivision 16, 
 85.34  (4) the market value subject to taxation after subtracting the 
 85.35  amount of any qualifying improvements, (5) the new 
 85.36  classification, (6) a note that if the property is homestead and 
 86.1   at least 35 years old, improvements made to the property may be 
 86.2   eligible for a valuation exclusion under section 273.11, 
 86.3   subdivision 16, (7) the assessor's office address, and (8) the 
 86.4   dates, places, and times set for the meetings of the local board 
 86.5   of review or equalization, the review process established under 
 86.6   section 274.13, subdivision 1c, and the county board of 
 86.7   equalization.  If the assessment roll is not complete, the 
 86.8   notice shall be sent by ordinary mail at least ten days prior to 
 86.9   the date on which the board of review has adjourned.  The 
 86.10  assessor shall attach to the assessment roll a statement that 
 86.11  the notices required by this section have been mailed.  Any 
 86.12  assessor who is not provided sufficient funds from the 
 86.13  assessor's governing body to provide such notices, may make 
 86.14  application to the commissioner of revenue to finance such 
 86.15  notices.  The commissioner of revenue shall conduct an 
 86.16  investigation and, if satisfied that the assessor does not have 
 86.17  the necessary funds, issue a certification to the commissioner 
 86.18  of finance of the amount necessary to provide such notices.  The 
 86.19  commissioner of finance shall issue a warrant for such amount 
 86.20  and shall deduct such amount from any state payment to such 
 86.21  county or municipality.  The necessary funds to make such 
 86.22  payments are hereby appropriated.  Failure to receive the notice 
 86.23  shall in no way affect the validity of the assessment, the 
 86.24  resulting tax, the procedures of any board of review or 
 86.25  equalization, or the enforcement of delinquent taxes by 
 86.26  statutory means. 
 86.27     Sec. 18.  Minnesota Statutes 1996, section 273.124, 
 86.28  subdivision 1, is amended to read: 
 86.29     Subdivision 1.  [GENERAL RULE.] (a) Residential real estate 
 86.30  that is occupied and used for the purposes of a homestead by its 
 86.31  owner, who must be a Minnesota resident, is a residential 
 86.32  homestead.  
 86.33     Agricultural land, as defined in section 273.13, 
 86.34  subdivision 23, that is occupied and used as a homestead by its 
 86.35  owner, who must be a Minnesota resident, is an agricultural 
 86.36  homestead. 
 87.1      Dates for establishment of a homestead and homestead 
 87.2   treatment provided to particular types of property are as 
 87.3   provided in this section.  
 87.4      Property of a trustee, beneficiary, or grantor of a trust 
 87.5   is not disqualified from receiving homestead benefits if the 
 87.6   homestead requirements under this chapter are satisfied. 
 87.7      The assessor shall require proof, as provided in 
 87.8   subdivision 13, of the facts upon which classification as a 
 87.9   homestead may be determined.  Notwithstanding any other law, the 
 87.10  assessor may at any time require a homestead application to be 
 87.11  filed in order to verify that any property classified as a 
 87.12  homestead continues to be eligible for homestead status.  
 87.13  Notwithstanding any other law to the contrary, the department of 
 87.14  revenue may, upon request from an assessor, verify whether an 
 87.15  individual who is requesting or receiving homestead 
 87.16  classification has filed a Minnesota income tax return as a 
 87.17  resident for the most recent taxable year for which the 
 87.18  information is available. 
 87.19     When there is a name change or a transfer of homestead 
 87.20  property, the assessor may reclassify the property in the next 
 87.21  assessment unless a homestead application is filed to verify 
 87.22  that the property continues to qualify for homestead 
 87.23  classification. 
 87.24     (b) For purposes of this section, homestead property shall 
 87.25  include property which is used for purposes of the homestead but 
 87.26  is separated from the homestead by a road, street, lot, 
 87.27  waterway, or other similar intervening property.  The term "used 
 87.28  for purposes of the homestead" shall include but not be limited 
 87.29  to uses for gardens, garages, or other outbuildings commonly 
 87.30  associated with a homestead, but shall not include vacant land 
 87.31  held primarily for future development.  In order to receive 
 87.32  homestead treatment for the noncontiguous property, the owner 
 87.33  shall apply for it to the assessor by July 1 of the year when 
 87.34  the treatment is initially sought.  After initial qualification 
 87.35  for the homestead treatment, additional applications for 
 87.36  subsequent years are not required. 
 88.1      (c) Residential real estate that is occupied and used for 
 88.2   purposes of a homestead by a relative of the owner is a 
 88.3   homestead but only to the extent of the homestead treatment that 
 88.4   would be provided if the related owner occupied the property.  
 88.5   For purposes of this paragraph and paragraph (f) (g), "relative" 
 88.6   means a parent, stepparent, child, stepchild, grandparent, 
 88.7   grandchild, brother, sister, uncle, or aunt.  This relationship 
 88.8   may be by blood or marriage.  Property that has been classified 
 88.9   as seasonal recreational residential property at any time during 
 88.10  which it has been owned by the current owner or spouse of the 
 88.11  current owner will not be reclassified as a homestead unless it 
 88.12  is occupied as a homestead by the owner; this prohibition also 
 88.13  applies to property that, in the absence of this paragraph, 
 88.14  would have been classified as seasonal recreational residential 
 88.15  property at the time when the residence was constructed.  
 88.16  Neither the related occupant nor the owner of the property may 
 88.17  claim a property tax refund under chapter 290A for a homestead 
 88.18  occupied by a relative.  In the case of a residence located on 
 88.19  agricultural land, only the house, garage, and immediately 
 88.20  surrounding one acre of land shall be classified as a homestead 
 88.21  under this paragraph, except as provided in paragraph (d). 
 88.22     (d) Agricultural property that is occupied and used for 
 88.23  purposes of a homestead by a relative of the owner, is a 
 88.24  homestead, only to the extent of the homestead treatment that 
 88.25  would be provided if the related owner occupied the property, 
 88.26  and only if all of the following criteria are met: 
 88.27     (1) the relative who is occupying the agricultural property 
 88.28  is a son, daughter, father, or mother of the owner of the 
 88.29  agricultural property or a son or daughter of the spouse of the 
 88.30  owner of the agricultural property, 
 88.31     (2) the owner of the agricultural property must be a 
 88.32  Minnesota resident, 
 88.33     (3) the owner of the agricultural property must not receive 
 88.34  homestead treatment on any other agricultural property in 
 88.35  Minnesota, and 
 88.36     (4) the owner of the agricultural property is limited to 
 89.1   only one agricultural homestead per family under this paragraph. 
 89.2      Neither the related occupant nor the owner of the property 
 89.3   may claim a property tax refund under chapter 290A for a 
 89.4   homestead occupied by a relative qualifying under this 
 89.5   paragraph.  For purposes of this paragraph, "agricultural 
 89.6   property" means the house, garage, other farm buildings and 
 89.7   structures, and agricultural land. 
 89.8      Application must be made to the assessor by the owner of 
 89.9   the agricultural property to receive homestead benefits under 
 89.10  this paragraph.  The assessor may require the necessary proof 
 89.11  that the requirements under this paragraph have been met. 
 89.12     (e) In the case of property owned by a property owner who 
 89.13  is married, the assessor must not deny homestead treatment in 
 89.14  whole or in part if only one of the spouses occupies the 
 89.15  property and the other spouse is absent due to:  (1) marriage 
 89.16  dissolution proceedings, (2) legal separation, (3) employment or 
 89.17  self-employment in another location, or (4) residence in a 
 89.18  nursing home or boarding care facility, or (5) other personal 
 89.19  circumstances causing the spouses to live separately, not 
 89.20  including an intent to obtain two homestead classifications for 
 89.21  property tax purposes.  To qualify under clause (3), the 
 89.22  spouse's place of employment or self-employment must be at least 
 89.23  50 miles distant from the other spouse's place of employment, 
 89.24  and the homesteads must be at least 50 miles distant from each 
 89.25  other.  Homestead treatment, in whole or in part, shall not be 
 89.26  denied to the owner's spouse who previously occupied the 
 89.27  residence with the owner if the absence of the owner is due to 
 89.28  one of the exceptions provided in this paragraph. 
 89.29     (f) The assessor must not deny homestead treatment in whole 
 89.30  or in part if: 
 89.31     (1) in the case of a property owner who is not married, the 
 89.32  owner is absent due to residence in a nursing home or boarding 
 89.33  care facility and the property is not otherwise occupied; or 
 89.34     (2) in the case of a property owner who is married, the 
 89.35  owner or the owner's spouse or both are absent due to residence 
 89.36  in a nursing home or boarding care facility and the property is 
 90.1   not occupied or is occupied only by the owner's spouse. 
 90.2      (g) If an individual is purchasing property with the intent 
 90.3   of claiming it as a homestead and is required by the terms of 
 90.4   the financing agreement to have a relative shown on the deed as 
 90.5   a coowner, the assessor shall allow a full homestead 
 90.6   classification.  This provision only applies to first-time 
 90.7   purchasers, whether married or single, or to a person who had 
 90.8   previously been married and is purchasing as a single individual 
 90.9   for the first time.  The application for homestead benefits must 
 90.10  be on a form prescribed by the commissioner and must contain the 
 90.11  data necessary for the assessor to determine if full homestead 
 90.12  benefits are warranted. 
 90.13     Sec. 19.  Minnesota Statutes 1996, section 273.13, 
 90.14  subdivision 23, is amended to read: 
 90.15     Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
 90.16  land including any improvements that is homesteaded.  The market 
 90.17  value of the house and garage and immediately surrounding one 
 90.18  acre of land has the same class rates as class 1a property under 
 90.19  subdivision 22.  The value of the remaining land including 
 90.20  improvements up to $115,000 has a net class rate of .45 percent 
 90.21  of market value and a gross class rate of 1.75 percent of market 
 90.22  value.  The remaining value of class 2a property over $115,000 
 90.23  of market value that does not exceed 320 acres has a net class 
 90.24  rate of one percent of market value, and a gross class rate of 
 90.25  2.25 percent of market value.  The remaining property over the 
 90.26  $115,000 market value in excess of 320 acres has a class rate of 
 90.27  1.5 1.4 percent of market value, and a gross class rate of 2.25 
 90.28  percent of market value.  
 90.29     (b) Class 2b property is (1) real estate, rural in 
 90.30  character and used exclusively for growing trees for timber, 
 90.31  lumber, and wood and wood products; (2) real estate that is not 
 90.32  improved with a structure and is used exclusively for growing 
 90.33  trees for timber, lumber, and wood and wood products, if the 
 90.34  owner has participated or is participating in a cost-sharing 
 90.35  program for afforestation, reforestation, or timber stand 
 90.36  improvement on that particular property, administered or 
 91.1   coordinated by the commissioner of natural resources; (3) real 
 91.2   estate that is nonhomestead agricultural land; or (4) a landing 
 91.3   area or public access area of a privately owned public use 
 91.4   airport.  Class 2b property has a net class rate of 1.5 1.4 
 91.5   percent of market value, and a gross class rate of 2.25 percent 
 91.6   of market value.  
 91.7      (c) Agricultural land as used in this section means 
 91.8   contiguous acreage of ten acres or more, primarily used during 
 91.9   the preceding year for agricultural purposes.  Agricultural use 
 91.10  may include "Agricultural purposes" as used in this section 
 91.11  means the raising or cultivation of agricultural products or 
 91.12  enrollment in the Reinvest in Minnesota program under sections 
 91.13  103F.501 to 103F.535 or the federal Conservation Reserve Program 
 91.14  as contained in Public Law Number 99-198.  Contiguous acreage on 
 91.15  the same parcel, or contiguous acreage on an immediately 
 91.16  adjacent parcel under the same ownership, may also qualify as 
 91.17  agricultural land, but only if it is pasture, timber, waste, 
 91.18  unusable wild land, and or land included in state or federal 
 91.19  farm or conservation programs.  "Agricultural purposes" as used 
 91.20  in this section means the raising or cultivation of agricultural 
 91.21  products.  Land enrolled in the Reinvest in Minnesota program 
 91.22  under sections 103F.505 to 103F.531 or the federal Conservation 
 91.23  Reserve Program as contained in Public Law Number 99-198, and 
 91.24  consisting of a minimum of ten contiguous acres, shall be 
 91.25  classified as agricultural.  Agricultural classification for 
 91.26  property shall be determined with respect to the use of the 
 91.27  whole parcel, excluding the house, garage, and immediately 
 91.28  surrounding one acre of land, and shall not be based upon the 
 91.29  market value of any residential structures on the parcel or 
 91.30  contiguous parcels under the same ownership. 
 91.31     (d) Real estate, excluding the house, garage, and 
 91.32  immediately surrounding one acre of land, of less than ten acres 
 91.33  which is exclusively or intensively used principally for raising 
 91.34  or cultivating agricultural products, shall be considered as 
 91.35  agricultural land, if it is not used primarily for residential 
 91.36  purposes. 
 92.1      Land shall be classified as agricultural even if all or a 
 92.2   portion of the agricultural use of that property is the leasing 
 92.3   to, or use by another person for agricultural purposes. 
 92.4      Classification under this subdivision is not determinative 
 92.5   for qualifying under section 273.111. 
 92.6      The property classification under this section supersedes, 
 92.7   for property tax purposes only, any locally administered 
 92.8   agricultural policies or land use restrictions that define 
 92.9   minimum or maximum farm acreage. 
 92.10     (e) The term "agricultural products" as used in this 
 92.11  subdivision includes production for sale of:  
 92.12     (1) livestock, livestock products, dairy animals, dairy 
 92.13  products, poultry and poultry products, fur-bearing animals, 
 92.14  horticultural and nursery stock described in sections 18.44 to 
 92.15  18.61, fruit of all kinds, vegetables, forage, grains, bees, and 
 92.16  apiary products by the owner; 
 92.17     (2) fish bred for sale and consumption if the fish breeding 
 92.18  occurs on land zoned for agricultural use; 
 92.19     (3) the commercial boarding of horses if the boarding is 
 92.20  done in conjunction with raising or cultivating agricultural 
 92.21  products as defined in clause (1); 
 92.22     (4) property which is owned and operated by nonprofit 
 92.23  organizations used for equestrian activities, excluding racing; 
 92.24  and 
 92.25     (5) game birds and waterfowl bred and raised for use on a 
 92.26  shooting preserve licensed under section 97A.115.  
 92.27     (f) If a parcel used for agricultural purposes is also used 
 92.28  for commercial or industrial purposes, including but not limited 
 92.29  to:  
 92.30     (1) wholesale and retail sales; 
 92.31     (2) processing of raw agricultural products or other goods; 
 92.32     (3) warehousing or storage of processed goods; and 
 92.33     (4) office facilities for the support of the activities 
 92.34  enumerated in clauses (1), (2), and (3), 
 92.35  the assessor shall classify the part of the parcel used for 
 92.36  agricultural purposes as class 1b, 2a, or 2b, whichever is 
 93.1   appropriate, and the remainder in the class appropriate to its 
 93.2   use.  The grading, sorting, and packaging of raw agricultural 
 93.3   products for first sale is considered an agricultural purpose.  
 93.4   A greenhouse or other building where horticultural or nursery 
 93.5   products are grown that is also used for the conduct of retail 
 93.6   sales must be classified as agricultural if it is primarily used 
 93.7   for the growing of horticultural or nursery products from seed, 
 93.8   cuttings, or roots and occasionally as a showroom for the retail 
 93.9   sale of those products.  Use of a greenhouse or building only 
 93.10  for the display of already grown horticultural or nursery 
 93.11  products does not qualify as an agricultural purpose.  
 93.12     The assessor shall determine and list separately on the 
 93.13  records the market value of the homestead dwelling and the one 
 93.14  acre of land on which that dwelling is located.  If any farm 
 93.15  buildings or structures are located on this homesteaded acre of 
 93.16  land, their market value shall not be included in this separate 
 93.17  determination.  
 93.18     (g) To qualify for classification under paragraph (b), 
 93.19  clause (4), a privately owned public use airport must be 
 93.20  licensed as a public airport under section 360.018.  For 
 93.21  purposes of paragraph (b), clause (4), "landing area" means that 
 93.22  part of a privately owned public use airport properly cleared, 
 93.23  regularly maintained, and made available to the public for use 
 93.24  by aircraft and includes runways, taxiways, aprons, and sites 
 93.25  upon which are situated landing or navigational aids.  A landing 
 93.26  area also includes land underlying both the primary surface and 
 93.27  the approach surfaces that comply with all of the following:  
 93.28     (i) the land is properly cleared and regularly maintained 
 93.29  for the primary purposes of the landing, taking off, and taxiing 
 93.30  of aircraft; but that portion of the land that contains 
 93.31  facilities for servicing, repair, or maintenance of aircraft is 
 93.32  not included as a landing area; 
 93.33     (ii) the land is part of the airport property; and 
 93.34     (iii) the land is not used for commercial or residential 
 93.35  purposes. 
 93.36  The land contained in a landing area under paragraph (b), clause 
 94.1   (4), must be described and certified by the commissioner of 
 94.2   transportation.  The certification is effective until it is 
 94.3   modified, or until the airport or landing area no longer meets 
 94.4   the requirements of paragraph (b), clause (4).  For purposes of 
 94.5   paragraph (b), clause (4), "public access area" means property 
 94.6   used as an aircraft parking ramp, apron, or storage hangar, or 
 94.7   an arrival and departure building in connection with the airport.
 94.8      (h) A structure is classified as an agricultural building 
 94.9   if all of the following criteria are met: 
 94.10     (1) the structure is located on property that is classified 
 94.11  as agricultural property under this subdivision; 
 94.12     (2) the structure is occupied exclusively by seasonal farm 
 94.13  workers during the time when they work on that farm, and the 
 94.14  occupants are not charged rent for the privilege of occupying 
 94.15  the property; 
 94.16     (3) the structure meets all applicable health and safety 
 94.17  requirements for the appropriate season; and 
 94.18     (4) the structure is not salable as residential property 
 94.19  because it does not comply with local ordinances relating to 
 94.20  location in relation to streets or roads. 
 94.21     Sec. 20.  Minnesota Statutes 1996, section 273.13, is 
 94.22  amended by adding a subdivision to read: 
 94.23     Subd. 25a.  [ELDERLY ASSISTED LIVING FACILITY 
 94.24  PROPERTY.] "Elderly assisted living facility property" means 
 94.25  residential real estate containing more than one unit held for 
 94.26  use by the tenants or lessees as a residence for periods of 30 
 94.27  days or more, along with community rooms, lounges, activity 
 94.28  rooms, and related facilities, designed to meet the housing, 
 94.29  health, and financial security needs of the elderly.  The real 
 94.30  estate may be owned by an individual, partnership, limited 
 94.31  partnership, for-profit corporation or nonprofit corporation 
 94.32  exempt from federal income taxation under United States Code, 
 94.33  title 26, section 501(c)(3) or related sections.  
 94.34     An admission or initiation fee may be required of tenants.  
 94.35  Monthly charges may include charges for the residential unit, 
 94.36  meals, housekeeping, utilities, social programs, a health care 
 95.1   alert system, or any combination of them.  On-site health care 
 95.2   may be provided by in-house staff or an outside health care 
 95.3   provider. 
 95.4      The assessor shall classify elderly assisted living 
 95.5   facility property, depending upon the property's ownership, 
 95.6   occupancy, and use.  The applicable class rates apply based on 
 95.7   its classification.  If a skilled care nursing home facility is 
 95.8   located on the same parcel as an elderly assisted living 
 95.9   facility, the portion of the property devoted to the elderly 
 95.10  assisted living facility shall be classified under this 
 95.11  subdivision. 
 95.12     Sec. 21.  [273.1651] [TAXATION AND FORFEITURE OF STOCKPILED 
 95.13  METALLIC MINERALS MATERIAL.] 
 95.14     Subdivision 1.  [DEFINITION.] "Stockpiled metallic minerals 
 95.15  material" for purposes of this section, means surface 
 95.16  overburden, rock, lean ore, tailings, or other material that has 
 95.17  been removed from the ground and deposited elsewhere on the 
 95.18  surface in the process of iron ore, taconite, or other metallic 
 95.19  minerals mining, or in the process of beneficiation.  Stockpiled 
 95.20  metallic minerals material does not include processed metallic 
 95.21  minerals concentrates in the form of pellets, chips, briquettes, 
 95.22  fines, or other form which have been prepared for or are in the 
 95.23  process of shipment. 
 95.24     Subd. 2.  [PURPOSE.] The purpose of this section is to 
 95.25  clarify the ownership of stockpiled metallic minerals material 
 95.26  in this state.  Depending on the intent of the person who 
 95.27  extracted the material from the ground, stockpiled metallic 
 95.28  minerals material may or may not be owned separately and apart 
 95.29  from the fee title to the surface of the real property.  The 
 95.30  legislature finds that the uncertainty of ownership of 
 95.31  stockpiled metallic minerals material located on real property 
 95.32  that becomes tax forfeited has created a burden on the public 
 95.33  owner of the surface of the real property and an impediment to 
 95.34  productive management or use of a public resource. 
 95.35     Subd. 3.  [TAXATION AND FORFEITURE.] From and after the 
 95.36  effective date of this section, for purposes of taxation, the 
 96.1   definition of "real property," as contained in section 272.03, 
 96.2   subdivision 1, includes stockpiled metallic minerals material.  
 96.3   Nothing in this subdivision shall be construed to subject 
 96.4   stockpiled metallic minerals material to the general property 
 96.5   tax when the stockpiled metallic minerals material is exempt 
 96.6   from the general property tax pursuant to section 298.015 or 
 96.7   298.25.  If the surface of the real property forfeits for 
 96.8   delinquent taxes, stockpiled metallic minerals material located 
 96.9   on the real property forfeits with the surface of the property. 
 96.10     Subd. 4.  [PRIOR FORFEITURE.] Stockpiled metallic minerals 
 96.11  material located on real property that forfeited prior to the 
 96.12  effective date of this section or forfeits due to a judgment for 
 96.13  delinquent taxes issued prior to the effective date of this 
 96.14  section shall be assessed and taxed as real property.  The tax 
 96.15  applies only to stockpiled metallic minerals material located on 
 96.16  real property that remains in the ownership of the state or a 
 96.17  political subdivision of the state.  The tax shall be based on 
 96.18  the market value of the rental of the property for storage of 
 96.19  stockpiled metallic minerals material. 
 96.20     Subd. 5.  [EXCEPTIONS; TAX LAWS.] (a) The tax imposed 
 96.21  pursuant to this section shall not be imposed on the following: 
 96.22     (1) stockpiled metallic minerals material valued and taxed 
 96.23  under other laws relating to the taxation of minerals, gas, 
 96.24  coal, oil, or other similar interests; 
 96.25     (2) stockpiled metallic minerals material that is exempt 
 96.26  from taxation pursuant to constitutional or related statutory 
 96.27  provisions; or 
 96.28     (3) stockpiled metallic minerals material that is owned by 
 96.29  the state.  
 96.30     (b) All laws for the enforcement of taxes on real property 
 96.31  shall apply to the tax imposed pursuant to this section on 
 96.32  stockpiled metallic minerals material. 
 96.33     Subd. 6.  [FEE OWNER.] For purposes of section 276.041, the 
 96.34  owner of stockpiled metallic minerals material is a fee owner. 
 96.35     Sec. 22.  Minnesota Statutes 1996, section 273.18, is 
 96.36  amended to read: 
 97.1      273.18 [LISTING, VALUATION, AND ASSESSMENT OF EXEMPT 
 97.2   PROPERTY BY COUNTY AUDITORS.] 
 97.3      (a) In every sixth year after the year 1926, the county 
 97.4   auditor shall enter, in a separate place in the real estate 
 97.5   assessment books, the description of each tract of real property 
 97.6   exempt by law from taxation, with the name of the owner, if 
 97.7   known, and the assessor shall value and assess the same in the 
 97.8   same manner that other real property is valued and assessed, and 
 97.9   shall designate in each case the purpose for which the property 
 97.10  is used.  
 97.11     (b) For purposes of the apportionment of fire state aid 
 97.12  under section 69.021, subdivision 7, the county auditor shall 
 97.13  include on the abstract of assessment of exempt real property 
 97.14  filed under this section, the total number of acres of all 
 97.15  natural resources lands for which in lieu payments are made 
 97.16  under sections 477A.11 to 477A.14.  The assessor shall estimate 
 97.17  its market value, provided that if the assessor is not able to 
 97.18  estimate the market value of the land on a per parcel basis, the 
 97.19  assessor shall furnish the commissioner of revenue with an 
 97.20  estimate of the average value per acre of this land within the 
 97.21  county. 
 97.22     Sec. 23.  Minnesota Statutes 1996, section 274.01, is 
 97.23  amended to read: 
 97.24     274.01 [BOARD OF REVIEW.] 
 97.25     Subdivision 1.  [ORDINARY BOARD; MEETINGS, DEADLINES, 
 97.26  GRIEVANCES.] (a) The town board of a town, or the council or 
 97.27  other governing body of a city, is the board of review 
 97.28  except (1) in cities whose charters provide for a board of 
 97.29  equalization or (2) in any city or town that has transferred its 
 97.30  local board of review power and duties to the county board as 
 97.31  provided in subdivision 3.  The county assessor shall fix a day 
 97.32  and time when the board or the board of equalization shall meet 
 97.33  in the assessment districts of the county.  On or before 
 97.34  February 15 of each year the assessor shall give written notice 
 97.35  of the time to the city or town clerk.  Notwithstanding the 
 97.36  provisions of any charter to the contrary, the meetings must be 
 98.1   held between April 1 and May 31 each year.  The clerk shall give 
 98.2   published and posted notice of the meeting at least ten days 
 98.3   before the date of the meeting.  
 98.4      If in any county, at least 25 percent of the total net tax 
 98.5   capacity of a city or town is noncommercial seasonal residential 
 98.6   recreational property classified under section 273.13, 
 98.7   subdivision 25, the county must hold two countywide 
 98.8   informational meetings on Saturdays.  The meetings will allow 
 98.9   noncommercial seasonal residential recreational taxpayers to 
 98.10  discuss their property valuation with the appropriate assessment 
 98.11  staff.  These Saturday informational meetings must be scheduled 
 98.12  to allow the owner of the noncommercial seasonal residential 
 98.13  recreational property the opportunity to attend one of the 
 98.14  meetings prior to the scheduled board of review for their city 
 98.15  or town.  The Saturday meeting dates must be contained on the 
 98.16  notice of valuation of real property under section 273.121.  
 98.17     The board shall meet at the office of the clerk to review 
 98.18  the assessment and classification of property in the town or 
 98.19  city.  No changes in valuation or classification which are 
 98.20  intended to correct errors in judgment by the county assessor 
 98.21  may be made by the county assessor after the board of review or 
 98.22  the county board of equalization has adjourned in those cities 
 98.23  or towns that hold a local board of review; however, corrections 
 98.24  of errors that are merely clerical in nature or changes that 
 98.25  extend homestead treatment to property are permitted after 
 98.26  adjournment until the tax extension date for that assessment 
 98.27  year.  The changes must be fully documented and maintained in 
 98.28  the assessor's office and must be available for review by any 
 98.29  person.  A copy of the changes made during this period in those 
 98.30  cities or towns that hold a local board of review must be sent 
 98.31  to the county board no later than December 31 of the assessment 
 98.32  year.  
 98.33     (b) The board shall determine whether the taxable property 
 98.34  in the town or city has been properly placed on the list and 
 98.35  properly valued by the assessor.  If real or personal property 
 98.36  has been omitted, the board shall place it on the list with its 
 99.1   market value, and correct the assessment so that each tract or 
 99.2   lot of real property, and each article, parcel, or class of 
 99.3   personal property, is entered on the assessment list at its 
 99.4   market value.  No assessment of the property of any person may 
 99.5   be raised unless the person has been duly notified of the intent 
 99.6   of the board to do so.  On application of any person feeling 
 99.7   aggrieved, the board shall review the assessment or 
 99.8   classification, or both, and correct it as appears just.  
 99.9      (c) A local board of review may reduce assessments upon 
 99.10  petition of the taxpayer but the total reductions must not 
 99.11  reduce the aggregate assessment made by the county assessor by 
 99.12  more than one percent.  If the total reductions would lower the 
 99.13  aggregate assessments made by the county assessor by more than 
 99.14  one percent, none of the adjustments may be made.  The assessor 
 99.15  shall correct any clerical errors or double assessments 
 99.16  discovered by the board of review without regard to the one 
 99.17  percent limitation.  
 99.18     (d) A majority of the members may act at the meeting, and 
 99.19  adjourn from day to day until they finish hearing the cases 
 99.20  presented.  The assessor shall attend, with the assessment books 
 99.21  and papers, and take part in the proceedings, but must not 
 99.22  vote.  The county assessor, or an assistant delegated by the 
 99.23  county assessor shall attend the meetings.  The board shall list 
 99.24  separately, on a form appended to the assessment book, all 
 99.25  omitted property added to the list by the board and all items of 
 99.26  property increased or decreased, with the market value of each 
 99.27  item of property, added or changed by the board, placed opposite 
 99.28  the item.  The county assessor shall enter all changes made by 
 99.29  the board in the assessment book.  
 99.30     (e) Except as provided in subdivision 3, if a person fails 
 99.31  to appear in person, by counsel, or by written communication 
 99.32  before the board after being duly notified of the board's intent 
 99.33  to raise the assessment of the property, or if a person feeling 
 99.34  aggrieved by an assessment or classification fails to apply for 
 99.35  a review of the assessment or classification, the person may not 
 99.36  appear before the county board of equalization for a review of 
100.1   the assessment or classification.  This paragraph does not apply 
100.2   if an assessment was made after the board meeting, as provided 
100.3   in section 273.01, or if the person can establish not having 
100.4   received notice of market value at least five days before the 
100.5   local board of review meeting.  
100.6      (f) The board of review or the board of equalization must 
100.7   complete its work and adjourn within 20 days from the time of 
100.8   convening stated in the notice of the clerk, unless a longer 
100.9   period is approved by the commissioner of revenue.  No action 
100.10  taken after that date is valid.  All complaints about an 
100.11  assessment or classification made after the meeting of the board 
100.12  must be heard and determined by the county board of 
100.13  equalization.  A nonresident may, at any time, before the 
100.14  meeting of the board of review file written objections to an 
100.15  assessment or classification with the county assessor.  The 
100.16  objections must be presented to the board of review at its 
100.17  meeting by the county assessor for its consideration. 
100.18     Subd. 2.  [SPECIAL BOARD; DUTIES DELEGATED.] The governing 
100.19  body of a city, including a city whose charter provides for a 
100.20  board of equalization, may appoint a special board of review.  
100.21  The city may delegate to the special board of review all of the 
100.22  powers and duties in subdivision 1.  The special board of review 
100.23  shall serve at the direction and discretion of the appointing 
100.24  body, subject to the restrictions imposed by law.  The 
100.25  appointing body shall determine the number of members of the 
100.26  board, the compensation and expenses to be paid, and the term of 
100.27  office of each member.  At least one member of the special board 
100.28  of review must be an appraiser, realtor, or other person 
100.29  familiar with property valuations in the assessment district. 
100.30     Subd. 3.  [LOCAL BOARD DUTIES TRANSFERRED TO COUNTY.] The 
100.31  town board of any town or the governing body of any home rule 
100.32  charter or statutory city may transfer its powers and duties 
100.33  under subdivision 1 to the county board, and no longer perform 
100.34  the function of a local board.  Before the town board or the 
100.35  governing body of a city transfers the powers and duties to the 
100.36  county board, the town board or city's governing body shall give 
101.1   public notice of the meeting at which the proposal for transfer 
101.2   is to be considered.  The public notice shall follow the 
101.3   procedure contained in section 471.705, subdivision 1c, 
101.4   paragraph (b).  A transfer of duties as permitted under this 
101.5   subdivision must be communicated to the county assessor, in 
101.6   writing, before December 1 of any year to be effective for the 
101.7   following year's assessment.  This transfer of duties to the 
101.8   county may either be permanent or for a specified number of 
101.9   years, provided that the transfer cannot be for less than three 
101.10  years.  Its length must be stated in writing.  A town or city 
101.11  may renew its option to transfer.  The option to transfer duties 
101.12  under this subdivision is only available to a town or city whose 
101.13  assessment is done by the county. 
101.14     Sec. 24.  Minnesota Statutes 1996, section 274.13, is 
101.15  amended by adding a subdivision to read: 
101.16     Subd. 1b.  [ASSESSMENT CHANGES.] No changes in valuation or 
101.17  classification that are intended to correct errors in judgment 
101.18  by the county assessor may be made by the county assessor after 
101.19  the county board of equalization has adjourned; however, 
101.20  corrections of errors that are merely clerical in nature or 
101.21  changes that extend homestead treatment to property are 
101.22  permitted after adjournment until the tax extension date for 
101.23  that assessment year.  The changes must be fully documented and 
101.24  maintained in the assessor's office and must be available for 
101.25  review by any person. 
101.26     Sec. 25.  Minnesota Statutes 1996, section 274.13, is 
101.27  amended by adding a subdivision to read: 
101.28     Subd. 1c.  [ALTERNATIVE REVIEW OPTION.] The county shall 
101.29  notify taxpayers whose town or city elected to transfer its 
101.30  powers and duties under section 274.01 to the county.  Prior to 
101.31  the time of the county board of equalization, the county shall 
101.32  make available to those taxpayers a procedure for a review of 
101.33  its assessments, including, but not limited to, open book 
101.34  meetings.  This alternative review process shall take place in 
101.35  April and May.  
101.36     Sec. 26.  Minnesota Statutes 1996, section 281.13, is 
102.1   amended to read: 
102.2      281.13 [NOTICE OF EXPIRATION OF REDEMPTION.] 
102.3      Every person holding a tax certificate after expiration of 
102.4   three years, or the redemption period specified in section 
102.5   281.17 if shorter, after the date of the tax sale under which 
102.6   the same was issued, may present such certificate to the county 
102.7   auditor; and thereupon the auditor shall prepare, under the 
102.8   auditor's hand and official seal, a notice, directed to the 
102.9   person or persons in whose name such lands are assessed, 
102.10  specifying the description thereof, the amount for which the 
102.11  same was sold, the amount required to redeem the same, exclusive 
102.12  of the costs to accrue upon such notice, and the time when the 
102.13  redemption period will expire.  If, at the time when any tax 
102.14  certificate is so presented, such lands are assessed in the name 
102.15  of the holder of the certificate, such notice shall be directed 
102.16  also to the person or persons in whose name title in fee of such 
102.17  land appears of record in the office of the county recorder.  
102.18  The auditor shall deliver such notice to the party applying 
102.19  therefor, who shall deliver it to the sheriff of the proper 
102.20  county or any other person not less than 18 years of age for 
102.21  service.  Within 20 days after receiving it, the sheriff or 
102.22  other person serving the notice shall serve such notice upon the 
102.23  persons to whom it is directed, if to be found in the sheriff's 
102.24  county, in the manner prescribed for serving a summons in a 
102.25  civil action; if not so found, then upon the person in 
102.26  possession of the land, and make return thereof to the auditor.  
102.27  In the case of land held in joint tenancy the notice shall be 
102.28  served upon each joint tenant.  If one or more of the persons to 
102.29  whom the notice is directed cannot be found in the county, and 
102.30  there is no one in possession of the land, of each of which 
102.31  facts the return of the sheriff or other person serving the 
102.32  notice so specifying shall be prima facie evidence, service 
102.33  shall be made upon those persons that can be found and service 
102.34  shall also be made by two weeks' published notice, proof of 
102.35  which publication shall be filed with the auditor. 
102.36     When the records in the office of the county recorder show 
103.1   that any lot or tract of land is encumbered by an unsatisfied 
103.2   mortgage or other lien, and show the post office address of the 
103.3   mortgagee or lienee, or if the same has been assigned, the post 
103.4   office address of the assignee, the person holding such tax 
103.5   certificate shall serve a copy of such notice upon such 
103.6   mortgagee, lienee, or assignee by certified mail addressed to 
103.7   such mortgagee, lienee, or assignee at the post office address 
103.8   of the mortgagee, lienee, or assignee as disclosed by the 
103.9   records in the office of the county recorder, at least 60 days 
103.10  prior to the time when the redemption period will expire. 
103.11     The notice herein provided for shall be sufficient if 
103.12  substantially in the following form: 
103.13                "NOTICE OF EXPIRATION OF REDEMPTION 
103.14     Office of the County Auditor 
103.15     County of ......................., State of Minnesota. 
103.16     To .............................. 
103.17     You are hereby notified that the following described piece 
103.18  or parcel of land, situated in the county of 
103.19  ......................., and State of Minnesota, and known and 
103.20  described as follows:  ......... 
103.21  ............................................................ 
103.22  .........., is now assessed in your name; that on the 
103.23  ........................ day of May, ....................., at 
103.24  the sale of land pursuant to the real estate tax judgment, duly 
103.25  given and made in and by the district court in and for said 
103.26  county of ......................................, on the 
103.27  ................................. day of March, .............., 
103.28  in proceedings to enforce the payment of taxes delinquent upon 
103.29  real estate for the year .............. for said county of 
103.30  ........... ......................., the above described piece 
103.31  or parcel of land was sold for the sum of $............., and 
103.32  the amount required to redeem such piece or parcel of land from 
103.33  such sale, exclusive of the cost to accrue upon this notice, is 
103.34  the sum of $............, and interest at the rate of 
103.35  ............... percent per annum from said 
103.36  ............................. day of ......................, 
104.1   ..................., to the day such redemption is made, and 
104.2   that the tax certificate has been presented to me by the holder 
104.3   thereof, and the time for redemption of such piece or parcel of 
104.4   land from such sale will expire 60 days after the service of 
104.5   this notice and proof thereof has been filed in my office. 
104.6      Witness my hand and official seal this 
104.7   ............................  day of ................, 
104.8   ................. 
104.9      ................. 
104.10     (OFFICIAL SEAL) 
104.11     County Auditor of 
104.12     ...................... County, Minnesota." 
104.13     Sec. 27.  Minnesota Statutes 1996, section 281.23, 
104.14  subdivision 6, is amended to read: 
104.15     Subd. 6.  [SERVICE BY SHERIFF OF NOTICE.] Forthwith after 
104.16  the commencement of such publication the county auditor shall 
104.17  deliver to the sheriff of the county or any other person not 
104.18  less than 18 years of age a sufficient number of copies of such 
104.19  notice of expiration of redemption for service upon the persons 
104.20  in possession of all parcels of such land as are actually 
104.21  occupied.  Within 30 days after receipt thereof, the sheriff or 
104.22  other person serving the notice shall make such investigation as 
104.23  may be necessary to ascertain whether the parcels covered by 
104.24  such notice are actually occupied or not, and shall serve a copy 
104.25  of such notice of expiration of redemption upon the person in 
104.26  possession of each parcel found to be so occupied, in the manner 
104.27  prescribed for serving summons in a civil action.  The 
104.28  sheriff or other person serving the notice shall make prompt 
104.29  return to the auditor as to all notices so served and as to all 
104.30  parcels found vacant and unoccupied.  Such return shall be made 
104.31  upon a copy of such notice and shall be prima facie evidence of 
104.32  the facts therein stated. 
104.33     Unless compensation for such services is otherwise provided 
104.34  by law If the notice is served by the sheriff, the sheriff shall 
104.35  receive from the county, in addition to other compensation 
104.36  prescribed by law, such fees and mileage for service on persons 
105.1   in possession as are prescribed by law for such service in other 
105.2   cases, and shall also receive such compensation for making 
105.3   investigation and return as to vacant and unoccupied lands as 
105.4   the county board may fix, subject to appeal to the district 
105.5   court as in case of other claims against the county.  As to 
105.6   either service upon persons in possession or return as to vacant 
105.7   lands, the sheriff shall charge mileage only for one trip if the 
105.8   occupants of more than two tracts are served simultaneously, and 
105.9   in such case mileage shall be prorated and charged equitably 
105.10  against all such owners. 
105.11     Sec. 28.  Minnesota Statutes 1996, section 281.273, is 
105.12  amended to read: 
105.13     281.273 [EXPIRATION OF TIME OF REDEMPTION ON LANDS OWNED BY 
105.14  PERSONS IN MILITARY SERVICE.] 
105.15     When a county sheriff or other person serves notice of 
105.16  expiration of the time for redemption of any parcel of real 
105.17  property from delinquent taxes upon any occupant of the real 
105.18  property, the sheriff or other person shall inquire of the 
105.19  occupant and otherwise as the sheriff or other person may deem 
105.20  proper whether the real property was owned and occupied for 
105.21  dwelling, professional, business or agricultural purposes by a 
105.22  person in the military service of the United States as defined 
105.23  in the Soldiers' and Sailors' Civil Relief Act of 1940, as 
105.24  amended, or the person's dependents at the commencement of the 
105.25  period of military service.  On finding that the real property 
105.26  is so owned, the sheriff or other person shall make a 
105.27  certificate to the county auditor, setting forth the description 
105.28  of the property, the name of the owner, the particulars of the 
105.29  owner's military service so far as ascertained or claimed, and 
105.30  the names and addresses of the persons of whom the sheriff or 
105.31  other person made inquiry.  The certificate shall be filed with 
105.32  the county auditor and shall be prima facie evidence of the 
105.33  facts stated.  If the real property described in the certificate 
105.34  becomes forfeited to the state, it shall be withheld from sale 
105.35  or conveyance as tax-forfeited property in accordance with and 
105.36  subject to the provisions of the Soldiers' and Sailors' Civil 
106.1   Relief Act of 1940, as amended, except that the requirement in 
106.2   United States Code, title 50, section 560, that the property be 
106.3   occupied by the dependent or employee of the person in military 
106.4   service does not apply.  The period of withholding from sale or 
106.5   conveyance shall be no longer than is required by that act.  If 
106.6   upon further investigation the sheriff or other person finds at 
106.7   any time that the certificate is erroneous in any particular, 
106.8   the sheriff or other person shall file a supplemental 
106.9   certificate referring to the matter in error and stating the 
106.10  facts as found.  The supplemental certificate shall be prima 
106.11  facie evidence of the facts stated, and shall supersede any 
106.12  prior certificate so far as in conflict therewith.  If it 
106.13  appears from the supplemental certificate that the owner of the 
106.14  real property affected is not entitled to have the same withheld 
106.15  from sale under the Soldiers' and Sailors' Civil Relief Act of 
106.16  1940, as amended, the property shall not be withheld from sale 
106.17  further under this section.  
106.18     Sec. 29.  Minnesota Statutes 1996, section 281.276, is 
106.19  amended to read: 
106.20     281.276 [RETURN OF SHERIFF MUST SHOW MILITARY SERVICE.] 
106.21     Unless a sheriff's certificate showing military service is 
106.22  filed as required by section 281.273, it shall be presumed that 
106.23  the owner of the property described in the notice of expiration 
106.24  of the time for redemption from delinquent taxes is not in such 
106.25  service.  The filing of the sheriff's certificate provided for 
106.26  in section 281.273 shall not affect the forfeiture of the real 
106.27  property described in such notice of the expiration of the time 
106.28  for redemption from delinquent taxes or their proceedings 
106.29  relating thereto except as expressly herein provided. 
106.30     Sec. 30.  Minnesota Statutes 1996, section 282.01, 
106.31  subdivision 8, is amended to read: 
106.32     Subd. 8.  [MINERALS IN TAX-FORFEITED LAND AND TAX-FORFEITED 
106.33  STOCKPILED METALLIC MINERALS MATERIAL SUBJECT TO MINING; 
106.34  PROCEDURES.] In case the commissioner of natural resources shall 
106.35  notify the county auditor of any county in writing that the 
106.36  minerals in any tax-forfeited land or tax-forfeited stockpiled 
107.1   metallic minerals material located on tax-forfeited land in such 
107.2   county have been designated as a mining unit as provided by law, 
107.3   or that such minerals or tax-forfeited stockpiled metallic 
107.4   minerals material are subject to a mining permit or lease issued 
107.5   therefor as provided by law, the surface of such tax-forfeited 
107.6   land shall be subject to disposal and use for mining purposes 
107.7   pursuant to such designation, permit, or lease, and shall be 
107.8   withheld from sale or lease by the county auditor until the 
107.9   commissioner shall notify the county auditor that such land has 
107.10  been removed from the list of mining units or that any mining 
107.11  permit or lease theretofore issued thereon is no longer in 
107.12  force; provided, that the surface of such tax-forfeited land may 
107.13  be leased by the county auditor as provided by law, with the 
107.14  written approval of the commissioner, subject to disposal and 
107.15  use for mining purposes as herein provided and to any special 
107.16  conditions relating thereto that the commissioner may prescribe, 
107.17  also subject to cancellation for mining purposes on three months 
107.18  written notice from the commissioner to the county auditor. 
107.19     Sec. 31.  Minnesota Statutes 1996, section 282.04, 
107.20  subdivision 1, is amended to read: 
107.21     Subdivision 1.  [TIMBER SALES; LAND LEASES AND USES.] (a) 
107.22  The county auditor may sell timber upon any tract that may be 
107.23  approved by the natural resources commissioner.  Such sale of 
107.24  timber shall be made for cash at not less than the appraised 
107.25  value determined by the county board to the highest bidder after 
107.26  not less than one week's published notice in an official paper 
107.27  within the county.  Any timber offered at such public sale and 
107.28  not sold may thereafter be sold at private sale by the county 
107.29  auditor at not less than the appraised value thereof, until such 
107.30  time as the county board may withdraw such timber from sale.  
107.31  The appraised value of the timber and the forestry practices to 
107.32  be followed in the cutting of said timber shall be approved by 
107.33  the commissioner of natural resources.  
107.34     (b) Payment of the full sale price of all timber sold on 
107.35  tax-forfeited lands shall be made in cash at the time of the 
107.36  timber sale, except in the case of oral or sealed bid auction 
108.1   sales, the down payment shall be no less than 15 percent of the 
108.2   appraised value, and the balance shall be paid prior to entry.  
108.3   In the case of auction sales that are partitioned and sold as a 
108.4   single sale with predetermined cutting blocks, the down payment 
108.5   shall be no less than 15 percent of the appraised price of the 
108.6   entire timber sale which may be held until the satisfactory 
108.7   completion of the sale or applied in whole or in part to the 
108.8   final cutting block.  The value of each separate block must be 
108.9   paid in full before any cutting may begin in that block.  With 
108.10  the permission of the county administrator the purchaser may 
108.11  enter unpaid blocks and cut necessary timber incidental to 
108.12  developing logging roads as may be needed to log other blocks 
108.13  provided that no timber may be removed from an unpaid block 
108.14  until separately scaled and paid for.  
108.15     (c) The county board may require final settlement on the 
108.16  basis of a scale of cut products.  Any parcels of land from 
108.17  which timber is to be sold by scale of cut products shall be so 
108.18  designated in the published notice of sale above mentioned, in 
108.19  which case the notice shall contain a description of such 
108.20  parcels, a statement of the estimated quantity of each species 
108.21  of timber thereon and the appraised price of each specie of 
108.22  timber for 1,000 feet, per cord or per piece, as the case may 
108.23  be.  In such cases any bids offered over and above the appraised 
108.24  prices shall be by percentage, the percent bid to be added to 
108.25  the appraised price of each of the different species of timber 
108.26  advertised on the land.  The purchaser of timber from such 
108.27  parcels shall pay in cash at the time of sale at the rate bid 
108.28  for all of the timber shown in the notice of sale as estimated 
108.29  to be standing on the land, and in addition shall pay at the 
108.30  same rate for any additional amounts which the final scale shows 
108.31  to have been cut or was available for cutting on the land at the 
108.32  time of sale under the terms of such sale.  Where the final 
108.33  scale of cut products shows that less timber was cut or was 
108.34  available for cutting under terms of such sale than was 
108.35  originally paid for, the excess payment shall be refunded from 
108.36  the forfeited tax sale fund upon the claim of the purchaser, to 
109.1   be audited and allowed by the county board as in case of other 
109.2   claims against the county.  No timber, except hardwood pulpwood, 
109.3   may be removed from such parcels of land or other designated 
109.4   landings until scaled by a person or persons designated by the 
109.5   county board and approved by the commissioner of natural 
109.6   resources.  Landings other than the parcel of land from which 
109.7   timber is cut may be designated for scaling by the county board 
109.8   by written agreement with the purchaser of the timber.  The 
109.9   county board may, by written agreement with the purchaser and 
109.10  with a consumer designated by the purchaser when the timber is 
109.11  sold by the county auditor, and with the approval of the 
109.12  commissioner of natural resources, accept the consumer's scale 
109.13  of cut products delivered at the consumer's landing.  No timber 
109.14  shall be removed until fully paid for in cash.  Small amounts of 
109.15  timber not exceeding $3,000 in appraised valuation may be sold 
109.16  for not less than the full appraised value at private sale to 
109.17  individual persons without first publishing notice of sale or 
109.18  calling for bids, provided that in case of such sale involving a 
109.19  total appraised value of more than $200 the sale shall be made 
109.20  subject to final settlement on the basis of a scale of cut 
109.21  products in the manner above provided and not more than two such 
109.22  sales, directly or indirectly to any individual shall be in 
109.23  effect at one time. 
109.24     (d) As directed by the county board, the county auditor may 
109.25  lease tax-forfeited land to individuals, corporations or 
109.26  organized subdivisions of the state at public or private vendue, 
109.27  and at such prices and under such terms as the county board may 
109.28  prescribe, for use as cottage and camp sites and for 
109.29  agricultural purposes and for the purpose of taking and removing 
109.30  of hay, stumpage, sand, gravel, clay, rock, marl, and black dirt 
109.31  therefrom, and for garden sites and other temporary uses 
109.32  provided that no leases shall be for a period to exceed ten 
109.33  years; provided, further that any leases involving a 
109.34  consideration of more than $1,500 per year, except to an 
109.35  organized subdivision of the state shall first be offered at 
109.36  public sale in the manner provided herein for sale of timber.  
110.1   Upon the sale of any such leased land, it shall remain subject 
110.2   to the lease for not to exceed one year from the beginning of 
110.3   the term of the lease.  Any rent paid by the lessee for the 
110.4   portion of the term cut off by such cancellation shall be 
110.5   refunded from the forfeited tax sale fund upon the claim of the 
110.6   lessee, to be audited and allowed by the county board as in case 
110.7   of other claims against the county. 
110.8      (e) As directed by the county board, the county auditor may 
110.9   lease tax-forfeited land to individuals, corporations, or 
110.10  organized subdivisions of the state at public or private vendue, 
110.11  at such prices and under such terms as the county board may 
110.12  prescribe, for the purpose of taking and removing for use for 
110.13  road construction and other purposes tax-forfeited stockpiled 
110.14  iron-bearing material.  The county auditor must determine that 
110.15  the material is needed and suitable for use in the construction 
110.16  or maintenance of a road, tailings basin, settling basin, dike, 
110.17  dam, bank fill, or other works on public or private property, 
110.18  and that the use would be in the best interests of the public.  
110.19  No lease shall exceed ten years.  The use of a stockpile for 
110.20  these purposes must first be approved by the commissioner of 
110.21  natural resources.  The request shall be deemed approved unless 
110.22  the requesting county is notified to the contrary by the 
110.23  commissioner of natural resources within six months after 
110.24  receipt of a request for approval for use of a stockpile.  Once 
110.25  use of a stockpile has been approved, the county may continue to 
110.26  lease it for these purposes until approval is withdrawn by the 
110.27  commissioner of natural resources. 
110.28     (f) The county auditor, with the approval of the county 
110.29  board is authorized to grant permits, licenses, and leases to 
110.30  tax-forfeited lands for the depositing of stripping, lean ores, 
110.31  tailings, or waste products from mines or ore milling plants, 
110.32  upon such conditions and for such consideration and for such 
110.33  period of time, not exceeding 15 years, as the county board may 
110.34  determine; said permits, licenses, or leases to be subject to 
110.35  approval by the commissioner of natural resources. 
110.36     (g) Any person who removes any timber from tax-forfeited 
111.1   land before said timber has been scaled and fully paid for as 
111.2   provided in this subdivision is guilty of a misdemeanor. 
111.3      (h) The county auditor may, with the approval of the county 
111.4   board, and without first offering at public sale, grant leases, 
111.5   for a term not exceeding 25 years, for the removal of peat from 
111.6   tax-forfeited lands upon such terms and conditions as the county 
111.7   board may prescribe.  Any lease for the removal of peat from 
111.8   tax-forfeited lands must first be reviewed and approved by the 
111.9   commissioner of natural resources if the lease covers 320 or 
111.10  more acres.  No lease for the removal of peat shall be made by 
111.11  the county auditor pursuant to this section without first 
111.12  holding a public hearing on the auditor's intention to lease.  
111.13  One printed notice in a legal newspaper in the county at least 
111.14  ten days before the hearing, and posted notice in the courthouse 
111.15  at least 20 days before the hearing shall be given of the 
111.16  hearing. 
111.17     Sec. 32.  Minnesota Statutes 1996, section 469.012, 
111.18  subdivision 1, is amended to read: 
111.19     Subdivision 1.  [SCHEDULE OF POWERS.] An authority shall be 
111.20  a public body corporate and politic and shall have all the 
111.21  powers necessary or convenient to carry out the purposes of 
111.22  sections 469.001 to 469.047, except that the power to levy and 
111.23  collect taxes or special assessments is limited to the power 
111.24  provided in sections 469.027 to 469.033.  Its powers include the 
111.25  following powers in addition to others granted in sections 
111.26  469.001 to 469.047:  
111.27     (1) to sue and be sued; to have a seal, which shall be 
111.28  judicially noticed, and to alter it; to have perpetual 
111.29  succession; and to make, amend, and repeal rules consistent with 
111.30  sections 469.001 to 469.047; 
111.31     (2) to employ an executive director, technical experts, and 
111.32  officers, agents, and employees, permanent and temporary, that 
111.33  it requires, and determine their qualifications, duties, and 
111.34  compensation; for legal services it requires, to call upon the 
111.35  chief law officer of the city or to employ its own counsel and 
111.36  legal staff; so far as practicable, to use the services of local 
112.1   public bodies in its area of operation, provided that those 
112.2   local public bodies, if requested, shall make the services 
112.3   available; 
112.4      (3) to delegate to one or more of its agents or employees 
112.5   the powers or duties it deems proper; 
112.6      (4) within its area of operation, to undertake, prepare, 
112.7   carry out, and operate projects and to provide for the 
112.8   construction, reconstruction, improvement, extension, 
112.9   alteration, or repair of any project or part thereof; 
112.10     (5) subject to the provisions of section 469.026, to give, 
112.11  sell, transfer, convey, or otherwise dispose of real or personal 
112.12  property or any interest therein and to execute leases, deeds, 
112.13  conveyances, negotiable instruments, purchase agreements, and 
112.14  other contracts or instruments, and take action that is 
112.15  necessary or convenient to carry out the purposes of these 
112.16  sections; 
112.17     (6) within its area of operation, to acquire real or 
112.18  personal property or any interest therein by gifts, grant, 
112.19  purchase, exchange, lease, transfer, bequest, devise, or 
112.20  otherwise, and by the exercise of the power of eminent domain, 
112.21  in the manner provided by chapter 117, to acquire real property 
112.22  which it may deem necessary for its purposes, after the adoption 
112.23  by it of a resolution declaring that the acquisition of the real 
112.24  property is necessary to eliminate one or more of the conditions 
112.25  found to exist in the resolution adopted pursuant to section 
112.26  469.003 or to provide decent, safe, and sanitary housing for 
112.27  persons of low and moderate income, or is necessary to carry out 
112.28  a redevelopment project.  Real property needed or convenient for 
112.29  a project may be acquired by the authority for the project by 
112.30  condemnation pursuant to this section.  This includes any 
112.31  property devoted to a public use, whether or not held in trust, 
112.32  notwithstanding that the property may have been previously 
112.33  acquired by condemnation or is owned by a public utility 
112.34  corporation, because the public use in conformity with the 
112.35  provisions of sections 469.001 to 469.047 shall be deemed a 
112.36  superior public use.  Property devoted to a public use may be so 
113.1   acquired only if the governing body of the municipality has 
113.2   approved its acquisition by the authority.  An award of 
113.3   compensation shall not be increased by reason of any increase in 
113.4   the value of the real property caused by the assembly, clearance 
113.5   or reconstruction, or proposed assembly, clearance or 
113.6   reconstruction for the purposes of sections 469.001 to 469.047 
113.7   of the real property in an area; 
113.8      (7) within its area of operation, and without the adoption 
113.9   of an urban renewal plan, to acquire, by all means as set forth 
113.10  in clause (6) but without the adoption of a resolution provided 
113.11  for in clause (6), real property, and to demolish, remove, 
113.12  rehabilitate, or reconstruct the buildings and improvements or 
113.13  construct new buildings and improvements thereon, or to so 
113.14  provide through other means as set forth in Laws 1974, chapter 
113.15  228, or to grade, fill, and construct foundations or otherwise 
113.16  prepare the site for improvements.  The authority may dispose of 
113.17  the property pursuant to section 469.029, provided that the 
113.18  provisions of section 469.029 requiring conformance to an urban 
113.19  renewal plan shall not apply.  The authority may finance these 
113.20  activities by means of the redevelopment project fund or by 
113.21  means of tax increments or tax increment bonds or by the methods 
113.22  of financing provided for in section 469.033 or by means of 
113.23  contributions from the municipality provided for in section 
113.24  469.041, clause (9), or by any combination of those means.  Real 
113.25  property with buildings or improvements thereon shall only be 
113.26  acquired under this clause when the buildings or improvements 
113.27  are substandard.  The exercise of the power of eminent domain 
113.28  under this clause shall be limited to real property which 
113.29  contains, or has contained within the three years immediately 
113.30  preceding the exercise of the power of eminent domain and is 
113.31  currently vacant, buildings and improvements which are vacated 
113.32  and substandard.  Notwithstanding the prior sentence, in cities 
113.33  of the first class the exercise of the power of eminent domain 
113.34  under this clause shall be limited to real property which 
113.35  contains, or has contained within the three years immediately 
113.36  preceding the exercise of the power of eminent domain, buildings 
114.1   and improvements which are substandard.  For the purpose of this 
114.2   clause, substandard buildings or improvements mean hazardous 
114.3   buildings as defined in section 463.15, subdivision 3, or 
114.4   buildings or improvements that are dilapidated or obsolescent, 
114.5   faultily designed, lack adequate ventilation, light, or sanitary 
114.6   facilities, or any combination of these or other factors that 
114.7   are detrimental to the safety or health of the community; 
114.8      (8) within its area of operation, to determine the level of 
114.9   income constituting low or moderate family income.  The 
114.10  authority may establish various income levels for various family 
114.11  sizes.  In making its determination, the authority may consider 
114.12  income levels that may be established by the Department of 
114.13  Housing and Urban Development or a similar or successor federal 
114.14  agency for the purpose of federal loan guarantees or subsidies 
114.15  for persons of low or moderate income.  The authority may use 
114.16  that determination as a basis for the maximum amount of income 
114.17  for admissions to housing development projects or housing 
114.18  projects owned or operated by it; 
114.19     (9) to provide in federally assisted projects any 
114.20  relocation payments and assistance necessary to comply with the 
114.21  requirements of the Federal Uniform Relocation Assistance and 
114.22  Real Property Acquisition Policies Act of 1970, and any 
114.23  amendments or supplements thereto; 
114.24     (10) to make an agreement with the governing body or bodies 
114.25  creating the authority which provides exemption from all ad 
114.26  valorem real and personal property taxes levied or imposed by 
114.27  the state, city, county, or other political subdivisions, for 
114.28  which the authority shall make payments in lieu of taxes to the 
114.29  state, city, county, or other political subdivisions as provided 
114.30  in section 469.040 body or bodies creating the authority.  The 
114.31  governing body shall agree on behalf of all the applicable 
114.32  governing bodies affected that local cooperation as required by 
114.33  the federal government shall be provided by the local governing 
114.34  body or bodies in whose jurisdiction the project is to be 
114.35  located, at no cost or at no greater cost than the same public 
114.36  services and facilities furnished to other residents; 
115.1      (11) to cooperate with or act as agent for the federal 
115.2   government, the state or any state public body, or any agency or 
115.3   instrumentality of the foregoing, in carrying out any of the 
115.4   provisions of sections 469.001 to 469.047 or of any other 
115.5   related federal, state, or local legislation; and upon the 
115.6   consent of the governing body of the city to purchase, lease, 
115.7   manage, or otherwise take over any housing project already owned 
115.8   and operated by the federal government; 
115.9      (12) to make plans for carrying out a program of voluntary 
115.10  repair and rehabilitation of buildings and improvements, and 
115.11  plans for the enforcement of laws, codes, and regulations 
115.12  relating to the use of land and the use and occupancy of 
115.13  buildings and improvements, and to the compulsory repair, 
115.14  rehabilitation, demolition, or removal of buildings and 
115.15  improvements.  The authority may develop, test, and report 
115.16  methods and techniques, and carry out demonstrations and other 
115.17  activities for the prevention and elimination of slums and 
115.18  blight; 
115.19     (13) to borrow money or other property and accept 
115.20  contributions, grants, gifts, services, or other assistance from 
115.21  the federal government, the state government, state public 
115.22  bodies, or from any other public or private sources; 
115.23     (14) to include in any contract for financial assistance 
115.24  with the federal government any conditions that the federal 
115.25  government may attach to its financial aid of a project, not 
115.26  inconsistent with purposes of sections 469.001 to 469.047, 
115.27  including obligating itself (which obligation shall be 
115.28  specifically enforceable and not constitute a mortgage, 
115.29  notwithstanding any other laws) to convey to the federal 
115.30  government the project to which the contract relates upon the 
115.31  occurrence of a substantial default with respect to the 
115.32  covenants or conditions to which the authority is subject; to 
115.33  provide in the contract that, in case of such conveyance, the 
115.34  federal government may complete, operate, manage, lease, convey, 
115.35  or otherwise deal with the project until the defaults are cured 
115.36  if the federal government agrees in the contract to reconvey to 
116.1   the authority the project as then constituted when the defaults 
116.2   have been cured; 
116.3      (15) to issue bonds for any of its corporate purposes and 
116.4   to secure the bonds by mortgages upon property held or to be 
116.5   held by it or by pledge of its revenues, including grants or 
116.6   contributions; 
116.7      (16) to invest any funds held in reserves or sinking funds, 
116.8   or any funds not required for immediate disbursement, in 
116.9   property or securities in which savings banks may legally invest 
116.10  funds subject to their control or in the manner and subject to 
116.11  the conditions provided in section 118A.04 for the deposit and 
116.12  investment of public funds; 
116.13     (17) within its area of operation, to determine where 
116.14  blight exists or where there is unsafe, unsanitary, or 
116.15  overcrowded housing; 
116.16     (18) to carry out studies of the housing and redevelopment 
116.17  needs within its area of operation and of the meeting of those 
116.18  needs.  This includes study of data on population and family 
116.19  groups and their distribution according to income groups, the 
116.20  amount and quality of available housing and its distribution 
116.21  according to rentals and sales prices, employment, wages, 
116.22  desirable patterns for land use and community growth, and other 
116.23  factors affecting the local housing and redevelopment needs and 
116.24  the meeting of those needs; to make the results of those studies 
116.25  and analyses available to the public and to building, housing, 
116.26  and supply industries; 
116.27     (19) if a local public body does not have a planning agency 
116.28  or the planning agency has not produced a comprehensive or 
116.29  general community development plan, to make or cause to be made 
116.30  a plan to be used as a guide in the more detailed planning of 
116.31  housing and redevelopment areas; 
116.32     (20) to lease or rent any dwellings, accommodations, lands, 
116.33  buildings, structures, or facilities included in any project 
116.34  and, subject to the limitations contained in sections 469.001 to 
116.35  469.047 with respect to the rental of dwellings in housing 
116.36  projects, to establish and revise the rents or charges therefor; 
117.1      (21) to own, hold, and improve real or personal property 
117.2   and to sell, lease, exchange, transfer, assign, pledge, or 
117.3   dispose of any real or personal property or any interest 
117.4   therein; 
117.5      (22) to insure or provide for the insurance of any real or 
117.6   personal property or operations of the authority against any 
117.7   risks or hazards; 
117.8      (23) to procure or agree to the procurement of government 
117.9   insurance or guarantees of the payment of any bonds or parts 
117.10  thereof issued by an authority and to pay premiums on the 
117.11  insurance; 
117.12     (24) to make expenditures necessary to carry out the 
117.13  purposes of sections 469.001 to 469.047; 
117.14     (25) to enter into an agreement or agreements with any 
117.15  state public body to provide informational service and 
117.16  relocation assistance to families, individuals, business 
117.17  concerns, and nonprofit organizations displaced or to be 
117.18  displaced by the activities of any state public body; 
117.19     (26) to compile and maintain a catalog of all vacant, open 
117.20  and undeveloped land, or land which contains substandard 
117.21  buildings and improvements as that term is defined in clause 
117.22  (7), that is owned or controlled by the authority or by the 
117.23  governing body within its area of operation and to compile and 
117.24  maintain a catalog of all authority owned real property that is 
117.25  in excess of the foreseeable needs of the authority, in order to 
117.26  determine and recommend if the real property compiled in either 
117.27  catalog is appropriate for disposal pursuant to the provisions 
117.28  of section 469.029, subdivisions 9 and 10; 
117.29     (27) to recommend to the city concerning the enforcement of 
117.30  the applicable health, housing, building, fire prevention, and 
117.31  housing maintenance code requirements as they relate to 
117.32  residential dwelling structures that are being rehabilitated by 
117.33  low- or moderate-income persons pursuant to section 469.029, 
117.34  subdivision 9, for the period of time necessary to complete the 
117.35  rehabilitation, as determined by the authority; 
117.36     (28) to recommend to the city the initiation of municipal 
118.1   powers, against certain real properties, relating to repair, 
118.2   closing, condemnation, or demolition of unsafe, unsanitary, 
118.3   hazardous, and unfit buildings, as provided in section 469.041, 
118.4   clause (5); 
118.5      (29) to sell, at private or public sale, at the price or 
118.6   prices determined by the authority, any note, mortgage, lease, 
118.7   sublease, lease purchase, or other instrument or obligation 
118.8   evidencing or securing a loan made for the purpose of economic 
118.9   development, job creation, redevelopment, or community 
118.10  revitalization by a public agency to a business, for-profit or 
118.11  nonprofit organization, or an individual; 
118.12     (30) within its area of operation, to acquire and sell real 
118.13  property that is benefited by federal housing assistance 
118.14  payments, other rental subsidies, interest reduction payments, 
118.15  or interest reduction contracts for the purpose of preserving 
118.16  the affordability of low- and moderate-income multifamily 
118.17  housing; 
118.18     (31) to apply for, enter into contracts with the federal 
118.19  government, administer, and carry out a section 8 program.  
118.20  Authorization by the governing body creating the authority to 
118.21  administer the program at the authority's initial application is 
118.22  sufficient to authorize operation of the program in its area of 
118.23  operation for which it was created without additional local 
118.24  governing body approval.  Approval by the governing body or 
118.25  bodies creating the authority constitutes approval of a housing 
118.26  program for purposes of any special or general law requiring 
118.27  local approval of section 8 programs undertaken by city, county, 
118.28  or multicounty authorities; and 
118.29     (32) to secure a mortgage or loan for a rental housing 
118.30  project by obtaining the appointment of receivers or assignments 
118.31  of rents and profits under sections 559.17 and 576.01, except 
118.32  that the limitation relating to the minimum amounts of the 
118.33  original principal balances of mortgages specified in sections 
118.34  559.17, subdivision 2, clause (2); and 576.01, subdivision 2, 
118.35  does not apply. 
118.36     Sec. 33.  Minnesota Statutes 1996, section 469.033, 
119.1   subdivision 6, is amended to read: 
119.2      Subd. 6.  [OPERATION AREA AS TAXING DISTRICT, SPECIAL TAX.] 
119.3   All of the territory included within the area of operation of 
119.4   any authority shall constitute a taxing district for the purpose 
119.5   of levying and collecting special benefit taxes as provided in 
119.6   this subdivision.  All of the taxable property, both real and 
119.7   personal, within that taxing district shall be deemed to be 
119.8   benefited by projects to the extent of the special taxes levied 
119.9   under this subdivision.  Subject to the consent by resolution of 
119.10  the governing body of the city in and for which it was created, 
119.11  an authority may levy a tax upon all taxable property within 
119.12  that taxing district.  The tax shall be extended, spread, and 
119.13  included with and as a part of the general taxes for state, 
119.14  county, and municipal purposes by the county auditor, to be 
119.15  collected and enforced therewith, together with the penalty, 
119.16  interest, and costs.  As the tax, including any penalties, 
119.17  interest, and costs, is collected by the county treasurer it 
119.18  shall be accumulated and kept in a separate fund to be known as 
119.19  the "housing and redevelopment project fund."  The money in the 
119.20  fund shall be turned over to the authority at the same time and 
119.21  in the same manner that the tax collections for the city are 
119.22  turned over to the city, and shall be expended only for the 
119.23  purposes of sections 469.001 to 469.047.  It shall be paid out 
119.24  upon vouchers signed by the chair of the authority or an 
119.25  authorized representative.  The amount of the levy shall be an 
119.26  amount approved by the governing body of the city, but shall not 
119.27  exceed 0.0131 0.0144 percent of taxable market value.  The 
119.28  authority may levy an additional levy, not to exceed 0.0013 
119.29  percent of taxable market value, to be used to defray costs of 
119.30  providing informational service and relocation assistance as set 
119.31  forth in section 469.012, subdivision 1.  The authority shall 
119.32  each year formulate and file a budget in accordance with the 
119.33  budget procedure of the city in the same manner as required of 
119.34  executive departments of the city or, if no budgets are required 
119.35  to be filed, by August 1.  The amount of the tax levy for the 
119.36  following year shall be based on that budget. 
120.1      Sec. 34.  [469.1812] [DEFINITIONS.] 
120.2      Subdivision 1.  [SCOPE.] For purposes of sections 469.1812 
120.3   to 469.1815, the following terms have the meanings given. 
120.4      Subd. 2.  [GOVERNING BODY.] "Governing body" means, for a 
120.5   city, the city council; for a school district, the school board; 
120.6   for a county, the county board; and for a town, the annual 
120.7   meeting of the town. 
120.8      Subd. 3.  [MUNICIPALITY.] "Municipality" means a statutory 
120.9   or home rule charter city or a town. 
120.10     Subd. 4.  [POLITICAL SUBDIVISION OR 
120.11  SUBDIVISION.] "Political subdivision" or "subdivision" means a 
120.12  statutory or home rule charter city, town, school district, or 
120.13  county. 
120.14     Sec. 35.  [469.1813] [ABATEMENT AUTHORITY.] 
120.15     Subdivision 1.  [AUTHORITY.] The governing body of a 
120.16  political subdivision may grant an abatement of the taxes 
120.17  imposed by the political subdivision on a parcel of property, if:
120.18     (a) it expects the benefits to the political subdivision of 
120.19  the proposed abatement agreement to at least equal the costs to 
120.20  the political subdivision of the proposed agreement; and 
120.21     (b) it finds that doing so is in the public interest 
120.22  because it will: 
120.23     (1) increase or preserve tax base; 
120.24     (2) provide employment opportunities in the political 
120.25  subdivision; 
120.26     (3) provide or help acquire or construct public facilities; 
120.27     (4) help redevelop or renew blighted areas; or 
120.28     (5) help provide access to services for residents of the 
120.29  political subdivision. 
120.30     Subd. 2.  [ABATEMENT RESOLUTION.] The governing body of a 
120.31  political subdivision may grant an abatement only by adopting an 
120.32  abatement resolution, specifying the terms of the abatement.  
120.33  The resolution must also include a specific statement as to the 
120.34  nature and extent of the public benefits which the governing 
120.35  body expects to result from the agreement. The abatement may 
120.36  reduce all or part of the property tax levied by the political 
121.1   subdivision on the parcel.  The political subdivision may limit 
121.2   the abatement: 
121.3      (1) to a specific dollar amount per year or in total; 
121.4      (2) to the increase in property taxes resulting from 
121.5   improvement of the property; 
121.6      (3) to the increases in property taxes resulting from 
121.7   increases in the market value or tax capacity of the property; 
121.8   or 
121.9      (4) in any other manner the governing body of the 
121.10  subdivision determines is appropriate. 
121.11  The political subdivision may not abate tax attributable to the 
121.12  value of the land or the areawide tax under chapter 276A or 473F.
121.13     Subd. 3.  [SCHOOL DISTRICT ABATEMENT 
121.14  PROCEDURE.] Notwithstanding the amounts in subdivision 2, a 
121.15  school district that grants an abatement under this section must 
121.16  limit the abatement for any property to not more than an amount 
121.17  equal to the product of:  (1) the property's net tax capacity, 
121.18  and (2) the difference between the district's total tax rate for 
121.19  that year and one-half of the general education tax rate for 
121.20  that year.  An abatement granted under this section is not an 
121.21  abatement for purposes of state aid or local levy under chapter 
121.22  124.  A school district may levy in the following year for the 
121.23  total amount of any revenue foregone through the abatement 
121.24  awarded under this subdivision. 
121.25     Subd. 4.  [PROPERTY LOCATED IN TAX INCREMENT FINANCING 
121.26  DISTRICTS.] The governing body of a governmental subdivision may 
121.27  not enter into a property tax abatement agreement under sections 
121.28  469.1812 to 469.1815 if the property is located in a tax 
121.29  increment financing district. 
121.30     Subd. 5.  [NOTICE AND PUBLIC HEARING.] (a) The governing 
121.31  body of the political subdivision may approve an abatement under 
121.32  sections 469.1812 to 469.1815 only after holding a public 
121.33  hearing on the abatement. 
121.34     (b) Notice of the hearing must be published in a newspaper 
121.35  of general circulation in the political subdivision at least 
121.36  once more than ten days but less than 30 days before the 
122.1   hearing.  The newspaper must be one of general interest and 
122.2   readership in the community, and not one of limited subject 
122.3   matter.  The newspaper must be published at least once per 
122.4   week.  The notice must indicate that the governing body will 
122.5   consider granting a property tax abatement, identify the 
122.6   property or properties for which an abatement is under 
122.7   consideration, and the total estimated amount of the abatement. 
122.8      Subd. 6.  [DURATION LIMIT.] (a) A political subdivision 
122.9   other than a school district may grant an abatement for a period 
122.10  no longer than ten years.  The subdivision may specify in the 
122.11  abatement resolution a shorter duration.  If the resolution does 
122.12  not specify a period of time, the abatement is for eight years.  
122.13  If an abatement has been granted to a parcel of property and the 
122.14  period of the abatement has expired, the political subdivision 
122.15  that granted the abatement may not grant another abatement for 
122.16  eight years after the expiration of the first abatement.  This 
122.17  prohibition does not apply to improvements added after and not 
122.18  subject to the first abatement. 
122.19     (b) A school district may grant an abatement for only one 
122.20  year at a time.  Once a school district has authorized an 
122.21  abatement for a property, it may reauthorize the abatement in 
122.22  any subsequent year for the next seven years, or nine years if 
122.23  provided in the original abatement agreement.  This prohibition 
122.24  does not apply to improvements added after and not subject to 
122.25  the original abatement agreement. 
122.26     Subd. 7.  [REVIEW AND MODIFICATION OF ABATEMENTS.] The 
122.27  political subdivision may provide in the abatement resolution 
122.28  that the abatement may not be modified or changed during its 
122.29  term.  If the abatement resolution does not provide that the 
122.30  abatement may not be modified or changed, the governing body of 
122.31  the political subdivision may review and modify the abatement 
122.32  every second year after it was approved. 
122.33     Subd. 8.  [LIMITATION ON ABATEMENTS.] In any year, the 
122.34  total amount of property taxes abated by a political subdivision 
122.35  under this section may not exceed (1) five percent of the 
122.36  current levy, or (2) $100,000, whichever is greater. 
123.1      Sec. 36.  [469.1814] [BONDING AUTHORITY.] 
123.2      Subdivision 1.  [AUTHORITY.] A political subdivision may 
123.3   issue bonds or other obligations to provide an amount equal to 
123.4   the sum of the abatements granted for a property under section 
123.5   469.1813.  The maximum principal amount of these bonds may not 
123.6   exceed the estimated sum of the abatements for the property for 
123.7   the years authorized.  The bonds may be general obligations of 
123.8   the political subdivision if the governing body of the political 
123.9   subdivision elects to pledge the full faith and credit of the 
123.10  subdivision in the resolution issuing the bonds. 
123.11     Subd. 2.  [BOND CODE APPLIES.] Chapter 475 applies to the 
123.12  obligations authorized by this section, except bonds are 
123.13  excluded from the calculation of the net debt limit. 
123.14     Subd. 3.  [MUNICIPAL ISSUE FOR COMBINED ABATEMENTS.] If two 
123.15  or more political subdivisions decide to grant abatements for 
123.16  the same property, the municipality in which the property is 
123.17  located may issue bonds to provide an amount equal to the sum of 
123.18  the abatements for each of the jurisdictions that agrees.  The 
123.19  governing body of each of the other jurisdictions must guarantee 
123.20  and pledge to pay annually to the municipality the amount of the 
123.21  abatement.  This pledge and guarantee is a binding obligation of 
123.22  the political subdivision and must be included in the abatement 
123.23  resolution. 
123.24     Subd. 4.  [BONDED ABATEMENTS NOT SUBJECT TO REVIEW.] If 
123.25  bonds are issued to provide advance payment of abatements under 
123.26  this section, the amount of abatement is not subject to periodic 
123.27  review by the political subdivision under section 469.1813, 
123.28  subdivision 7. 
123.29     Subd. 5.  [USE OF PROCEEDS.] The proceeds of bonds issued 
123.30  under this section may be used to (1) pay for public 
123.31  improvements that benefit the property, (2) to acquire and 
123.32  convey land or other property, as provided under this section, 
123.33  (3) to reimburse the property owner for the cost of improvements 
123.34  made to the property, or (4) to pay the costs of issuance of the 
123.35  bonds. 
123.36     Sec. 37.  [469.1815] [ADMINISTRATIVE.] 
124.1      Subdivision 1.  [INCLUSION IN PROPOSED AND FINAL 
124.2   LEVIES.] The political subdivision must add to its levy amount 
124.3   for the current year under sections 275.065 and 275.07 the total 
124.4   estimated amount of all current year abatements granted.  The 
124.5   tax amounts shown on the proposed notice under section 275.065, 
124.6   subdivision 3, and on the property tax statement under section 
124.7   276.04, subdivision 2, are the total amounts before the 
124.8   reduction of any abatements that will be granted on the property.
124.9      Subd. 2.  [PROPERTY TAXES; ABATEMENT PAYMENT.] The total 
124.10  property taxes shall be levied on the property and shall be due 
124.11  and payable to the county at the times provided under section 
124.12  279.01.  The political subdivision will pay the abatement to the 
124.13  property owner, lessee, or a representative of the bondholders, 
124.14  as provided by the abatement resolution. 
124.15     Sec. 38.  Minnesota Statutes 1996, section 477A.011, 
124.16  subdivision 36, is amended to read: 
124.17     Subd. 36.  [CITY AID BASE.] (a) Except as provided in 
124.18  paragraphs (b) and, (c), and (d), "city aid base" means, for 
124.19  each city, the sum of the local government aid and equalization 
124.20  aid it was originally certified to receive in calendar year 1993 
124.21  under Minnesota Statutes 1992, section 477A.013, subdivisions 3 
124.22  and 5, and the amount of disparity reduction aid it received in 
124.23  calendar year 1993 under Minnesota Statutes 1992, section 
124.24  273.1398, subdivision 3. 
124.25     (b) For aids payable in 1996 and thereafter, a city that in 
124.26  1992 or 1993 transferred an amount from governmental funds to 
124.27  its sewer and water fund, which amount exceeded its net levy for 
124.28  taxes payable in the year in which the transfer occurred, has a 
124.29  "city aid base" equal to the sum of (i) its city aid base, as 
124.30  calculated under paragraph (a), and (ii) one-half of the 
124.31  difference between its city aid distribution under section 
124.32  477A.013, subdivision 9, for aids payable in 1995 and its city 
124.33  aid base for aids payable in 1995. 
124.34     (c) The city aid base for any city with a population less 
124.35  than 500 is increased by $40,000 for aids payable in calendar 
124.36  year 1995 and thereafter, and the maximum amount of total aid it 
125.1   may receive under section 477A.013, subdivision 9, paragraph 
125.2   (c), is also increased by $40,000 for aids payable in calendar 
125.3   year 1995 only, provided that: 
125.4      (i) the average total tax capacity rate for taxes payable 
125.5   in 1995 exceeds 200 percent; 
125.6      (ii) the city portion of the tax capacity rate exceeds 100 
125.7   percent; and 
125.8      (iii) its city aid base is less than $60 per capita. 
125.9      (d) The city aid base for a city is increased by $20,000 in 
125.10  1998 and thereafter and the maximum amount of total aid it may 
125.11  receive under section 477A.013, subdivision 9, paragraph (c), is 
125.12  also increased by $20,000 in calendar year 1998 only, provided 
125.13  that: 
125.14     (i) the city has a population in 1994 of 2,500 or more; 
125.15     (ii) the city is located in a county, outside of the 
125.16  metropolitan area, which contains a city of the first class; 
125.17     (iii) the city's net tax capacity used in calculating its 
125.18  1996 aid under section 477A.013 is less than $400 per capita; 
125.19  and 
125.20     (iv) at least four percent of the total net tax capacity, 
125.21  for taxes payable in 1996, of property located in the city is 
125.22  classified as railroad property. 
125.23     Sec. 39.  Laws 1992, chapter 511, article 2, section 52, is 
125.24  amended to read: 
125.25     Sec. 52.  [WATERSHED DISTRICT LEVIES.] 
125.26     (a) The Nine Mile Creek watershed district, the 
125.27  Riley-Purgatory Bluff Creek watershed district, the Minnehaha 
125.28  Creek watershed district, the Coon Creek watershed district, and 
125.29  the Lower Minnesota River watershed district may levy in 1992 
125.30  and thereafter a tax not to exceed $200,000 on property within 
125.31  the district for the administrative fund.  The levy authorized 
125.32  under this section is in lieu of section 103D.905, subdivision 
125.33  3.  The administrative fund shall be used for the purposes 
125.34  contained in Minnesota Statutes, section 103D.905, subdivision 
125.35  3.  The board of managers shall make the levy for the 
125.36  administrative fund in accordance with Minnesota Statutes, 
126.1   section 103D.915. 
126.2      (b) The Wild Rice watershed district may levy, for taxes 
126.3   payable in 1993, 1994, 1995, 1996, and 1997, 1998, 1999, 2000, 
126.4   2001, and 2002, an ad valorem tax not to exceed $200,000 on 
126.5   property within the district for the administrative fund.  The 
126.6   additional $75,000 above the amount authorized in Minnesota 
126.7   Statutes, section 103D.905, subdivision 3, must be used for 
126.8   costs incurred in connection with the development and 
126.9   maintenance of cost-sharing projects with the United States Army 
126.10  Corps of Engineers.  The board of managers shall make the levy 
126.11  for the administrative fund in accordance with Minnesota 
126.12  Statutes, section 103D.915. 
126.13     Sec. 40.  [FLOODWOOD JOINT RECREATION BOARD TAX.] 
126.14     Subdivision 1.  [LEVY AUTHORIZATION.] Each year, the 
126.15  Floodwood joint recreation board may levy a tax not to exceed 
126.16  $25,000 on the value of property situated in the territory of 
126.17  independent school district No. 698 in accordance with this 
126.18  section.  Property in territory in the school district may be 
126.19  made subject to the tax permitted by this section by the 
126.20  agreement of the governing body or town board of the city or 
126.21  town where it is located.  The agreement may be by resolution of 
126.22  a governing body or town board or by a joint powers agreement 
126.23  pursuant to Minnesota Statutes, section 471.59.  If levied, the 
126.24  tax is in addition to all other taxes on the property subject to 
126.25  it permitted to be levied for park and recreation purposes by 
126.26  the cities and towns other than for the support of the joint 
126.27  recreation board.  It shall be disregarded in the calculation of 
126.28  all other mill rate or per capita tax levy limitations imposed 
126.29  by law or charter upon them.  A city or town may withdraw its 
126.30  agreement to future taxes by notice to the recreation board and 
126.31  the county auditor unless provided otherwise by a joint powers 
126.32  agreement.  The tax shall be collected by the applicable county 
126.33  auditor and treasurer and paid directly to the Floodwood joint 
126.34  recreation board.  
126.35     Subd. 2.  [LOCAL APPROVAL.] This section is effective in 
126.36  the city of Floodwood, the towns of Arrowhead, Fine Lakes, 
127.1   Floodwood, Halden, Van Buren, Cedar Valley, Prairie Lake, and 
127.2   Unorganized Township 52-21 in St. Louis county, and Unorganized 
127.3   Township 52-22 in Aitkin county the day after compliance with 
127.4   Minnesota Statutes, section 645.021, subdivision 3, by the 
127.5   governing body of each.  This section is effective for each 
127.6   city, town, and unorganized township regardless of the action of 
127.7   the others.  
127.8      Approval of this section is not agreement to be subject to 
127.9   the tax permitted by it.  Agreement to the tax must be by 
127.10  separate action in accordance with subdivision 1. 
127.11     Sec. 41.  [SAUK RIVER WATERSHED DISTRICT.] 
127.12     Subdivision 1.  [LEVY AUTHORIZATION.] Notwithstanding 
127.13  Minnesota Statutes, section 103D.905, subdivision 3, the Sauk 
127.14  River watershed district may levy up to $150,000 for its 
127.15  administrative fund for taxes levied in 1997, payable in 1998. 
127.16     Subd. 2.  [EFFECTIVE DATE.] This section is effective the 
127.17  day following final enactment. 
127.18     Sec. 42.  [VIRGINIA AREA AMBULANCE DISTRICT.] 
127.19     Subdivision 1.  [AGREEMENT; POWERS; GENERAL 
127.20  DESCRIPTION.] (a) The cities of Virginia, Mountain Iron, 
127.21  Eveleth, Leonidas, Iron Junction, and Gilbert, and the towns of 
127.22  Pike, Clinton, McDavitt, Colvin, Sandy, Cherry, Ellsburg, Wouri, 
127.23  Lavell, Fayal, Cotton, and Embarrass, may by resolution of their 
127.24  city councils and town boards establish the Virginia area 
127.25  ambulance district. 
127.26     (b) The St. Louis county board may by resolution provide 
127.27  that property located in unorganized townships described in 
127.28  clauses (1) to (7) may be included within the district: 
127.29     (1) Township 61 North, Range 17 West; 
127.30     (2) Township 59 North, Ranges 16 and 18 West; 
127.31     (3) Township 56 North, Range 16 West; 
127.32     (4) Township 60 North, Range 18 West; 
127.33     (5) Township 55 North, Range 15; 
127.34     (6) Township 56, Range 17; and 
127.35     (7) Township 57, Range 16.  
127.36     (c) The district shall make payments of the proceeds of the 
128.1   tax authorized in this section to the city of Virginia, which 
128.2   shall provide ambulance services throughout the district and may 
128.3   exercise all the powers of the cities and towns that relate to 
128.4   ambulance service anywhere within its territory.  
128.5      (d) Any other contiguous town or home rule charter or 
128.6   statutory city may join the district with the agreement of the 
128.7   cities and towns that comprise the district at the time of its 
128.8   application to join.  Action to join the district may be taken 
128.9   by the city council or town board of the city or town.  
128.10     Subd. 2.  [BOARD.] The district shall be governed by a 
128.11  board composed of one member appointed by the city council or 
128.12  town board of each city and town in the district.  A district 
128.13  board member may, but is not required to, be a member of a city 
128.14  council or town board.  Except as provided in this section, 
128.15  members shall serve two-year terms ending the first Monday in 
128.16  January and until their successors are appointed and qualified.  
128.17  Of the members first appointed, as far as possible, the terms of 
128.18  one-half shall expire on the first Monday in January in the 
128.19  first year following appointment and one-half the first Monday 
128.20  in January in the second year.  The terms of those initially 
128.21  appointed must be determined by lot.  If an additional member is 
128.22  added because an additional city or town joins the district, the 
128.23  member's term must be fixed so that, as far as possible, the 
128.24  terms of one-half of all the members expire on the same date. 
128.25     Subd. 3.  [TAX.] The district may impose a property tax on 
128.26  real and personal property in the district in an amount 
128.27  sufficient to discharge its operating expenses and debt payable 
128.28  in each year, but not to exceed .0528 percent of the district's 
128.29  taxable market value.  The St. Louis county auditor shall 
128.30  collect the tax and distribute it to the Virginia area ambulance 
128.31  district. 
128.32     Subd. 4.  [EXPENDITURES.] The taxes collected under 
128.33  subdivision 3 shall be used for licensed ambulance services and 
128.34  first responders.  Licensed ambulance services shall receive 80 
128.35  percent of the available funds and first responders shall 
128.36  receive 20 percent of the available funds.  The amounts 
129.1   allocated to first responders shall be used for education, 
129.2   training, and reimbursement for their allowable expenses.  Only 
129.3   education and training that meets the recognized education and 
129.4   training guidelines set by the emergency medical services 
129.5   regulatory board under Minnesota Statutes, chapter 144E, shall 
129.6   be reimbursable under this subdivision. 
129.7      Subd. 5.  [PUBLIC INDEBTEDNESS.] The district may incur 
129.8   debt in the manner provided for a municipality by Minnesota 
129.9   Statutes, chapter 475, when necessary to accomplish a duty 
129.10  charged to it. 
129.11     Subd. 6.  [WITHDRAWAL.] Upon two years' notice, a city or 
129.12  town may withdraw from the district.  Its territory shall remain 
129.13  subject to taxation for debt incurred prior to its withdrawal 
129.14  under Minnesota Statutes, chapter 475. 
129.15     Subd. 7.  [EFFECTIVE DATE.] This section is effective (1) 
129.16  in the cities of Virginia, Mountain Iron, Eveleth, Leonidas, 
129.17  Iron Junction, and Gilbert, and the towns of Pike, Clinton, 
129.18  McDavitt, Colvin, Sandy, Cherry, Ellsburg, Wouri, Lavell, Fayal, 
129.19  Cotton, and Embarrass, the day after compliance with Minnesota 
129.20  Statutes, section 645.021, subdivision 2, by the governing body 
129.21  of each, and (2) for unorganized townships described in 
129.22  subdivision 1, paragraph (b), clauses (1) to (7), the day after 
129.23  compliance with Minnesota Statutes, section 645.021, subdivision 
129.24  2, by the St. Louis county board, provided that the district 
129.25  must be established by September 1, 2000.  Any of the cities, 
129.26  towns, and unorganized townships listed in subdivision 1 that do 
129.27  not join the district initially may join the district after its 
129.28  establishment. 
129.29     Sec. 43.  [BROOKLYN CENTER, RICHFIELD, AND ST. LOUIS PARK; 
129.30  APARTMENT EXCLUSIONS.] 
129.31     Subdivision 1.  [IMPROVEMENTS MADE TO CERTAIN 
129.32  APARTMENTS.] (a) Notwithstanding any other provisions to the 
129.33  contrary, the market value of qualifying property located in the 
129.34  city of Brooklyn Center, Richfield, or St. Louis Park shall not 
129.35  be increased for assessment purposes under the conditions 
129.36  provided in this subdivision.  
130.1      (b) "Qualifying property" means property that meets all of 
130.2   the following criteria: 
130.3      (1) the building is at least 30 years old at the time of 
130.4   the improvements; 
130.5      (2) the building is residential real estate of four or more 
130.6   units and is classified under Minnesota Statutes, section 
130.7   273.13, subdivision 25, as class 4a, 4c, or 4d property; and 
130.8      (3) the building has been improved after January 1, 1997, 
130.9   and those total improvements exceed $5,000 per unit. 
130.10     (c) A building permit must have been issued prior to the 
130.11  commencement of the improvements.  Only improvements to the 
130.12  residential structure and garages qualify for the market value 
130.13  freeze as provided in this subdivision.  The assessor shall 
130.14  require an application, including, if unknown by the assessor, 
130.15  documentation of the age of the building from the owner.  The 
130.16  application may be filed subsequent to the date of the building 
130.17  permit provided that the application is filed prior to the next 
130.18  assessment date. 
130.19     (d) If the property qualifies under this subdivision, the 
130.20  assessor shall not increase that qualifying property's market 
130.21  value for the five assessment years immediately following the 
130.22  year in which the improvements were completed, at which time the 
130.23  assessor shall determine the property's estimated market value, 
130.24  and 20 percent of the increased market value over the base value 
130.25  shall be added back in each of the next five subsequent 
130.26  assessment years.  The assessor may require from the owner any 
130.27  documentation necessary to verify that the amount of 
130.28  improvements exceed the $5,000 per unit minimum.  Improvements 
130.29  made subsequent to the initial improvements which allowed the 
130.30  building to qualify shall also be disregarded by the assessor in 
130.31  any determination of market value during the initial five-year 
130.32  time period; provided, however, that beginning in the sixth year 
130.33  when the increased market value is added back, the assessor's 
130.34  estimate of market value shall include all improvements made in 
130.35  the entire five-year time period. 
130.36     Subd. 2.  [SUNSET.] This section is effective beginning 
131.1   with the 1998 assessment and ending with the 2000 assessment, 
131.2   provided that any property that originally qualifies in that 
131.3   time period will be allowed to receive the benefits provided 
131.4   under that section for the full time period prescribed in that 
131.5   section. 
131.6      Subd. 3.  [EFFECTIVE DATE.] This section is effective for 
131.7   each of the cities of Brooklyn Center, Richfield, and St. Louis 
131.8   Park upon compliance with Minnesota Statutes, section 645.021, 
131.9   subdivision 3, by the governing body of that city. 
131.10     Sec. 44.  [ST. LOUIS COUNTY; UTILITY PERSONAL PROPERTY 
131.11  EXEMPTION.] 
131.12     (a) An electric generating facility with a capacity of 
131.13  110,000 kilowatts located in St. Louis County whose operation is 
131.14  integral to the development and operation of a new, adjacent 
131.15  industrial park is exempt from property taxes on attached 
131.16  machinery and other personal property for replacement equipment 
131.17  and improvements installed after July 1, 1997.  If the 
131.18  industrial park is not built by July 1, 2001, this exemption 
131.19  expires.  
131.20     (b) The governing bodies of the county, city or town, and 
131.21  school district must each approve by resolution the exemption of 
131.22  the personal property under this section.  The resolution shall 
131.23  contain the number of years for which the exemption is granted.  
131.24  Each of the governing bodies shall file a copy of the resolution 
131.25  with the county auditor.  The county auditor shall publish the 
131.26  resolutions in newspapers of general circulation within the 
131.27  county.  The voters of the county may request a referendum on 
131.28  the proposed exemption by filing a petition within 30 days after 
131.29  the resolutions are published.  The petition must be signed by 
131.30  voters who reside in the county.  The number of signatures must 
131.31  equal at least five percent of the number of persons voting in 
131.32  the county in the last general election.  If such a petition is 
131.33  timely filed, the resolutions are not effective until they have 
131.34  been submitted to the voters residing in the county at a general 
131.35  or special election and a majority of votes cast on the question 
131.36  of approving the resolution are in the affirmative.  The 
132.1   commissioner of revenue shall prepare a suggested form of 
132.2   question to be presented at the referendum. 
132.3      (c) The exemption under this section is limited to a 
132.4   maximum of five years, beginning with the assessment year 
132.5   immediately following when the personal property is put in 
132.6   operation and expires thereafter. 
132.7      Sec. 45.  [REPORT; ELDERLY ASSISTED LIVING CARE 
132.8   FACILITIES.] 
132.9      The department of revenue shall conduct a survey with all 
132.10  county assessors of the tax status of all elderly assisted 
132.11  living care facilities as defined in Minnesota Statutes, section 
132.12  273.13, subdivision 25a, located in the state, and report to the 
132.13  chairs of the house and senate tax committees by February 1, 
132.14  1998, on its findings.  The survey shall include, but not be 
132.15  limited to, estimates of the amount of charitable contributions, 
132.16  if any, for each elderly assisted living care facility and the 
132.17  relative portion of those charitable contributions to the total 
132.18  operating costs of the elderly assisted living care facility. 
132.19     Sec. 46.  [REPEALER.] 
132.20     (a) Minnesota Statutes 1996, sections 270B.12, subdivision 
132.21  11; 276.012; 290A.055; and 290A.26; and Laws 1995, chapter 264, 
132.22  article 4, as amended by Laws 1996, chapter 471, article 3, are 
132.23  repealed.  Notwithstanding Minnesota Statutes, section 645.34, 
132.24  the sections of statutes amended by the repealed Laws 1995, 
132.25  chapter 264, article 4, as amended, remain in effect as if not 
132.26  so amended. 
132.27     (b) Minnesota Statutes 1996, section 469.181, is repealed. 
132.28     Sec. 47.  [EFFECTIVE DATE.] 
132.29     Section 1 is effective for aids distributed in 1999 and 
132.30  thereafter.  
132.31     Sections 3 to 5, 7, 17, 23 to 25, 41, 45, and 46, paragraph 
132.32  (a), are effective the day following final enactment. 
132.33     Sections 8, 9 to 11, 18 and 19, and 33 to 37 are effective 
132.34  for the 1997 assessment and thereafter, for taxes payable in 
132.35  1998 and thereafter. 
132.36     Section 12 is effective for the 1997 assessment and 
133.1   thereafter, for taxes payable in 1998 and thereafter.  
133.2   Notwithstanding Minnesota Statutes, section 273.112, application 
133.3   for deferment and the notices of approval under section 12 for 
133.4   the 1997 assessment must be filed with the county assessor by 
133.5   August 1, 1997. 
133.6      Section 14 is effective beginning with the 1997 assessment. 
133.7      Section 15 is effective beginning with the 1997 assessment 
133.8   and ending with the 2002 assessment, for qualifying improvements 
133.9   made after January 2, 1993, to a residence that has been 
133.10  relocated; provided, that any residence that originally 
133.11  qualifies in that time period will be allowed to receive the 
133.12  benefits provided under section 15 for the full ten-year time 
133.13  period.  In order to qualify for a market value exclusion under 
133.14  Minnesota Statutes, section 273.11, subdivision 10, for the 1997 
133.15  assessment for improvements made to a relocated residence, a 
133.16  homeowner must notify the assessor by July 1, 1997. 
133.17     Section 16 is effective for the 1998 assessment, taxes 
133.18  payable in 1999 and thereafter, for improvements made after 
133.19  January 2, 1997. 
133.20     Section 20 is effective for taxes levied in 1997, payable 
133.21  in 1998, only, provided that any elderly assisted living care 
133.22  facility that is tax exempt for the taxes payable year 1997, 
133.23  will remain tax exempt for the taxes payable year 1998, and any 
133.24  elderly assisted living care facility that is taxable for the 
133.25  taxes payable year 1997 will remain taxable for the taxes 
133.26  payable year 1998.  
133.27     Section 23 is effective for the abstracts of exempt real 
133.28  property filed in 1998 and thereafter. 
133.29     Section 33 is effective for agreements executed on or after 
133.30  the day following final enactment. 
133.31     Section 39 is effective for aids paid in 1998 and 
133.32  thereafter. 
133.33     Section 47, paragraph (b), is effective for property tax 
133.34  deferrals granted after June 30, 1997. 
133.35                             ARTICLE 4 
133.36                            LEVY LIMITS 
134.1      Section 1.  [275.70] [LEVY LIMITATIONS; DEFINITIONS.] 
134.2      Subdivision 1.  [APPLICATION.] For the purposes of sections 
134.3   275.70 to 275.74, the following terms shall have these meanings, 
134.4   unless provided otherwise. 
134.5      Subd. 2.  [IMPLICIT PRICE DEFLATOR.] "Implicit price 
134.6   deflator" means the implicit price deflator for government 
134.7   purchases of goods and services for state and local governments 
134.8   prepared by the bureau of economic analysis of the United States 
134.9   Department of Commerce for the 12-month period ending in June of 
134.10  the levy year. 
134.11     Subd. 3.  [LOCAL GOVERNMENTAL UNIT.] "Local governmental 
134.12  unit" means a county, or a statutory or home rule charter city. 
134.13     Subd. 4.  [POPULATION AND HOUSEHOLD ESTIMATES.] "Population"
134.14  or "number of households" means the population or number of 
134.15  households for the local governmental unit as established by the 
134.16  last federal census, by a census taken under section 275.14, or 
134.17  by an estimate made by the metropolitan council or by the state 
134.18  demographer under section 4A.02, whichever is most recent as to 
134.19  the stated date of the count or estimate up to and including 
134.20  July 1 of the current levy year. 
134.21     Subd. 5.  [SPECIAL LEVIES.] "Special levies" means those 
134.22  portions of ad valorem taxes levied by a local governmental unit 
134.23  for the following purposes or in the following manner: 
134.24     (1) to pay the costs of the principal and interest on 
134.25  bonded indebtedness or to reimburse for the amount of liquor 
134.26  store revenues used to pay the principal and interest due on 
134.27  municipal liquor store bonds in the year preceding the year for 
134.28  which the levy limit is calculated; 
134.29     (2) to pay the costs of principal and interest on 
134.30  certificates of indebtedness issued for any corporate purpose 
134.31  except for the following: 
134.32     (i) tax anticipation or aid anticipation certificates of 
134.33  indebtedness; 
134.34     (ii) certificates of indebtedness issued under sections 
134.35  298.28 and 298.282; 
134.36     (iii) certificates of indebtedness used to fund current 
135.1   expenses or to pay the costs of extraordinary expenditures that 
135.2   result from a public emergency; or 
135.3      (iv) certificates of indebtedness used to fund an 
135.4   insufficiency in tax receipts or an insufficiency in other 
135.5   revenue sources; 
135.6      (3) to provide for the bonded indebtedness portion of 
135.7   payments made to another political subdivision of the state of 
135.8   Minnesota; 
135.9      (4) to fund payments made to the Minnesota state armory 
135.10  building commission under section 193.145, subdivision 2, to 
135.11  retire the principal and interest on armory construction bonds; 
135.12     (5) for counties only, to fund increased county costs 
135.13  associated with the reform of income maintenance programs 
135.14  enacted by the 1997 legislature including increased 
135.15  administration and program costs of the income maintenance 
135.16  programs and also related support services as they relate 
135.17  directly to the reform of income maintenance programs; 
135.18     (6) for un-reimbursed expenses related to flooding that 
135.19  occurred during the first half of calendar year 1997, as allowed 
135.20  by the commissioner of revenue under section 275.74, paragraph 
135.21  (c); 
135.22     (7) for local units of government located in an area 
135.23  designated by the Federal Emergency Management Agency pursuant 
135.24  to a major disaster declaration issued for Minnesota by 
135.25  President Clinton after April 1, 1997, and before April 21, 
135.26  1997, only for levies authorized under section 273.123, 
135.27  subdivision 7, to the extent that they are due to abatements 
135.28  related to the major disaster; 
135.29     (8) property taxes approved by voters which are levied 
135.30  against the referendum market value as provided under section 
135.31  275.61; 
135.32     (9) to fund matching requirements needed to qualify for 
135.33  federal or state grants or programs to the extent that either 
135.34  (a) the matching requirement exceeds the matching requirement in 
135.35  calendar year 1997, or (b) it is a new matching requirement that 
135.36  didn't exist prior to 1998; and 
136.1      (10) to pay the expenses reasonably and necessarily 
136.2   incurred in preparing for or repairing the effects of natural 
136.3   disaster including the occurrence or threat of widespread or 
136.4   severe damage, injury, or loss of life or property resulting 
136.5   from natural causes, in accordance with standards formulated by 
136.6   the emergency services division of the state department of 
136.7   public safety, as allowed by the commissioner of revenue under 
136.8   section 275.70, paragraph (c). 
136.9      Sec. 2.  [275.71] [LEVY LIMITS.] 
136.10     Subdivision 1.  [LIMIT ON LEVIES.] Notwithstanding any 
136.11  other provision of law or municipal charter to the contrary 
136.12  which authorize ad valorem taxes in excess of the limits 
136.13  established by sections 275.70 to 275.74, the provision of this 
136.14  section shall apply to local governmental units for all purposes 
136.15  other than those for which special levies and special 
136.16  assessments are made. 
136.17     Subd. 2.  [LEVY LIMIT BASE.] (a) The levy limit base for a 
136.18  local governmental unit for taxes levied in 1997 shall be equal 
136.19  to the sum of: 
136.20     (1) the amount the local governmental unit levied in 1996, 
136.21  less any amount levied for debt, as reported to the department 
136.22  of revenue under section 275.62, subdivision 1, clause (1), and 
136.23  less any tax levied in 1996 against market value as provided for 
136.24  in section 275.61; 
136.25     (2) the amount of aids the local governmental unit was 
136.26  certified to receive in calendar year 1997 under sections 
136.27  477A.011 to 477A.03 before any reductions for state tax 
136.28  increment financing aid under section 273.1399, subdivision 5; 
136.29     (3) the amount of homestead and agricultural credit aid the 
136.30  local governmental unit was certified to receive under section 
136.31  273.1398 in calendar year 1997 before any reductions for tax 
136.32  increment financing aid under section 273.1399, subdivision 5; 
136.33     (4) the amount of local performance aid the local 
136.34  governmental unit was certified to receive in calendar year 1997 
136.35  under section 477A.05; and 
136.36     (5) the amount of any payments certified to the local 
137.1   government unit in 1997 under sections 298.28 and 298.282. 
137.2      If a governmental unit was not required to report under 
137.3   section 275.62 for taxes levied in 1997, the commissioner shall 
137.4   request information on levies used for debt from the local 
137.5   governmental unit and adjust its levy limit base accordingly. 
137.6      (b) The levy limit base for a local governmental unit for 
137.7   taxes levied in 1998 and 1999 is limited to its adjusted levy 
137.8   limit base in the previous year, subject to any adjustments 
137.9   under section 275.72. 
137.10     Subd. 3.  [ADJUSTED LEVY LIMIT BASE.] For taxes levied in 
137.11  1997, 1998, and 1999, the adjusted levy limit is equal to the 
137.12  levy limit base computed under subdivision 2, multiplied by: 
137.13     (a) one plus a percentage equal to the percentage growth in 
137.14  the implicit price deflator; and 
137.15     (b) one plus a percentage equal to the percentage increase 
137.16  in number of households, if any, for the most recent 12-month 
137.17  period for which data is available. 
137.18     Subd. 4.  [PROPERTY TAX LEVY LIMIT.] For taxes levied in 
137.19  1997, 1998, and 1999, the property tax levy limit for a local 
137.20  governmental unit is equal to its adjusted levy limit base 
137.21  determined under subdivision 3 plus any additional levy 
137.22  authorized under section 275.73, which is levied against net tax 
137.23  capacity, reduced by the sum of (a) the total amount of aids 
137.24  that the local governmental unit is certified to receive under 
137.25  sections 477A.011 to 477A.014, (b) homestead and agricultural 
137.26  aids it is certified to receive under section 273.1398, (c) 
137.27  local performance aid it is certified to receive under section 
137.28  477A.05, and (d) taconite aids under sections 298.28 and 298.282 
137.29  including any aid which was required to be placed in a special 
137.30  fund for expenditure in the next succeeding year. 
137.31     Subd. 5.  [LEVIES IN EXCESS OF LEVY LIMITS.] If the levy 
137.32  made by a city exceeds the levy limit provided in sections 
137.33  275.70 to 275.74, except when the excess levy is due to the 
137.34  rounding of the rate in accordance with section 275.28, the 
137.35  county auditor shall only extend the amount of taxes permitted 
137.36  under sections 275.70 to 275.74, as provided for in section 
138.1   275.16. 
138.2      Sec. 3.  [275.72] [LEVY LIMIT ADJUSTMENTS FOR CONSOLIDATION 
138.3   AND ANNEXATION.] 
138.4      Subdivision 1.  [ADJUSTMENTS FOR CONSOLIDATION.] If all of 
138.5   the area included in two or more local governmental units is 
138.6   consolidated, merged, or otherwise combined to constitute a 
138.7   single governmental unit, the levy limit base for the resulting 
138.8   governmental unit in the first levy year in which the 
138.9   consolidation is effective shall be equal to (a) the highest tax 
138.10  rate in any of the merging governmental units in the previous 
138.11  year multiplied by the net tax capacity of all the merging 
138.12  governmental units in the previous year, minus (b) the sum of 
138.13  all levies in the merging governmental units in the previous 
138.14  year that qualify as special levies under section 275.70, 
138.15  subdivision 3. 
138.16     Subd. 2.  [ADJUSTMENTS FOR ANNEXATION.] If a local 
138.17  governmental unit increases its tax base through annexation of 
138.18  an area which is not the area of an entire local governmental 
138.19  unit, the levy limit base of the local governmental unit in the 
138.20  first year in which the annexation is effective shall be equal 
138.21  to its adjusted levy limit base from the previous year 
138.22  multiplied by the ratio of the net tax capacity in the local 
138.23  governmental unit after the annexation compared to its net tax 
138.24  capacity before the annexation. 
138.25     Subd. 3.  [TRANSFER OF GOVERNMENTAL FUNCTIONS.] If a 
138.26  function or service of one local governmental unit is 
138.27  transferred to another local governmental unit, the levy limits 
138.28  established under section 275.71 shall be adjusted by the 
138.29  commissioner of revenue in such manner so as to fairly and 
138.30  equitably reflect the reduced or increased property tax burden 
138.31  resulting from the transfer.  The aggregate of the adjusted 
138.32  limitations shall not exceed the aggregate of the limitations 
138.33  prior to adjustment. 
138.34     Subd. 4.  [EFFECTIVE DATE FOR LEVY LIMITS PURPOSES.] 
138.35  Annexations, mergers, and shifts in services and functional 
138.36  responsibilities that are effective by June 30 of the levy year 
139.1   are included in the calculation of the levy limit for that levy 
139.2   year.  Annexations, mergers, and shifts in services and 
139.3   functional responsibilities that are effective after June 30 of 
139.4   a levy year are not included in the calculation of the levy 
139.5   limit until the subsequent levy year. 
139.6      Sec. 4.  [275.73] [ELECTIONS FOR ADDITIONAL LEVIES.] 
139.7      Subdivision 1.  [ADDITIONAL LEVY AUTHORIZATION.] 
139.8   Notwithstanding the provisions of sections 275.70 to 275.72, but 
139.9   subject to other law or charter provisions establishing other 
139.10  limitations on the amount of property taxes a local governmental 
139.11  unit may levy, a local governmental unit may levy an additional 
139.12  levy in any amount which is approved by the majority of voters 
139.13  of the governmental unit voting on the question at a general or 
139.14  special election.  Notwithstanding section 275.61, any levy 
139.15  authorized under this section shall be levied against net tax 
139.16  capacity unless the levy required voter approval under another 
139.17  general or special law or any charter provisions.  When the 
139.18  governing body of the local governmental unit resolves to 
139.19  increase the levy pursuant to this section, it shall provide for 
139.20  submission of the proposition of an additional levy at a general 
139.21  or special election.  Notice of the election shall be given in 
139.22  the manner required by law.  The notice shall state the purpose 
139.23  and the maximum yearly amount of the additional levy. 
139.24     Subd. 2.  [LEVY EFFECTIVE DATE.] An additional levy 
139.25  approved under subdivision 1 at a general or special election 
139.26  held prior to October 1 in any levy year may be levied in that 
139.27  same levy year and subsequent levy years.  An additional levy 
139.28  approved under subdivision 1 at a general or special election 
139.29  held after September 30 in any levy year shall not be levied in 
139.30  that same levy but may be levied in subsequent levy years. 
139.31     Sec. 5.  [275.74] [STATE REGULATION OF LEVIES.] 
139.32     (a) The commissioner of revenue shall make all necessary 
139.33  calculations for determining levy limits for local governmental 
139.34  units and notify the affected governmental units of their levy 
139.35  limits directly by August 1 of each levy year.  In addition, the 
139.36  commissioner of revenue shall notify all county auditors of the 
140.1   levy limits imposed on local governmental units located within 
140.2   their boundaries so that they may fix the levies as required in 
140.3   section 275.16.  The local governmental units shall provide the 
140.4   commissioner of revenue with all information that the 
140.5   commissioner deems necessary to make the calculations provided 
140.6   for in sections 275.70 to 275.73. 
140.7      (b) Counties shall report annually to the commissioner of 
140.8   revenue on the purposes for which the special levy authorized 
140.9   under section 275.70, subdivision 5, clause (5), is used.  The 
140.10  report shall be made on a form developed by the commissioner, in 
140.11  consultation with the commissioner of human services, and 
140.12  provide information on the costs to the county for the relevant 
140.13  programs both before and after the reform of the income 
140.14  maintenance programs enacted by the 1997 legislature. 
140.15     (c) A local governmental unit may request authorization to 
140.16  levy under section 275.70, clause (6) if (i) the governmental 
140.17  unit is located in an area designated by the Federal Emergency 
140.18  Management Agency pursuant to a major disaster declaration 
140.19  issued for Minnesota by President Clinton after April 1, 1997, 
140.20  and before April 21, 1997, and (ii) the amount of direct 
140.21  un-reimbursed costs incurred by the governmental unit related to 
140.22  the flooding and its clean-up, including emergency disaster 
140.23  assistance to residents, exceeds five percent of its levy in 
140.24  1997.  A local governmental unit may request authorization to 
140.25  levy for unreimbursed costs for other natural disasters, except 
140.26  the 1997 floods, under section 275.70, clause (10).  The local 
140.27  governmental unit must submit a request to levy under section 
140.28  275.70, subdivision 5, clause (6) or (10), to the commissioner 
140.29  of revenue by July 1 of the levy year and the request must 
140.30  include information documenting the estimated un-reimbursed 
140.31  costs.  The commissioner of revenue may grant levy authority, up 
140.32  to the amount requested based on the documentation submitted.  
140.33  All decisions of the commissioner are final.  The commissioner 
140.34  shall send a report to the chairs of the house and senate tax 
140.35  committees on the levies authorized and levied under this 
140.36  provision by January 15 of the year following the levy year. 
141.1      Sec. 6.  [FARIBAULT COUNTY; CITY OF BLUE EARTH; SPECIAL 
141.2   LEVY.] 
141.3      The amount of taxes levied by Faribault county and by the 
141.4   city of Blue Earth is a special levy for the purposes of levy 
141.5   limits under Minnesota Statutes, sections 275.70 to 275.73, if 
141.6   the levy's purpose is to raise the matching funds required to 
141.7   receive restitution funds awarded by plea agreement in the case 
141.8   of United States v. Darling International, Inc., for developing 
141.9   environmental projects that will improve water quality in the 
141.10  Blue Earth and Minnesota rivers. 
141.11     Sec. 7.  [EFFECTIVE DATE.] 
141.12     Sections 1 to 5 are effective for taxes levied in 1997, 
141.13  1998, and 1999, payable in 1998, 1999, and 2000. 
141.14     Upon compliance with Minnesota Statutes, section 645.021, 
141.15  subdivision 3, by the governing body of Faribault county or the 
141.16  city of Blue Earth, section 6 is effective for taxes levied in 
141.17  1997, 1998, and 1999, in the city or county that approves it. 
141.18                             ARTICLE 5
141.19                         TRUTH IN TAXATION
141.20     Section 1.  Minnesota Statutes 1996, section 275.065, 
141.21  subdivision 1, is amended to read: 
141.22     Subdivision 1.  [PROPOSED LEVY.] (a) Notwithstanding any 
141.23  law or charter to the contrary, on or before September 15, each 
141.24  taxing authority, other than a school district, shall adopt a 
141.25  proposed budget and shall certify to the county auditor the 
141.26  proposed or, in the case of a town, the final property tax levy 
141.27  for taxes payable in the following year. 
141.28     (b) On or before September 30, each school district shall 
141.29  certify to the county auditor the proposed property tax levy for 
141.30  taxes payable in the following year.  The school district may 
141.31  shall certify the proposed levy as: 
141.32     (1) a specific dollar amount; or the state determined 
141.33  school levy amount as prescribed under section 124A.23, 
141.34  subdivision 2; 
141.35     (2) voter approved referendum and debt levies; and 
141.36     (2) an amount equal to (3) the sum of the remaining school 
142.1   levies, or the maximum levy limitation certified by the 
142.2   commissioner of children, families, and learning to the county 
142.3   auditor according to section 124.918, subdivision 1, less the 
142.4   amounts levied under clauses (1) and (2). 
142.5      (c) If the board of estimate and taxation or any similar 
142.6   board that establishes maximum tax levies for taxing 
142.7   jurisdictions within a first class city certifies the maximum 
142.8   property tax levies for funds under its jurisdiction by charter 
142.9   to the county auditor by September 15, the city shall be deemed 
142.10  to have certified its levies for those taxing jurisdictions. 
142.11     (d) For purposes of this section, "taxing authority" 
142.12  includes all home rule and statutory cities, towns, counties, 
142.13  school districts, and special taxing districts as defined in 
142.14  section 275.066.  Intermediate school districts that levy a tax 
142.15  under chapter 124 or 136D, joint powers boards established under 
142.16  sections 124.491 to 124.495, and common school districts No. 
142.17  323, Franconia, and No. 815, Prinsburg, are also special taxing 
142.18  districts for purposes of this section.  
142.19     Sec. 2.  Minnesota Statutes 1996, section 275.065, is 
142.20  amended by adding a subdivision to read: 
142.21     Subd. 1a.  [LEVY; SHARED, MERGED, CONSOLIDATED 
142.22  SERVICES.] If two or more taxing authorities are in the process 
142.23  of negotiating an agreement for sharing, merging, or 
142.24  consolidating services between those taxing authorities at the 
142.25  time the proposed levy is to be certified under subdivision 1, 
142.26  each taxing authority involved in the negotiation shall certify 
142.27  its total proposed levy as provided in that subdivision, 
142.28  including a notification to the county auditor of the specific 
142.29  service involved in the agreement which is not yet finalized.  
142.30  The affected taxing authorities may amend their proposed levies 
142.31  under subdivision 1 until October 10 for levy amounts relating 
142.32  only to the specific service involved. 
142.33     Sec. 3.  Minnesota Statutes 1996, section 275.065, 
142.34  subdivision 3, is amended to read: 
142.35     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
142.36  county auditor shall prepare and the county treasurer shall 
143.1   deliver after November 10 and on or before November 24 each 
143.2   year, by first class mail to each taxpayer at the address listed 
143.3   on the county's current year's assessment roll, a notice of 
143.4   proposed property taxes and, in the case of a town, final 
143.5   property taxes.  
143.6      (b) The commissioner of revenue shall prescribe the form of 
143.7   the notice. 
143.8      (c) The notice must inform taxpayers that it contains the 
143.9   amount of property taxes each taxing authority other than a town 
143.10  proposes to collect for taxes payable the following year and, 
143.11  for a town, the amount of its final levy.  It In the case of a 
143.12  town, or in the case of the state determined portion of the 
143.13  school district levy, the final tax amount will be its proposed 
143.14  tax.  The notice must clearly state that each taxing authority, 
143.15  including regional library districts established under section 
143.16  134.201, and including the metropolitan taxing districts as 
143.17  defined in paragraph (i), but excluding all other special taxing 
143.18  districts and towns, will hold a public meeting to receive 
143.19  public testimony on the proposed budget and proposed or final 
143.20  property tax levy, or, in case of a school district, on the 
143.21  current budget and proposed property tax levy.  It must clearly 
143.22  state the time and place of each taxing authority's meeting and 
143.23  an address where comments will be received by mail.  
143.24     (d) The notice must state for each parcel: 
143.25     (1) the market value of the property as determined under 
143.26  section 273.11, and used for computing property taxes payable in 
143.27  the following year and for taxes payable in the current year; 
143.28  and, in the case of residential property, whether the property 
143.29  is classified as homestead or nonhomestead.  The notice must 
143.30  clearly inform taxpayers of the years to which the market values 
143.31  apply and that the values are final values; 
143.32     (2) the items listed below, shown separately by county, 
143.33  city or town, school district excess referenda levy state 
143.34  determined school tax, remaining voter approved school levy, 
143.35  other local school district levy, regional library district, if 
143.36  in existence, the total of the metropolitan special taxing 
144.1   districts as defined in paragraph (i) and the sum of 
144.2   the remaining special taxing districts, and as a total of the 
144.3   all taxing authorities, including all special taxing districts, 
144.4   the proposed or, for a town, final net tax on the property for 
144.5   taxes payable the following year and the actual tax for taxes 
144.6   payable the current year: 
144.7      (i) the actual tax for taxes payable in the current year; 
144.8      (ii) the tax change due to spending factors, defined as the 
144.9   proposed tax minus the constant spending tax amount; 
144.10     (iii) the tax change due to other factors, defined as the 
144.11  constant spending tax amount minus the actual current year tax; 
144.12  and 
144.13     (iv) the proposed tax amount. 
144.14     In the case of a town or the state determined school tax, 
144.15  the final tax shall also be its proposed tax.  If a school 
144.16  district has certified under section 124A.03, subdivision 2, 
144.17  that a referendum will be held in the school district at the 
144.18  November general election, the county auditor must note next to 
144.19  the school district's proposed amount that a referendum is 
144.20  pending and that, if approved by the voters, the tax amount may 
144.21  be higher than shown on the notice.  For the purposes of this 
144.22  subdivision, "school district excess referenda levy" means 
144.23  school district taxes for operating purposes approved at 
144.24  referendums, including those taxes based on net tax capacity as 
144.25  well as those based on market value.  "School district excess 
144.26  referenda levy" does not include school district taxes for 
144.27  capital expenditures approved at referendums or school district 
144.28  taxes to pay for the debt service on bonds approved at 
144.29  referenda.  In the case of the city of Minneapolis, the levy for 
144.30  the Minneapolis library board and the levy for Minneapolis park 
144.31  and recreation shall be listed separately from the remaining 
144.32  amount of the city's levy considered as special taxing district 
144.33  levies for the purposes of this subdivision.  In the case of a 
144.34  parcel where tax increment or the fiscal disparities areawide 
144.35  tax under chapter 276A or 473F applies, the proposed tax levy on 
144.36  the captured value or the proposed tax levy on the tax capacity 
145.1   subject to the areawide tax must each be stated separately and 
145.2   not included in the sum of the special taxing districts; and 
145.3      (3) the increase or decrease in the amounts in clause (2) 
145.4   from between the total taxes payable in the current year to and 
145.5   the total proposed or, for a town, final taxes payable the 
145.6   following year taxes, expressed as a dollar amount and as a 
145.7   percentage. 
145.8      (e) The notice must clearly state that the proposed or 
145.9   final taxes do not include the following: 
145.10     (1) special assessments; 
145.11     (2) levies approved by the voters after the date the 
145.12  proposed taxes are certified, including bond referenda, school 
145.13  district levy referenda, and levy limit increase referenda; 
145.14     (3) amounts necessary to pay cleanup or other costs due to 
145.15  a natural disaster occurring after the date the proposed taxes 
145.16  are certified; 
145.17     (4) amounts necessary to pay tort judgments against the 
145.18  taxing authority that become final after the date the proposed 
145.19  taxes are certified; and 
145.20     (5) the contamination tax imposed on properties which 
145.21  received market value reductions for contamination. 
145.22     (f) Except as provided in subdivision 7, failure of the 
145.23  county auditor to prepare or the county treasurer to deliver the 
145.24  notice as required in this section does not invalidate the 
145.25  proposed or final tax levy or the taxes payable pursuant to the 
145.26  tax levy. 
145.27     (g) If the notice the taxpayer receives under this section 
145.28  lists the property as nonhomestead and the homeowner provides 
145.29  satisfactory documentation to the county assessor that the 
145.30  property is owned and used as the owner's homestead, the 
145.31  assessor shall reclassify the property to homestead for taxes 
145.32  payable in the following year. 
145.33     (h) In the case of class 4 residential property used as a 
145.34  residence for lease or rental periods of 30 days or more, the 
145.35  taxpayer must either: 
145.36     (1) mail or deliver a copy of the notice of proposed 
146.1   property taxes to each tenant, renter, or lessee; or 
146.2      (2) post a copy of the notice in a conspicuous place on the 
146.3   premises of the property.  
146.4      The notice must be mailed or posted by the taxpayer by 
146.5   November 27 or within three days of receipt of the notice, 
146.6   whichever is later.  A taxpayer may notify the county treasurer 
146.7   of the address of the taxpayer, agent, caretaker, or manager of 
146.8   the premises to which the notice must be mailed in order to 
146.9   fulfill the requirements of this paragraph. 
146.10     (i) For purposes of this subdivision, subdivisions 5a and 
146.11  6, "metropolitan special taxing districts" means the following 
146.12  taxing districts in the seven-county metropolitan area that levy 
146.13  a property tax for any of the specified purposes listed below: 
146.14     (1) metropolitan council under section 473.132, 473.167, 
146.15  473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
146.16     (2) metropolitan airports commission under section 473.667, 
146.17  473.671, or 473.672; and 
146.18     (3) metropolitan mosquito control commission under section 
146.19  473.711. 
146.20     For purposes of this section, any levies made by the 
146.21  regional rail authorities in the county of Anoka, Carver, 
146.22  Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
146.23  398A shall be included with the appropriate county's levy and 
146.24  shall be discussed at that county's public hearing. 
146.25     (j) For taxes levied in 1996, payable in 1997 only, in the 
146.26  case of a statutory or home rule charter city or town that 
146.27  exercises the local levy option provided in section 473.388, 
146.28  subdivision 7, the notice of its proposed taxes may include a 
146.29  statement of the amount by which its proposed tax increase for 
146.30  taxes payable in 1997 is attributable to its exercise of that 
146.31  option, together with a statement that the levy of the 
146.32  metropolitan council was decreased by a similar amount because 
146.33  of the exercise of that option. 
146.34     Sec. 4.  Minnesota Statutes 1996, section 275.065, is 
146.35  amended by adding a subdivision to read: 
146.36     Subd. 3a.  [CONSTANT SPENDING LEVY AMOUNT.] (a) For 
147.1   purposes of this section, "constant spending levy amount" for a 
147.2   county, city, town, or special taxing district means the 
147.3   property tax levy that the taxing authority would need to levy 
147.4   so that the sum of its levy, including its fiscal disparities 
147.5   distribution levy under section 276A.06, subdivision 3, clause 
147.6   (a), or 473F.08, subdivision 3, clause (a), plus its property 
147.7   tax aid amounts would remain constant from the current year to 
147.8   the proposed year, taking into account the fiscal disparities 
147.9   distribution levy amounts and the property tax aid amounts that 
147.10  have been certified for the proposed year.  For the purposes of 
147.11  this paragraph, property tax aids include homestead and 
147.12  agricultural credit aid under section 273.1398, subdivision 2, 
147.13  local government aid under section 477A.013, local performance 
147.14  aid under section 477A.05, county criminal justice aid under 
147.15  section 477A.0121, and family preservation aid under section 
147.16  477A.0122. 
147.17     (b) For school districts, for the state determined school 
147.18  tax, "constant spending levy amount" is the same as the proposed 
147.19  tax.  For the other school district levies, the commissioner 
147.20  shall compute the constant spending levy amount by separately 
147.21  calculating each program levy using the current year's revenue 
147.22  per pupil unit and the proposed year's tax base, pupil units and 
147.23  aid amounts, and then adding the resulting amounts.  In no case 
147.24  shall the constant spending levy amount be less than $0.  The 
147.25  commissioner shall also determine the apportionment of the 
147.26  fiscal disparities distribution levy between the state 
147.27  determined school levy and the other school district levies.  On 
147.28  or before September 30 annually, the commissioner must report to 
147.29  the county auditor each school district's constant spending 
147.30  state determined school levy and its constant spending levy 
147.31  amount for the other school district levies.  
147.32     Sec. 5.  Minnesota Statutes 1996, section 275.065, 
147.33  subdivision 5a, is amended to read: 
147.34     Subd. 5a.  [PUBLIC ADVERTISEMENT.] (a) A city that has a 
147.35  population of more than 2,500, county, a metropolitan special 
147.36  taxing district as defined in subdivision 3, paragraph (i), a 
148.1   regional library district established under section 134.201, or 
148.2   school district shall advertise in a newspaper a notice of its 
148.3   intent to adopt a budget and property tax levy or, in the case 
148.4   of a school district, to review its current budget and proposed 
148.5   property taxes payable in the following year, at a public 
148.6   hearing.  The notice must be published not less than two 
148.7   business days nor more than six business days before the hearing.
148.8      The advertisement must be at least one-eighth page in size 
148.9   of a standard-size or a tabloid-size newspaper.  The 
148.10  advertisement must not be placed in the part of the newspaper 
148.11  where legal notices and classified advertisements appear.  The 
148.12  advertisement must be published in an official newspaper of 
148.13  general circulation in the taxing authority.  The newspaper 
148.14  selected must be one of general interest and readership in the 
148.15  community, and not one of limited subject matter.  The 
148.16  advertisement must appear in a newspaper that is published at 
148.17  least once per week.  
148.18     For purposes of this section, the metropolitan special 
148.19  taxing district's advertisement must only be published in the 
148.20  Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 
148.21     (b) The advertisement for school districts, metropolitan 
148.22  special taxing districts, and regional library districts must be 
148.23  in the following form, except that the notice for a school 
148.24  district may include references to the current budget in regard 
148.25  to proposed property taxes. 
148.26                             "NOTICE OF
148.27                      PROPOSED PROPERTY TAXES
148.28            (City/County/School District/Metropolitan
148.29                  Special Taxing District/Regional
148.30                   Library District) of .........
148.31  The governing body of ........ will soon hold budget hearings 
148.32  and vote on the property taxes for (city/county/metropolitan 
148.33  special taxing district/regional library district services that 
148.34  will be provided in 199_ (year)/school district services that 
148.35  will be provided in 199_ (year) and 199_ (year)). 
148.36                     NOTICE OF PUBLIC HEARING:
149.1   All concerned citizens are invited to attend a public hearing 
149.2   and express their opinions on the proposed (city/county/school 
149.3   district/metropolitan special taxing district/regional library 
149.4   district) budget and property taxes, or in the case of a school 
149.5   district, its current budget and proposed property taxes, 
149.6   payable in the following year.  The hearing will be held on 
149.7   (Month/Day/Year) at (Time) at (Location, Address)." 
149.8      (c) The advertisement for cities and counties must be in 
149.9   the following form. 
149.10                       "NOTICE OF PROPOSED
149.11                 TOTAL BUDGET AND PROPERTY TAXES
149.12  The (city/county) governing body or board of commissioners will 
149.13  hold a public hearing to discuss the budget and to vote on the 
149.14  amount of property taxes to collect for services the 
149.15  (city/county) will provide in (year). 
149.16     
149.17  SPENDING:  The total budget amounts below compare 
149.18  (city's/county's) (year) total actual budget with the amount the 
149.19  (city/county) proposes to spend in (year). 
149.20     
149.21  (Year) Total          Proposed (Year)          Change from
149.22  Actual Budget             Budget               (Year)-(Year)
149.23     
149.24    $.......              $.......                ...%
149.25     
149.26  TAXES:  The property tax amounts below compare that portion of 
149.27  the current budget levied in property taxes in (city/county) for 
149.28  (year) with the property taxes the (city/county) proposes to 
149.29  collect in (year). 
149.30     
149.31  (Year) Property       Proposed (Year)          Change from
149.32      Taxes              Property Taxes         (Year)-(Year)
149.33     
149.34    $.......              $.......                ...% 
149.35     
149.36                    ATTEND THE PUBLIC HEARING
150.1   All (city/county) residents are invited to attend the public 
150.2   hearing of the (city/county) to express your opinions on the 
150.3   budget and the proposed amount of (year) property taxes.  The 
150.4   hearing will be held on: 
150.5                       (Month/Day/Year/Time)
150.6                         (Location/Address)
150.7   If the discussion of the budget cannot be completed, a time and 
150.8   place for continuing the discussion will be announced at the 
150.9   hearing.  You are also invited to send your written comments to: 
150.10                          (City/County)
150.11                       (Location/Address)"
150.12     (d) For purposes of this subdivision, the budget amounts 
150.13  listed on the advertisement mean: 
150.14     (1) for cities, the total government fund expenditures, as 
150.15  defined by the state auditor under section 471.6965, less any 
150.16  expenditures for improvements or services that are specially 
150.17  assessed or charged under chapter 429, 430, 435, or the 
150.18  provisions of any other law or charter; and 
150.19     (2) for counties, the total government fund expenditures, 
150.20  as defined by the state auditor under section 375.169, less any 
150.21  expenditures for direct payments to recipients or providers for 
150.22  the human service aids listed in section 273.1398, subdivision 
150.23  1, paragraph (i). 
150.24     (c) (e) A city with a population of over 500 but not more 
150.25  than 2,500 must advertise by posted notice as defined in section 
150.26  645.12, subdivision 1.  The advertisement must be posted at the 
150.27  time provided in paragraph (a).  It must be in the form required 
150.28  in paragraph (b). 
150.29     (d) (f) For purposes of this subdivision, the population of 
150.30  a city is the most recent population as determined by the state 
150.31  demographer under section 4A.02. 
150.32     (e) (g) The commissioner of revenue, subject to the 
150.33  approval of the chairs of the house and senate tax committees, 
150.34  shall prescribe the form and format of the advertisement. 
150.35     (f) For calendar year 1993, each taxing authority required 
150.36  to publish an advertisement must include on the advertisement a 
151.1   statement that information on the increases or decreases of the 
151.2   total budget, including employee and independent contractor 
151.3   compensation in the prior year, current year, and proposed 
151.4   budget year will be discussed at the hearing. 
151.5      (g) Notwithstanding paragraph (f), for 1993, the 
151.6   commissioner of revenue shall prescribe the form, format, and 
151.7   content of an advertisement comparing current and proposed 
151.8   expense budgets for the metropolitan council, the metropolitan 
151.9   airports commission, and the metropolitan mosquito control 
151.10  commission.  The expense budget must include occupancy, 
151.11  personnel, contractual and capital improvement expenses.  The 
151.12  form, format, and content of the advertisement must be approved 
151.13  by the chairs of the house and senate tax committees prior to 
151.14  publication. 
151.15     Sec. 6.  Minnesota Statutes 1996, section 275.065, 
151.16  subdivision 6, is amended to read: 
151.17     Subd. 6.  [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 
151.18     (a) For purposes of this section, the following terms shall 
151.19  have the meanings given: 
151.20     (1) "Initial hearing" means the first and primary hearing 
151.21  held to discuss the taxing authority's proposed budget and 
151.22  proposed property tax levy for taxes payable in the following 
151.23  year, or, for school districts, the current budget and the 
151.24  proposed property tax levy for taxes payable in the following 
151.25  year. 
151.26     (2) "Continuation hearing" means a hearing held to complete 
151.27  the initial hearing, if the initial hearing is not completed on 
151.28  its scheduled date. 
151.29     (3) "Subsequent hearing" means the hearing held to adopt 
151.30  the taxing authority's final property tax levy, and, in the case 
151.31  of taxing authorities other than school districts, the final 
151.32  budget, for taxes payable in the following year. 
151.33     (b) Between November 29 and December 20, the governing 
151.34  bodies of a city that has a population over 500, county, 
151.35  metropolitan special taxing districts as defined in subdivision 
151.36  3, paragraph (i), and regional library districts shall each hold 
152.1   a an initial public hearing to discuss and seek public comment 
152.2   on its final budget and property tax levy for taxes payable in 
152.3   the following year, and the governing body of the school 
152.4   district shall hold a an initial public hearing to review its 
152.5   current budget and proposed property tax levy for taxes payable 
152.6   in the following year.  The metropolitan special taxing 
152.7   districts shall be required to hold only a single joint initial 
152.8   public hearing, the location of which will be determined by the 
152.9   affected metropolitan agencies. 
152.10     (c) The initial hearing must be held after 5:00 p.m. if 
152.11  scheduled on a day other than Saturday.  No initial hearing may 
152.12  be held on a Sunday.  
152.13     (d) At the initial hearing under this subdivision, the 
152.14  percentage increase in property taxes proposed by the taxing 
152.15  authority, if any, and the specific purposes for which property 
152.16  tax revenues are being increased must be discussed.  During the 
152.17  discussion, the governing body shall hear comments regarding a 
152.18  proposed increase and explain the reasons for the proposed 
152.19  increase.  The public shall be allowed to speak and to ask 
152.20  questions.  At the public hearing, the school district must also 
152.21  provide and discuss information on the distribution of its 
152.22  revenues by revenue source, and the distribution of its spending 
152.23  by program area.  
152.24     (e) If the initial hearing is not completed on its 
152.25  scheduled date, the taxing authority must announce, prior to 
152.26  adjournment of the hearing, the date, time, and place for the 
152.27  continuation of the hearing.  The continuation hearing must be 
152.28  held at least five business days but no more than 14 business 
152.29  days after the initial hearing.  A continuation hearing may not 
152.30  be held later than December 20 except as provided in paragraphs 
152.31  (f) and (g).  A continuation hearing must be held after 5:00 
152.32  p.m. if scheduled on a day other than Saturday.  No continuation 
152.33  hearing may be held on a Sunday. 
152.34     (f) The governing body of a county shall hold its initial 
152.35  hearing on the second Tuesday in December each year, and may 
152.36  hold additional initial hearings on other dates before December 
153.1   20 if necessary for the convenience of county residents.  If the 
153.2   county needs a continuation of its hearing, the continuation 
153.3   hearing shall be held on the third Tuesday in December.  If the 
153.4   third Tuesday in December falls on December 21, the county's 
153.5   continuation hearing shall be held on Monday, December 20.  
153.6      (g) The metropolitan special taxing districts shall hold a 
153.7   joint initial public hearing on the first Monday of December.  A 
153.8   continuation hearing, if necessary, shall be held on the second 
153.9   Monday of December even if that second Monday is after December 
153.10  10. 
153.11     (h) The county auditor shall provide for the coordination 
153.12  of initial and continuation hearing dates for all school 
153.13  districts and cities within the county to prevent conflicts 
153.14  under clauses (i) and (j). 
153.15     (i) By August 10, each school board and the board of the 
153.16  regional library district shall certify to the county auditors 
153.17  of the counties in which the school district or regional library 
153.18  district is located the dates on which it elects to hold its 
153.19  initial hearing and any continuation hearing.  If a school board 
153.20  or regional library district does not certify these dates by 
153.21  August 10, the auditor will assign the initial and continuation 
153.22  hearing dates.  The dates elected or assigned must not conflict 
153.23  with the initial and continuation hearing dates of the county or 
153.24  the metropolitan special taxing districts.  
153.25     (j) By August 20, the county auditor shall notify the 
153.26  clerks of the cities within the county of the dates on which 
153.27  school districts and regional library districts have elected to 
153.28  hold their initial and continuation hearings.  At the time a 
153.29  city certifies its proposed levy under subdivision 1 it shall 
153.30  certify the dates on which it elects to hold its initial hearing 
153.31  and any continuation hearing.  If a city does not certify these 
153.32  dates by September 15, the auditor will assign the initial and 
153.33  continuation hearing dates.  The dates elected or assigned must 
153.34  not conflict with the initial and continuation hearing dates of 
153.35  the county, metropolitan special taxing districts, regional 
153.36  library districts, or school districts within which the city is 
154.1   located.  This paragraph does not apply to cities of 500 
154.2   population or less. 
154.3      (k) The county initial hearing date and the city, 
154.4   metropolitan special taxing district, regional library district, 
154.5   and school district initial hearing dates must be designated on 
154.6   the notices required under subdivision 3.  The continuation 
154.7   hearing dates need not be stated on the notices.  
154.8      (l) At a subsequent hearing, each county, school district, 
154.9   city over 500 population, and metropolitan special taxing 
154.10  district may amend its proposed property tax levy and must adopt 
154.11  a final property tax levy.  Each county, city over 500 
154.12  population, and metropolitan special taxing district may also 
154.13  amend its proposed budget and must adopt a final budget at the 
154.14  subsequent hearing.  The final property tax levy must be adopted 
154.15  prior to adopting the final budget.  A school district is not 
154.16  required to adopt its final budget at the subsequent hearing.  
154.17  The subsequent hearing of a taxing authority must be held on a 
154.18  date subsequent to the date of the taxing authority's initial 
154.19  public hearing, or subsequent to the date of its continuation 
154.20  hearing.  If a continuation hearing is held, the subsequent 
154.21  hearing must be held either immediately following the 
154.22  continuation hearing or on a date subsequent to the continuation 
154.23  hearing.  The subsequent hearing may be held at a regularly 
154.24  scheduled board or council meeting or at a special meeting 
154.25  scheduled for the purposes of the subsequent hearing.  The 
154.26  subsequent hearing of a taxing authority does not have to be 
154.27  coordinated by the county auditor to prevent a conflict with an 
154.28  initial hearing, a continuation hearing, or a subsequent hearing 
154.29  of any other taxing authority.  All subsequent hearings must be 
154.30  held prior to five working days after December 20 of the levy 
154.31  year.  The date, time, and place of the subsequent hearing must 
154.32  be announced at the initial public hearing or at the 
154.33  continuation hearing. 
154.34     (m) The property tax levy certified under section 275.07 by 
154.35  a city of any population, county, metropolitan special taxing 
154.36  district, regional library district, or school district must not 
155.1   exceed the proposed levy determined under subdivision 1, except 
155.2   by an amount up to the sum of the following amounts: 
155.3      (1) the amount of a school district levy whose voters 
155.4   approved a referendum to increase taxes under section 124.82, 
155.5   subdivision 3, 124A.03, subdivision 2, or 124B.03, subdivision 
155.6   2, after the proposed levy was certified; 
155.7      (2) the amount of a city or county levy approved by the 
155.8   voters after the proposed levy was certified; 
155.9      (3) the amount of a levy to pay principal and interest on 
155.10  bonds approved by the voters under section 475.58 after the 
155.11  proposed levy was certified; 
155.12     (4) the amount of a levy to pay costs due to a natural 
155.13  disaster occurring after the proposed levy was certified, if 
155.14  that amount is approved by the commissioner of revenue under 
155.15  subdivision 6a; 
155.16     (5) the amount of a levy to pay tort judgments against a 
155.17  taxing authority that become final after the proposed levy was 
155.18  certified, if the amount is approved by the commissioner of 
155.19  revenue under subdivision 6a; 
155.20     (6) the amount of an increase in levy limits certified to 
155.21  the taxing authority by the commissioner of children, families, 
155.22  and learning or the commissioner of revenue after the proposed 
155.23  levy was certified; and 
155.24     (7) the amount required under section 124.755. 
155.25     At the hearing under this subdivision, the percentage 
155.26  increase in property taxes proposed by the taxing authority, if 
155.27  any, and the specific purposes for which property tax revenues 
155.28  are being increased must be discussed.  
155.29     During the discussion, the governing body shall hear 
155.30  comments regarding a proposed increase and explain the reasons 
155.31  for the proposed increase.  The public shall be allowed to speak 
155.32  and to ask questions.  At the subsequent hearing held as 
155.33  provided in this subdivision, the governing body, other than the 
155.34  governing body of a school district, shall adopt its final 
155.35  property tax levy prior to adopting its final budget. 
155.36     If the hearing is not completed on its scheduled date, the 
156.1   taxing authority must announce, prior to adjournment of the 
156.2   hearing, the date, time, and place for the continuation of the 
156.3   hearing.  The continued hearing must be held at least five 
156.4   business days but no more than 14 business days after the 
156.5   original hearing. 
156.6      The hearing must be held after 5:00 p.m. if scheduled on a 
156.7   day other than Saturday.  No hearing may be held on a Sunday.  
156.8   The governing body of a county shall hold a hearing on the 
156.9   second Tuesday in December each year, and may hold additional 
156.10  hearings on other dates before December 20 if necessary for the 
156.11  convenience of county residents.  If the county needs a 
156.12  continuation of its hearing, the continued hearing shall be held 
156.13  on the third Tuesday in December.  If the third Tuesday in 
156.14  December falls on December 21, the county's continuation hearing 
156.15  shall be held on Monday, December 20.  The county auditor shall 
156.16  provide for the coordination of hearing dates for all cities and 
156.17  school districts within the county. 
156.18     The metropolitan special taxing districts shall hold a 
156.19  joint public hearing on the first Monday of December.  A 
156.20  continuation hearing, if necessary, shall be held on the second 
156.21  Monday of December. 
156.22     By August 10, each school board and the board of the 
156.23  regional library district shall certify to the county auditors 
156.24  of the counties in which the school district or regional library 
156.25  district is located the dates on which it elects to hold its 
156.26  hearings and any continuations.  If a school board or regional 
156.27  library district does not certify the dates by August 10, the 
156.28  auditor will assign the hearing date.  The dates elected or 
156.29  assigned must not conflict with the hearing dates of the county 
156.30  or the metropolitan special taxing districts.  By August 20, the 
156.31  county auditor shall notify the clerks of the cities within the 
156.32  county of the dates on which school districts and regional 
156.33  library districts have elected to hold their hearings.  At the 
156.34  time a city certifies its proposed levy under subdivision 1 it 
156.35  shall certify the dates on which it elects to hold its hearings 
156.36  and any continuations.  For its initial hearing and for the 
157.1   subsequent hearing at which the final property tax levy will be 
157.2   adopted, the city must not select dates that conflict with the 
157.3   county hearing dates, metropolitan special taxing district 
157.4   dates, or with those elected by or assigned to the school 
157.5   districts or regional library district in which the city is 
157.6   located.  For continuation hearings, the city may select dates 
157.7   that conflict with other taxing authorities' dates if the city 
157.8   deems it necessary. 
157.9      The county hearing dates and the city, metropolitan special 
157.10  taxing district, regional library district, and school district 
157.11  hearing dates must be designated on the notices required under 
157.12  subdivision 3.  The continuation dates need not be stated on the 
157.13  notices.  
157.14     (n) This subdivision does not apply to towns and special 
157.15  taxing districts other than regional library districts and 
157.16  metropolitan special taxing districts. 
157.17     (o) Notwithstanding the requirements of this section, the 
157.18  employer is required to meet and negotiate over employee 
157.19  compensation as provided for in chapter 179A.  
157.20     Sec. 7.  Minnesota Statutes 1996, section 275.065, is 
157.21  amended by adding a subdivision to read: 
157.22     Subd. 6b.  [JOINT PUBLIC HEARINGS.] Notwithstanding any 
157.23  other provision of law, any city with a population of 10,000 and 
157.24  over, may conduct a more comprehensive public hearing than is 
157.25  contained in subdivision 6 by including a board member from the 
157.26  county, a board member from the school district located within 
157.27  the city's boundary, and the member or the member's designee of 
157.28  the metropolitan council for the district in which the city is 
157.29  located, if the city is in the metropolitan area, as defined in 
157.30  section 473.121, subdivision 2, at the city's public hearing.  
157.31  All provisions regarding the public hearings under subdivision 6 
157.32  are applicable to the joint public hearings under this 
157.33  subdivision. 
157.34     Upon the adoption of a resolution by the governing body of 
157.35  the city to hold a joint hearing, the city shall notify the 
157.36  county, the school district, and the metropolitan council if the 
158.1   city is in the metropolitan area, of the decision to hold a 
158.2   joint public hearing and request a board member from each of 
158.3   those taxing authorities, and the member or the designee of the 
158.4   metropolitan council if applicable, to be at the joint hearing.  
158.5   If the city is located in more than one county, the city may 
158.6   choose to request a county board member from each county or only 
158.7   from the county containing the majority of the city's market 
158.8   value.  If more than one school district is partially or totally 
158.9   located within the city, the city may choose to request a school 
158.10  district board member from each school district, or a board 
158.11  member only from the school district containing the majority of 
158.12  the city's market value.  If, as a result of requests under this 
158.13  subdivision, there are not sufficient board members in the 
158.14  county or the school district to attend the joint hearing, the 
158.15  county or school district may send a nonelected person working 
158.16  for its taxing authority to speak on the authority's behalf.  
158.17  The city may also invite each state senator and representative 
158.18  who represents the city, or a portion of the city, to come to 
158.19  the joint hearing. 
158.20     The primary purpose of the joint hearing is to discuss the 
158.21  city's budget and property tax levy.  However, the county and 
158.22  school district officials, and metropolitan council 
158.23  representative, if the city is in the metropolitan area, should 
158.24  be prepared to answer questions relevant to its budget and levy 
158.25  and the effect that its levy has on the property owners in the 
158.26  city. 
158.27     If a city conducts a hearing under this subdivision, this 
158.28  hearing is in lieu of the initial hearing required under 
158.29  subdivision 6.  However, the city is still required to adopt its 
158.30  proposed property tax levy at a subsequent hearing as provided 
158.31  under subdivision 6.  The hearings under this subdivision do not 
158.32  relieve a county, school district, or the metropolitan council 
158.33  of the requirement to hold its individual hearing under 
158.34  subdivision 6. 
158.35     Sec. 8.  Minnesota Statutes 1996, section 275.065, 
158.36  subdivision 8, is amended to read: 
159.1      Subd. 8.  [HEARING.] Notwithstanding any other provision of 
159.2   law, Ramsey county, the city of St. Paul, and independent school 
159.3   district No. 625 are authorized to and shall hold their initial 
159.4   public hearing jointly.  The hearing must be held on the second 
159.5   Tuesday of December each year.  The advertisement required in 
159.6   subdivision 5a may be a joint advertisement.  The hearing is 
159.7   otherwise subject to the requirements of this section. 
159.8      Ramsey county is authorized to hold an additional initial 
159.9   hearing or hearings as provided under this section, provided 
159.10  that any additional hearings must not conflict with the initial 
159.11  or continuation hearing dates of the other taxing districts.  
159.12  However, if Ramsey county elects not to hold such 
159.13  additional initial hearing or hearings, the joint initial 
159.14  hearing required by this subdivision must be held in a St. Paul 
159.15  location convenient to residents of Ramsey county. 
159.16     Sec. 9.  Minnesota Statutes 1996, section 275.07, 
159.17  subdivision 4, is amended to read: 
159.18     Subd. 4.  [REPORT TO COMMISSIONER.] (a) On or before 
159.19  October 8 of each year, the county auditor shall report to the 
159.20  commissioner of revenue the proposed levy certified by local 
159.21  units of government under section 275.065, subdivision 1.  If 
159.22  any taxing authorities have notified the county auditor that 
159.23  they are in the process of negotiating an agreement for sharing, 
159.24  merging, or consolidating services but that when the proposed 
159.25  levy was certified under section 275.065, subdivision 1a, the 
159.26  agreement was not yet finalized, the county auditor shall supply 
159.27  that information to the commissioner when filing the report 
159.28  under this section and shall recertify the affected levies as 
159.29  soon as practical after October 10. 
159.30     (b) On or before January 15 of each year, the county 
159.31  auditor shall report to the commissioner of revenue the final 
159.32  levy certified by local units of government under subdivision 1. 
159.33     (c) The levies must be reported in the manner prescribed by 
159.34  the commissioner.  The reports must show a total levy and the 
159.35  amount of each special levy. 
159.36     Sec. 10.  Minnesota Statutes 1996, section 276.04, 
160.1   subdivision 2, is amended to read: 
160.2      Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
160.3   shall provide for the printing of the tax statements.  The 
160.4   commissioner of revenue shall prescribe the form of the property 
160.5   tax statement and its contents.  The statement must contain a 
160.6   tabulated statement of the dollar amount due to each taxing 
160.7   authority and the amount of the state determined school tax from 
160.8   the parcel of real property for which a particular tax statement 
160.9   is prepared.  The dollar amounts due attributable to the county, 
160.10  the state determined school tax, the voter approved school tax, 
160.11  the other local school tax, the township or municipality, and 
160.12  the total of the metropolitan special taxing districts as 
160.13  defined in section 275.065, subdivision 3, paragraph (i), school 
160.14  district excess referenda levy, remaining school district levy, 
160.15  and the total of other voter approved referenda levies based on 
160.16  market value under section 275.61 must be separately stated.  
160.17  The amounts due all other special taxing districts, if any, may 
160.18  be aggregated.  For the purposes of this subdivision, "school 
160.19  district excess referenda levy" means school district taxes for 
160.20  operating purposes approved at referenda, including those taxes 
160.21  based on net tax capacity as well as those based on market 
160.22  value. "School district excess referenda levy" does not include 
160.23  school district taxes for capital expenditures approved at 
160.24  referendums or school district taxes to pay for the debt service 
160.25  on bonds approved at referenda.  The amount of the tax on 
160.26  contamination value imposed under sections 270.91 to 270.98, if 
160.27  any, must also be separately stated.  The dollar amounts, 
160.28  including the dollar amount of any special assessments, may be 
160.29  rounded to the nearest even whole dollar.  For purposes of this 
160.30  section whole odd-numbered dollars may be adjusted to the next 
160.31  higher even-numbered dollar.  The amount of market value 
160.32  excluded under section 273.11, subdivision 16, if any, must also 
160.33  be listed on the tax statement.  The statement shall include the 
160.34  following sentence sentences, printed in upper case letters in 
160.35  boldface print:  "EVEN THOUGH THE STATE OF MINNESOTA DOES NOT 
160.36  RECEIVE ANY PROPERTY TAX REVENUES, IT DETERMINES THE AMOUNT OF 
161.1   THE GENERAL EDUCATION TAX LEVY.  THE STATE OF MINNESOTA REDUCES 
161.2   YOUR PROPERTY TAX BY PAYING CREDITS AND REIMBURSEMENTS TO LOCAL 
161.3   UNITS OF GOVERNMENT."  
161.4      (b) The property tax statements for manufactured homes and 
161.5   sectional structures taxed as personal property shall contain 
161.6   the same information that is required on the tax statements for 
161.7   real property.  
161.8      (c) Real and personal property tax statements must contain 
161.9   the following information in the order given in this paragraph.  
161.10  The information must contain the current year tax information in 
161.11  the right column with the corresponding information for the 
161.12  previous year in a column on the left: 
161.13     (1) the property's estimated market value under section 
161.14  273.11, subdivision 1; 
161.15     (2) the property's taxable market value after reductions 
161.16  under section 273.11, subdivisions 1a and 16; 
161.17     (3) the property's gross tax, calculated by multiplying the 
161.18  property's gross tax capacity times the total local tax rate and 
161.19  adding the property's total property tax to the result the sum 
161.20  of the aids enumerated in clause (4); 
161.21     (4) a total of the following aids: 
161.22     (i) education aids payable under chapters 124 and 124A; and 
161.23     (ii) local government aids for cities, towns, and counties 
161.24  under chapter 477A; and 
161.25     (iii) disparity reduction aid under section 273.1398; 
161.26     (5) for homestead residential and agricultural properties, 
161.27  the homestead and agricultural credit aid apportioned to the 
161.28  property.  This amount is obtained by multiplying the total 
161.29  local tax rate by the difference between the property's gross 
161.30  and net tax capacities under section 273.13.  This amount must 
161.31  be separately stated and identified as "homestead and 
161.32  agricultural credit."  For purposes of comparison with the 
161.33  previous year's amount for the statement for taxes payable in 
161.34  1990, the statement must show the homestead credit for taxes 
161.35  payable in 1989 under section 273.13, and the agricultural 
161.36  credit under section 273.132 for taxes payable in 1989; 
162.1      (6) (5) any credits received under sections 273.119; 
162.2   273.123; 273.135; 273.1391; 273.1398, subdivision 4; 469.171; 
162.3   and 473H.10, except that the amount of credit received under 
162.4   section 273.135 must be separately stated and identified as 
162.5   "taconite tax relief"; and 
162.6      (7) (6) the net tax payable in the manner required in 
162.7   paragraph (a). 
162.8      (d) If the county uses envelopes for mailing property tax 
162.9   statements and if the county agrees, a taxing district may 
162.10  include a notice with the property tax statement notifying 
162.11  taxpayers when the taxing district will begin its budget 
162.12  deliberations for the current year, and encouraging taxpayers to 
162.13  attend the hearings.  If the county allows notices to be 
162.14  included in the envelope containing the property tax statement, 
162.15  and if more than one taxing district relative to a given 
162.16  property decides to include a notice with the tax statement, the 
162.17  county treasurer or auditor must coordinate the process and may 
162.18  combine the information on a single announcement.  
162.19     The commissioner of revenue shall certify to the county 
162.20  auditor the actual or estimated aids enumerated in clauses (3) 
162.21  and clause (4) that local governments will receive in the 
162.22  following year.  In the case of a county containing a city of 
162.23  the first class, for taxes levied in 1991, and for all counties 
162.24  for taxes levied in 1992 and thereafter, The commissioner must 
162.25  certify this amount by September 1 of each year.  
162.26     Sec. 11.  [EFFECTIVE DATE.] 
162.27     Sections 1 to 4 and 9 are effective for levies and notices 
162.28  for taxes payable in 1998, and thereafter. 
162.29     Section 5 is effective for newspaper advertisements 
162.30  prepared in 1997 for taxes payable in 1998, and thereafter. 
162.31     Sections 6 to 8 are effective for public hearings held in 
162.32  1997, and thereafter. 
162.33     Section 10 is effective for property tax statements 
162.34  prepared in 1998, and thereafter. 
162.35                             ARTICLE 6 
162.36                    PROPERTY TAX REFORM PAY 2000 
163.1      Section 1.  Minnesota Statutes 1996, section 273.124, 
163.2   subdivision 14, is amended to read: 
163.3      Subd. 14.  [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 
163.4   (a) Real estate of less than ten acres that is the homestead of 
163.5   its owner must be classified as class 2a qualifies for treatment 
163.6   as an agricultural homestead under section 273.13, subdivision 
163.7   23, paragraph (a), if:  
163.8      (1) the parcel on which the house is located is contiguous 
163.9   on at least two sides to (i) agricultural land, (ii) land owned 
163.10  or administered by the United States Fish and Wildlife Service, 
163.11  or (iii) land administered by the department of natural 
163.12  resources on which in lieu taxes are paid under sections 477A.11 
163.13  to 477A.14; 
163.14     (2) its owner also owns a noncontiguous parcel of 
163.15  agricultural land that is at least 20 acres; 
163.16     (3) the noncontiguous land is located not farther than two 
163.17  townships or cities, or a combination of townships or cities 
163.18  from the homestead; and 
163.19     (4) the agricultural use value of the noncontiguous land 
163.20  and farm buildings is equal to at least 50 percent of the market 
163.21  value of the house, garage, and one acre of land. 
163.22     Homesteads initially classified as class 2a qualifying 
163.23  under the provisions of this subdivision shall remain classified 
163.24  as class 2a qualified, irrespective of subsequent changes in the 
163.25  use of adjoining properties, as long as the homestead remains 
163.26  under the same ownership, the owner owns a noncontiguous parcel 
163.27  of agricultural land that is at least 20 acres, and the 
163.28  agricultural use value qualifies under clause (4). 
163.29     (b) Noncontiguous land shall be included as part of a an 
163.30  agricultural homestead under section 273.13, subdivision 23, 
163.31  paragraph (a), only if the homestead is classified as class 2a 
163.32  and the detached land is located in the same township or city, 
163.33  or not farther than two townships or cities or combination 
163.34  thereof from the remainder of the homestead.  
163.35     (c) Agricultural land used for purposes of a homestead and 
163.36  actively farmed by a person holding a vested remainder interest 
164.1   in it must be classified as a homestead under section 273.13, 
164.2   subdivision 23, paragraph (a).  If agricultural land is 
164.3   classified class 2a qualifies for homestead treatment, any other 
164.4   dwellings on the land used for purposes of a homestead as a 
164.5   residence by persons holding vested remainder interests who are 
164.6   actively engaged in farming the property, and up to one acre of 
164.7   the land surrounding each homestead dwelling and reasonably 
164.8   necessary for the use of the dwelling as a home, must also be 
164.9   assessed class 2a qualify for homestead treatment. 
164.10     Sec. 2.  Minnesota Statutes 1996, section 273.13, 
164.11  subdivision 1, is amended to read: 
164.12     Subdivision 1.  [HOW CLASSIFIED.] All real and personal 
164.13  property subject to a general property tax and not subject to 
164.14  any gross earnings or other lieu in-lieu tax is hereby 
164.15  classified for purposes of taxation as provided by this section. 
164.16  All of a property's taxable value must be assigned to the 
164.17  classes defined in this section provided, however, that the 
164.18  value may be split into more than one class. 
164.19     Sec. 3.  Minnesota Statutes 1996, section 273.13, is 
164.20  amended by adding a subdivision to read: 
164.21     Subd. 1a.  [CLASS RATES; LOCAL PROPERTY TAX CAPACITY.] The 
164.22  following class rates apply to each class of property described 
164.23  in this section in determining net tax capacity for levying 
164.24  local property taxes: 
164.25             Class                      Class rate
164.26       1 (residential)                  1.0 percent
164.27       2 (agricultural)                 0.5 percent
164.28       3 (commercial-industrial)        2.0 percent
164.29       4 (apartment)                    1.5 percent
164.30     Sec. 4.  Minnesota Statutes 1996, section 273.13, is 
164.31  amended by adding a subdivision to read: 
164.32     Subd. 1b.  [CLASS RATES; GENERAL EDUCATION TAX 
164.33  CAPACITY.] The following class rates apply to each class of 
164.34  property described in this section in determining tax capacity 
164.35  for levying the general education property tax: 
164.36             Class                      Education class rate
165.1        1 (residential)                  1.2 percent
165.2        2 (agricultural)                 1.2 percent
165.3        3 (commercial-industrial)        2.4 percent
165.4        4 (apartments)                   1.2 percent
165.5      All property classified as subclass 1a, 2a, 3a, or 4d is 
165.6   exempt from the general education property tax. 
165.7      Sec. 5.  Minnesota Statutes 1996, section 273.13, is 
165.8   amended by adding a subdivision to read: 
165.9      Subd. 1c.  [TRANSITION STATE TAX RATES.] (a) 
165.10  Notwithstanding subdivision 1b, the general education class rate 
165.11  applying to subclass 4a property is 0.8 percent for taxes 
165.12  payable in 2000 and one percent for taxes payable in 2001. 
165.13     (b) Notwithstanding subdivision 1b, the general education 
165.14  class rates for property qualifying under section 273.127 are as 
165.15  follows: 
165.16     (1) 0.6 percent for taxes payable in 2000; 
165.17     (2) 0.8 percent for taxes payable in 2001; and 
165.18     (3) one percent for taxes payable in 2002. 
165.19     Sec. 6.  Minnesota Statutes 1996, section 273.13, is 
165.20  amended by adding a subdivision to read: 
165.21     Subd. 34.  [EFFECT OF NEW PROPERTY TAX 
165.22  CLASSIFICATIONS.] For taxes levied in 1999, payable in 2000 and 
165.23  subsequent years, property shall be classified according to 
165.24  subdivisions 35 to 38, which shall supersede classification 
165.25  under subdivisions 22 to 31. 
165.26     Sec. 7.  Minnesota Statutes 1996, section 273.13, is 
165.27  amended by adding a subdivision to read: 
165.28     Subd. 35.  [CLASS 1.] (a) Class 1 property consists of real 
165.29  estate which is (1) used for residential purposes, including 
165.30  residential structures on agricultural property, or (2) devoted 
165.31  to temporary and seasonal residential occupancy for recreation 
165.32  purposes.  
165.33     (b) A residential property qualifies for class 1 only if it 
165.34  contains no more than three housing units. 
165.35     (c) Seasonal recreational residential property qualifies 
165.36  for class 1 only if it is not used for commercial purposes for 
166.1   more than 250 days in the year preceding the year of 
166.2   assessment.  For purposes of this paragraph, property is devoted 
166.3   to a commercial purpose on a specific day if any portion of the 
166.4   property is used for residential occupancy, and a fee is charged 
166.5   for residential occupancy.  
166.6      (d) Class 1 includes commercial use real property used 
166.7   exclusively for recreational purposes in conjunction with class 
166.8   1 property devoted to temporary and seasonal residential 
166.9   occupancy for recreational purposes, up to a total of two acres, 
166.10  provided the property is not devoted to commercial recreational 
166.11  use for more than 250 days in the year preceding the year of 
166.12  assessment and is located within two miles of the class 1 
166.13  property with which it is used.  Owners of real property devoted 
166.14  to temporary and seasonal residential occupancy for recreational 
166.15  purposes and all or a portion of which was devoted to commercial 
166.16  purposes for not more than 250 days in the year preceding the 
166.17  year of assessment desiring classification as class 1, must 
166.18  submit a declaration to the assessor designating the cabins or 
166.19  units occupied for 250 days or less in the year preceding the 
166.20  year of assessment by January 15 of the assessment year.  Those 
166.21  cabins or units and a proportionate share of the land on which 
166.22  they are located will be designated class 1 as otherwise 
166.23  provided.  The remainder of the cabins or units and a 
166.24  proportionate share of the land on which they are located will 
166.25  be designated as class 3.  The owner of property desiring 
166.26  designation as class 1 property must provide guest registers or 
166.27  other records demonstrating that the units for which class 1 
166.28  designation is sought were not occupied for more than 250 days 
166.29  in the year preceding the assessment if so requested.  The 
166.30  portion of a property operated as a (1) restaurant, (2) bar, (3) 
166.31  gift shop, and (4) other nonresidential facility operated on a 
166.32  commercial basis not directly related to temporary and seasonal 
166.33  residential occupancy for recreational purposes shall not 
166.34  qualify for class 1. 
166.35     (e) Class 1 includes commercial use real property that 
166.36  abuts a lakeshore line and is devoted to temporary and seasonal 
167.1   residential occupancy for recreational purposes, and that 
167.2   includes a portion used as a homestead by the owner, which 
167.3   includes a dwelling occupied as a homestead by a shareholder of 
167.4   a corporation that owns the resort or a partner in a partnership 
167.5   that owns the resort, even if the title to the homestead is held 
167.6   by the corporation or partnership.  
167.7      (f) Subclass 1a consists of the first tier of market value 
167.8   of each class 1 property that (1) is used for residential 
167.9   purposes and contains only one dwelling unit, or contains more 
167.10  than one dwelling unit but qualifies for homestead treatment 
167.11  under section 273.124, (2) is used for noncommercial seasonal 
167.12  recreational residential purposes, or (3) is used for homestead 
167.13  commercial seasonal recreational residential purposes as defined 
167.14  in paragraph (e).  
167.15     (g) The valuation limit for the first tier in paragraph 
167.16  (f), clause (1), is $115,000, adjusted for inflation under 
167.17  subdivision 39.  The valuation limit for the first tier in 
167.18  paragraph (f), clause (2), is $40,000, adjusted for inflation 
167.19  under subdivision 39.  The valuation limit for the first tier in 
167.20  paragraph (f), clause (3), is $230,000, adjusted for inflation 
167.21  under subdivision 39.  
167.22     Sec. 8.  Minnesota Statutes 1996, section 273.13, is 
167.23  amended by adding a subdivision to read: 
167.24     Subd. 36.  [CLASS 2.] (a) Class 2 property consists of 
167.25  agricultural land and structures used for agricultural purposes. 
167.26  In the case of a property qualifying as an agricultural 
167.27  homestead under section 273.124, the house and garage and 
167.28  immediately surrounding one acre of land is class 1 property and 
167.29  the remainder of the homestead is class 2.  
167.30     (b) Class 2 includes property that is (1) real estate, 
167.31  rural in character and used exclusively for growing trees for 
167.32  timber, lumber, and wood and wood products; (2) real estate that 
167.33  is not improved with a structure and is used exclusively for 
167.34  growing trees for timber, lumber, and wood and wood products, if 
167.35  the owner has participated or is participating in a cost-sharing 
167.36  program for afforestation, reforestation, or timber stand 
168.1   improvement on that particular property, administered or 
168.2   coordinated by the commissioner of natural resources; or (3) a 
168.3   landing area or public access area of a privately owned public 
168.4   use airport.  
168.5      (c) Agricultural land as used in this section means 
168.6   contiguous acreage of ten acres or more, used during the 
168.7   preceding year for agricultural purposes.  "Agricultural 
168.8   purposes" as used in this section means the raising or 
168.9   cultivation of agricultural products or enrollment in the 
168.10  Reinvest in Minnesota program under sections 103F.501 to 
168.11  103F.535 or the federal Conservation Reserve Program as 
168.12  contained in Public Law Number 99-198.  Contiguous acreage on 
168.13  the same parcel, or contiguous acreage on an immediately 
168.14  adjacent parcel under the same ownership, may also qualify as 
168.15  agricultural land, but only if it is pasture, timber, waste, 
168.16  unusable wild land, or land included in state or federal farm 
168.17  programs.  Agricultural classification for property shall be 
168.18  determined excluding the house, garage, and immediately 
168.19  surrounding one acre of land, and shall not be based upon the 
168.20  market value of any residential structures on the parcel or 
168.21  contiguous parcels under the same ownership. 
168.22     (d) Real estate, excluding the house, garage, and 
168.23  immediately surrounding one acre of land, of less than ten acres 
168.24  which is exclusively or intensively used for raising or 
168.25  cultivating agricultural products, shall be considered as 
168.26  agricultural land.  
168.27     Land shall be classified as agricultural even if all or a 
168.28  portion of the agricultural use of that property is the leasing 
168.29  to, or use by another person for agricultural purposes. 
168.30     Classification under this subdivision is not determinative 
168.31  for qualifying under section 273.111. 
168.32     The property classification under this section supersedes, 
168.33  for property tax purposes only, any locally administered 
168.34  agricultural policies or land use restrictions that define 
168.35  minimum or maximum farm acreage. 
168.36     (e) The term "agricultural products" as used in this 
169.1   subdivision includes production for sale of:  
169.2      (1) livestock, livestock products, dairy animals, dairy 
169.3   products, poultry and poultry products, fur-bearing animals, 
169.4   horticultural and nursery stock described in sections 18.44 to 
169.5   18.61, fruit of all kinds, vegetables, forage, grains, bees, and 
169.6   apiary products by the owner; 
169.7      (2) fish bred for sale and consumption if the fish breeding 
169.8   occurs on land zoned for agricultural use; 
169.9      (3) the commercial boarding of horses if the boarding is 
169.10  done in conjunction with raising or cultivating agricultural 
169.11  products as defined in clause (1); 
169.12     (4) property which is owned and operated by nonprofit 
169.13  organizations used for equestrian activities, excluding racing; 
169.14  and 
169.15     (5) game birds and waterfowl bred and raised for use on a 
169.16  shooting preserve licensed under section 97A.115.  
169.17     (f) If a parcel used for agricultural purposes is also used 
169.18  for commercial or industrial purposes, including but not limited 
169.19  to:  
169.20     (1) wholesale and retail sales; 
169.21     (2) processing of raw agricultural products or other goods; 
169.22     (3) warehousing or storage of processed goods; and 
169.23     (4) office facilities for the support of the activities 
169.24  enumerated in clauses (1), (2), and (3), 
169.25  the assessor shall classify the part of the parcel used for 
169.26  agricultural purposes as class 2 and the remainder in the class 
169.27  appropriate to its use.  The grading, sorting, and packaging of 
169.28  raw agricultural products for first sale is considered an 
169.29  agricultural purpose.  A greenhouse or other building where 
169.30  horticultural or nursery products are grown that is also used 
169.31  for the conduct of retail sales must be classified as 
169.32  agricultural if it is primarily used for the growing of 
169.33  horticultural or nursery products from seed, cuttings, or roots 
169.34  and occasionally as a showroom for the retail sale of those 
169.35  products.  Use of a greenhouse or building only for the display 
169.36  of already grown horticultural or nursery products does not 
170.1   qualify as an agricultural purpose.  
170.2      (g) To qualify for classification under paragraph (b), 
170.3   clause (3), a privately owned public use airport must be 
170.4   licensed as a public airport under section 360.018.  For 
170.5   purposes of paragraph (b), clause (3), "landing area" means that 
170.6   part of a privately owned public use airport properly cleared, 
170.7   regularly maintained, and made available to the public for use 
170.8   by aircraft and includes runways, taxiways, aprons, and sites 
170.9   upon which are situated landing or navigational aids.  A landing 
170.10  area also includes land underlying both the primary surface and 
170.11  the approach surfaces that comply with all of the following:  
170.12     (i) the land is properly cleared and regularly maintained 
170.13  for the primary purposes of the landing, taking off, and taxiing 
170.14  of aircraft; but that portion of the land that contains 
170.15  facilities for servicing, repair, or maintenance of aircraft is 
170.16  not included as a landing area; 
170.17     (ii) the land is part of the airport property; and 
170.18     (iii) the land is not used for commercial or residential 
170.19  purposes. 
170.20     The land contained in a landing area under paragraph (b), 
170.21  clause (3), must be described and certified by the commissioner 
170.22  of transportation.  The certification is effective until it is 
170.23  modified, or until the airport or landing area no longer meets 
170.24  the requirements of paragraph (b), clause (3).  For purposes of 
170.25  paragraph (b), clause (3), "public access area" means property 
170.26  used as an aircraft parking ramp, apron, or storage hangar, or 
170.27  an arrival and departure building in connection with the airport.
170.28     (h) A structure is classified as an agricultural building 
170.29  if all of the following criteria are met: 
170.30     (1) the structure is located on property that is classified 
170.31  as agricultural property under this subdivision; 
170.32     (2) the structure is occupied exclusively by seasonal farm 
170.33  workers during the time when they work on that farm, and the 
170.34  occupants are not charged rent for the privilege of occupying 
170.35  the property; 
170.36     (3) the structure meets all applicable health and safety 
171.1   requirements for the appropriate season; and 
171.2      (4) the structure is not salable as residential property 
171.3   because it does not comply with local ordinances relating to 
171.4   location in relation to streets or roads. 
171.5      (i) Subclass 2a consists of the first tier of class 2 
171.6   market value of each homestead agricultural property.  The 
171.7   valuation limit for the first tier is $200,000, adjusted for 
171.8   inflation under subdivision 39. 
171.9      Sec. 9.  Minnesota Statutes 1996, section 273.13, is 
171.10  amended by adding a subdivision to read: 
171.11     Subd. 37.  [CLASS 3.] (a) Class 3 consists of commercial 
171.12  and industrial property and utility real and personal property, 
171.13  including: 
171.14     (1) tools, implements, and machinery of an electric 
171.15  generating, transmission, or distribution system or a pipeline 
171.16  system transporting or distributing water, gas, crude oil, or 
171.17  petroleum products or mains and pipes used in the distribution 
171.18  of steam or hot or chilled water for heating or cooling 
171.19  buildings, which are fixtures; 
171.20     (2) unmined iron ore and low-grade iron-bearing formations 
171.21  as defined in section 273.14; and 
171.22     (3) all other property not otherwise classified. 
171.23     (b) Subclass 3a consists of the first $70,000 of each 
171.24  parcel of class 3 property's market value, provided that in the 
171.25  case of contiguous parcels of commercial and industrial property 
171.26  owned by the same person or entity, only the first $70,000 of 
171.27  market value of the contiguous parcels is eligible for inclusion 
171.28  in subclass 3a, and provided that in the case of utility 
171.29  property owned by one person or entity, only one parcel in each 
171.30  county is eligible for inclusion in subclass 3a. 
171.31     For purposes of this paragraph, parcels are considered to 
171.32  be contiguous even if they are separated from each other by a 
171.33  road, street, vacant lot, waterway, or other similar intervening 
171.34  type of property. 
171.35     Sec. 10.  Minnesota Statutes 1996, section 273.13, is 
171.36  amended by adding a subdivision to read: 
172.1      Subd. 38.  [CLASS 4.] (a) Class 4 consists of residential 
172.2   real estate containing four or more units and used or held for 
172.3   use by the owner or by the tenants or lessees of the owner as a 
172.4   residence for rental periods of 30 days or more.  Class 4 also 
172.5   includes all property described in paragraph (c), and hospitals 
172.6   licensed under sections 144.50 to 144.56, other than hospitals 
172.7   exempt under section 272.02, and contiguous property used for 
172.8   hospital purposes, without regard to whether the property has 
172.9   been platted or subdivided.  
172.10     (b) Subclass 4a consists of property in a city with a 
172.11  population of 5,000 or less, that is (1) located outside of the 
172.12  metropolitan area, as defined in section 473.121, subdivision 2, 
172.13  or outside any county contiguous to the metropolitan area, and 
172.14  (2) whose city boundary is at least 15 miles from the boundary 
172.15  of any city with a population greater than 5,000.  For the 
172.16  purposes of this paragraph, "population" has the meaning given 
172.17  in section 477A.011, subdivision 3. 
172.18     (c) Subclass 4d property includes: 
172.19     (1) qualifying low-income rental housing certified to the 
172.20  assessor by the housing finance agency under sections 273.126 
172.21  and 462A.071.  Subclass 4d includes land in proportion to the 
172.22  total market value of the building that is qualifying low-income 
172.23  rental housing.  For all properties qualifying as subclass 4d, 
172.24  the market value determined by the assessor must be based in the 
172.25  normal approach to value using normal unrestricted rents; 
172.26     (2) real property up to a maximum of one acre of land owned 
172.27  by a nonprofit community service oriented organization; provided 
172.28  that the property is not used for a revenue-producing activity 
172.29  for more than six days in the calendar year preceding the year 
172.30  of assessment and the property is not used for residential 
172.31  purposes on either a temporary or permanent basis.  For purposes 
172.32  of this clause, a "nonprofit community service oriented 
172.33  organization" means any corporation, society, association, 
172.34  foundation, or institution organized and operated exclusively 
172.35  for charitable, religious, fraternal, civic, or educational 
172.36  purposes, and which is exempt from federal income taxation 
173.1   pursuant to section 501(c)(3), (10), or (19) of the Internal 
173.2   Revenue Code of 1986, as amended through December 31, 1990.  For 
173.3   purposes of this clause, "revenue-producing activities" shall 
173.4   include but not be limited to property or that portion of the 
173.5   property that is used as an on-sale intoxicating liquor or 3.2 
173.6   percent malt liquor establishment licensed under chapter 340A, a 
173.7   restaurant open to the public, bowling alley, a retail store, 
173.8   gambling conducted by organizations licensed under chapter 349, 
173.9   an insurance business, or office or other space leased or rented 
173.10  to a lessee who conducts a for-profit enterprise on the 
173.11  premises.  Any portion of the property which is used for 
173.12  revenue-producing activities for more than six days in the 
173.13  calendar year preceding the year of assessment shall be assessed 
173.14  as class 3.  The use of the property for social events open 
173.15  exclusively to members and their guests for periods of less than 
173.16  24 hours, when an admission is not charged nor any revenues are 
173.17  received by the organization shall not be considered a 
173.18  revenue-producing activity; 
173.19     (3) post-secondary student housing of not more than one 
173.20  acre of land that is owned by a nonprofit corporation organized 
173.21  under chapter 317A and is used exclusively by a student 
173.22  cooperative, sorority, or fraternity for on-campus housing or 
173.23  housing located within two miles of the border of a college 
173.24  campus; 
173.25     (4) manufactured home parks as defined in section 327.14, 
173.26  subdivision 3; and 
173.27     (5) real property devoted to a seasonal golf operation, 
173.28  which is privately owned and open to the public on a daily fee 
173.29  basis.  Any portion of the real estate used for commercial 
173.30  purposes beyond the length of the golf season in the year 
173.31  preceding the year of assessment shall be classified as class 3a 
173.32  property under subdivision 24, paragraph (a).  In order to 
173.33  qualify for class 4c under this paragraph, the golf course must 
173.34  be open to the public and can charge membership fees or dues, 
173.35  but a membership is not required in order to use the property 
173.36  for golfing.  To qualify under this paragraph, the property must 
174.1   meet the requirements of section 273.112, subdivision 3, 
174.2   paragraph (d). 
174.3      Sec. 11.  Minnesota Statutes 1996, section 273.13, is 
174.4   amended by adding a subdivision to read: 
174.5      Subd. 39.  [INFLATION ADJUSTMENT.] Beginning for property 
174.6   assessed in 2000, payable in 2001, the commissioner shall 
174.7   annually adjust the valuation limits specified in subdivisions 
174.8   35 and 36 for inflation.  The commissioner shall make the 
174.9   inflation adjustments in accordance with section 290.06, 
174.10  subdivision 2d, except that for purposes of this subdivision the 
174.11  percentage increase shall be determined from the year ending on 
174.12  August 31, 1998, to the year ending on August 31 of the year 
174.13  preceding the assessment year.  The commissioner shall round the 
174.14  valuation limits to the nearest $1,000 value.  The commissioner 
174.15  shall annually announce the adjusted valuation limits at the 
174.16  same time provided under section 290.06.  The determination of 
174.17  the commissioner under this subdivision is not a rule under the 
174.18  Administrative Procedure Act. 
174.19     Sec. 12.  Minnesota Statutes 1996, section 273.135, 
174.20  subdivision 2, is amended to read: 
174.21     Subd. 2.  The amount of the reduction authorized by 
174.22  subdivision 1 shall be: 
174.23     (a) In the case of property located within the boundaries 
174.24  of a municipality which meets the qualifications prescribed in 
174.25  section 273.134, 66 percent of the tax, provided that the 
174.26  reduction shall not exceed the maximum amounts specified in 
174.27  clause (c), and shall not exceed an amount sufficient to reduce 
174.28  the effective tax rate on each parcel of property to 95 percent 
174.29  of the base year effective tax rate.  In no case will the 
174.30  reduction for each homestead resulting from this credit be less 
174.31  than $10.  
174.32     (b) In the case of property located within the boundaries 
174.33  of a school district which qualifies as a tax relief area but 
174.34  which is outside the boundaries of a municipality which meets 
174.35  the qualifications prescribed in section 273.134, 57 percent of 
174.36  the tax, provided that the reduction shall not exceed the 
175.1   maximum amounts specified in clause (c), and shall not exceed an 
175.2   amount sufficient to reduce the effective tax rate on each 
175.3   parcel of property to 95 percent of the base year effective tax 
175.4   rate.  In no case will the reduction for each homestead 
175.5   resulting from this credit be less than $10.  
175.6      (c) The maximum reduction of the tax is $225.40 on property 
175.7   described in clause (a) and $200.10 on property described in 
175.8   clause (b), for taxes payable in 1985.  These maximum amounts 
175.9   shall increase by $15 times the quantity one minus the homestead 
175.10  credit equivalency percentage per year for taxes payable in 1986 
175.11  and subsequent years through taxes payable in 1999.  Beginning 
175.12  with taxes payable in 2000 and thereafter, the maximum reduction 
175.13  of the tax under this subdivision will be $315.10. 
175.14     For the purposes of this subdivision, "homestead credit 
175.15  equivalency percentage" means one minus the ratio of the net 
175.16  class rate to the gross class rate applicable to the first 
175.17  $72,000 of the market value of residential homesteads, 
175.18  "effective tax rate" means tax divided by the market value of a 
175.19  property, and the "base year effective tax rate" means the 
175.20  payable 1988 tax on a property with an identical market value to 
175.21  that of the property receiving the credit in the current year 
175.22  after the application of the credits payable under Minnesota 
175.23  Statutes 1988, section 273.13, subdivisions 22 and 23, and this 
175.24  section, divided by the market value of the property.  
175.25     Sec. 13.  Minnesota Statutes 1996, section 273.1391, 
175.26  subdivision 2, is amended to read: 
175.27     Subd. 2.  The amount of the reduction authorized by 
175.28  subdivision 1 shall be: 
175.29     (a) In the case of property located within a school 
175.30  district which does not meet the qualifications of section 
175.31  273.134 as a tax relief area, but which is located in a county 
175.32  with a population of less than 100,000 in which taconite is 
175.33  mined or quarried and wherein a school district is located which 
175.34  does meet the qualifications of a tax relief area, and provided 
175.35  that at least 90 percent of the area of the school district 
175.36  which does not meet the qualifications of section 273.134 lies 
176.1   within such county, 57 percent of the tax on qualified property 
176.2   located in the school district that does not meet the 
176.3   qualifications of section 273.134, provided that the amount of 
176.4   said reduction shall not exceed the maximum amounts specified in 
176.5   clause (c), and shall not exceed an amount sufficient to reduce 
176.6   the effective tax rate on each parcel of property to the product 
176.7   of 95 percent of the base year effective tax rate multiplied by 
176.8   the ratio of the current year's tax rate to the payable 1989 tax 
176.9   rate.  In no case will the reduction for each homestead 
176.10  resulting from this credit be less than $10.  The reduction 
176.11  provided by this clause shall only be applicable to property 
176.12  located within the boundaries of the county described therein.  
176.13     (b) In the case of property located within a school 
176.14  district which does not meet the qualifications of section 
176.15  273.134 as a tax relief area, but which is located in a school 
176.16  district in a county containing a city of the first class and a 
176.17  qualifying municipality, but not in a school district containing 
176.18  a city of the first class or adjacent to a school district 
176.19  containing a city of the first class unless the school district 
176.20  so adjacent contains a qualifying municipality, 57 percent of 
176.21  the tax, but not to exceed the maximums specified in clause (c), 
176.22  and shall not exceed an amount sufficient to reduce the 
176.23  effective tax rate on each parcel of property to the product of 
176.24  95 percent of the base year effective tax rate multiplied by the 
176.25  ratio of the current year's tax rate to the payable 1989 tax 
176.26  rate.  In no case will the reduction for each homestead 
176.27  resulting from this credit be less than $10. 
176.28     (c) The maximum reduction of the tax is $200.10 for taxes 
176.29  payable in 1985.  This maximum amount shall increase by $15 
176.30  multiplied by the quantity one minus the homestead credit 
176.31  equivalency percentage per year for taxes payable in 1986 and 
176.32  subsequent years through taxes payable in 1999.  Beginning with 
176.33  taxes payable in 2000 and thereafter, the maximum reduction of 
176.34  the tax under this subdivision will be $289.80.  
176.35     For the purposes of this subdivision, "homestead credit 
176.36  equivalency percentage" means one minus the ratio of the net 
177.1   class rate to the gross class rate applicable to the first 
177.2   $72,000 of the market value of residential homesteads, and 
177.3   "effective tax rate" means tax divided by the market value of a 
177.4   property, and the "base year effective tax rate" means the 
177.5   payable 1988 tax on a property with an identical market value to 
177.6   that of the property receiving the credit in the current year 
177.7   after application of the credits payable under Minnesota 
177.8   Statutes 1988, section 273.13, subdivisions 22 and 23, and this 
177.9   section, divided by the market value of the property. 
177.10     Sec. 14.  Minnesota Statutes 1996, section 275.08, 
177.11  subdivision 1b, is amended to read: 
177.12     Subd. 1b.  [COMPUTATION OF TAX RATES.] The amounts 
177.13  certified to be levied against net tax capacity under section 
177.14  275.07 by an individual local government unit shall be divided 
177.15  by the total net tax capacity of all taxable properties within 
177.16  the local government unit's taxing jurisdiction.  The resulting 
177.17  ratio, the local government's local tax rate, multiplied by each 
177.18  property's net tax capacity shall be each property's net tax 
177.19  capacity tax for that local government unit before reduction by 
177.20  any credits.  The sum of the general education tax, if any, plus 
177.21  each local government's tax is the property's total property 
177.22  tax, before reduction by any credits. 
177.23     Any amount certified to the county auditor to be levied 
177.24  against market value shall be divided by the total referendum 
177.25  market value of all taxable properties within the taxing 
177.26  district.  The resulting ratio, the taxing district's new 
177.27  referendum tax rate, multiplied by each property's referendum 
177.28  market value shall be each property's new referendum tax before 
177.29  reduction by any credits.  For the purposes of this subdivision, 
177.30  "referendum market value" means the market value as defined in 
177.31  section 124A.02, subdivision 3b. 
177.32     Sec. 15.  Minnesota Statutes 1996, section 290.06, is 
177.33  amended by adding a subdivision to read: 
177.34     Subd. 25.  [PROPERTY TAX CREDIT FOR DISABLED.] (a) A 
177.35  disabled individual may claim a credit against the tax imposed 
177.36  by this chapter equal to 50 percent of the ad valorem homestead 
178.1   property tax paid during the taxable year.  The maximum credit 
178.2   allowed to an individual or a married couple for the year is 
178.3   $300.  Homestead tax means the tax paid on the individual's or 
178.4   married couple's principal residence, classified as class 1 
178.5   under section 273.13, subdivision 22. 
178.6      (b) If the amount of the credit under this subdivision 
178.7   exceeds the claimant's liability for tax, the commissioner shall 
178.8   refund the excess to the individual.  An amount sufficient to 
178.9   pay the refunds is appropriated to the commissioner from the 
178.10  general fund. 
178.11     (c) For purposes of this subdivision, a disabled person 
178.12  means: 
178.13     (1) a blind person; 
178.14     (2) a person who: 
178.15     (i) served in the active military or naval service of the 
178.16  United States; 
178.17     (ii) is entitled to compensation under the laws and 
178.18  regulations of the United States for permanent and total 
178.19  service-connected disability due to the loss, or loss of use, by 
178.20  reason of amputation, ankylosis, progressive muscular 
178.21  dystrophies, or paralysis of both lower extremities, such as to 
178.22  preclude motion without the aid of braces, crutches, canes, or a 
178.23  wheelchair; and 
178.24     (iii) has acquired a special housing unit with special 
178.25  fixtures or movable facilities made necessary by the nature of 
178.26  the veteran's disability; 
178.27     (3) the surviving spouse of a deceased individual who 
178.28  qualified under clause (2), for as long as the surviving spouse 
178.29  uses the special housing unit as the spouse's principal 
178.30  residence; 
178.31     (4) any person who: 
178.32     (i) is permanently and totally disabled; and 
178.33     (ii) receives 90 percent or more of the person's total 
178.34  income from one or more of the following: 
178.35     (A) aid from any state as a result of that disability; 
178.36     (B) supplemental security income for the disabled; 
179.1      (C) workers' compensation based on a finding of total and 
179.2   permanent disability; 
179.3      (D) social security disability, including the amount of a 
179.4   disability insurance benefit which is converted to an old-age 
179.5   insurance benefit and any subsequent cost-of-living increases; 
179.6      (E) aid under the federal Railroad Retirement Act of 1937, 
179.7   United States Code Annotated, title 45, section 228b(a)5; 
179.8      (F) a pension from any local government retirement fund 
179.9   located in the state of Minnesota as a result of that 
179.10  disability; 
179.11     (G) pension, annuity, or other income paid as a result of 
179.12  that disability from a private pension or disability plan, 
179.13  including employer, employee, union, and insurance plans; and 
179.14     (iii) has household income as defined in section 290A.03, 
179.15  subdivision 5, of $50,000 or less; or 
179.16     (5) any person who is permanently and totally disabled and 
179.17  whose household income as defined in section 290A.03, 
179.18  subdivision 5, is 150 percent or less of the federal poverty 
179.19  level. 
179.20     Permanently and totally disabled for purposes of this 
179.21  subdivision means a condition that is permanent and totally 
179.22  incapacitates the person from working at an occupation which 
179.23  brings the person an income. 
179.24     Sec. 16.  Minnesota Statutes 1996, section 290A.03, 
179.25  subdivision 6, is amended to read: 
179.26     Subd. 6.  [HOMESTEAD.] "Homestead" means the dwelling 
179.27  occupied as the claimant's principal residence and so much of 
179.28  the land surrounding it, not exceeding ten acres, as is 
179.29  reasonably necessary for use of the dwelling as a home and any 
179.30  other property used for purposes of a homestead as defined in 
179.31  section 273.13, subdivision 22, except for agricultural land 
179.32  assessed as part of a homestead pursuant to section 273.13, 
179.33  subdivision 23, "homestead" is limited to 320 acres or, where 
179.34  the farm homestead is rented, one acre 273.124.  The homestead 
179.35  may be owned or rented and may be a part of a multidwelling or 
179.36  multipurpose building and the land on which it is built.  A 
180.1   manufactured home, as defined in section 273.125, subdivision 8, 
180.2   or a park trailer taxed as a manufactured home under section 
180.3   168.012, subdivision 9, assessed as personal property may be a 
180.4   dwelling for purposes of this subdivision. 
180.5      Sec. 17.  Minnesota Statutes 1996, section 290A.04, 
180.6   subdivision 1, is amended to read: 
180.7      Subdivision 1.  A refund shall be is allowed each claimant 
180.8   in the amount that property taxes payable or rent constituting 
180.9   property taxes exceed the percentage of the household income of 
180.10  the claimant specified in subdivision 2 or 2a in the year for 
180.11  which the taxes were levied or in the year in which the rent was 
180.12  paid as specified in under subdivision 2 or 2a.  If the amount 
180.13  of property taxes payable or rent constituting property taxes is 
180.14  equal to or less than the percentage of the claimant's household 
180.15  income of the claimant is greater than the maximum amount 
180.16  specified in subdivision 2 or 2a in the year for which the taxes 
180.17  were levied or in the year in which the rent was paid, the 
180.18  claimant shall is not be eligible for a state refund pursuant to 
180.19  this section. 
180.20     Sec. 18.  Minnesota Statutes 1996, section 290A.04, 
180.21  subdivision 2, is amended to read: 
180.22     Subd. 2.  [HOMEOWNERS.] Each homeowner is allowed a 
180.23  standard refund equal to the lesser of: 
180.24     (1) 0.25 percent of the taxable market value of the 
180.25  homestead; or 
180.26     (2) $180. 
180.27     In addition to the standard refund, a claimant whose 
180.28  property taxes payable after subtraction of (1) the standard 
180.29  refund, and (2) the state education tax are in excess of the 
180.30  percentage 2.5 percent of the household income stated below 
180.31  shall pay an amount equal to the percent of income shown for the 
180.32  appropriate 2.5 percent of household income level along 
180.33  with plus the percent to be paid by the claimant of the 
180.34  remaining amount of property taxes payable as stated below.  The 
180.35  total state refund equals the amount of property taxes payable 
180.36  that remain plus the standard refund amount, up to the maximum 
181.1   state refund amount shown below.  
181.2                         Percent           Percent    Maximum
181.3   Household Income     of Income          Paid by     State
181.4                                           Claimant    Refund
181.5       $0 to 1,029     1.2 percent        18 percent   $440
181.6    1,030 to 2,059     1.3 percent        18 percent   $440
181.7    2,060 to 3,099     1.4 percent        20 percent   $440
181.8    3,100 to 4,129     1.6 percent        20 percent   $440
181.9    4,130 to 5,159     1.7 percent        20 percent   $440
181.10   5,160 to 7,229     1.9 percent        25 percent   $440
181.11   7,230 to 8,259     2.1 percent        25 percent   $440
181.12   8,260 to 9,289     2.2 percent        25 percent   $440
181.13   9,290 to 10,319    2.3 percent        30 percent   $440
181.14  10,320 to 11,349    2.4 percent        30 percent   $440
181.15  11,350 to 12,389    2.5 percent        30 percent   $440
181.16  12,390 to 14,449    2.6 percent        30 percent   $440
181.17  14,450 to 15,479    2.8 percent        35 percent   $440
181.18  15,480 to 16,509    3.0 percent        35 percent   $440
181.19  16,510 to 17,549    3.2 percent        40 percent   $440
181.20  17,550 to 21,669    3.3 percent        40 percent   $440
181.21  21,670 to 24,769    3.4 percent        45 percent   $440
181.22  24,770 to 30,959    3.5 percent        45 percent   $440
181.23  30,960 to 36,119    3.5 percent        45 percent   $440
181.24  36,120 to 41,279    3.7 percent        50 percent   $440
181.25  41,280 to 58,829    4.0 percent        50 percent   $440
181.26  58,830 to 59,859    4.0 percent        50 percent   $310
181.27  59,860 to 60,889    4.0 percent        50 percent   $210
181.28  60,890 to 61,929    4.0 percent        50 percent   $100 
181.29     
181.30                               Percent Paid      Maximum State
181.31       Household Income        by Claimant       Refund
181.33           $0 to  4,999        20 percent        $750
181.34        5,000 to  9,999        20 percent        $750
181.35       10,000 to 14,999        30 percent        $750
181.36       15,000 to 19,999        35 percent        $750
181.37       20,000 to 24,999        40 percent        $750
181.38       25,000 to 29,999        45 percent        $750
181.39       30,000 to 34,999        50 percent        $750
181.40       35,000 to 39,999        55 percent        $750
181.41       40,000 to 44,999        60 percent        $700
181.42       45,000 to 49,999        60 percent        $650
181.43       50,000 to 54,999        60 percent        $600
181.44       55,000 to 59,999        60 percent        $550
181.45       60,000 to 64,999        60 percent        $500
181.46       65,000 to 69,499        60 percent        $450
181.47       69,500 to 73,999        60 percent        $400
181.48       74,000 to 77,499        60 percent        $350
181.49       77,500 to 81,999        60 percent        $300
181.50       82,000 to 85,499        60 percent        $250
181.51       85,500 to 89,999        60 percent        $200
181.52       90,000 to 94,499        60 percent        $150
181.53       94,500 to 97,499        60 percent        $100
181.54       97,500 to 99,999        60 percent        $ 50
181.55     The payment made to a claimant shall be the amount of the 
181.56  state refund calculated under this subdivision.  No payment is 
181.57  allowed if the claimant's household income is $61,930 $100,000 
181.58  or more. 
181.59     Sec. 19.  Minnesota Statutes 1996, section 290A.04, 
181.60  subdivision 6, is amended to read: 
181.61     Subd. 6.  [INFLATION ADJUSTMENT.] Beginning for property 
182.1   tax refunds payable in calendar year 1996, the commissioner 
182.2   shall annually adjust the dollar amounts of the income 
182.3   thresholds and the maximum refunds under subdivisions 2 and 2a 
182.4   for inflation.  The commissioner shall make the inflation 
182.5   adjustments in accordance with section 290.06, subdivision 2d, 
182.6   except that for purposes of this subdivision the percentage 
182.7   increase shall be determined from the year ending on August 31, 
182.8   1994, to the year ending on August 31 of the year preceding that 
182.9   in which the refund is payable.  The commissioner shall not 
182.10  adjust the dollar amounts under subdivision 2 for refunds that 
182.11  are payable in calendar year 2001.  Beginning for refunds 
182.12  payable in 2002, the base year for adjustment of the dollar 
182.13  amounts in subdivision 2 is the year ending June 30, 2000.  The 
182.14  commissioner shall use the appropriate percentage increase to 
182.15  annually adjust the income thresholds and maximum refunds under 
182.16  subdivisions 2 and 2a for inflation without regard to whether or 
182.17  not the income tax brackets are adjusted for inflation in that 
182.18  year.  The commissioner shall round the thresholds and the 
182.19  maximum amounts, as adjusted to the nearest $10 amount.  If the 
182.20  amount ends in $5, the commissioner shall round it up to the 
182.21  next $10 amount.  
182.22     The commissioner shall annually announce the adjusted 
182.23  refund schedule at the same time provided under section 290.06.  
182.24  The determination of the commissioner under this subdivision is 
182.25  not a rule under the administrative procedure act. 
182.26     Sec. 20.  Minnesota Statutes 1996, section 298.24, 
182.27  subdivision 1, is amended to read: 
182.28     Subdivision 1.  (a) For concentrate produced in 1992, 1993, 
182.29  1994, and 1995 there is imposed upon taconite and iron 
182.30  sulphides, and upon the mining and quarrying thereof, and upon 
182.31  the production of iron ore concentrate therefrom, and upon the 
182.32  concentrate so produced, a tax of $2.054 per gross ton of 
182.33  merchantable iron ore concentrate produced therefrom.  
182.34     (b) For concentrates produced in 1996 and subsequent years 
182.35  1997, 1998, and 1999, the tax rate shall be equal to the 
182.36  preceding year's tax rate plus an amount equal to the preceding 
183.1   year's tax rate multiplied by the percentage increase in the 
183.2   implicit price deflator from the fourth quarter of the second 
183.3   preceding year to the fourth quarter of the preceding year, 
183.4   provided that, for concentrates produced in 1996 only, the 
183.5   increase in the rate of tax imposed under this section over the 
183.6   rate imposed for the previous year may not exceed four cents per 
183.7   ton.  "Implicit price deflator" for the gross national product 
183.8   means the implicit price deflator prepared by the bureau of 
183.9   economic analysis of the United States Department of 
183.10  Commerce.  For concentrates produced in 2000 and subsequent 
183.11  years, the tax rate shall be equal to the tax rate determined 
183.12  under this subdivision for 1999. 
183.13     (c) The tax shall be imposed on the average of the 
183.14  production for the current year and the previous two years.  The 
183.15  rate of the tax imposed will be the current year's tax rate.  
183.16  This clause shall not apply in the case of the closing of a 
183.17  taconite facility if the property taxes on the facility would be 
183.18  higher if this clause and section 298.25 were not applicable.  
183.19     (d) If the tax or any part of the tax imposed by this 
183.20  subdivision is held to be unconstitutional, a tax of $2.054 per 
183.21  gross ton of merchantable iron ore concentrate produced shall be 
183.22  imposed.  
183.23     (e) Consistent with the intent of this subdivision to 
183.24  impose a tax based upon the weight of merchantable iron ore 
183.25  concentrate, the commissioner of revenue may indirectly 
183.26  determine the weight of merchantable iron ore concentrate 
183.27  included in fluxed pellets by subtracting the weight of the 
183.28  limestone, dolomite, or olivine derivatives or other basic flux 
183.29  additives included in the pellets from the weight of the 
183.30  pellets.  For purposes of this paragraph, "fluxed pellets" are 
183.31  pellets produced in a process in which limestone, dolomite, 
183.32  olivine, or other basic flux additives are combined with 
183.33  merchantable iron ore concentrate.  No subtraction from the 
183.34  weight of the pellets shall be allowed for binders, mineral and 
183.35  chemical additives other than basic flux additives, or moisture. 
183.36     (f)(1) Notwithstanding any other provision of this 
184.1   subdivision, for the first five years of a plant's production of 
184.2   direct reduced ore, the rate of the tax on direct reduced ore is 
184.3   determined under this paragraph.  As used in this paragraph, 
184.4   "direct reduced ore" is ore that results in a product that has 
184.5   an iron content of at least 75 percent.  The rate to be applied 
184.6   to direct reduced ore is 25 percent of the rate otherwise 
184.7   determined under this subdivision for the first 500,000 of 
184.8   taxable tons for the production year, and 50 percent of the rate 
184.9   otherwise determined for any remainder.  If the taxpayer had no 
184.10  production in the two years prior to the current production 
184.11  year, the tonnage eligible to be taxed at 25 percent of the rate 
184.12  otherwise determined under this subdivision is the first 166,667 
184.13  tons.  If the taxpayer had some production in the year prior to 
184.14  the current production year but no production in the second 
184.15  prior year, the tonnage eligible to be taxed at 25 percent of 
184.16  the rate otherwise determined under this subdivision is the 
184.17  first 333,333 tons. 
184.18     (2) Production of direct reduced ore in this state is 
184.19  subject to the tax imposed by this section, but if that 
184.20  production is not produced by a producer of taconite or iron 
184.21  sulfides, the production of taconite or iron sulfides consumed 
184.22  in the production of direct reduced iron in this state is not 
184.23  subject to the tax imposed by this section on taconite or iron 
184.24  sulfides. 
184.25     Sec. 21.  [REPEALER.] 
184.26     Minnesota Statutes 1996, sections 273.13, subdivision 21a; 
184.27  273.1315; 275.08, subdivisions 1c and 1d; and 275.61, are 
184.28  repealed. 
184.29     Sec. 22.  [EFFECTIVE DATE.] 
184.30     Sections 1 to 4 and 6 to 14 and 21 are effective for taxes 
184.31  levied in 1999, payable in 2000 and subsequent years.  
184.32     Section 15 is effective for tax years beginning after 1999. 
184.33     Sections 16 to 19 are effective for refunds payable in 2000 
184.34  and following years. 
184.35     Section 20 is effective January 1, 2000. 
184.36                             ARTICLE 7
185.1                  EDUCATION FINANCE REFORM PAY 2000 
185.2      Section 1.  Minnesota Statutes 1996, section 122.247, 
185.3   subdivision 3, is amended to read: 
185.4      Subd. 3.  [TRANSITIONAL LEVY REVENUE.] The board of the 
185.5   combined district, or the boards of combining districts that 
185.6   have received voter approval for the combination under section 
185.7   122.243, subdivision 2, may levy are eligible for state aid to 
185.8   pay for the expenses of negotiation, administrative expenses 
185.9   directly related to the transition from cooperation to 
185.10  combination, and the cost of necessary new athletic and music 
185.11  uniforms.  The board or boards may levy this amount over three 
185.12  or fewer years.  All expenses must be approved by the 
185.13  commissioner of children, families, and learning.  The 
185.14  commissioner may pay this state aid to a district over three or 
185.15  fewer years.  
185.16     Sec. 2.  Minnesota Statutes 1996, section 122.45, 
185.17  subdivision 3a, is amended to read: 
185.18     Subd. 3a.  (a) Liabilities of a dissolved district existing 
185.19  at the time of the attachment other than bonded debt within the 
185.20  purview of subdivision 2 shall be obligations of the 
185.21  consolidated district after attachment (in the amount and kind 
185.22  determined by the commissioner according to subdivision 1, where 
185.23  a dissolved district is divided), for the payment of which the 
185.24  consolidated district has a right to reimbursement by special 
185.25  levy or levies state aid.  The amount of reimbursement will be 
185.26  equal to the liabilities of the dissolved district for which the 
185.27  consolidated district is obligated less the aggregate of the 
185.28  following which has been or will be received by the consolidated 
185.29  district at or after the time of attachment from or as a result 
185.30  of the dissolution and attachment of the dissolved district: 
185.31     (1) all taxes inuring to the consolidating district upon 
185.32  levies made by the dissolved district; 
185.33     (2) all cash, bank accounts, investments, and other current 
185.34  assets; 
185.35     (3) earned state aids of the dissolved districts; 
185.36     (4) returns from the sale of property of the dissolved 
186.1   district. 
186.2      (b) The amount of such special levy so computed shall be 
186.3   certified to the county auditor with the other tax requirements 
186.4   of the consolidated district but separately stated and 
186.5   identified.  The auditor shall add the amount of special levy so 
186.6   certified to the school rate for the territory in the 
186.7   consolidated district which came from the dissolved district and 
186.8   include it in the levy on the taxable property in that 
186.9   territory; provided, the county auditor shall not spread more of 
186.10  the amount certified for special levy in any year than will 
186.11  amount to 20 percent of the school levy without the special 
186.12  levy, leaving the remaining part of the certified amount for 
186.13  levy in successive years without further certification.  Any 
186.14  amount of reimbursement to which it is entitled omitted by the 
186.15  consolidated district from its initial certification for special 
186.16  levy may be certified in a subsequent year for levy in the same 
186.17  manner as the levy upon initial certification. 
186.18     The levy authorized by this subdivision shall be in 
186.19  addition to those otherwise authorized for a school district. 
186.20  state aid shall be calculated by the commissioner and may be 
186.21  reduced at the commissioner's discretion for any liabilities 
186.22  that the commissioner determines are inappropriate for 
186.23  reimbursement. 
186.24     Sec. 3.  Minnesota Statutes 1996, section 122.531, 
186.25  subdivision 4a, is amended to read: 
186.26     Subd. 4a.  [REORGANIZATION OPERATING DEBT LEVIES REVENUE.] 
186.27  (a) A district that receives revenue under section 124.2725 for 
186.28  cooperation or has combined according to sections 122.241 to 
186.29  122.248 may levy is eligible for state aid to eliminate 
186.30  reorganization operating debt as defined in section 121.915, 
186.31  clause (1).  The amount of the debt must be certified over a 
186.32  period of five years.  After the effective date of combination 
186.33  according to sections 122.241 to 122.248, the levy may be 
186.34  certified and spread either 
186.35     (1) only on the property in the combined district that 
186.36  would have been taxable in the preexisting district that 
187.1   incurred the debt, or 
187.2      (2) on all of the taxable property in the combined district.
187.3      (b) A district that has reorganized according to section 
187.4   122.22 or 122.23 may levy is eligible for state aid to eliminate 
187.5   reorganization operating debt as defined in section 121.915, 
187.6   clause (2).  The amount of debt must be certified over a period 
187.7   not to exceed five years and may be spread either 
187.8      (1) only on the property in the newly created or enlarged 
187.9   district which was taxable in the preexisting district that 
187.10  incurred the debt, or 
187.11     (2) on all of the taxable property in the newly created or 
187.12  enlarged district. 
187.13     (c) The commissioner shall calculate the amount of 
187.14  reorganization operating debt for each qualifying school 
187.15  district.  At the commissioner's discretion, the amount of the 
187.16  state aid may be reduced for any school district.  The 
187.17  commissioner shall establish a schedule for the payment of state 
187.18  aid.  The schedule may extend for up to five years. 
187.19     Sec. 4.  Minnesota Statutes 1996, section 122.531, 
187.20  subdivision 9, is amended to read: 
187.21     Subd. 9.  [LEVY REVENUE FOR SEVERANCE PAY OR EARLY 
187.22  RETIREMENT INCENTIVES.] The school board of a newly created or 
187.23  enlarged district to which part or all of a dissolved district 
187.24  was attached according to section 122.22 may levy for is 
187.25  eligible for state aid payments for the cost of severance pay or 
187.26  early retirement incentives for licensed and nonlicensed 
187.27  employees who resign or retire early as a result of the 
187.28  dissolution or consolidation, if the commissioner of children, 
187.29  families, and learning approves the incentives and the amount to 
187.30  be levied.  The amount may be levied over a period of up to five 
187.31  years and shall be spread in whole or in part on the property of 
187.32  a preexisting district or the newly created or enlarged 
187.33  district, as determined by the school board of the newly created 
187.34  or enlarged district of the incentives.  The commissioner shall 
187.35  establish a schedule for the payment of state aid.  The schedule 
187.36  may extend for up to five years. 
188.1      Sec. 5.  Minnesota Statutes 1996, section 122.533, is 
188.2   amended to read: 
188.3      122.533 [EXPENSES OF TRANSITION.] 
188.4      The board of a district to which a dissolved district is 
188.5   attached pursuant to section 122.22, may, is eligible for state 
188.6   aid for the purpose of paying the expenses of negotiations and 
188.7   other administrative expenses relating to the transition,.  The 
188.8   board of the district may enter into agreements with banks or 
188.9   any person to take its orders at any rate of interest not to 
188.10  exceed seven percent per annum.  These orders shall be paid by 
188.11  the treasurer of the district from district funds after the 
188.12  effective date of the dissolution and attachment.  
188.13  Notwithstanding the provisions of sections 124.226, 124.2716, 
188.14  124.91, 124.912, 124.914, 124.916, and 124.918, the district may 
188.15  is, in the year the dissolution and attachment becomes 
188.16  effective, levy eligible for state aid in an amount equal to the 
188.17  amount of the orders issued pursuant to this subdivision and the 
188.18  interest on these orders.  No district shall issue orders for 
188.19  funds or make a levy pursuant according to this subdivision 
188.20  without the commissioner's approval of the expenses to be paid 
188.21  with the funds from the orders and levy state aid. 
188.22     Sec. 6.  Minnesota Statutes 1996, section 122.535, 
188.23  subdivision 6, is amended to read: 
188.24     Subd. 6.  [SEVERANCE PAY.] A district shall pay severance 
188.25  pay to a teacher who is placed on unrequested leave of absence 
188.26  by the district as a result of the agreement.  A teacher is 
188.27  eligible under this subdivision if the teacher: 
188.28     (1) is a teacher, as defined in section 125.12, subdivision 
188.29  1, but not a superintendent; 
188.30     (2) has a continuing contract with the district according 
188.31  to section 125.12, subdivision 4. 
188.32     The amount of severance pay shall be equal to the teacher's 
188.33  salary for the school year during which the teacher was placed 
188.34  on unrequested leave of absence minus the gross amount the 
188.35  teacher was paid during the 12 months following the teacher's 
188.36  termination of salary, by an entity whose teachers by statute or 
189.1   rule must possess a valid Minnesota teaching license, and minus 
189.2   the amount a teacher receives as severance or other similar pay 
189.3   according to a contract with the district or district policy.  
189.4   These entities include, but are not limited to, the school 
189.5   district that placed the teacher on unrequested leave of 
189.6   absence, another school district in Minnesota, an education 
189.7   district, an intermediate school district, a SC, a board formed 
189.8   under section 471.59, a state residential academy, the Lola and 
189.9   Rudy Perpich Minnesota center for arts education, a vocational 
189.10  center, or a special education cooperative.  These entities do 
189.11  not include a school district in another state, a Minnesota 
189.12  public post-secondary institution, or a state agency.  Only 
189.13  amounts earned by the teacher as a substitute teacher or in a 
189.14  position requiring a valid Minnesota teaching license shall be 
189.15  subtracted.  A teacher may decline any offer of employment as a 
189.16  teacher without loss of rights to severance pay. 
189.17     To determine the amount of severance pay that is due for 
189.18  the first six months following termination of the teacher's 
189.19  salary, the district may require the teacher to provide 
189.20  documented evidence of the teacher's employers and gross 
189.21  earnings during that period.  The district shall pay the teacher 
189.22  the amount of severance pay it determines to be due from the 
189.23  proceeds of the levy state aid for this purpose.  To determine 
189.24  the amount of severance pay that is due for the second six 
189.25  months of the 12 months following the termination of the 
189.26  teacher's salary, the district may require the teacher to 
189.27  provide documented evidence of the teacher's employers and gross 
189.28  earnings during that period.  The district shall pay the teacher 
189.29  the amount of severance pay it determines to be due from 
189.30  the proceeds of the levy state aid for this purpose.  
189.31     A teacher who receives severance pay under this subdivision 
189.32  waives all further reinstatement rights under section 125.12, 
189.33  subdivision 6a or 6b.  If the teacher receives severance pay, 
189.34  the teacher shall not receive credit for any years of service in 
189.35  the district paying severance pay prior to the year in which the 
189.36  teacher becomes eligible to receive severance pay. 
190.1      The severance pay is subject to section 465.72.  The 
190.2   district may levy annually is eligible for state aid according 
190.3   to section 124.912, subdivision 1, for the severance pay.  
190.4      Sec. 7.  Minnesota Statutes 1996, section 124.2131, 
190.5   subdivision 1, is amended to read: 
190.6      Subdivision 1.  [ADJUSTED NET TAX CAPACITY.] (a) 
190.7   [COMPUTATION.] The department of revenue shall annually conduct 
190.8   an assessment/sales ratio study of the taxable property in each 
190.9   school district in accordance with the procedures in paragraphs 
190.10  (b) and (c).  Based upon the results of this assessment/sales 
190.11  ratio study, the department of revenue shall determine an 
190.12  aggregate equalized net local tax capacity for the various 
190.13  classes of taxable property in each county, city, town, and 
190.14  school district under the definition of tax base contained in 
190.15  section 273.13, subdivision 1a, which tax capacity shall be 
190.16  designated as the adjusted net local tax capacity.  Based upon 
190.17  the results of the study, the department shall determine an 
190.18  aggregate equalized education tax capacity for each school 
190.19  district under the definition of tax base contained in section 
190.20  273.13, subdivision 1b, which shall be designated as the 
190.21  adjusted education tax capacity.  The adjusted net tax 
190.22  capacities shall be determined using the net tax capacity 
190.23  percentages in effect for the assessment year following the 
190.24  assessment year of the study.  The department of revenue shall 
190.25  make whatever estimates are necessary to account for changes in 
190.26  the classification system.  The department of revenue may incur 
190.27  the expense necessary to make the determinations.  The 
190.28  commissioner of revenue may reimburse any county or governmental 
190.29  official for requested services performed in ascertaining the 
190.30  adjusted net tax capacity.  On or before March 15 annually, the 
190.31  department of revenue shall file with the chair of the tax 
190.32  committee of the house of representatives and the chair of the 
190.33  committee on taxes and tax laws of the senate a report of 
190.34  adjusted net tax capacities.  On or before June 15 annually, the 
190.35  department of revenue shall file its final report on the 
190.36  adjusted net education tax capacities established by the 
191.1   previous year's assessments and the current year's net education 
191.2   tax capacity percentages with the commissioner of children, 
191.3   families, and learning and each county auditor for those school 
191.4   districts for which the auditor has the responsibility for 
191.5   determination of local tax rates.  A copy of the report so filed 
191.6   shall be mailed to the clerk of each district involved and to 
191.7   the county assessor or supervisor of assessments of the county 
191.8   or counties in which each district is located. 
191.9      (b)  [METHODOLOGY.] In making its annual assessment/sales 
191.10  ratio studies, the department of revenue shall use a methodology 
191.11  consistent with the most recent Standard on Assessment Ratio 
191.12  Studies published by the assessment standards committee of the 
191.13  International Association of Assessing Officers.  The 
191.14  commissioner of revenue shall supplement this general 
191.15  methodology with specific procedures necessary for execution of 
191.16  the study in accordance with other Minnesota laws impacting the 
191.17  assessment/sales ratio study.  The commissioner shall document 
191.18  these specific procedures in writing and shall publish the 
191.19  procedures in the State Register, but these procedures will not 
191.20  be considered "rules" pursuant to the Minnesota administrative 
191.21  procedure act.  For purposes of this section, sections 270.12, 
191.22  subdivision 2, clause (8), and 278.05, subdivision 4, the 
191.23  commissioner of revenue shall exclude from the assessment/sales 
191.24  ratio study the sale of any nonagricultural property which does 
191.25  not contain an improvement, if (1) the statutory basis on which 
191.26  the property's taxable value as most recently assessed is less 
191.27  than market value as defined in section 273.11, or (2) the 
191.28  property has undergone significant physical change or a change 
191.29  of use since the most recent assessment.  
191.30     (c)  [AGRICULTURAL LANDS.] For purposes of determining the 
191.31  adjusted net tax capacity of agricultural lands for the 
191.32  calculation of adjusted net tax capacities, the market value of 
191.33  agricultural lands shall be the price for which the property 
191.34  would sell in an arms length transaction. 
191.35     (d)  [FORCED SALES.] The commissioner may include forced 
191.36  sales in the assessment/sales ratio studies if it is determined 
192.1   by the commissioner that these forced sales indicate true market 
192.2   value. 
192.3      (e)  [STIPULATED VALUES AND ABATEMENTS.] The estimated 
192.4   market value to be used in calculating sales ratios shall be the 
192.5   value established by the assessor before any stipulations 
192.6   resulting from appeals by property owners and before any 
192.7   abatement unless the abatement was granted for the purpose of 
192.8   correcting mere clerical errors. 
192.9      (f)  [SALES OF INDUSTRIAL PROPERTY.] Separate sales ratios 
192.10  shall be calculated for commercial property and for industrial 
192.11  property.  These two classes shall be combined only in 
192.12  jurisdictions in which there is not an adequate sample of sales 
192.13  in each class. 
192.14     Sec. 8.  Minnesota Statutes 1996, section 124.239, 
192.15  subdivision 5, is amended to read: 
192.16     Subd. 5.  [LEVY AUTHORIZED.] A district, after local board 
192.17  approval, may levy for costs related to an approved facility 
192.18  plan as follows:  
192.19     (a) if the district has indicated to the commissioner that 
192.20  bonds will be issued, the district may levy for the principal 
192.21  and interest payments on outstanding bonds issued according to 
192.22  subdivision 3; or 
192.23     (b) if the district has indicated to the commissioner that 
192.24  the plan will be funded through levy, the district may levy 
192.25  according to the schedule approved in the plan. 
192.26     The authority to levy for costs related to an approved 
192.27  facility plan under this section is limited to facilities plans 
192.28  approved prior to July 1, 1999. 
192.29     Sec. 9.  Minnesota Statutes 1996, section 124.2725, 
192.30  subdivision 2, is amended to read: 
192.31     Subd. 2.  [COOPERATION AND COMBINATION REVENUE.] 
192.32  Cooperation and combination revenue equals $100 times the pupil 
192.33  units served in the district.  For purposes of this section, 
192.34  pupil units served means the number of resident and nonresident 
192.35  pupil units in average daily membership receiving instruction in 
192.36  the cooperating or combined district.  A district may not 
193.1   receive revenue under this section if it levies receives revenue 
193.2   under section 124.912, subdivision 4.  Cooperation and 
193.3   combination revenue is provided through state aid. 
193.4      Sec. 10.  Minnesota Statutes 1996, section 124.2725, 
193.5   subdivision 6, is amended to read: 
193.6      Subd. 6.  [ADDITIONAL AID.] In addition to the aid in 
193.7   subdivision 5 2, districts shall receive aid according to the 
193.8   following: 
193.9      (1) for districts that did not enter into an agreement 
193.10  under section 122.541 at least three years before the date of a 
193.11  successful referendum held under section 122.243, subdivision 2, 
193.12  and combine without cooperating, $100 times the pupil units 
193.13  served in the district in the first year of combination; or 
193.14     (2) for districts that combine after one or two years of 
193.15  cooperation, $100 times the actual pupil units served in each 
193.16  district for the first year of cooperation and $100 times the 
193.17  actual pupil units served in the combined district for the first 
193.18  year of combination; or 
193.19     (3) for districts that entered into an agreement under 
193.20  section 122.541 at least three years before the date of a 
193.21  successful referendum held under section 122.243, subdivision 2, 
193.22  and combine without cooperating, $100 times the pupil units 
193.23  served in the combined district for the first two years of 
193.24  combination. 
193.25     Sec. 11.  Minnesota Statutes 1996, section 124.2725, 
193.26  subdivision 13, is amended to read: 
193.27     Subd. 13.  [FAILURE TO COMBINE.] A district has failed to 
193.28  combine if the commissioner disapproves of the plan according to 
193.29  section 122.243, subdivision 1, or if a third referendum fails 
193.30  under section 122.243, subdivision 2, or if the commissioner of 
193.31  children, families, and learning determines that the districts 
193.32  involved are not making sufficient progress toward combination. 
193.33     (a) If a district has failed to combine, cooperation and 
193.34  combination aid under subdivisions 5 and 6 shall not be paid and 
193.35  the authority to levy under subdivision 4 ceases.  The 
193.36  commissioner shall reduce other aids due the district to recover 
194.1   an amount equal to the aid paid under subdivision 6 plus the 
194.2   difference between the aid paid under subdivision 5 and the aid 
194.3   that would have been paid if the revenue had been $50 times the 
194.4   pupil units served.  
194.5      (b) If a district has failed to combine, the authority to 
194.6   levy eligibility for revenue for reorganization operating debt 
194.7   under section 122.531, subdivision 4a, and for severance pay or 
194.8   early retirement incentives under subdivision 15 ceases. 
194.9      Sec. 12.  Minnesota Statutes 1996, section 124.2725, 
194.10  subdivision 14, is amended to read: 
194.11     Subd. 14.  [CESSATION OF REVENUE.] At any time the 
194.12  districts cease cooperating, aid shall not be paid and the 
194.13  authority to levy ceases.  If a district ceases to cooperate for 
194.14  all or a portion of a fiscal year for which a levy has been 
194.15  certified under subdivision 3, the department of children, 
194.16  families, and learning shall adjust the next levy certified by 
194.17  the district by an amount in proportion to the part of the 
194.18  fiscal year that the district did not cooperate. 
194.19     Sec. 13.  Minnesota Statutes 1996, section 124.2726, 
194.20  subdivision 1, is amended to read: 
194.21     Subdivision 1.  [ELIGIBILITY AND USE.] A school district 
194.22  that has been reorganized after June 30, 1994, under section 
194.23  122.23 is eligible for consolidation transition revenue.  
194.24  Revenue is equal to the sum of aid under subdivision 
194.25  subdivisions 2 and levy under subdivision 3.  Consolidation 
194.26  transition revenue may only be used according to this section.  
194.27  Revenue must be used for the following purposes and may be 
194.28  distributed among these purposes at the discretion of the 
194.29  district: 
194.30     (1) to offer early retirement incentives as provided by 
194.31  section 122.23, subdivision 20; 
194.32     (2) to reduce operating debt as defined in section 121.915; 
194.33     (3) to enhance learning opportunities for students in the 
194.34  reorganized district; and 
194.35     (4) for other costs incurred in the reorganization. 
194.36     Revenue received and utilized under clause (3) or (4) may 
195.1   be expended for operating, facilities, and/or equipment.  
195.2   Revenue received under this section shall not be included in the 
195.3   determination of the reduction under section 124A.26, 
195.4   subdivision 1.  
195.5      Sec. 14.  Minnesota Statutes 1996, section 124.2726, 
195.6   subdivision 3, is amended to read: 
195.7      Subd. 3.  [LEVY ADDITIONAL AID.] If the aid available in 
195.8   subdivision 2 is insufficient to cover the costs of the district 
195.9   under section 122.23, subdivision 20, the district may levy 
195.10  apply to the commissioner for state aid to cover the difference 
195.11  over a period of time not to exceed.  The commissioner shall 
195.12  evaluate the aid request and may award additional aid for a 
195.13  period not to exceed three years.  
195.14     Sec. 15.  Minnesota Statutes 1996, section 124.2727, 
195.15  subdivision 6a, is amended to read: 
195.16     Subd. 6a.  [DISTRICT COOPERATION REVENUE.] A district's 
195.17  cooperation revenue is equal to the greater of $67 times the 
195.18  actual pupil units or $25,000.  District cooperation revenue is 
195.19  provided through state aid. 
195.20     Sec. 16.  Minnesota Statutes 1996, section 124.312, 
195.21  subdivision 5, is amended to read: 
195.22     Subd. 5.  [INTEGRATION AID.] For fiscal year 1996 and later 
195.23  fiscal years Integration revenue is provided through state aid 
195.24  and equals the following amounts: 
195.25     (1) for independent school district No. 709, Duluth, 
195.26  $1,385,000 plus the sum of $660,000 and an amount equal to 2.0 
195.27  percent times the district's adjusted net tax capacity for 
195.28  assessment year 1998; 
195.29     (2) for independent school district No. 625, St. Paul, 
195.30  $8,090,700 plus the product of $197 and the district's actual 
195.31  pupil units for that year; and 
195.32     (3) for special school district No. 1, Minneapolis, 
195.33  $9,368,300 plus the product of $197 and the district's actual 
195.34  pupil units for that year. 
195.35     Sec. 17.  Minnesota Statutes 1996, section 124.313, is 
195.36  amended to read: 
196.1      124.313 [TARGETED NEEDS REVENUE.] 
196.2      For fiscal year 1996 and thereafter, a school district's 
196.3   targeted needs revenue equals the sum of: 
196.4      (1) assurance of mastery revenue according to section 
196.5   124.311; plus 
196.6      (2) the district's limited English proficiency revenue 
196.7   computed according to section 124.273, subdivision 1d; plus 
196.8      (3) integration revenue computed according to section 
196.9   124.312, subdivision 4. 
196.10     Sec. 18.  Minnesota Statutes 1996, section 124.4945, is 
196.11  amended to read: 
196.12     124.4945 [LEVY STATE AID FOR SEVERANCE PAY.] 
196.13     A joint powers board established under section 124.494 may 
196.14  make a levy is eligible to receive state aid to provide 
196.15  severance pay and early retirement incentives under section 
196.16  125.611, for any teacher as defined under section 125.12, 
196.17  subdivision 1, who is placed on unrequested leave as a result of 
196.18  the cooperative secondary facility agreement.  A joint powers 
196.19  board making a levy shall certify to each participating district 
196.20  tax levies sufficient to raise the amount necessary to provide 
196.21  the district's portion of severance pay and early retirement 
196.22  incentives.  The tax levy certified to each district must be 
196.23  expressed as a local tax rate, that, when applied to the 
196.24  adjusted net tax capacity of all of the participating districts 
196.25  raises the amount necessary to provide severance pay and early 
196.26  retirement incentives.  Each participating school district shall 
196.27  include the levy in the next tax roll which it shall certify to 
196.28  the county auditor, and shall remit the collections of the levy 
196.29  to the joint powers board.  The commissioner shall approve any 
196.30  severance pay agreements or early retirement incentives and 
196.31  determine the amount of state aid for the districts. 
196.32     Sec. 19.  Minnesota Statutes 1996, section 124.83, 
196.33  subdivision 3, is amended to read: 
196.34     Subd. 3.  [HEALTH AND SAFETY REVENUE.] A district's health 
196.35  and safety revenue for a fiscal year equals: 
196.36     (1) the sum of (a) the total approved cost of the 
197.1   district's hazardous substance plan for fiscal years 1985 
197.2   through 1989, plus (b) the total approved cost of the district's 
197.3   health and safety program for fiscal year 1990 through the 
197.4   fiscal year to which the levy is attributable, minus 
197.5      (2) the sum of (a) the district's total hazardous substance 
197.6   aid and levy for fiscal years 1985 through 1989 under sections 
197.7   124.245 and 275.125, subdivision 11c, plus (b) the district's 
197.8   health and safety revenue under this subdivision, for years 
197.9   before the fiscal year to which the levy is attributable, plus 
197.10  (c) the amount of other federal, state, or local receipts for 
197.11  the district's hazardous substance or health and safety programs 
197.12  for fiscal year 1985 through the fiscal year to which the levy 
197.13  is attributable.  
197.14     The commissioner shall not approve any new health and 
197.15  safety revenue plans after July 1, 1999. 
197.16     Sec. 20.  Minnesota Statutes 1996, section 124.91, 
197.17  subdivision 1, is amended to read: 
197.18     Subdivision 1.  [TO LEASE BUILDING OR LAND.] When a 
197.19  district finds it economically advantageous to rent or lease a 
197.20  building or land for any instructional purposes or for school 
197.21  storage or furniture repair, and it determines that the capital 
197.22  expenditure facilities revenues authorized under sections 
197.23  124.243 and 124A.22, subdivision 10, are insufficient for this 
197.24  purpose, it may apply to the commissioner for permission to make 
197.25  an additional capital expenditure levy for this purpose.  The 
197.26  commissioner shall not approve any levies under this section 
197.27  after July 1, 1999.  A school district that has approved levy 
197.28  authority under this section may continue to levy for the 
197.29  remainder of the lease amounts.  An application for permission 
197.30  to levy under this subdivision must contain financial 
197.31  justification for the proposed levy, the terms and conditions of 
197.32  the proposed lease, and a description of the space to be leased 
197.33  and its proposed use.  The criteria for approval of applications 
197.34  to levy under this subdivision must include:  the reasonableness 
197.35  of the price, the appropriateness of the space to the proposed 
197.36  activity, the feasibility of transporting pupils to the leased 
198.1   building or land, conformity of the lease to the laws and rules 
198.2   of the state of Minnesota, and the appropriateness of the 
198.3   proposed lease to the space needs and the financial condition of 
198.4   the district.  The commissioner must not authorize a levy under 
198.5   this subdivision in an amount greater than the cost to the 
198.6   district of renting or leasing a building or land for approved 
198.7   purposes.  The proceeds of this levy must not be used for 
198.8   custodial or other maintenance services.  A district may not 
198.9   levy under this subdivision for the purpose of leasing or 
198.10  renting a district-owned building to itself. 
198.11     Sec. 21.  Minnesota Statutes 1996, section 124.91, 
198.12  subdivision 2, is amended to read: 
198.13     Subd. 2.  [PRE-JULY 1990 LEASE PURCHASE, INSTALLMENT BUYS.] 
198.14  For taxes payable prior to 2000, a district may annually levy 
198.15  the amount needed to make payments required by a lease purchase 
198.16  agreement, installment purchase agreement, or other deferred 
198.17  payment agreement authorized by Minnesota Statutes 1989 
198.18  Supplement, section 465.71, if:  
198.19     (1) the agreement was approved by the commissioner before 
198.20  July 1, 1990, according to Minnesota Statutes 1989 Supplement, 
198.21  section 275.125, subdivision 11d; or 
198.22     (2) the district levied in 1989 for the payments. 
198.23     For fiscal years 2001 and later, the commissioner shall pay 
198.24  state aid to each district in the amount needed to make the 
198.25  payments authorized by this section. 
198.26     Sec. 22.  Minnesota Statutes 1996, section 124.91, 
198.27  subdivision 5, is amended to read: 
198.28     Subd. 5.  [INTERACTIVE TELEVISION.] (a) A school district 
198.29  with its central administrative office located within economic 
198.30  development region one, two, three, four, five, six, seven, 
198.31  eight, nine, and ten may apply to the commissioner of children, 
198.32  families, and learning for ITV revenue up to the greater of .5 
198.33  percent of the adjusted net tax capacity of the district or 
198.34  $25,000 for the construction, maintenance, and lease costs of an 
198.35  interactive television system for instructional purposes.  The 
198.36  approval by the commissioner of children, families, and learning 
199.1   and the application procedures set forth in subdivision 1 shall 
199.2   apply to the revenue in this subdivision.  In granting the 
199.3   approval, the commissioner must consider whether the district is 
199.4   maximizing efficiency through peak use and off-peak use pricing 
199.5   structures.  The commissioner may not approve any new projects 
199.6   after July 1, 1999. 
199.7      (b) To obtain ITV revenue, a district may levy an amount 
199.8   not to exceed the district's ITV revenue times the lesser of one 
199.9   or the ratio of: 
199.10     (1) the quotient derived by dividing the adjusted net tax 
199.11  capacity of the district for the year before the year the levy 
199.12  is certified by the actual pupil units in the district for the 
199.13  year to which the levy is attributable; to 
199.14     (2) 100 percent of the equalizing factor as defined in 
199.15  section 124A.02, subdivision 8, for the year to which the levy 
199.16  is attributable. 
199.17     (c) A district's ITV aid is the difference between its ITV 
199.18  revenue and the ITV levy. 
199.19     (d) The revenue in the first year after reorganization for 
199.20  a district that has reorganized under section 122.22, 122.23, or 
199.21  122.241 to 122.247 shall be the greater of: 
199.22     (1) the revenue computed for the reorganized district under 
199.23  paragraph (a), or 
199.24     (2)(i) for two districts that reorganized, 75 percent of 
199.25  the revenue computed as if the districts involved in the 
199.26  reorganization were separate, or 
199.27     (ii) for three or more districts that reorganized, 50 
199.28  percent of the revenue computed as if the districts involved in 
199.29  the reorganization were separate. 
199.30     (e) The revenue in paragraph (d) is increased by the 
199.31  difference between the initial revenue and ITV lease costs for 
199.32  leases that had been entered into by the preexisting districts 
199.33  on the effective date of the consolidation or combination and 
199.34  with a term not exceeding ten years.  This increased revenue is 
199.35  only available for the remaining term of the lease.  However, in 
199.36  no case shall the revenue exceed the amount available had the 
200.1   preexisting districts received revenue separately. 
200.2      Sec. 23.  Minnesota Statutes 1996, section 124.91, 
200.3   subdivision 7, is amended to read: 
200.4      Subd. 7.  [LEASE PURCHASE, INSTALLMENT BUYS.] (a) Upon 
200.5   application to, and approval by, the commissioner in accordance 
200.6   with the procedures and limits in subdivision 1, a district, as 
200.7   defined in this subdivision, may: 
200.8      (1) purchase real or personal property under an installment 
200.9   contract or may lease real or personal property with an option 
200.10  to purchase under a lease purchase agreement, by which 
200.11  installment contract or lease purchase agreement title is kept 
200.12  by the seller or vendor or assigned to a third party as security 
200.13  for the purchase price, including interest, if any; and 
200.14     (2) annually levy receive state aid in the amounts 
200.15  necessary to pay the district's obligations under the 
200.16  installment contract or lease purchase agreement. 
200.17     (b) The obligation created by the installment contract or 
200.18  the lease purchase agreement must not be included in the 
200.19  calculation of net debt for purposes of section 475.53, and does 
200.20  not constitute debt under other law.  An election is not 
200.21  required in connection with the execution of the installment 
200.22  contract or the lease purchase agreement. 
200.23     (c) The proceeds of the levy authorized by commissioner 
200.24  shall not authorize state aid under this subdivision must not to 
200.25  be used to acquire a facility to be primarily used for athletic 
200.26  or school administration purposes. 
200.27     (d) For the purposes of this subdivision, "district" means: 
200.28     (1) a school district required to have a comprehensive plan 
200.29  for the elimination of segregation whose plan has been 
200.30  determined by the commissioner to be in compliance with the 
200.31  state board of education rules relating to equality of 
200.32  educational opportunity and school desegregation; or 
200.33     (2) a school district that participates in a joint program 
200.34  for interdistrict desegregation with a district defined in 
200.35  clause (1) if the facility acquired under this subdivision is to 
200.36  be primarily used for the joint program. 
201.1      (e) Notwithstanding subdivision 1, the prohibition against 
201.2   a levy by a district to lease or rent a district-owned building 
201.3   to itself does not apply to levies otherwise authorized by this 
201.4   subdivision. 
201.5      (f) For the purposes of this subdivision, any references in 
201.6   subdivision 1 to building or land shall include personal 
201.7   property. 
201.8      Sec. 24.  Minnesota Statutes 1996, section 124.912, 
201.9   subdivision 1, is amended to read: 
201.10     Subdivision 1.  [STATUTORY OBLIGATIONS.] (a) A school 
201.11  district may levy the amount authorized for liabilities of 
201.12  dissolved districts pursuant to section 122.45; the amounts 
201.13  necessary to pay the district's obligations under section 
201.14  268.06, subdivision 25; the amounts necessary to pay for job 
201.15  placement services offered to employees who may become eligible 
201.16  for benefits pursuant to section 268.08; the amounts necessary 
201.17  to pay the district's obligations under section 127.05; the 
201.18  amounts authorized by section 122.531; the amounts necessary to 
201.19  pay the district's obligations under section 122.533; and for 
201.20  severance pay required by sections 120.08, subdivision 3, and 
201.21  122.535, subdivision 6. 
201.22     (b) Each year, a member district of an education district 
201.23  that levies under this subdivision must transfer the amount of 
201.24  revenue certified under paragraph (b) to the education district 
201.25  board according to this subdivision.  By June 20 and November 30 
201.26  of each year, an amount must be transferred equal to: 
201.27     (1) 50 percent times 
201.28     (2) the amount certified in paragraph (b) minus homestead 
201.29  and agricultural credit aid allocated for that levy according to 
201.30  section 273.1398, subdivision 6.  A school district is eligible 
201.31  for state aid for the following purposes: 
201.32     (1) liabilities for dissolved districts under section 
201.33  122.45; 
201.34     (2) the amounts necessary to pay the district's obligations 
201.35  under section 268.06, subdivision 25; 
201.36     (3) the amounts necessary to pay for job placement services 
202.1   offered to employees who may become eligible for benefits 
202.2   pursuant to section 268.08; 
202.3      (4) the amounts authorized by section 122.531; 
202.4      (5) the amounts necessary to pay the district's obligations 
202.5   under section 122.533; and 
202.6      (6) for severance pay required by sections 120.08, 
202.7   subdivision 3, and 122.535, subdivision 6.  
202.8      The commissioner shall consider all requests for state aid 
202.9   under this subdivision and shall, at the commissioner's 
202.10  discretion, approve, modify, or disapprove aid amounts. 
202.11     Sec. 25.  Minnesota Statutes 1996, section 124.912, 
202.12  subdivision 3, is amended to read: 
202.13     Subd. 3.  [RULE COMPLIANCE.] Each year a district that is 
202.14  required to implement a plan according to the requirements of 
202.15  Minnesota Rules, parts 3535.0200 to 3535.2200, may levy is 
202.16  eligible for state aid in an amount not to exceed a net tax rate 
202.17  of equal to 2.0 percent times the adjusted net tax capacity of 
202.18  the district for taxes payable in 1991 and thereafter the 
202.19  preceding year.  A district that levies receives integration 
202.20  revenue according to subdivision 2 may not levy according 
202.21  to section 124.312 is not eligible for state aid under this 
202.22  subdivision.  Notwithstanding section 121.904, the entire amount 
202.23  of this levy shall be recognized as revenue for the fiscal year 
202.24  in which the levy is certified.  This levy shall not be 
202.25  considered in computing the aid reduction under section 124.155. 
202.26     Sec. 26.  Minnesota Statutes 1996, section 124.912, 
202.27  subdivision 6, is amended to read: 
202.28     Subd. 6.  [CRIME RELATED COSTS.] For taxes levied in 1991 
202.29  and subsequent years, payable in 1992 and subsequent years, each 
202.30  school district may make a levy on all taxable property located 
202.31  within the school district for the purposes specified in this 
202.32  subdivision.  The maximum amount which may be levied for all 
202.33  costs under this subdivision shall be equal to State aid for 
202.34  crime related costs equals $1 multiplied by the population of 
202.35  the school district.  For purposes of this subdivision, 
202.36  "population" of the school district means the same as contained 
203.1   in section 275.14.  The proceeds of the levy state aid must be 
203.2   used for reimbursing the cities and counties who contract with 
203.3   the school district for the following purposes:  (1) to pay the 
203.4   costs incurred for the salaries, benefits, and transportation 
203.5   costs of peace officers and sheriffs for liaison services in the 
203.6   district's middle and secondary schools; (2) to pay the costs 
203.7   for a drug abuse prevention program as defined in Minnesota 
203.8   Statutes 1991 Supplement, section 609.101, subdivision 3, 
203.9   paragraph (f), in the elementary schools; or (3) to pay the 
203.10  costs for a gang resistance education training curriculum in the 
203.11  middle schools.  The school district must initially attempt to 
203.12  contract for these services with the police department of each 
203.13  city or the sheriff's department of the county within the school 
203.14  district containing the school receiving the services.  If a 
203.15  local police department or a county sheriff's department does 
203.16  not wish to provide the necessary services, the district may 
203.17  contract for these services with any other police or sheriff's 
203.18  department located entirely or partially within the school 
203.19  district's boundaries.  The levy authorized under this 
203.20  subdivision is not included in determining the school district's 
203.21  levy limitations. 
203.22     Sec. 27.  Minnesota Statutes 1996, section 124.912, 
203.23  subdivision 7, is amended to read: 
203.24     Subd. 7.  [ICE ARENA LEVY AID.] (a) Each year, an 
203.25  independent school district operating and maintaining an ice 
203.26  arena, may levy is eligible for state aid for the net 
203.27  operational costs of the ice arena.  The levy amount of state 
203.28  aid may not exceed the net actual costs of operation of the 
203.29  arena for the previous year.  Net actual costs are defined as 
203.30  operating costs less any operating revenues. 
203.31     (b) Any school district operating and maintaining an ice 
203.32  arena must demonstrate to the satisfaction of the office of 
203.33  monitoring in the department of children, families, and learning 
203.34  that the district will offer equal sports opportunities for male 
203.35  and female students to use its ice arena, particularly in areas 
203.36  of access to prime practice time, team support, and providing 
204.1   junior varsity and younger level teams for girls' ice sports and 
204.2   ice sports offerings.  The commissioner shall consider all 
204.3   requests for state aid under this subdivision and shall, at the 
204.4   commissioner's discretion, approve, modify, or disapprove aid 
204.5   amounts. 
204.6      Sec. 28.  Minnesota Statutes 1996, section 124.914, 
204.7   subdivision 1, is amended to read: 
204.8      Subdivision 1.  [1977 STATUTORY OPERATING DEBT.] (1) In 
204.9   each year in which so required by this subdivision, a district 
204.10  shall make an additional levy is eligible for state aid to 
204.11  eliminate its statutory operating debt, determined as of June 
204.12  30, 1977, and certified and adjusted by the commissioner.  This 
204.13  State aid payments for fiscal years 2001 and later and the 
204.14  previous local levy shall not be made in more than 30 successive 
204.15  years and each year before it is made, it must be approved by 
204.16  the commissioner and the approval shall specify its 
204.17  amount.  This levy shall be an amount which is equal to the 
204.18  amount raised by a levy of a net tax rate of 1.66 percent times 
204.19  the adjusted net tax capacity of the district for the preceding 
204.20  year for taxes payable in 1991 and thereafter; provided that in 
204.21  the last year in which the district is required to make this 
204.22  levy, it shall levy an amount not to exceed the amount raised by 
204.23  a levy of a net tax rate of 1.66 percent times the adjusted net 
204.24  tax capacity of the district for the preceding year for taxes 
204.25  payable in 1991 and thereafter The state aid for each district 
204.26  equals the amount raised by the levy for this purpose for taxes 
204.27  payable in 1999.  When the sum of the cumulative levies made 
204.28  pursuant revenue received according to this subdivision and 
204.29  transfers made according to section 121.912, subdivision 4, 
204.30  equals an amount equal to the statutory operating debt of the 
204.31  district, the levy state aid shall be discontinued. 
204.32     (2) The district shall establish a special account in the 
204.33  general fund which shall be designated "appropriated fund 
204.34  balance reserve account for purposes of reducing statutory 
204.35  operating debt" on its books and records.  This account shall 
204.36  reflect the levy revenue authorized pursuant to this subdivision.
205.1   The proceeds of this levy revenue shall be used only for cash 
205.2   flow requirements and shall not be used to supplement district 
205.3   revenues or income for the purposes of increasing the district's 
205.4   expenditures or budgets. 
205.5      (3) Any district which is required to levy pursuant to this 
205.6   subdivision shall certify the maximum levy allowable under 
205.7   section 124A.23, subdivision 2, in that same year. 
205.8      (4) Each district shall make permanent fund balance 
205.9   transfers so that the total statutory operating debt of the 
205.10  district is reflected in the general fund as of June 30, 1977. 
205.11     Sec. 29.  Minnesota Statutes 1996, section 124.914, 
205.12  subdivision 2, is amended to read: 
205.13     Subd. 2.  [1983 OPERATING DEBT.] (1) Each year, a 
205.14  district may make an additional levy is eligible for state aid 
205.15  to eliminate a deficit in the net unappropriated operating funds 
205.16  of the district, determined as of June 30, 1983, and certified 
205.17  and adjusted by the commissioner.  This levy may in each year be 
205.18  an amount not to exceed the amount raised by a levy of a net tax 
205.19  rate of 1.85 percent times the adjusted net tax capacity for 
205.20  taxes payable in 1991 and thereafter of the district for the 
205.21  preceding year as determined by the commissioner state aid for 
205.22  each district equals the amount raised by the district's levy 
205.23  for this purpose for taxes payable in 1999.  However, the total 
205.24  amount of this levy revenue for all years it is made received 
205.25  shall not exceed the lesser of (a) the amount of the deficit in 
205.26  the net unappropriated operating funds of the district as of 
205.27  June 30, 1983, or (b) the amount of the aid reduction, according 
205.28  to Laws 1981, Third Special Session chapter 2, article 2, 
205.29  section 2, but excluding clauses (l), (m), (n), (o), and (p), 
205.30  and Laws 1982, Third Special Session chapter 1, article 3, 
205.31  section 6, to the district in fiscal year 1983.  When the 
205.32  cumulative levies made pursuant revenue received according to 
205.33  this subdivision equal equals the total amount permitted by this 
205.34  subdivision, the levy state aid shall be discontinued.  
205.35     (2) The proceeds of this levy state aid shall be used only 
205.36  for cash flow requirements and shall not be used to supplement 
206.1   district revenues or income for the purposes of increasing the 
206.2   district's expenditures or budgets.  
206.3      (3) Any district that levies pursuant to this subdivision 
206.4   shall certify the maximum levy allowable under section 124A.23, 
206.5   subdivisions 2 and 2a, in that same year. 
206.6      Sec. 30.  Minnesota Statutes 1996, section 124.914, 
206.7   subdivision 3, is amended to read: 
206.8      Subd. 3.  [1985 OPERATING DEBT.] (1) Each year, a 
206.9   district may levy is eligible for state aid to eliminate a 
206.10  deficit in the net unappropriated balance in the general fund of 
206.11  the district, determined as of June 30, 1985, and certified and 
206.12  adjusted by the commissioner.  Each year this levy may be an 
206.13  amount not to exceed the amount raised by a levy of a net tax 
206.14  rate of 1.85 percent times the adjusted net tax capacity for 
206.15  taxes payable in 1991 and thereafter of the district for the 
206.16  preceding year the state aid for each district equals the amount 
206.17  raised by the district's levy for this purpose for taxes payable 
206.18  in 1999.  However, the total amount of this levy revenue for all 
206.19  years it is made received shall not exceed the amount of the 
206.20  deficit in the net unappropriated balance in the general fund of 
206.21  the district as of June 30, 1985.  When the cumulative levies 
206.22  made pursuant to revenue received under this subdivision equal 
206.23  equals the total amount permitted by this subdivision, the levy 
206.24  state aid shall be discontinued.  
206.25     (2) A district, if eligible, may levy receive revenue under 
206.26  this subdivision or subdivision 2 but not both. 
206.27     (3) The proceeds of this levy revenue shall be used only 
206.28  for cash flow requirements and shall not be used to supplement 
206.29  district revenues or income for the purposes of increasing the 
206.30  district's expenditures or budgets.  
206.31     (4) Any district that levies pursuant to this subdivision 
206.32  shall certify the maximum levy allowable under section 124A.23, 
206.33  subdivision 2, in that same year. 
206.34     Sec. 31.  Minnesota Statutes 1996, section 124.914, 
206.35  subdivision 4, is amended to read: 
206.36     Subd. 4.  [1992 OPERATING DEBT.] (a) For taxes payable for 
207.1   calendar year 2003 fiscal year 2004 and earlier, a district that 
207.2   has filed a plan pursuant to section 121.917, subdivision 4, may 
207.3   levy is eligible for state aid, with the approval of the 
207.4   commissioner, to eliminate a deficit in the net unappropriated 
207.5   balance in the operating funds of the district, determined as of 
207.6   June 30, 1992, and certified and adjusted by the commissioner.  
207.7   Each year this levy may be an amount not to state aid shall not 
207.8   exceed the lesser of: 
207.9      (1) an amount raised by a levy of a net tax rate of one 
207.10  percent times the adjusted net tax capacity the district's levy 
207.11  for this purpose for taxes payable in 1999; or 
207.12     (2) $100,000. 
207.13  This amount shall be reduced by referendum revenue authorized 
207.14  under section 124A.03 pursuant to the plan filed under section 
207.15  121.917.  However, the total amount of this levy revenue for all 
207.16  years it is made received shall not exceed the amount of the 
207.17  deficit in the net unappropriated balance in the operating funds 
207.18  of the district as of June 30, 1992.  When the cumulative levies 
207.19  made pursuant to revenue received under this subdivision equal 
207.20  equals the total amount permitted by this subdivision, the levy 
207.21  state aid shall be discontinued.  
207.22     (b) A district, if eligible, may levy receive revenue under 
207.23  this subdivision or subdivision 2 or 3, or under section 
207.24  122.531, subdivision 4a, or Laws 1992, chapter 499, article 7, 
207.25  sections 16 or 17, but not under more than one. 
207.26     (c) The proceeds of this levy revenue shall be used only 
207.27  for cash flow requirements and shall not be used to supplement 
207.28  district revenues or income for the purposes of increasing the 
207.29  district's expenditures or budgets.  
207.30     (d) Any district that levies pursuant to this subdivision 
207.31  shall certify the maximum levy allowable under section 124A.23, 
207.32  subdivision 2, in that same year. 
207.33     Sec. 32.  Minnesota Statutes 1996, section 124.916, 
207.34  subdivision 1, is amended to read: 
207.35     Subdivision 1.  [HEALTH INSURANCE.] (a) A school 
207.36  district may levy is eligible for state aid in the amount 
208.1   necessary to make employer contributions for insurance for 
208.2   retired employees under this subdivision.  Notwithstanding 
208.3   section 121.904, 50 percent of the amount levied shall be 
208.4   recognized as revenue for the fiscal year in which the levy is 
208.5   certified.  This levy shall not be considered in computing the 
208.6   aid reduction under section 124.155. 
208.7      (b) The school board of a joint vocational technical 
208.8   district formed under sections 136C.60 to 136C.69 and the school 
208.9   board of a school district may provide employer-paid hospital, 
208.10  medical, and dental benefits to a person who: 
208.11     (1) is eligible for employer-paid insurance under 
208.12  collective bargaining agreements or personnel plans in effect on 
208.13  June 30, 1992; 
208.14     (2) has at least 25 years of service credit in the public 
208.15  pension plan of which the person is a member on the day before 
208.16  retirement or, in the case of a teacher, has a total of at least 
208.17  25 years of service credit in the teachers retirement 
208.18  association, a first-class city teacher retirement fund, or any 
208.19  combination of these; 
208.20     (3) upon retirement is immediately eligible for a 
208.21  retirement annuity; 
208.22     (4) is at least 55 and not yet 65 years of age; and 
208.23     (5) retires on or after May 15, 1992, and before July 21, 
208.24  1992. 
208.25     A school board paying insurance under this subdivision may 
208.26  not exclude any eligible employees. 
208.27     (c) An employee who is eligible both for the health 
208.28  insurance benefit under this subdivision and for an early 
208.29  retirement incentive under a collective bargaining agreement or 
208.30  personnel plan established by the employer must select either 
208.31  the early retirement incentive provided under the collective 
208.32  bargaining agreement personnel plan or the incentive provided 
208.33  under this subdivision, but may not receive both.  For purposes 
208.34  of this subdivision, a person retires when the person terminates 
208.35  active employment and applies for retirement benefits.  The 
208.36  retired employee is eligible for single and dependent coverages 
209.1   and employer payments to which the person was entitled 
209.2   immediately before retirement, subject to any changes in 
209.3   coverage and employer and employee payments through collective 
209.4   bargaining or personnel plans, for employees in positions 
209.5   equivalent to the position from which the employee retired.  The 
209.6   retired employee is not eligible for employer-paid life 
209.7   insurance.  Eligibility ceases when the retired employee attains 
209.8   the age of 65, or when the employee chooses not to receive the 
209.9   retirement benefits for which the employee has applied, or when 
209.10  the employee is eligible for employer-paid health insurance from 
209.11  a new employer.  Coverages must be coordinated with relevant 
209.12  health insurance benefits provided through the federally 
209.13  sponsored Medicare program.  
209.14     (d) Unilateral implementation of this section by a public 
209.15  employer is not an unfair labor practice for purposes of chapter 
209.16  179A.  The authority provided in this subdivision for an 
209.17  employer to pay health insurance costs for certain retired 
209.18  employees is not subject to the limits in section 179A.20, 
209.19  subdivision 2a. 
209.20     (e) If a school district levies receives revenue according 
209.21  to this subdivision, it may not also levy receive revenue 
209.22  according to section 122.531, subdivision 9, for eligible 
209.23  employees. 
209.24     Sec. 33.  Minnesota Statutes 1996, section 124.916, 
209.25  subdivision 3, is amended to read: 
209.26     Subd. 3.  [RETIREMENT LEVIES AID.] (1) In addition to the 
209.27  excess levy authorized in 1976 any district within a city of the 
209.28  first class which was authorized in 1975 to make a retirement 
209.29  levy under Minnesota Statutes 1974, section 275.127 and chapter 
209.30  422A may levy an amount per pupil unit which is equal to the 
209.31  amount levied in 1975 payable 1976, under Minnesota Statutes 
209.32  1974, section 275.127 and chapter 422A, divided by the number of 
209.33  pupil units in the district in 1976-1977. 
209.34     (2) In 1979 and each year thereafter, any district which 
209.35  qualified in 1976 for an extra levy under paragraph (1) shall be 
209.36  allowed to levy the same amount as levied for retirement in 1978 
210.1   under this clause reduced each year by ten percent of the 
210.2   difference between the amount levied for retirement in 1971 
210.3   under Minnesota Statutes 1971, sections 275.127 and 422.01 to 
210.4   422.54 and the amount levied for retirement in 1975 under 
210.5   Minnesota Statutes 1974, section 275.127 and chapter 422A. 
210.6      (3) In 1991 and each year thereafter, a district to which 
210.7   this subdivision applies may levy an additional amount required 
210.8   for contributions to the Minneapolis employees retirement fund 
210.9   as a result of the maximum dollar amount limitation on state 
210.10  contributions to the fund imposed under section 422A.101, 
210.11  subdivision 3.  The additional levy shall not exceed the most 
210.12  recent amount certified by the board of the Minneapolis 
210.13  employees retirement fund as the district's share of the 
210.14  contribution requirement in excess of the maximum state 
210.15  contribution under section 422A.101, subdivision 3.  
210.16     (4) For taxes payable in 1994 and thereafter, special 
210.17  school district No. 1, Minneapolis, and independent school 
210.18  district No. 625, St. Paul, may levy for the increase in the 
210.19  employer retirement fund contributions, under Laws 1992, chapter 
210.20  598, article 5, section 1.  Notwithstanding section 121.904, the 
210.21  entire amount of this levy may be recognized as revenue for the 
210.22  fiscal year in which the levy is certified.  This levy shall not 
210.23  be considered in computing the aid reduction under section 
210.24  124.155. 
210.25     (1) For fiscal years 2001 and later, a district is eligible 
210.26  for state aid equal to the amount of its retirement levies 
210.27  certified under this subdivision for taxes payable in 1999. 
210.28     (5) (2) If the employer retirement fund contributions under 
210.29  section 354A.12, subdivision 2a, are increased for fiscal year 
210.30  1994 or later fiscal years, special school district No. 1, 
210.31  Minneapolis, and independent school district No. 625, St. Paul, 
210.32  may levy in payable 1994 or later an amount are eligible for 
210.33  state aid equal to the amount derived by applying the net 
210.34  increase in the employer retirement fund contribution rate of 
210.35  the respective teacher retirement fund association between 
210.36  fiscal year 1993 and the fiscal year beginning in the year after 
211.1   the levy is certified to the total covered payroll of the 
211.2   applicable teacher retirement fund association.  Notwithstanding 
211.3   section 121.904, the entire amount of this levy may be 
211.4   recognized as revenue for the fiscal year in which the levy is 
211.5   certified.  This levy shall not be considered in computing the 
211.6   aid reduction under section 124.155.  If an applicable school 
211.7   district levies under this paragraph, they may not levy under 
211.8   paragraph (4). 
211.9      (6) (3) In addition to the levy state aid authorized under 
211.10  paragraph (5) (2), special school district No. 1, 
211.11  Minneapolis, may also levy payable in 1997 or later is also 
211.12  eligible for additional state aid in an amount equal to the 
211.13  contributions under section sections 423A.02, subdivision 3, and 
211.14  may also levy in payable 1994 or later an amount equal to the 
211.15  state aid contribution under section 354A.12, subdivision 3b.  
211.16  Independent school district No. 625, St. Paul, may levy payable 
211.17  in 1997 or is eligible for additional state aid in fiscal years 
211.18  2001 and later in an amount equal to the supplemental 
211.19  contributions under section 423A.02, subdivision 
211.20  3.  Notwithstanding section 121.904, the entire amount of these 
211.21  levies may be recognized as revenue for the fiscal year in which 
211.22  the levy is certified.  These levies shall not be considered in 
211.23  computing the aid reduction under section 124.155. 
211.24     Sec. 34.  Minnesota Statutes 1996, section 124.916, 
211.25  subdivision 4, is amended to read: 
211.26     Subd. 4.  [MINNEAPOLIS HEALTH INSURANCE SUBSIDY.] Each year 
211.27  special school district No. 1, Minneapolis, may make an 
211.28  additional levy not to exceed is eligible for state aid equal to 
211.29  the amount raised by a net tax rate of .10 percent times the 
211.30  adjusted net tax capacity for taxes payable in 1991 and 
211.31  thereafter of the property in the district for the preceding 
211.32  assessment year 1998.  The proceeds may be used only to 
211.33  subsidize health insurance costs for eligible teachers as 
211.34  provided in this section.  
211.35     "Eligible teacher" means a retired teacher who was a basic 
211.36  member of the Minneapolis teachers retirement fund association, 
212.1   who retired before May 1, 1974, or who had 20 or more years of 
212.2   basic member service in the Minneapolis teacher retirement fund 
212.3   association and retired before June 30, 1983, and who is not 
212.4   eligible to receive the hospital insurance benefits of the 
212.5   federal Medicare program of the Social Security Act without 
212.6   payment of a monthly premium.  The district shall notify 
212.7   eligible teachers that a subsidy is available.  To obtain a 
212.8   subsidy, an eligible teacher must submit to the school district 
212.9   a copy of receipts for health insurance premiums paid.  The 
212.10  school district shall disburse the health insurance premium 
212.11  subsidy to each eligible teacher according to a schedule 
212.12  determined by the district, but at least annually.  An eligible 
212.13  teacher may receive a subsidy up to an amount equal to the 
212.14  lesser of 90 percent of the cost of the eligible teacher's 
212.15  health insurance or up to 90 percent of the cost of the number 
212.16  two qualified plan of health coverage for individual policies 
212.17  made available by the Minnesota comprehensive health association 
212.18  under chapter 62E.  
212.19     If funds remaining from the previous year's health 
212.20  insurance subsidy levy revenue, minus the previous year's 
212.21  required subsidy amount, are sufficient to pay the estimated 
212.22  current year subsidy, the levy state aid must be discontinued 
212.23  until the remaining funds are estimated by the school board to 
212.24  be insufficient to pay the subsidy. 
212.25     This subdivision does not extend benefits to teachers who 
212.26  retire after June 30, 1983, and does not create a contractual 
212.27  right or claim for altering the benefits in this subdivision.  
212.28  This subdivision does not restrict the school district's right 
212.29  to modify or terminate coverage under this subdivision. 
212.30     Sec. 35.  Minnesota Statutes 1996, section 124.918, 
212.31  subdivision 8, is amended to read: 
212.32     Subd. 8.  [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1) 
212.33  Reductions in levies pursuant to section 124.918, subdivision 1, 
212.34  and section 273.138, shall be made prior to the reductions in 
212.35  clause (2) A school district's levies shall be reduced according 
212.36  to section 298.28, subdivision 4a. 
213.1      (2) Notwithstanding any other law to the contrary, 
213.2   districts which received payments pursuant to sections 298.018; 
213.3   298.23 to 298.28, except an amount distributed under section 
213.4   298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to 
213.5   298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 
213.6   upon severed mineral values, or recognized revenue pursuant to 
213.7   section 477A.15; shall not include a portion of these aids in 
213.8   their permissible levies pursuant to those sections, but instead 
213.9   shall reduce the permissible levies authorized by this chapter 
213.10  and chapter 124A by the greater of the following: 
213.11     (a) an amount equal to 50 percent of the total dollar 
213.12  amount of the payments received pursuant to those sections or 
213.13  revenue recognized pursuant to section 477A.15 in the previous 
213.14  fiscal year; or 
213.15     (b) an amount equal to the total dollar amount of the 
213.16  payments received pursuant to those sections or revenue 
213.17  recognized pursuant to section 477A.15 in the previous fiscal 
213.18  year less the product of the same dollar amount of payments or 
213.19  revenue times the ratio of the maximum levy allowed the district 
213.20  under Minnesota Statutes 1986, sections 124A.03, subdivision 2, 
213.21  124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
213.22  subdivision 3a, 124A.12, subdivision 3a, and 124A.14, 
213.23  subdivision 5a, to the total levy allowed the district under 
213.24  this section and Minnesota Statutes 1986, sections 124A.03, 
213.25  124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
213.26  subdivision 3a, 124A.12, subdivision 3a, 124A.14, subdivision 
213.27  5a, and 124A.20, subdivision 2, for levies certified in 1986. 
213.28     (3) No reduction pursuant to this subdivision shall reduce 
213.29  the levy made by the district pursuant to section 124A.23, to an 
213.30  amount less than the amount raised by a levy of a net tax rate 
213.31  of 6.82 percent times the adjusted net tax capacity for taxes 
213.32  payable in 1990 and thereafter of that district for the 
213.33  preceding year as determined by the commissioner.  The amount of 
213.34  any increased levy authorized by referendum pursuant to section 
213.35  124A.03, subdivision 2, shall not be reduced pursuant to this 
213.36  subdivision.  The amount of any levy authorized by section 
214.1   124.912, subdivision 1, to make payments for bonds issued and 
214.2   for interest thereon, shall not be reduced pursuant to this 
214.3   subdivision.  
214.4      (4) Before computing the reduction pursuant to this 
214.5   subdivision of the capital expenditure facilities levy 
214.6   authorized by section 124.243, the capital expenditure equipment 
214.7   levy authorized by section 124.244, the health and safety levy 
214.8   authorized by sections 124.83 and 124.91, subdivision 6, the 
214.9   commissioner shall ascertain from each affected school district 
214.10  the amount it proposes to levy under each section or 
214.11  subdivision.  The reduction shall be computed on the basis of 
214.12  the amount so ascertained. 
214.13     (5) Notwithstanding any law to the contrary, (2) Any 
214.14  amounts received by districts in any fiscal year pursuant to 
214.15  sections 298.018; 298.23 to 298.28; 298.34 to 298.39; 298.391 to 
214.16  298.396; 298.405; or any law imposing a tax on severed mineral 
214.17  values; and not deducted from general education aid pursuant to 
214.18  section 124A.035, subdivision 5, clause (2), under this section 
214.19  and not applied to reduce levies pursuant to this subdivision 
214.20  shall be paid by the district to the St. Louis county auditor in 
214.21  the following amount by March 15 of each year, the amount 
214.22  required to be subtracted from the previous fiscal year's 
214.23  general education aid pursuant to section 124A.035, subdivision 
214.24  5, which is in excess of the general education aid earned for 
214.25  that fiscal year.  The county auditor shall deposit any amounts 
214.26  received pursuant to this clause in the St. Louis county 
214.27  treasury for purposes of paying the taconite homestead credit as 
214.28  provided in section 273.135. 
214.29     Sec. 36.  Minnesota Statutes 1996, section 124A.03, 
214.30  subdivision 1g, is amended to read: 
214.31     Subd. 1g.  [REFERENDUM EQUALIZATION LEVY.] (a) For fiscal 
214.32  year 1996, a district's referendum equalization levy equals the 
214.33  district's referendum equalization revenue times the lesser of 
214.34  one or the ratio of the district's adjusted net tax capacity per 
214.35  actual pupil unit to 100 percent of the equalizing factor as 
214.36  defined in section 124A.02, subdivision 8. 
215.1      (b) For fiscal year years 1997 and thereafter through 
215.2   2000, a district's referendum equalization levy for a referendum 
215.3   levied against the referendum market value of all taxable 
215.4   property as defined in section 124A.02, subdivision 3b, equals 
215.5   the district's referendum equalization revenue times the lesser 
215.6   of one or the ratio of the district's referendum market value 
215.7   per actual pupil unit to $476,000. 
215.8      (c) (b) For fiscal year years 1997 and 
215.9   thereafter through 2000, a district's referendum equalization 
215.10  levy for a referendum levied against the net tax capacity of all 
215.11  taxable property equals the district's referendum equalization 
215.12  revenue times the lesser of one or the ratio of the district's 
215.13  adjusted net tax capacity per actual pupil unit to 100 percent 
215.14  of the equalizing factor for that year. 
215.15     (c) For fiscal years 2001 and later, a district's 
215.16  referendum equalization levy equals the district's referendum 
215.17  equalization revenue times the lesser of one or the ratio of the 
215.18  district's adjusted local tax capacity to the product of 
215.19  $476,000 times the ratio of the district's adjusted local tax 
215.20  capacity for assessment year 1998 to the district's referendum 
215.21  market value for assessment year 1998. 
215.22     Sec. 37.  [124A.235] [STATEWIDE UNIFORM GENERAL EDUCATION 
215.23  LEVY.] 
215.24     Subdivision 1.  [GENERAL EDUCATION LEVY CALCULATION.] A 
215.25  school district's general education levy equals the lesser of:  
215.26  (1) an amount equal to the district's adjusted education tax 
215.27  capacity; or (2) the sum of its revenue under chapters 124 and 
215.28  124A, excluding the revenue for debt service under section 
215.29  124.95 and for operating referenda under section 124A.03.  The 
215.30  general education levy shall be levied against each district's 
215.31  general education tax base. 
215.32     Subd. 2.  [GENERAL EDUCATION AID.] A school district's 
215.33  general education aid is the difference between its general 
215.34  education revenue computed under section 124A.22 and its levy 
215.35  established according to subdivision 1. 
215.36     Subd. 3.  [COMPUTATION OF TAX INCREMENT.] Notwithstanding 
216.1   any law to the contrary, the tax imposed under this section may 
216.2   not be used to compute the increment for a tax increment 
216.3   financing district.  
216.4      Subd. 4.  [RELATIONSHIP TO FISCAL DISPARITIES.] The tax 
216.5   imposed under this section shall not be subject to the 
216.6   provisions of chapters 276A and 473F. 
216.7      Sec. 38.  Minnesota Statutes 1996, section 124A.292, 
216.8   subdivision 2, is amended to read: 
216.9      Subd. 2.  [REVENUE.] Staff development incentive revenue is 
216.10  equal to the number of teachers at the site times $25.  Staff 
216.11  development incentive revenue is provided through state aid. 
216.12     Sec. 39.  Minnesota Statutes 1996, section 298.28, 
216.13  subdivision 4, is amended to read: 
216.14     Subd. 4.  [SCHOOL DISTRICTS; REFERENDUM AID.] (a) 27.5 
216.15  cents per taxable ton plus the increase provided in paragraph 
216.16  (d) must be allocated to qualifying school districts to be 
216.17  distributed, based upon the certification of the commissioner of 
216.18  revenue, under paragraphs (b) and (c). 
216.19     (b) 5.5 cents per taxable ton must be distributed to the 
216.20  school districts in which the lands from which taconite was 
216.21  mined or quarried were located or within which the concentrate 
216.22  was produced.  The distribution must be based on the 
216.23  apportionment formula prescribed in subdivision 2. 
216.24     (c)(i) 22 cents per taxable ton, less any amount 
216.25  distributed under paragraph (e), shall be distributed to a group 
216.26  of school districts comprised of those school districts in which 
216.27  the taconite was mined or quarried or the concentrate produced 
216.28  or in which there is a qualifying municipality as defined by 
216.29  section 273.134 in direct proportion to school district indexes 
216.30  as follows:  for each school district, its pupil units 
216.31  determined under section 124.17 for the prior school year shall 
216.32  be multiplied by the ratio of the average adjusted net tax 
216.33  capacity per pupil unit for school districts receiving aid under 
216.34  this clause as calculated pursuant to chapter 124A for the 
216.35  school year ending prior to distribution to the adjusted net tax 
216.36  capacity per pupil unit of the district.  Each district shall 
217.1   receive that portion of the distribution which its index bears 
217.2   to the sum of the indices for all school districts that receive 
217.3   the distributions.  
217.4      (ii) Notwithstanding clause (i), each school district that 
217.5   receives a distribution under sections 298.018; 298.23 to 
217.6   298.28, exclusive of any amount received under this clause; 
217.7   298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
217.8   imposing a tax on severed mineral values that is less than the 
217.9   amount of its levy reduction under section 124.918, subdivision 
217.10  8, for the second year prior to the year of the distribution 
217.11  shall receive a distribution equal to the difference; the amount 
217.12  necessary to make this payment shall be derived from 
217.13  proportionate reductions in the initial distribution to other 
217.14  school districts under clause (i).  
217.15     (d) Any school district described in paragraph (c) where a 
217.16  levy increase pursuant to section 124A.03, subdivision 2, is 
217.17  authorized by referendum, shall receive a distribution according 
217.18  to the following formula.  In 1994, the amount distributed per 
217.19  ton shall be equal to the amount per ton distributed in 1991 
217.20  under this paragraph increased in the same proportion as the 
217.21  increase between the fourth quarter of 1989 and the fourth 
217.22  quarter of 1992 in the implicit price deflator as defined in 
217.23  section 298.24, subdivision 1.  On July 15, 1995, and subsequent 
217.24  years, the increase over the amount established for the prior 
217.25  year shall be determined according to the increase in the 
217.26  implicit price deflator as provided in section 298.24, 
217.27  subdivision 1.  Each district shall receive the product of: 
217.28     (i) $175 times the pupil units identified in section 
217.29  124.17, subdivision 1, enrolled in the second previous year or 
217.30  the 1983-1984 school year, whichever is greater, less the 
217.31  product of 1.8 percent times the district's taxable net tax 
217.32  capacity in the second previous year; times 
217.33     (ii) the lesser of: 
217.34     (A) one, or 
217.35     (B) the ratio of the sum of the amount certified pursuant 
217.36  to section 124A.03, subdivision 1g, in the previous year, plus 
218.1   the amount certified pursuant to section 124A.03, subdivision 
218.2   1i, in the previous year, plus the referendum aid according to 
218.3   section 124A.03, subdivision 1h, for the current year, plus an 
218.4   amount equal to the reduction under section 124A.03, subdivision 
218.5   3b, to the product of 1.8 percent times the district's taxable 
218.6   net tax capacity in the second previous year. 
218.7      If the total amount provided by paragraph (d) is 
218.8   insufficient to make the payments herein required then the 
218.9   entitlement of $175 per pupil unit shall be reduced uniformly so 
218.10  as not to exceed the funds available.  Any amounts received by a 
218.11  qualifying school district in any fiscal year pursuant to 
218.12  paragraph (d) shall not be applied to reduce general education 
218.13  aid which the district receives pursuant to section 124A.23 or 
218.14  the permissible levies of the district.  Any amount remaining 
218.15  after the payments provided in this paragraph shall be paid to 
218.16  the commissioner of iron range resources and rehabilitation who 
218.17  shall deposit the same in the taconite environmental protection 
218.18  fund and the northeast Minnesota economic protection trust fund 
218.19  as provided in subdivision 11. 
218.20     For fiscal years 2001 and later, a school district's 
218.21  taconite referendum aid equals its taconite referendum aid for 
218.22  fiscal year 2000.  Each district receiving money according to 
218.23  this paragraph shall reserve $25 times the number of pupil units 
218.24  in the district.  It may use the money for early childhood 
218.25  programs or for outcome-based learning programs that enhance the 
218.26  academic quality of the district's curriculum.  The 
218.27  outcome-based learning programs must be approved by the 
218.28  commissioner of children, families, and learning. 
218.29     (e) There shall be distributed to any school district the 
218.30  amount which the school district was entitled to receive under 
218.31  section 298.32 in 1975.  
218.32     Sec. 40.  Minnesota Statutes 1996, section 298.28, is 
218.33  amended by adding a subdivision to read: 
218.34     Subd. 4a.  [SCHOOL DISTRICT LEVY REDUCTION.] For taxes 
218.35  payable in 2001 and later, a school district's levy reduction 
218.36  under section 124.918, subdivision 8, is equal to one-third of 
219.1   its reduction for taxes payable in 1998 times the ratio of the 
219.2   taxable tons in the current year to the taxable tons in payable 
219.3   year 1998. 
219.4      Sec. 41.  Minnesota Statutes 1996, section 298.28, is 
219.5   amended by adding a subdivision to read: 
219.6      Subd. 4b.  [SCHOOL DISTRICT AID REDUCTION.] A school 
219.7   district's taconite aid reduction to general education aid is 
219.8   equal to one-third of its aid reduction for fiscal year 2000 
219.9   times the ratio of the taxable tons in the current payable year 
219.10  to the taxable tons in the payable year 1998. 
219.11     Sec. 42.  [CHANGES TO SCHOOL DISTRICT LEVIES.] 
219.12     Any school levy programs created or amended after January 
219.13  1, 1997, are expired for revenue for fiscal years 2001 and 
219.14  later.  The state aid appropriation under Minnesota Statutes, 
219.15  section 124A.032, is increased by the amount of any levies 
219.16  eliminated under this section and that amount shall be paid to 
219.17  each school district in the same amount for the same purposes as 
219.18  the levy. 
219.19     Sec. 43.  [REPEALER.] 
219.20     (a) Minnesota Statutes 1996, sections 124.2131, subdivision 
219.21  3a; 124.2134; 124.225, subdivisions 1, 3a, 7a, 7b, 7d, 7e, 7f, 
219.22  8a, 8k, 8l, 8m, 9, 10, 13, 14, 15, 16, and 17; 124.226; 
219.23  124.2442; 124.2725, subdivisions 3, 4, 5, and 7; 124.2727, 
219.24  subdivisions 6b, 6c, and 9; 124.314, subdivision 2; 124.321; 
219.25  124.91, subdivision 4; 124.912, subdivision 2; 124A.029; 
219.26  124A.03, subdivisions 2a and 3b; 124A.0311; 124A.22, 
219.27  subdivisions 4a, 4b, 8a, 8b, 13d, and 13e; 124A.23, subdivisions 
219.28  1, 2, 3, and 4; 124A.26, subdivisions 2 and 3; 124A.292, 
219.29  subdivisions 3 and 4, are repealed for revenue for fiscal year 
219.30  2001.  
219.31     (b) Minnesota Statutes 1996, sections 273.1399; and 
219.32  469.1782, subdivision 1, are repealed for taxes payable and aids 
219.33  payable in 2000 and subsequent years. 
219.34     Sec. 44.  [EFFECTIVE DATE.] 
219.35     Sections 1 to 43 are effective for revenue for fiscal year 
219.36  2001. 
220.1                              ARTICLE 8
220.2                           STATE AID REFORM 
220.3      Section 1.  Minnesota Statutes 1996, section 273.1398, 
220.4   subdivision 6, is amended to read: 
220.5      Subd. 6.  [PAYMENT.] The commissioner shall certify the 
220.6   aids provided in subdivisions 2, 2b, 3, and 5 before September 1 
220.7   of the year preceding the distribution year to the county 
220.8   auditor of the affected local government.  The aids provided in 
220.9   subdivisions 2, 2b, 3, and 5 must be paid to local governments 
220.10  other than school districts at the times provided in section 
220.11  477A.015 for payment of local government aid to taxing 
220.12  jurisdictions, except that the first one-half payment of 
220.13  disparity reduction aid provided in subdivision 3 must be paid 
220.14  on or before August 31.  The disparity reduction credit provided 
220.15  in subdivision 4 must be paid to taxing jurisdictions other than 
220.16  school districts at the time provided in section 473H.10, 
220.17  subdivision 3.  Aids and Credit reimbursements to school 
220.18  districts must be certified to the commissioner of children, 
220.19  families, and learning and paid under section 273.1392.  Except 
220.20  for education districts and secondary cooperatives that receive 
220.21  revenue according to section 124.575, payment shall not be made 
220.22  to any taxing jurisdiction that has ceased to levy a property 
220.23  tax.  
220.24     Sec. 2.  Minnesota Statutes 1996, section 298.28, 
220.25  subdivision 2, is amended to read: 
220.26     Subd. 2.  [CITY OR TOWN WHERE QUARRIED OR PRODUCED.] 
220.27  4.5 6.75 cents per gross ton of merchantable iron ore 
220.28  concentrate, hereinafter referred to as "taxable ton," must be 
220.29  allocated to the city or town in the county in which the lands 
220.30  from which taconite was mined or quarried were located or within 
220.31  which the concentrate was produced.  If the mining, quarrying, 
220.32  and concentration, or different steps in either thereof are 
220.33  carried on in more than one taxing district, the commissioner 
220.34  shall apportion equitably the proceeds of the part of the tax 
220.35  going to cities and towns among such subdivisions upon the basis 
220.36  of attributing 40 percent of the proceeds of the tax to the 
221.1   operation of mining or quarrying the taconite, and the remainder 
221.2   to the concentrating plant and to the processes of 
221.3   concentration, and with respect to each thereof giving due 
221.4   consideration to the relative extent of such operations 
221.5   performed in each such taxing district.  The commissioner's 
221.6   order making such apportionment shall be subject to review by 
221.7   the tax court at the instance of any of the interested taxing 
221.8   districts, in the same manner as other orders of the 
221.9   commissioner. 
221.10     Sec. 3.  Minnesota Statutes 1996, section 298.28, 
221.11  subdivision 3, is amended to read: 
221.12     Subd. 3.  [CITIES; TOWNS.] (a) 12.5 18.75 cents per taxable 
221.13  ton, less any amount distributed under subdivision 8, and 
221.14  paragraph (b), must be allocated to the taconite municipal aid 
221.15  account to be distributed as provided in section 298.282. 
221.16     (b) An amount must be allocated to towns or cities that is 
221.17  annually certified by the county auditor of a county containing 
221.18  a taconite tax relief area within which there is (1) an 
221.19  organized township if, as of January 2, 1982, more than 75 
221.20  percent of the assessed valuation of the township consists of 
221.21  iron ore or (2) a city if, as of January 2, 1980, more than 75 
221.22  percent of the assessed valuation of the city consists of iron 
221.23  ore.  
221.24     (c) The amount allocated under paragraph (b) will be the 
221.25  portion of a township's or city's certified levy equal to the 
221.26  proportion of (1) the difference between 50 percent of January 
221.27  2, 1982, assessed value in the case of a township and 50 percent 
221.28  of the January 2, 1980, assessed value in the case of a city and 
221.29  its current assessed value to (2) the sum of its current 
221.30  assessed value plus the difference determined in (1), provided 
221.31  that the amount distributed shall not exceed $55 per capita in 
221.32  the case of a township or $75 per capita in the case of a city.  
221.33  For purposes of this limitation, population will be determined 
221.34  according to the 1980 decennial census conducted by the United 
221.35  States Bureau of the Census.  If the current assessed value of 
221.36  the township exceeds 50 percent of the township's January 2, 
222.1   1982, assessed value, or if the current assessed value of the 
222.2   city exceeds 50 percent of the city's January 2, 1980, assessed 
222.3   value, this paragraph shall not apply.  For purposes of this 
222.4   paragraph, "assessed value," when used in reference to years 
222.5   other than 1980 or 1982, means, for distributions for production 
222.6   year 1989, production taxes payable in 1990, the appropriate net 
222.7   tax capacities multiplied by 8.2 and for distributions for 
222.8   production year 1990 and thereafter, production taxes payable in 
222.9   1991 and thereafter, the appropriate net tax capacities 
222.10  multiplied by 10.2. 
222.11     Sec. 4.  Minnesota Statutes 1996, section 298.28, 
222.12  subdivision 5, is amended to read: 
222.13     Subd. 5.  [COUNTIES.] (a) 16.5 24.75 cents per taxable ton 
222.14  is allocated to counties to be distributed, based upon 
222.15  certification by the commissioner of revenue, under paragraphs 
222.16  (b) to (d). 
222.17     (b) 13 19.5 cents per taxable ton shall be distributed to 
222.18  the county in which the taconite is mined or quarried or in 
222.19  which the concentrate is produced, less any amount which is to 
222.20  be distributed pursuant to paragraph (c).  The apportionment 
222.21  formula prescribed in subdivision 2 is the basis for the 
222.22  distribution. 
222.23     (c) If an electric power plant owned by and providing the 
222.24  primary source of power for a taxpayer mining and concentrating 
222.25  taconite is located in a county other than the county in which 
222.26  the mining and the concentrating processes are conducted, one 
222.27  cent 1.5 cents per taxable ton of the tax distributed to the 
222.28  counties pursuant to paragraph (b) and imposed on and collected 
222.29  from such taxpayer shall be paid to the county in which the 
222.30  power plant is located. 
222.31     (d) 3.5 5.25 cents per taxable ton shall be paid to the 
222.32  county from which the taconite was mined, quarried or 
222.33  concentrated to be deposited in the county road and bridge 
222.34  fund.  If the mining, quarrying and concentrating, or separate 
222.35  steps in any of those processes are carried on in more than one 
222.36  county, the commissioner shall follow the apportionment formula 
223.1   prescribed in subdivision 2. 
223.2      Sec. 5.  Minnesota Statutes 1996, section 477A.011, is 
223.3   amended by adding a subdivision to read: 
223.4      Subd. 3d.  [POVERTY ADJUSTED POPULATION.] "Poverty adjusted 
223.5   population" means the sum of (1) the county's population, and 
223.6   (2) three times the average unduplicated number of persons who 
223.7   receive benefits per month under general assistance, medical 
223.8   assistance, or AFDC, or its successor program, as determined 
223.9   under section 256E.06. 
223.10     Sec. 6.  Minnesota Statutes 1996, section 477A.011, 
223.11  subdivision 20, is amended to read: 
223.12     Subd. 20.  [CITY NET TAX CAPACITY.] "City Net tax capacity" 
223.13  for a local taxing jurisdiction means (1) the net tax capacity 
223.14  computed using the net tax capacity rates in section 273.13, and 
223.15  the market values for taxes payable in the year prior to the aid 
223.16  distribution plus (2) a city's jurisdiction's fiscal disparities 
223.17  distribution tax capacity under section 276A.06, subdivision 2, 
223.18  paragraph (b), or 473F.08, subdivision 2, paragraph (b), for 
223.19  taxes payable in the year prior to that for which aids are being 
223.20  calculated.  The market value utilized in computing city a 
223.21  jurisdiction's net tax capacity shall be reduced by the sum of 
223.22  (1) a city's the jurisdiction's market value of commercial 
223.23  industrial property as defined in section 276A.01, subdivision 
223.24  3, or 473F.02, subdivision 3, multiplied by the ratio determined 
223.25  pursuant to section 276A.06, subdivision 2, paragraph (a), or 
223.26  473F.08, subdivision 2, paragraph (a), (2) the market value of 
223.27  the captured value of tax increment financing districts as 
223.28  defined in section 469.177, subdivision 2, and (3) the market 
223.29  value of transmission lines deducted from a city's the 
223.30  jurisdiction's total net tax capacity under section 273.425.  
223.31  The county or city net tax capacity will be computed using 
223.32  equalized market values.  
223.33     Sec. 7.  Minnesota Statutes 1996, section 477A.011, 
223.34  subdivision 35, is amended to read: 
223.35     Subd. 35.  [TAX EFFORT RATE.] "Tax effort rate" for a type 
223.36  of taxing jurisdiction means the sum of the net levy for 
224.1   all cities jurisdictions of that type divided by the sum of the 
224.2   city net tax capacity for all cities jurisdictions of that type. 
224.3   For aids payable in 2000 only, the "tax effort rate" for cities 
224.4   means (1) the sum of the net levy for all cities plus the 1999 
224.5   homestead and agricultural credit aid for all cities, divided by 
224.6   (2) the sum of the net tax capacity for all cities.  For 
224.7   purposes of this section, "net levy" means the city levy, after 
224.8   all adjustments, used for calculating the local tax rate under 
224.9   section 275.08 for taxes payable in the year prior to the aid 
224.10  distribution.  The fiscal disparity distribution levy under 
224.11  chapter 276A or 473F is included in net levy. 
224.12     Sec. 8.  Minnesota Statutes 1996, section 477A.011, is 
224.13  amended by adding a subdivision to read: 
224.14     Subd. 38.  [ACRES.] The number of acres in a township or a 
224.15  county are the number of acres of land in the jurisdiction, 
224.16  according to the most recent federal census, adjusted for any 
224.17  annexations and detachments as provided under section 477A.014, 
224.18  subdivision 1. 
224.19     Sec. 9.  Minnesota Statutes 1996, section 477A.011, is 
224.20  amended by adding a subdivision to read: 
224.21     Subd. 39.  [AGRICULTURAL NET TAX CAPACITY.] The 
224.22  "agricultural net tax capacity" for a township is equal to the 
224.23  net tax capacity for all property in the township that is 
224.24  classified as class 2 under section 273.13, subdivision 23, 
224.25  excluding any airport property, plus any class 1 property under 
224.26  section 273.13, subdivision 22, that is part of an agricultural 
224.27  homestead. 
224.28     Sec. 10.  [477A.0125] [COUNTY AID DISTRIBUTIONS.] 
224.29     Subdivision 1.  [FORMULA AMOUNT.] In calendar year 2000 and 
224.30  subsequent years, each county shall receive an aid amount equal 
224.31  to the product of (1) an aid percentage, and (2) the sum of (i) 
224.32  its poverty weighted population multiplied by 145; and (ii) its 
224.33  acres of land multiplied by .40; minus its net tax capacity 
224.34  multiplied by 50 percent of the county tax effort rate.  The aid 
224.35  percentage shall be calculated by the department of revenue so 
224.36  that the total aid paid to counties under this section equals 
225.1   the amount available for distribution under section 477A.03. 
225.2      Subd. 2.  [AID LIMITATION.] (a) For aids payable in 2000, 
225.3   the amount of aid a county receives under this section shall not 
225.4   exceed an amount equal to (1) its 1997 homestead and 
225.5   agricultural credit aid, plus (2) ten percent of its net levy 
225.6   for taxes payable in 1997. 
225.7      (b) For aids payable in 2001 and subsequent years, the 
225.8   amount of aid a county receives under this section shall not 
225.9   exceed an amount equal to (1) its 1997 homestead and 
225.10  agricultural credit aid increased by the percentage increase in 
225.11  total aid under this section for the current aid payable year 
225.12  compared to the total aid under this section for 2000, plus (2) 
225.13  a percentage of its net levy for taxes payable in 1997 equal to 
225.14  ten percent plus one percent for each aid payable year since 
225.15  2000. 
225.16     Sec. 11.  Minnesota Statutes 1996, section 477A.013, 
225.17  subdivision 1, is amended to read: 
225.18     Subdivision 1.  [TOWNS.] In 1994 each town that had levied 
225.19  for taxes payable in the prior year a local tax rate of at least 
225.20  .008 shall receive a distribution equal to the amount it 
225.21  received in 1993 under this section before any nonpermanent 
225.22  reductions made under section 477A.0132.  In 1995 each town that 
225.23  had levied for taxes payable in 1993 a local tax rate of at 
225.24  least .008 shall receive a distribution equal to 102 percent of 
225.25  the amount it received in 1994 under this section before any 
225.26  increases or reductions under sections 16A.711, subdivision 5, 
225.27  and 477A.0132.  In 1996 and subsequent years each town that had 
225.28  levied for taxes payable in 1993 a local tax rate of at least 
225.29  .008 shall receive a distribution equal to the amount it 
225.30  received in the previous year under this section, adjusted for 
225.31  inflation as provided under section 477A.03, subdivision 3. In 
225.32  calendar year 2000 and subsequent years, the amount of aid that 
225.33  a town receives is equal to (1) the aid factor multiplied by the 
225.34  number of acres in the town, less (2) 0.10 multiplied by the 
225.35  difference between the town's total net tax capacity and its 
225.36  agricultural net tax capacity.  In 2000, the aid factor is $1.  
226.1   In 2001 and subsequent years, the aid factor is the aid factor 
226.2   from the previous year adjusted for inflation as provided under 
226.3   section 477A.03, subdivision 3.  If the town's agricultural net 
226.4   tax capacity is less than 40 percent of its total net tax 
226.5   capacity, the amount of aid it receives is zero.  No town may 
226.6   have an aid amount less than zero. 
226.7      Sec. 12.  Minnesota Statutes 1996, section 477A.03, 
226.8   subdivision 2, is amended to read: 
226.9      Subd. 2.  [ANNUAL APPROPRIATION.] A sum sufficient to 
226.10  discharge the duties imposed by sections 477A.011 to 477A.014 is 
226.11  annually appropriated from the general fund to the commissioner 
226.12  of revenue.  For aids payable in 1996 2000 and thereafter, the 
226.13  total aids paid under sections 477A.013, subdivision 9, 
226.14  477A.0121, and 477A.0122 are the amounts certified to be paid in 
226.15  the previous year, adjusted for inflation as provided under 
226.16  subdivision 3.  Aid payments to counties under section 477A.0121 
226.17  are limited to $20,265,000 in 1996 477A.0125 are limited to 
226.18  $200,000,000 in 2000.  Aid payments to counties under section 
226.19  477A.0121 are limited to $27,571,625 in 1997.  For aid payable 
226.20  in 1998 2001 and thereafter, the total aids paid under section 
226.21  477A.0121 477A.0125 are the amounts certified to be paid in the 
226.22  previous year, adjusted for inflation as provided under 
226.23  subdivision 3. 
226.24     Sec. 13.  [477A.20] [STATE-OWNED BUILDINGS; PAYMENTS IN 
226.25  LIEU.] 
226.26     Subdivision 1.  [STATE-OWNED BUILDINGS.] For purposes of 
226.27  this section, "state-owned buildings" means all buildings owned 
226.28  or leased by the state of Minnesota, the University of 
226.29  Minnesota, state universities, community colleges, and technical 
226.30  colleges which are currently exempt from local property taxes, 
226.31  with the following exceptions: 
226.32     (1) buildings that have less than 2,000 square feet of 
226.33  finished floor space, and 
226.34     (2) buildings owned or leased and used by the department of 
226.35  natural resources for purposes other than as a state or district 
226.36  headquarters. 
227.1      Subd. 2.  [EDUCATIONAL AND CORRECTIONAL BUILDINGS.] For 
227.2   purposes of this section, "educational and correctional 
227.3   buildings" means correctional facilities and buildings used for 
227.4   higher education purposes. 
227.5      Subd. 3.  [IN LIEU PAYMENT.] (a) A city shall receive a 
227.6   payment in lieu of property taxes for state owned buildings in 
227.7   the following amount, subject to the limits imposed in 
227.8   paragraphs (b) and (c).  The in lieu payment shall be equal to 
227.9   $.25 for each square foot of finished floor space in state-owned 
227.10  educational and correctional buildings plus $.75 for each square 
227.11  foot of finished floor space for all other state owned buildings 
227.12  located within the city.  The department of administration will 
227.13  provide the square footage for all qualifying buildings to the 
227.14  commissioner of revenue to allow calculation of this payment. 
227.15     (b) No city may receive an in lieu payment greater than $15 
227.16  per capita, based on the most recent city population estimate, 
227.17  as defined in section 477A.011, subdivision 3. 
227.18     (c) If the total amount of finished floor space in 
227.19  qualifying state owned buildings in a city is less than 8,000 
227.20  square feet, the in lieu payment shall be zero. 
227.21     Subd. 4.  [APPROPRIATION.] A sum sufficient to discharge 
227.22  the duties imposed under this section is annually appropriated 
227.23  from the general fund to the commissioner of revenue.  The 
227.24  payments shall be made in the manner in prescribed in section 
227.25  477A.014, subdivision 1.  The payments shall be made on the 
227.26  dates prescribed in section 477A.015. 
227.27     Sec. 14.  [TIF GRANTS; APPROPRIATIONS.] 
227.28     (a) The commissioner of revenue shall pay grants to 
227.29  municipalities for deficits in tax increment financing districts 
227.30  caused by the changes in class rates, the reduction of school 
227.31  district taxes, and the imposition of a state tax that is not 
227.32  used in determining tax increment under this act.  
227.33  Municipalities must submit applications for the grants in a form 
227.34  prescribed by the commissioner by no later than March 1 for 
227.35  taxes payable during the calendar year.  The maximum grant 
227.36  equals the lesser of: 
228.1      (1) the reduction in the tax increment financing district's 
228.2   revenues derived from increment resulting from the provisions of 
228.3   this act; and 
228.4      (2) the municipality's total available tax increments, 
228.5   including those from previous years, less the amount due during 
228.6   the calendar year to pay bonds issued and sold before and 
228.7   binding contracts entered into before the day following final 
228.8   enactment of this act. 
228.9      (b) The amount necessary to make the grants is appropriated 
228.10  to the commissioner of revenue from the general fund for 
228.11  purposes of this section. 
228.12     Sec. 15.  [REPEALER.] 
228.13     Minnesota Statutes 1996, sections 273.1398, subdivisions 2, 
228.14  2c, 2d, 3, and 3a; and 273.166, are repealed. 
228.15     Sec. 16.  [EFFECTIVE DATE.] 
228.16     This article is effective for aids payable in 2000 and 
228.17  subsequent years. 
228.18                             ARTICLE 9
228.19                     INCOME AND CORPORATE TAXES
228.20     Section 1.  Minnesota Statutes 1996, section 270B.02, is 
228.21  amended by adding a subdivision to read: 
228.22     Subd. 6.  [CLIENT LISTS; THIRD-PARTY BULK FILERS.] Client 
228.23  lists required under section 290.92, subdivision 30, are 
228.24  classified as private data on individuals or nonpublic data, as 
228.25  defined in section 13.02, subdivisions 9 and 12. 
228.26     Sec. 2.  Minnesota Statutes 1996, section 289A.26, 
228.27  subdivision 2, is amended to read: 
228.28     Subd. 2.  [AMOUNT AND TIME FOR PAYMENT OF INSTALLMENTS.] 
228.29  The estimated tax payment required under subdivision 1 must be 
228.30  paid in four equal installments on or before the 15th day of the 
228.31  third fourth, sixth, ninth, and 12th month of the taxable year.  
228.32     Sec. 3.  Minnesota Statutes 1996, section 289A.26, 
228.33  subdivision 3, is amended to read: 
228.34     Subd. 3.  [SHORT TAXABLE YEAR.] (a) An entity with a short 
228.35  taxable year of less than 12 months, but at least four months, 
228.36  must pay estimated tax in equal installments on or before the 
229.1   15th day of the third fourth, sixth, ninth, and final month of 
229.2   the short taxable year, to the extent applicable based on the 
229.3   number of months in the short taxable year.  
229.4      (b) An entity is not required to make estimated tax 
229.5   payments for a short taxable year unless its tax liability 
229.6   before the first day of the last month of the taxable year can 
229.7   reasonably be expected to exceed $500.  
229.8      (c) No payment is required for a short taxable year of less 
229.9   than four months. 
229.10     Sec. 4.  Minnesota Statutes 1996, section 289A.26, 
229.11  subdivision 6, is amended to read: 
229.12     Subd. 6.  [PERIOD OF UNDERPAYMENT.] The period of the 
229.13  underpayment runs from the date the installment was required to 
229.14  be paid to the earlier of the following dates: 
229.15     (1) the 15th day of the third fourth month following the 
229.16  close of the taxable year for corporations, and the 15th day of 
229.17  the fifth month following the close of the taxable year for 
229.18  entities subject to tax under section 290.05, subdivision 3; or 
229.19     (2) with respect to any part of the underpayment, the date 
229.20  on which that part is paid.  For purposes of this clause, a 
229.21  payment of estimated tax shall be credited against unpaid 
229.22  required installments in the order in which those installments 
229.23  are required to be paid. 
229.24     Sec. 5.  Minnesota Statutes 1996, section 289A.26, 
229.25  subdivision 7, is amended to read: 
229.26     Subd. 7.  [REQUIRED INSTALLMENTS.] (a) Except as otherwise 
229.27  provided in this subdivision, the amount of a required 
229.28  installment is 25 percent of the required annual payment. 
229.29     (b) Except as otherwise provided in this subdivision, the 
229.30  term "required annual payment" means the lesser of: 
229.31     (1) 100 percent of the tax shown on the return for the 
229.32  taxable year, or, if no return is filed, 100 percent of the tax 
229.33  for that year; or 
229.34     (2) 100 percent of the tax shown on the return of the 
229.35  entity for the preceding taxable year provided the return was 
229.36  for a full 12-month period, showed a liability, and was filed by 
230.1   the entity. 
230.2      (c) Except for determining the first required installment 
230.3   for any taxable year, paragraph (b), clause (2), does not apply 
230.4   in the case of a large corporation.  The term "large 
230.5   corporation" means a corporation or any predecessor corporation 
230.6   that had taxable net income of $1,000,000 or more for any 
230.7   taxable year during the testing period.  The term "testing 
230.8   period" means the three taxable years immediately preceding the 
230.9   taxable year involved.  A reduction allowed to a large 
230.10  corporation for the first installment that is allowed by 
230.11  applying paragraph (b), clause (2), must be recaptured by 
230.12  increasing the next required installment by the amount of the 
230.13  reduction. 
230.14     (d) In the case of a required installment, if the 
230.15  corporation establishes that the annualized income installment 
230.16  is less than the amount determined in paragraph (a), the amount 
230.17  of the required installment is the annualized income installment 
230.18  and the recapture of previous quarters' reductions allowed by 
230.19  this paragraph must be recovered by increasing later required 
230.20  installments to the extent the reductions have not previously 
230.21  been recovered. 
230.22     (e) The "annualized income installment" is the excess, if 
230.23  any, of: 
230.24     (1) an amount equal to the applicable percentage of the tax 
230.25  for the taxable year computed by placing on an annualized basis 
230.26  the taxable income: 
230.27     (i) for the first two three months of the taxable year, in 
230.28  the case of the first required installment; 
230.29     (ii) for the first two three months or for the first five 
230.30  months of the taxable year, in the case of the second required 
230.31  installment; 
230.32     (iii) for the first six months or for the first eight 
230.33  months of the taxable year, in the case of the third required 
230.34  installment; and 
230.35     (iv) for the first nine months or for the first 11 months 
230.36  of the taxable year, in the case of the fourth required 
231.1   installment, over 
231.2      (2) the aggregate amount of any prior required installments 
231.3   for the taxable year.  
231.4      (3) For the purpose of this paragraph, the annualized 
231.5   income shall be computed by placing on an annualized basis the 
231.6   taxable income for the year up to the end of the month preceding 
231.7   the due date for the quarterly payment multiplied by 12 and 
231.8   dividing the resulting amount by the number of months in the 
231.9   taxable year (2, 5, 6, 8, 9, or 11 as the case may be) referred 
231.10  to in clause (1). 
231.11     (4) The "applicable percentage" used in clause (1) is: 
231.12  For the following                 The applicable
231.13  required installments:            percentage is:
231.14          1st                               25 
231.15          2nd                               50  
231.16          3rd                               75  
231.17          4th                              100   
231.18     (f)(1) If this paragraph applies, the amount determined for 
231.19  any installment must be determined in the following manner: 
231.20     (i) take the taxable income for the months during the 
231.21  taxable year preceding the filing month; 
231.22     (ii) divide that amount by the base period percentage for 
231.23  the months during the taxable year preceding the filing month; 
231.24     (iii) determine the tax on the amount determined under item 
231.25  (ii); and 
231.26     (iv) multiply the tax computed under item (iii) by the base 
231.27  period percentage for the filing month and the months during the 
231.28  taxable year preceding the filing month.  
231.29     (2) For purposes of this paragraph: 
231.30     (i) the "base period percentage" for a period of months is 
231.31  the average percent that the taxable income for the 
231.32  corresponding months in each of the three preceding taxable 
231.33  years bears to the taxable income for the three preceding 
231.34  taxable years; 
231.35     (ii) the term "filing month" means the month in which the 
231.36  installment is required to be paid; 
232.1      (iii) this paragraph only applies if the base period 
232.2   percentage for any six consecutive months of the taxable year 
232.3   equals or exceeds 70 percent; and 
232.4      (iv) the commissioner may provide by rule for the 
232.5   determination of the base period percentage in the case of 
232.6   reorganizations, new corporations, and other similar 
232.7   circumstances.  
232.8      (3) In the case of a required installment determined under 
232.9   this paragraph, if the entity determines that the installment is 
232.10  less than the amount determined in paragraph (a), the amount of 
232.11  the required installment is the amount determined under this 
232.12  paragraph and the recapture of previous quarters' reductions 
232.13  allowed by this paragraph must be recovered by increasing later 
232.14  required installments to the extent the reductions have not 
232.15  previously been recovered.  
232.16     Sec. 6.  Minnesota Statutes 1996, section 290.01, 
232.17  subdivision 19b, is amended to read: 
232.18     Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
232.19  individuals, estates, and trusts, there shall be subtracted from 
232.20  federal taxable income: 
232.21     (1) interest income on obligations of any authority, 
232.22  commission, or instrumentality of the United States to the 
232.23  extent includable in taxable income for federal income tax 
232.24  purposes but exempt from state income tax under the laws of the 
232.25  United States; 
232.26     (2) if included in federal taxable income, the amount of 
232.27  any overpayment of income tax to Minnesota or to any other 
232.28  state, for any previous taxable year, whether the amount is 
232.29  received as a refund or as a credit to another taxable year's 
232.30  income tax liability; 
232.31     (3) the amount paid to others not to exceed $650 for each 
232.32  dependent in grades kindergarten to 6 and $1,000 for each 
232.33  dependent in grades 7 to 12, for tuition, textbooks, and 
232.34  transportation of each dependent in attending an elementary or 
232.35  secondary school situated in Minnesota, North Dakota, South 
232.36  Dakota, Iowa, or Wisconsin, wherein a resident of this state may 
233.1   legally fulfill the state's compulsory attendance laws, which is 
233.2   not operated for profit, and which adheres to the provisions of 
233.3   the Civil Rights Act of 1964 and chapter 363.  As used in this 
233.4   clause, "textbooks" includes books and other instructional 
233.5   materials and equipment used in elementary and secondary schools 
233.6   in teaching only those subjects legally and commonly taught in 
233.7   public elementary and secondary schools in this state.  
233.8   "Textbooks" does not include instructional books and materials 
233.9   used in the teaching of religious tenets, doctrines, or worship, 
233.10  the purpose of which is to instill such tenets, doctrines, or 
233.11  worship, nor does it include books or materials for, or 
233.12  transportation to, extracurricular activities including sporting 
233.13  events, musical or dramatic events, speech activities, driver's 
233.14  education, or similar programs.  In order to qualify for the 
233.15  subtraction under this clause the taxpayer must elect to itemize 
233.16  deductions under section 63(e) of the Internal Revenue Code; 
233.17     (4) to the extent included in federal taxable income, 
233.18  distributions from a qualified governmental pension plan, an 
233.19  individual retirement account, simplified employee pension, or 
233.20  qualified plan covering a self-employed person that represent a 
233.21  return of contributions that were included in Minnesota gross 
233.22  income in the taxable year for which the contributions were made 
233.23  but were deducted or were not included in the computation of 
233.24  federal adjusted gross income.  The distribution shall be 
233.25  allocated first to return of contributions until the 
233.26  contributions included in Minnesota gross income have been 
233.27  exhausted.  This subtraction applies only to contributions made 
233.28  in a taxable year prior to 1985; 
233.29     (5) income as provided under section 290.0802; 
233.30     (6) the amount of unrecovered accelerated cost recovery 
233.31  system deductions allowed under subdivision 19g; 
233.32     (7) to the extent included in federal adjusted gross 
233.33  income, income realized on disposition of property exempt from 
233.34  tax under section 290.491; 
233.35     (8) to the extent not deducted in determining federal 
233.36  taxable income, the amount paid for health insurance of 
234.1   self-employed individuals as determined under section 162(l) of 
234.2   the Internal Revenue Code, except that the 25 percent limit does 
234.3   not apply.  If the taxpayer deducted insurance payments under 
234.4   section 213 of the Internal Revenue Code of 1986, the 
234.5   subtraction under this clause must be reduced by the lesser of: 
234.6      (i) the total itemized deductions allowed under section 
234.7   63(d) of the Internal Revenue Code, less state, local, and 
234.8   foreign income taxes deductible under section 164 of the 
234.9   Internal Revenue Code and the standard deduction under section 
234.10  63(c) of the Internal Revenue Code; or 
234.11     (ii) the lesser of (A) the amount of insurance qualifying 
234.12  as "medical care" under section 213(d) of the Internal Revenue 
234.13  Code to the extent not deducted under section 162(1) of the 
234.14  Internal Revenue Code or excluded from income or (B) the total 
234.15  amount deductible for medical care under section 213(a); and 
234.16     (9) the exemption amount allowed under Laws 1995, chapter 
234.17  255, article 3, section 2, subdivision 3; and 
234.18     (10) to the extent included in federal taxable income, 
234.19  postservice benefits for youth community service under section 
234.20  121.707 for volunteer service under United States Code, title 
234.21  42, section 5011(d), as amended. 
234.22     Sec. 7.  Minnesota Statutes 1996, section 290.01, 
234.23  subdivision 19c, is amended to read: 
234.24     Subd. 19c.  [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE 
234.25  INCOME.] For corporations, there shall be added to federal 
234.26  taxable income: 
234.27     (1) the amount of any deduction taken for federal income 
234.28  tax purposes for income, excise, or franchise taxes based on net 
234.29  income or related minimum taxes paid by the corporation to 
234.30  Minnesota, another state, a political subdivision of another 
234.31  state, the District of Columbia, or any foreign country or 
234.32  possession of the United States; 
234.33     (2) interest not subject to federal tax upon obligations 
234.34  of:  the United States, its possessions, its agencies, or its 
234.35  instrumentalities; the state of Minnesota or any other state, 
234.36  any of its political or governmental subdivisions, any of its 
235.1   municipalities, or any of its governmental agencies or 
235.2   instrumentalities; the District of Columbia; or Indian tribal 
235.3   governments; 
235.4      (3) exempt-interest dividends received as defined in 
235.5   section 852(b)(5) of the Internal Revenue Code; 
235.6      (4) the amount of any windfall profits tax deducted under 
235.7   section 164 or 471 of the Internal Revenue Code; 
235.8      (5) the amount of any net operating loss deduction taken 
235.9   for federal income tax purposes under section 172 or 832(c)(10) 
235.10  of the Internal Revenue Code or operations loss deduction under 
235.11  section 810 of the Internal Revenue Code; 
235.12     (6) the amount of any special deductions taken for federal 
235.13  income tax purposes under sections 241 to 247 of the Internal 
235.14  Revenue Code; 
235.15     (7) losses from the business of mining, as defined in 
235.16  section 290.05, subdivision 1, clause (a), that are not subject 
235.17  to Minnesota income tax; 
235.18     (8) the amount of any capital losses deducted for federal 
235.19  income tax purposes under sections 1211 and 1212 of the Internal 
235.20  Revenue Code; 
235.21     (9) the amount of any charitable contributions deducted for 
235.22  federal income tax purposes under section 170 of the Internal 
235.23  Revenue Code; 
235.24     (10) the exempt foreign trade income of a foreign sales 
235.25  corporation under sections 921(a) and 291 of the Internal 
235.26  Revenue Code; 
235.27     (11) the amount of percentage depletion deducted under 
235.28  sections 611 through 614 and 291 of the Internal Revenue Code; 
235.29     (12) for certified pollution control facilities placed in 
235.30  service in a taxable year beginning before December 31, 1986, 
235.31  and for which amortization deductions were elected under section 
235.32  169 of the Internal Revenue Code of 1954, as amended through 
235.33  December 31, 1985, the amount of the amortization deduction 
235.34  allowed in computing federal taxable income for those 
235.35  facilities; and 
235.36     (13) the amount of any deemed dividend from a foreign 
236.1   operating corporation determined pursuant to section 290.17, 
236.2   subdivision 4, paragraph (g); and 
236.3      (14) the amount of any environmental tax paid under section 
236.4   59A of the Internal Revenue Code. 
236.5      Sec. 8.  Minnesota Statutes 1996, section 290.01, 
236.6   subdivision 19d, is amended to read: 
236.7      Subd. 19d.  [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 
236.8   TAXABLE INCOME.] For corporations, there shall be subtracted 
236.9   from federal taxable income after the increases provided in 
236.10  subdivision 19c:  
236.11     (1) the amount of foreign dividend gross-up added to gross 
236.12  income for federal income tax purposes under section 78 of the 
236.13  Internal Revenue Code; 
236.14     (2) the amount of salary expense not allowed for federal 
236.15  income tax purposes due to claiming the federal jobs credit 
236.16  under section 51 of the Internal Revenue Code; 
236.17     (3) any dividend (not including any distribution in 
236.18  liquidation) paid within the taxable year by a national or state 
236.19  bank to the United States, or to any instrumentality of the 
236.20  United States exempt from federal income taxes, on the preferred 
236.21  stock of the bank owned by the United States or the 
236.22  instrumentality; 
236.23     (4) amounts disallowed for intangible drilling costs due to 
236.24  differences between this chapter and the Internal Revenue Code 
236.25  in taxable years beginning before January 1, 1987, as follows: 
236.26     (i) to the extent the disallowed costs are represented by 
236.27  physical property, an amount equal to the allowance for 
236.28  depreciation under Minnesota Statutes 1986, section 290.09, 
236.29  subdivision 7, subject to the modifications contained in 
236.30  subdivision 19e; and 
236.31     (ii) to the extent the disallowed costs are not represented 
236.32  by physical property, an amount equal to the allowance for cost 
236.33  depletion under Minnesota Statutes 1986, section 290.09, 
236.34  subdivision 8; 
236.35     (5) the deduction for capital losses pursuant to sections 
236.36  1211 and 1212 of the Internal Revenue Code, except that: 
237.1      (i) for capital losses incurred in taxable years beginning 
237.2   after December 31, 1986, capital loss carrybacks shall not be 
237.3   allowed; 
237.4      (ii) for capital losses incurred in taxable years beginning 
237.5   after December 31, 1986, a capital loss carryover to each of the 
237.6   15 taxable years succeeding the loss year shall be allowed; 
237.7      (iii) for capital losses incurred in taxable years 
237.8   beginning before January 1, 1987, a capital loss carryback to 
237.9   each of the three taxable years preceding the loss year, subject 
237.10  to the provisions of Minnesota Statutes 1986, section 290.16, 
237.11  shall be allowed; and 
237.12     (iv) for capital losses incurred in taxable years beginning 
237.13  before January 1, 1987, a capital loss carryover to each of the 
237.14  five taxable years succeeding the loss year to the extent such 
237.15  loss was not used in a prior taxable year and subject to the 
237.16  provisions of Minnesota Statutes 1986, section 290.16, shall be 
237.17  allowed; 
237.18     (6) an amount for interest and expenses relating to income 
237.19  not taxable for federal income tax purposes, if (i) the income 
237.20  is taxable under this chapter and (ii) the interest and expenses 
237.21  were disallowed as deductions under the provisions of section 
237.22  171(a)(2), 265 or 291 of the Internal Revenue Code in computing 
237.23  federal taxable income; 
237.24     (7) in the case of mines, oil and gas wells, other natural 
237.25  deposits, and timber for which percentage depletion was 
237.26  disallowed pursuant to subdivision 19c, clause (11), a 
237.27  reasonable allowance for depletion based on actual cost.  In the 
237.28  case of leases the deduction must be apportioned between the 
237.29  lessor and lessee in accordance with rules prescribed by the 
237.30  commissioner.  In the case of property held in trust, the 
237.31  allowable deduction must be apportioned between the income 
237.32  beneficiaries and the trustee in accordance with the pertinent 
237.33  provisions of the trust, or if there is no provision in the 
237.34  instrument, on the basis of the trust's income allocable to 
237.35  each; 
237.36     (8) for certified pollution control facilities placed in 
238.1   service in a taxable year beginning before December 31, 1986, 
238.2   and for which amortization deductions were elected under section 
238.3   169 of the Internal Revenue Code of 1954, as amended through 
238.4   December 31, 1985, an amount equal to the allowance for 
238.5   depreciation under Minnesota Statutes 1986, section 290.09, 
238.6   subdivision 7; 
238.7      (9) the amount included in federal taxable income 
238.8   attributable to the credits provided in Minnesota Statutes 1986, 
238.9   section 273.1314, subdivision 9, or Minnesota Statutes, section 
238.10  469.171, subdivision 6; 
238.11     (10) amounts included in federal taxable income that are 
238.12  due to refunds of income, excise, or franchise taxes based on 
238.13  net income or related minimum taxes paid by the corporation to 
238.14  Minnesota, another state, a political subdivision of another 
238.15  state, the District of Columbia, or a foreign country or 
238.16  possession of the United States to the extent that the taxes 
238.17  were added to federal taxable income under section 290.01, 
238.18  subdivision 19c, clause (1), in a prior taxable year; 
238.19     (11) the following percentage 80 percent of royalties, 
238.20  fees, or other like income accrued or received from a foreign 
238.21  operating corporation or a foreign corporation which is part of 
238.22  the same unitary business as the receiving corporation: 
238.23        Taxable Year 
238.24        Beginning After .......... Percentage 
238.25        December 31, 1988 ........ 50 percent 
238.26        December 31, 1990 ........ 80 percent;    
238.27     (12) income or gains from the business of mining as defined 
238.28  in section 290.05, subdivision 1, clause (a), that are not 
238.29  subject to Minnesota franchise tax; 
238.30     (13) the amount of handicap access expenditures in the 
238.31  taxable year which are not allowed to be deducted or capitalized 
238.32  under section 44(d)(7) of the Internal Revenue Code; 
238.33     (14) the amount of qualified research expenses not allowed 
238.34  for federal income tax purposes under section 280C(c) of the 
238.35  Internal Revenue Code, but only to the extent that the amount 
238.36  exceeds the amount of the credit allowed under section 290.068; 
239.1   and 
239.2      (15) the amount of salary expenses not allowed for federal 
239.3   income tax purposes due to claiming the Indian employment credit 
239.4   under section 45A(a) of the Internal Revenue Code; and 
239.5      (16) the amount of any refund of environmental taxes paid 
239.6   under section 59A of the Internal Revenue Code. 
239.7      Sec. 9.  [290.0672] [LONG-TERM CARE INSURANCE CREDIT.] 
239.8      Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
239.9   section, the following terms have the meanings given. 
239.10     (b) "Long-term care insurance" means a policy that: 
239.11     (1) qualifies for a deduction under section 213 of the 
239.12  Internal Revenue Code, disregarding the 7.5 percent income test; 
239.13  or meets the requirements given in section 62A.46; or provides 
239.14  similar coverage issued under the laws of another jurisdiction; 
239.15  and 
239.16     (2) does not have a lifetime long-term care benefit limit 
239.17  of less than $100,000; and 
239.18     (3) includes inflation protection that meets or exceeds the 
239.19  inflation protection requirements of the long-term care 
239.20  insurance model regulation cited under section 
239.21  7702B(g)(2)(A)(i)(x) of the Internal Revenue Code. 
239.22     (c) "Qualified beneficiary" means the taxpayer or the 
239.23  taxpayer's spouse.  
239.24     (d) "Premiums deducted in determining federal taxable 
239.25  income" means the lesser of (1) long-term care insurance 
239.26  premiums that qualify as deductions under section 213 of the 
239.27  Internal Revenue Code; and (2) the total amount deductible for 
239.28  medical care under section 213 of the Internal Revenue Code. 
239.29     Subd. 2.  [CREDIT.] A taxpayer is allowed a credit against 
239.30  the tax imposed by this chapter for long-term care insurance 
239.31  policy premiums paid during the tax year.  The credit for each 
239.32  policy equals the lesser of (1) 25 percent of premiums paid to 
239.33  the extent not deducted in determining federal taxable income; 
239.34  or (2) $100.  A taxpayer may claim a credit for only one policy 
239.35  for each qualified beneficiary.  Only one credit may be claimed 
239.36  by any taxpayer for each policy.  The maximum total credit 
240.1   allowed per year is $200 for married couples filing joint 
240.2   returns and $100 for all other filers.  For a nonresident or 
240.3   part-year resident, the credit determined under this section 
240.4   must be allocated based on the percentage calculated under 
240.5   section 290.06, subdivision 2c, paragraph (e). 
240.6      Sec. 10.  [290.0673] [JOB TRAINING PROGRAM CREDIT.] 
240.7      Subdivision 1.  [CREDIT ALLOWED.] (a) A credit is allowed 
240.8   against the tax imposed by section 290.06, subdivision 1, equal 
240.9   to the sum of: 
240.10     (1) placement fees paid to a job training program upon 
240.11  hiring a qualified graduate of the program; and 
240.12     (2) retention fees paid to a job training program for 
240.13  retention of a qualified graduate of the program. 
240.14     (b) The maximum placement fee qualifying for a credit under 
240.15  this section is $8,000 per qualified graduate in the year 
240.16  hired.  The maximum retention fee qualifying for a credit under 
240.17  this section is $6,000 per qualified graduate retained as an 
240.18  employee per year.  Only retention fees paid in the second and 
240.19  third years after the qualified graduate is hired qualify for 
240.20  the credit. 
240.21     (c) A credit is allowed only up to the dollar amount of 
240.22  certificates, issued under subdivision 4, and provided by the 
240.23  job training program to the taxpayer. 
240.24     Subd. 2.  [QUALIFIED JOB TRAINING PROGRAM.] (a) To qualify 
240.25  for credits under this section, a job training program must 
240.26  satisfy the following requirements: 
240.27     (1) It must be operated by a nonprofit corporation that 
240.28  qualifies under section 501(c)(3) of the Internal Revenue Code. 
240.29     (2) The organization must spend at least $5,000 per 
240.30  graduate of the program. 
240.31     (3) The program must provide education and training in: 
240.32     (i) basic skills, such as reading, writing, mathematics, 
240.33  and communications; 
240.34     (ii) thinking skills, such as reasoning, creative thinking, 
240.35  decision making, and problem solving; and 
240.36     (iii) personal qualities, such as responsibility, 
241.1   self-esteem, self-management, honesty, and integrity. 
241.2      (4) The program must provide income supplements, when 
241.3   needed, to participants for housing, counseling, tuition, and 
241.4   other basic needs. 
241.5      (5) The education and training course must last for at 
241.6   least six months. 
241.7      (6) Individuals served by the program must: 
241.8      (i) be 18 years old or older; 
241.9      (ii) have had federal adjusted gross income of no more than 
241.10  $10,000 per year in the last two years; 
241.11     (iii) have assets of no more than $5,000, excluding the 
241.12  value of a homestead; and 
241.13     (iv) not have been claimed as a dependent on the federal 
241.14  tax return of another person in the previous taxable year. 
241.15     (7) The program must charge placement and retention fees 
241.16  that exceed the amount of credit certificates provided to the 
241.17  employer by at least 20 percent. 
241.18     (b) The program must be certified by the commissioner of 
241.19  children, families, and learning as meeting the requirements of 
241.20  this subdivision. 
241.21     Subd. 3.  [QUALIFIED GRADUATE.] A qualified graduate is a 
241.22  graduate of a job training program qualifying under subdivision 
241.23  1, who is placed in a job in Minnesota that pays at least $9 per 
241.24  hour or its equivalent.  To qualify for a credit under this 
241.25  section for a retention fee, a job in which the graduate is 
241.26  retained must pay at least $10 per hour at the end for the first 
241.27  and second years of employment.  
241.28     Subd. 4.  [DUTIES OF PROGRAM.] (a) Each program certified 
241.29  by the commissioner under subdivision 2 must comply with the 
241.30  requirements of this subdivision. 
241.31     (b) Each program must maintain records for each graduate 
241.32  for which the program provides a credit certificate to an 
241.33  employer.  These records must include information sufficient to 
241.34  verify the graduate's eligibility under this section, identify 
241.35  the employer, describe the job including its compensation rate 
241.36  and benefits, and determine the amount of placement and 
242.1   retention fees received. 
242.2      (c) Each program must report to the commissioner of revenue 
242.3   by January 1, 1999, and by January 1, 2001, on its use of the 
242.4   credit.  Each report must include, at least, information on: 
242.5      (1) the number of graduates placed; 
242.6      (2) demographic information on the graduates; 
242.7      (3) the types of position in which each graduate is placed, 
242.8   including compensation information; 
242.9      (4) the tenure of each graduate at the placed position or 
242.10  in other jobs; 
242.11     (5) the amount of employer fees paid to the program; 
242.12     (6) the amount of money raised by the program from other 
242.13  sources; and 
242.14     (7) the types and sizes of employers with which graduates 
242.15  have been placed and retained. 
242.16     (d) The commissioner shall compile and summarize this 
242.17  information and report to the legislature by February 15, 1999, 
242.18  and February 15, 2001.  
242.19     Subd. 5.  [ISSUANCE OF CREDIT CERTIFICATES.] (a) The total 
242.20  amount of credits under this section is limited to $1,700,000 
242.21  for taxable years beginning after December 31, 1996, and before 
242.22  January 1, 2002.  The commissioner may issue under paragraph (b) 
242.23  no more than the specified amount of certificates for taxable 
242.24  years beginning during each calendar year: 
242.25         1997            $200,000
242.26         1998            $400,000
242.27         1999            $600,000
242.28         2000            $340,000
242.29         2001            $160,000
242.30     Unused certificates for a taxable year carry over and may 
242.31  be used for a later taxable year, regardless of when issued by 
242.32  the commissioner. 
242.33     (b) Upon application, the commissioner of children, 
242.34  families, and learning shall issue certificates to job training 
242.35  programs, certified under subdivision 2, up to the dollar amount 
242.36  available for the taxable year.  The certificates must be in a 
243.1   dollar amount that is no greater than the dollar amount applied 
243.2   for, and reflects the commissioner's estimate of the job 
243.3   training program's projected fees for placements and retentions 
243.4   of qualifying graduates.  The commissioner shall issue the 
243.5   certificates in the order in which applications are received 
243.6   until the available authority has been issued. 
243.7      (c) To the extent available, the job training program must 
243.8   provide to employers of its qualified graduates certificates 
243.9   issued by the commissioner of children, families, and learning 
243.10  under this subdivision. 
243.11     Subd. 6.  [NONREFUNDABLE.] The taxpayer must use the tax 
243.12  credit for the taxable year in which the certificate is issued 
243.13  to the employer.  The credit for the taxable year may not exceed 
243.14  the liability for tax under section 290.06, subdivision 1, for 
243.15  the taxable year, before reduction by the nonrefundable credits 
243.16  allowed under this chapter. 
243.17     Subd. 7.  [MANNER OF CLAIMING.] The commissioner shall 
243.18  prescribe the manner in which the credit may be claimed.  This 
243.19  may include allowing the credit only as a separately processed 
243.20  claim for a refund. 
243.21     Subd. 8.  [EXPIRATION.] This section expires effective for 
243.22  taxable years beginning after December 31, 2001. 
243.23     Sec. 11.  Minnesota Statutes 1996, section 290.92, is 
243.24  amended by adding a subdivision to read: 
243.25     Subd. 30.  [REGISTRATION; THIRD-PARTY BULK FILER.] (a) For 
243.26  purposes of this subdivision, the following terms have the 
243.27  meanings given: 
243.28     (1) Notwithstanding section 290.01, "person" means an 
243.29  individual, fiduciary, partnership, corporation, limited 
243.30  liability company, association, or other entity organized under 
243.31  the laws of this state or any other jurisdiction. 
243.32     (2) "Third-party bulk filer" means a person that collects 
243.33  withholding taxes from more than one employer for the purpose of 
243.34  filing returns and depositing the withheld taxes with the 
243.35  commissioner.  
243.36     (b) A person shall not act as a third-party bulk filer 
244.1   unless the person is registered with the commissioner under this 
244.2   subdivision. 
244.3      (c) A person may apply to the commissioner, on a form 
244.4   prescribed by the commissioner, for registration as a 
244.5   third-party bulk filer under this subdivision, and the 
244.6   commissioner shall grant the application if the application 
244.7   indicates that the person will comply with this subdivision. 
244.8      (d) A third-party bulk filer must: 
244.9      (1) keep client funds held for payment of federal or state 
244.10  withholding taxes or other client obligations in an account 
244.11  separate from the third-party bulk filer's own funds; 
244.12     (2) permit the commissioner to conduct scheduled or 
244.13  unscheduled audits of the third-party bulk filer's books and 
244.14  records relating to compliance with this subdivision and fully 
244.15  cooperate with the audits or, at the discretion of the 
244.16  commissioner, submit an audit conducted by a certified public 
244.17  accountant; 
244.18     (3) file returns electronically and make deposits 
244.19  electronically with the commissioner in compliance with the 
244.20  commissioner's requirements for electronic filing and 
244.21  depositing; 
244.22     (4) provide to the commissioner at least monthly, in the 
244.23  form requested by the commissioner, an updated client list that 
244.24  includes at least the name, address, tax identification number, 
244.25  and federal deposit frequency of each client.  The address 
244.26  listed for the client must be the client's actual street or post 
244.27  office box address and not the third-party bulk filer's address; 
244.28     (5) disclose in writing to prospective clients that: 
244.29     (i) the third-party bulk filer may invest client funds 
244.30  prior to depositing them with the commissioner and with the 
244.31  Internal Revenue Service and that earnings from those 
244.32  investments will be the property of the third-party bulk filer; 
244.33     (ii) if the third-party bulk filer incurs losses on those 
244.34  investments or uses the client's funds for other purposes, the 
244.35  third-party bulk filer will still be liable to the client for 
244.36  the amounts withheld but will be able to make required tax 
245.1   deposits on behalf of the client only by using the third-party 
245.2   bulk filer's own funds or other assets to replace the funds lost 
245.3   through the investments or used for other purposes; and 
245.4      (iii) no state or federal agency monitors or assumes any 
245.5   responsibility for the financial solvency of third-party bulk 
245.6   filers; 
245.7      (6) timely file all returns and timely make all tax 
245.8   deposits required under its contracts with its clients; 
245.9      (7) upon request, provide to the commissioner, within the 
245.10  time specified in the request, a copy of any contract with a 
245.11  client; and 
245.12     (8) comply with all other requirements of this section or 
245.13  of rules adopted under this section. 
245.14     (e) When the commissioner sends an order of assessment 
245.15  issued under section 289A.37, in either paper or electronic 
245.16  form, to a third-party bulk filer regarding a client, the 
245.17  commissioner shall also send a paper copy of the order of 
245.18  assessment to the client. 
245.19     (f) If the commissioner determines that a required deposit 
245.20  appears not to have been made, the commissioner shall send a 
245.21  written notice of the delinquency, in electronic or paper form, 
245.22  to the third-party bulk filer, and a copy to the client as 
245.23  required under paragraph (e). 
245.24     (g) If the commissioner determines that a required deposit 
245.25  has not been made, and that continued operation of the 
245.26  third-party bulk filer would present a risk of loss to its 
245.27  clients, the commissioner may, upon ten business days' written 
245.28  notice by certified mail to the third-party bulk filer, suspend 
245.29  the registration of the third-party bulk filer for an indefinite 
245.30  period, and notify the third-party bulk filer's clients that the 
245.31  registration has been suspended.  A registration may not be 
245.32  suspended if the failure to make a deposit was caused by the 
245.33  client's failure to deposit funds or provide the information 
245.34  necessary to calculate appropriate tax withholding payments.  
245.35  The commissioner shall, upon request, provide the third-party 
245.36  bulk filer with the opportunity for an administrative appeal 
246.1   under section 289A.65, subdivisions 1, 4, and 10, prior to 
246.2   suspension; the hearing, if any, on the administrative appeal 
246.3   must occur within the ten-day period unless the commissioner, in 
246.4   the commissioner's sole discretion, agrees to delay the 
246.5   suspension to permit a later hearing.  The 60-day period 
246.6   specified in section 289A.65, subdivision 4, does not apply to a 
246.7   proceeding under this paragraph.  Within 30 days after the 
246.8   beginning of a suspension under this paragraph, the commissioner 
246.9   may commence a proceeding to suspend or revoke under paragraph 
246.10  (h); if the commissioner fails to do so, the suspension under 
246.11  this paragraph terminates. 
246.12     (h) If the commissioner determines, in compliance with 
246.13  paragraph (i), that a third-party bulk filer has violated this 
246.14  section without reasonable cause or is no longer eligible for 
246.15  registration under this subdivision, the commissioner may 
246.16  suspend or revoke the third-party bulk filer's registration or 
246.17  may assess a civil penalty upon the third-party bulk filer, not 
246.18  to exceed $5,000 per violation.  A suspension of registration 
246.19  may be for any period of less than six months and may include 
246.20  conditions for reinstatement.  If the commissioner revokes the 
246.21  registration, the third-party bulk filer may not apply for 
246.22  reregistration for six months after the revocation.  If the 
246.23  commissioner suspends or revokes a registration, the 
246.24  commissioner shall notify the former registrant's clients that 
246.25  the registration has been suspended or revoked.  If the 
246.26  commissioner assesses a civil penalty, the commissioner shall 
246.27  not notify the third-party bulk filer's clients of the 
246.28  assessment. 
246.29     (i) Prior to a suspension, revocation, or assessment of a 
246.30  civil penalty under paragraph (h), the commissioner shall first 
246.31  provide 30 days' written notice to the third-party bulk filer, 
246.32  specifying the violations and informing the third-party bulk 
246.33  filer that the commissioner intends, based upon those 
246.34  violations, to take action against the third-party bulk filer as 
246.35  permitted under this paragraph and paragraph (h).  The notice 
246.36  shall advise the third-party bulk filer of the right to contest 
247.1   the suspension, revocation, or assessment of a civil penalty and 
247.2   of the general procedures for a contested case hearing under 
247.3   chapter 14.  The notice may be served personally or by mail in 
247.4   the manner prescribed for service of an order of assessment 
247.5   issued under section 289A.37.  A suspension or revocation of 
247.6   registration under this paragraph is effective when the 
247.7   commissioner serves a notice of suspension or revocation upon 
247.8   the third-party bulk filer after 30 days have passed following 
247.9   the date of the notice of intent to suspend or revoke without 
247.10  the third-party bulk filer requesting a hearing.  If a hearing 
247.11  is timely requested and held, the suspension or revocation is 
247.12  effective upon service by the commissioner of an order of 
247.13  suspension or revocation under section 14.62, subdivision 1. 
247.14     (j) A third-party bulk filer may terminate its registration 
247.15  by written notice to the commissioner, but the termination does 
247.16  not affect the commissioner's authority to begin or continue a 
247.17  proceeding to take action permitted under paragraph (h).  The 
247.18  commissioner shall notify the third-party bulk filer's clients 
247.19  of a termination of registration under this paragraph. 
247.20     (k) The commissioner shall remind employers at least 
247.21  annually, through the department's regular informational 
247.22  publications that it sends to employers, that employers may 
247.23  telephone the department to determine whether a required filing 
247.24  or deposit has been made by a third-party bulk filer. 
247.25     Sec. 12.  Laws 1997, chapter 34, section 2, is amended to 
247.26  read: 
247.27     Sec. 2.  [EFFECTIVE DATE.] 
247.28     Section 1 is effective the day following final enactment 
247.29  for time limitations which expire or due dates specified in 
247.30  Minnesota Statutes, section 289A.20, which fall in the period 
247.31  between March 31, 1997, and May 30, 1997. 
247.32     Sec. 13.  [APPROPRIATION; BUSINESS TAX STUDY.] 
247.33     (a) $50,000 is appropriated from the general fund for 
247.34  fiscal years 1998 and 1999 to the legislative coordinating 
247.35  commission to study alternative methods for taxing business.  
247.36  This appropriation may be used to hire a consultant or 
248.1   consultants to prepare all or part of the study and related 
248.2   costs. 
248.3      (b) The study must analyze the following taxes paid by the 
248.4   businesses: 
248.5      (1) the corporate franchise tax; 
248.6      (2) the sales tax on capital or other business inputs; 
248.7      (3) the personal property tax on utility property; 
248.8      (4) the real property tax on commercial and industrial 
248.9   property. 
248.10     The study must consider the impact of alternative methods 
248.11  of taxing business and the impact of doing so on the fairness, 
248.12  efficiency, simplicity, elasticity, and stability of revenues, 
248.13  and competitiveness of Minnesota's taxation of business. 
248.14     (c) The legislative commission on planning and fiscal 
248.15  policy is responsible for managing any contracts under this 
248.16  section and for preparing the study.  The commission may appoint 
248.17  a formal or informal bipartisan working group of house and 
248.18  senate members to oversee and coordinate the study.  The 
248.19  commission shall regularly consult with and report to the chairs 
248.20  of the house and senate tax committees on the study process and 
248.21  results.  The commission shall regularly consult with and 
248.22  involve the commissioner of revenue in contracting with 
248.23  consultants and preparing the study.  
248.24     Sec. 14.  [EFFECTIVE DATE.] 
248.25     Sections 1 and 13 are effective the day following final 
248.26  enactment.  
248.27     Sections 2 to 5 are effective for taxable years beginning 
248.28  after December 31, 1997. 
248.29     Sections 6 to 9 are effective for taxable years beginning 
248.30  after December 31, 1996. 
248.31     Section 10 is effective for tax credit certificates issued 
248.32  after December 31, 1997, and used in taxable years beginning 
248.33  after December 31, 1997. 
248.34     Section 11 is effective January 1, 1998. 
248.35     Section 12 is effective April 16, 1997. 
248.36                             ARTICLE 10 
249.1                            FEDERAL UPDATE
249.2      Section 1.  Minnesota Statutes 1996, section 289A.02, 
249.3   subdivision 7, is amended to read: 
249.4      Subd. 7.  [INTERNAL REVENUE CODE.] Unless specifically 
249.5   defined otherwise, "Internal Revenue Code" means the Internal 
249.6   Revenue Code of 1986, as amended through March 22 December 31, 
249.7   1996, and includes the provisions of section 1(a) and (b) of 
249.8   Public Law Number 104-117. 
249.9      Sec. 2.  Minnesota Statutes 1996, section 290.01, 
249.10  subdivision 19, is amended to read: 
249.11     Subd. 19.  [NET INCOME.] The term "net income" means the 
249.12  federal taxable income, as defined in section 63 of the Internal 
249.13  Revenue Code of 1986, as amended through the date named in this 
249.14  subdivision, incorporating any elections made by the taxpayer in 
249.15  accordance with the Internal Revenue Code in determining federal 
249.16  taxable income for federal income tax purposes, and with the 
249.17  modifications provided in subdivisions 19a to 19f. 
249.18     In the case of a regulated investment company or a fund 
249.19  thereof, as defined in section 851(a) or 851(h) of the Internal 
249.20  Revenue Code, federal taxable income means investment company 
249.21  taxable income as defined in section 852(b)(2) of the Internal 
249.22  Revenue Code, except that:  
249.23     (1) the exclusion of net capital gain provided in section 
249.24  852(b)(2)(A) of the Internal Revenue Code does not apply; and 
249.25     (2) the deduction for dividends paid under section 
249.26  852(b)(2)(D) of the Internal Revenue Code must be applied by 
249.27  allowing a deduction for capital gain dividends and 
249.28  exempt-interest dividends as defined in sections 852(b)(3)(C) 
249.29  and 852(b)(5) of the Internal Revenue Code; and 
249.30     (3) the deduction for dividends paid must also be applied 
249.31  in the amount of any undistributed capital gains which the 
249.32  regulated investment company elects to have treated as provided 
249.33  in section 852(b)(3)(D) of the Internal Revenue Code.  
249.34     The net income of a real estate investment trust as defined 
249.35  and limited by section 856(a), (b), and (c) of the Internal 
249.36  Revenue Code means the real estate investment trust taxable 
250.1   income as defined in section 857(b)(2) of the Internal Revenue 
250.2   Code.  
250.3      The net income of a designated settlement fund as defined 
250.4   in section 468B(d) of the Internal Revenue Code means the gross 
250.5   income as defined in section 468B(b) of the Internal Revenue 
250.6   Code. 
250.7      The Internal Revenue Code of 1986, as amended through 
250.8   December 31, 1986, shall be in effect for taxable years 
250.9   beginning after December 31, 1986.  The provisions of sections 
250.10  10104, 10202, 10203, 10204, 10206, 10212, 10221, 10222, 10223, 
250.11  10226, 10227, 10228, 10611, 10631, 10632, and 10711 of the 
250.12  Omnibus Budget Reconciliation Act of 1987, Public Law Number 
250.13  100-203, the provisions of sections 1001, 1002, 1003, 1004, 
250.14  1005, 1006, 1008, 1009, 1010, 1011, 1011A, 1011B, 1012, 1013, 
250.15  1014, 1015, 1018, 2004, 3041, 4009, 6007, 6026, 6032, 6137, 
250.16  6277, and 6282 of the Technical and Miscellaneous Revenue Act of 
250.17  1988, Public Law Number 100-647, and the provisions of sections 
250.18  7811, 7816, and 7831 of the Omnibus Budget Reconciliation Act of 
250.19  1989, Public Law Number 101-239, and the provisions of sections 
250.20  1305, 1704(r), and 1704(e)(1) of the Small Business Job 
250.21  Protection Act, Public Law Number 104-188, shall be effective at 
250.22  the time they become effective for federal income tax purposes.  
250.23     The Internal Revenue Code of 1986, as amended through 
250.24  December 31, 1987, shall be in effect for taxable years 
250.25  beginning after December 31, 1987.  The provisions of sections 
250.26  4001, 4002, 4011, 5021, 5041, 5053, 5075, 6003, 6008, 6011, 
250.27  6030, 6031, 6033, 6057, 6064, 6066, 6079, 6130, 6176, 6180, 
250.28  6182, 6280, and 6281 of the Technical and Miscellaneous Revenue 
250.29  Act of 1988, Public Law Number 100-647, the provisions of 
250.30  sections 7815 and 7821 of the Omnibus Budget Reconciliation Act 
250.31  of 1989, Public Law Number 101-239, and the provisions of 
250.32  section 11702 of the Revenue Reconciliation Act of 1990, Public 
250.33  Law Number 101-508, shall become effective at the time they 
250.34  become effective for federal tax purposes.  
250.35     The Internal Revenue Code of 1986, as amended through 
250.36  December 31, 1988, shall be in effect for taxable years 
251.1   beginning after December 31, 1988.  The provisions of sections 
251.2   7101, 7102, 7104, 7105, 7201, 7202, 7203, 7204, 7205, 7206, 
251.3   7207, 7210, 7211, 7301, 7302, 7303, 7304, 7601, 7621, 7622, 
251.4   7641, 7642, 7645, 7647, 7651, and 7652 of the Omnibus Budget 
251.5   Reconciliation Act of 1989, Public Law Number 101-239, the 
251.6   provision of section 1401 of the Financial Institutions Reform, 
251.7   Recovery, and Enforcement Act of 1989, Public Law Number 101-73, 
251.8   and the provisions of sections 11701 and 11703 of the Revenue 
251.9   Reconciliation Act of 1990, Public Law Number 101-508, and the 
251.10  provisions of sections 1702(g) and 1704(f)(2)(A) and (B) of the 
251.11  Small Business Job Protection Act, Public Law Number 104-188, 
251.12  shall become effective at the time they become effective for 
251.13  federal tax purposes.  
251.14     The Internal Revenue Code of 1986, as amended through 
251.15  December 31, 1989, shall be in effect for taxable years 
251.16  beginning after December 31, 1989.  The provisions of sections 
251.17  11321, 11322, 11324, 11325, 11403, 11404, 11410, and 11521 of 
251.18  the Revenue Reconciliation Act of 1990, Public Law Number 
251.19  101-508, and the provisions of sections 13224 and 13261 of the 
251.20  Omnibus Budget Reconciliation Act of 1993, Public Law Number 
251.21  103-66, shall become effective at the time they become effective 
251.22  for federal purposes.  
251.23     The Internal Revenue Code of 1986, as amended through 
251.24  December 31, 1990, shall be in effect for taxable years 
251.25  beginning after December 31, 1990. 
251.26     The provisions of section 13431 of the Omnibus Budget 
251.27  Reconciliation Act of 1993, Public Law Number 103-66, shall 
251.28  become effective at the time they became effective for federal 
251.29  purposes.  
251.30     The Internal Revenue Code of 1986, as amended through 
251.31  December 31, 1991, shall be in effect for taxable years 
251.32  beginning after December 31, 1991.  
251.33     The provisions of sections 1936 and 1937 of the 
251.34  Comprehensive National Energy Policy Act of 1992, Public Law 
251.35  Number 102-486, and the provisions of sections 13101, 13114, 
251.36  13122, 13141, 13150, 13151, 13174, 13239, 13301, and 13442 of 
252.1   the Omnibus Budget Reconciliation Act of 1993, Public Law Number 
252.2   103-66, shall become effective at the time they become effective 
252.3   for federal purposes.  
252.4      The Internal Revenue Code of 1986, as amended through 
252.5   December 31, 1992, shall be in effect for taxable years 
252.6   beginning after December 31, 1992.  
252.7      The provisions of sections 13116, 13121, 13206, 13210, 
252.8   13222, 13223, 13231, 13232, 13233, 13239, 13262, and 13321 of 
252.9   the Omnibus Budget Reconciliation Act of 1993, Public Law Number 
252.10  103-66, and the provisions of sections 1703(a), 1703(d), 
252.11  1703(i), 1703(l), and 1703(m) of the Small Business Job 
252.12  Protection Act, Public Law Number 104-188, shall become 
252.13  effective at the time they become effective for federal purposes.
252.14     The Internal Revenue Code of 1986, as amended through 
252.15  December 31, 1993, shall be in effect for taxable years 
252.16  beginning after December 31, 1993. 
252.17     The provision of section 741 of Legislation to Implement 
252.18  Uruguay Round of General Agreement on Tariffs and Trade, Public 
252.19  Law Number 103-465, and the provisions of sections 1, 2, and 3, 
252.20  of the Self-Employed Health Insurance Act of 1995, Public Law 
252.21  Number 104-7, the provision of section 501(b)(2) of the Health 
252.22  Insurance Portability and Accountability Act, Public Law Number 
252.23  104-191, and the provisions of sections 1604 and 1704(p)(1) and 
252.24  (2) of the Small Business Job Protection Act, Public Law Number 
252.25  104-188, shall become effective at the time they become 
252.26  effective for federal purposes. 
252.27     The Internal Revenue Code of 1986, as amended through 
252.28  December 31, 1994, shall be in effect for taxable years 
252.29  beginning after December 31, 1994. 
252.30     The provisions of sections 1119(a), 1120, 1121, 1202(a), 
252.31  1444, 1449(b), 1602(a), 1610(a), 1613, and 1805 of the Small 
252.32  Business Job Protection Act, Public Law Number 104-188, and the 
252.33  provision of section 511 of the Health Insurance Portability and 
252.34  Accountability Act, Public Law Number 104-191, shall become 
252.35  effective at the time they become effective for federal purposes.
252.36     The Internal Revenue Code of 1986, as amended through March 
253.1   22, 1996, is in effect for taxable years beginning after 
253.2   December 31, 1995. 
253.3      The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 
253.4   1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 
253.5   1616, 1617, 1704(l), and 1704(m) of the Small Business Job 
253.6   Protection Act, Public Law Number 104-188, and the provisions of 
253.7   Public Law Number 104-117 become effective at the time they 
253.8   become effective for federal purposes. 
253.9      The Internal Revenue Code of 1986, as amended through 
253.10  December 31, 1996, shall be in effect for taxable years 
253.11  beginning after December 31, 1996. 
253.12     Except as otherwise provided, references to the Internal 
253.13  Revenue Code in subdivisions 19a to 19g mean the code in effect 
253.14  for purposes of determining net income for the applicable year. 
253.15     Sec. 3.  Minnesota Statutes 1996, section 290.01, 
253.16  subdivision 19a, is amended to read: 
253.17     Subd. 19a.  [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 
253.18  individuals, estates, and trusts, there shall be added to 
253.19  federal taxable income: 
253.20     (1)(i) interest income on obligations of any state other 
253.21  than Minnesota or a political or governmental subdivision, 
253.22  municipality, or governmental agency or instrumentality of any 
253.23  state other than Minnesota exempt from federal income taxes 
253.24  under the Internal Revenue Code or any other federal statute, 
253.25  and 
253.26     (ii) exempt-interest dividends as defined in section 
253.27  852(b)(5) of the Internal Revenue Code, except the portion of 
253.28  the exempt-interest dividends derived from interest income on 
253.29  obligations of the state of Minnesota or its political or 
253.30  governmental subdivisions, municipalities, governmental agencies 
253.31  or instrumentalities, but only if the portion of the 
253.32  exempt-interest dividends from such Minnesota sources paid to 
253.33  all shareholders represents 95 percent or more of the 
253.34  exempt-interest dividends that are paid by the regulated 
253.35  investment company as defined in section 851(a) of the Internal 
253.36  Revenue Code, or the fund of the regulated investment company as 
254.1   defined in section 851(h) of the Internal Revenue Code, making 
254.2   the payment; and 
254.3      (iii) for the purposes of items (i) and (ii), interest on 
254.4   obligations of an Indian tribal government described in section 
254.5   7871(c) of the Internal Revenue Code shall be treated as 
254.6   interest income on obligations of the state in which the tribe 
254.7   is located; 
254.8      (2) the amount of income taxes paid or accrued within the 
254.9   taxable year under this chapter and income taxes paid to any 
254.10  other state or to any province or territory of Canada, to the 
254.11  extent allowed as a deduction under section 63(d) of the 
254.12  Internal Revenue Code, but the addition may not be more than the 
254.13  amount by which the itemized deductions as allowed under section 
254.14  63(d) of the Internal Revenue Code exceeds the amount of the 
254.15  standard deduction as defined in section 63(c) of the Internal 
254.16  Revenue Code.  For the purpose of this paragraph, the 
254.17  disallowance of itemized deductions under section 68 of the 
254.18  Internal Revenue Code of 1986, income tax is the last itemized 
254.19  deduction disallowed; 
254.20     (3) the capital gain amount of a lump sum distribution to 
254.21  which the special tax under section 1122(h)(3)(B)(ii) of the Tax 
254.22  Reform Act of 1986, Public Law Number 99-514, applies; and 
254.23     (4) the amount of income taxes paid or accrued within the 
254.24  taxable year under this chapter and income taxes paid to any 
254.25  other state or any province or territory of Canada, to the 
254.26  extent allowed as a deduction in determining federal adjusted 
254.27  gross income.  For the purpose of this paragraph, income taxes 
254.28  do not include the taxes imposed by sections 290.0922, 
254.29  subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729.; 
254.30  and 
254.31     (5) the amount of loss or expense included in federal 
254.32  taxable income under section 1366 of the Internal Revenue Code 
254.33  flowing from a corporation having a valid election in effect for 
254.34  the taxable year under section 1362 of the Internal Revenue Code 
254.35  which is not allowed to be an "S" corporation under section 
254.36  290.9725. 
255.1      Sec. 4.  Minnesota Statutes 1996, section 290.01, 
255.2   subdivision 19b, is amended to read: 
255.3      Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
255.4   individuals, estates, and trusts, there shall be subtracted from 
255.5   federal taxable income: 
255.6      (1) interest income on obligations of any authority, 
255.7   commission, or instrumentality of the United States to the 
255.8   extent includable in taxable income for federal income tax 
255.9   purposes but exempt from state income tax under the laws of the 
255.10  United States; 
255.11     (2) if included in federal taxable income, the amount of 
255.12  any overpayment of income tax to Minnesota or to any other 
255.13  state, for any previous taxable year, whether the amount is 
255.14  received as a refund or as a credit to another taxable year's 
255.15  income tax liability; 
255.16     (3) the amount paid to others not to exceed $650 for each 
255.17  dependent in grades kindergarten to 6 and $1,000 for each 
255.18  dependent in grades 7 to 12, for tuition, textbooks, and 
255.19  transportation of each dependent in attending an elementary or 
255.20  secondary school situated in Minnesota, North Dakota, South 
255.21  Dakota, Iowa, or Wisconsin, wherein a resident of this state may 
255.22  legally fulfill the state's compulsory attendance laws, which is 
255.23  not operated for profit, and which adheres to the provisions of 
255.24  the Civil Rights Act of 1964 and chapter 363.  As used in this 
255.25  clause, "textbooks" includes books and other instructional 
255.26  materials and equipment used in elementary and secondary schools 
255.27  in teaching only those subjects legally and commonly taught in 
255.28  public elementary and secondary schools in this state.  
255.29  "Textbooks" does not include instructional books and materials 
255.30  used in the teaching of religious tenets, doctrines, or worship, 
255.31  the purpose of which is to instill such tenets, doctrines, or 
255.32  worship, nor does it include books or materials for, or 
255.33  transportation to, extracurricular activities including sporting 
255.34  events, musical or dramatic events, speech activities, driver's 
255.35  education, or similar programs.  In order to qualify for the 
255.36  subtraction under this clause the taxpayer must elect to itemize 
256.1   deductions under section 63(e) of the Internal Revenue Code; 
256.2      (4) to the extent included in federal taxable income, 
256.3   distributions from a qualified governmental pension plan, an 
256.4   individual retirement account, simplified employee pension, or 
256.5   qualified plan covering a self-employed person that represent a 
256.6   return of contributions that were included in Minnesota gross 
256.7   income in the taxable year for which the contributions were made 
256.8   but were deducted or were not included in the computation of 
256.9   federal adjusted gross income.  The distribution shall be 
256.10  allocated first to return of contributions until the 
256.11  contributions included in Minnesota gross income have been 
256.12  exhausted.  This subtraction applies only to contributions made 
256.13  in a taxable year prior to 1985; 
256.14     (5) income as provided under section 290.0802; 
256.15     (6) the amount of unrecovered accelerated cost recovery 
256.16  system deductions allowed under subdivision 19g; 
256.17     (7) to the extent included in federal adjusted gross 
256.18  income, income realized on disposition of property exempt from 
256.19  tax under section 290.491; 
256.20     (8) to the extent not deducted in determining federal 
256.21  taxable income, the amount paid for health insurance of 
256.22  self-employed individuals as determined under section 162(l) of 
256.23  the Internal Revenue Code, except that the 25 percent limit does 
256.24  not apply.  If the taxpayer deducted insurance payments under 
256.25  section 213 of the Internal Revenue Code of 1986, the 
256.26  subtraction under this clause must be reduced by the lesser of: 
256.27     (i) the total itemized deductions allowed under section 
256.28  63(d) of the Internal Revenue Code, less state, local, and 
256.29  foreign income taxes deductible under section 164 of the 
256.30  Internal Revenue Code and the standard deduction under section 
256.31  63(c) of the Internal Revenue Code; or 
256.32     (ii) the lesser of (A) the amount of insurance qualifying 
256.33  as "medical care" under section 213(d) of the Internal Revenue 
256.34  Code to the extent not deducted under section 162(1) of the 
256.35  Internal Revenue Code or excluded from income or (B) the total 
256.36  amount deductible for medical care under section 213(a); and 
257.1      (9) the exemption amount allowed under Laws 1995, chapter 
257.2   255, article 3, section 2, subdivision 3.; and 
257.3      (10) the amount of income or gain included in federal 
257.4   taxable income under section 1366 of the Internal Revenue Code 
257.5   flowing from a corporation having a valid election in effect for 
257.6   the taxable year under section 1362 of the Internal Revenue Code 
257.7   which is not allowed to be an "S" corporation under section 
257.8   290.9725. 
257.9      Sec. 5.  Minnesota Statutes 1996, section 290.01, 
257.10  subdivision 19g, is amended to read: 
257.11     Subd. 19g.  [ACRS MODIFICATION FOR INDIVIDUALS.] (a) An 
257.12  individual is allowed a subtraction from federal taxable income 
257.13  for the amount of accelerated cost recovery system deductions 
257.14  that were added to federal adjusted gross income in computing 
257.15  Minnesota gross income for taxable year 1981, 1982, 1983, or 
257.16  1984 and that were not deducted in a later taxable year.  The 
257.17  deduction is allowed beginning in the first taxable year after 
257.18  the entire allowable deduction for the property has been allowed 
257.19  under federal law or the first taxable year beginning after 
257.20  December 31, 1987, whichever is later.  The amount of the 
257.21  deduction is computed by deducting the amount added to federal 
257.22  adjusted gross income in computing Minnesota gross income (less 
257.23  any deduction allowed under Minnesota Statutes 1986, section 
257.24  290.01, subdivision 20f) in equal annual amounts over five years.
257.25     (b) In the event of a sale or exchange of the property, a 
257.26  deduction is allowed equal to the lesser of (1) the remaining 
257.27  amount that would be allowed as a deduction under paragraph (a) 
257.28  or (2) the amount of capital gain recognized and the amount of 
257.29  cost recovery deductions that were subject to recapture under 
257.30  sections 1245 and 1250 of the Internal Revenue Code of 1986 for 
257.31  the taxable year. 
257.32     (c) In the case of a corporation electing S corporation 
257.33  status under section 1362 of the Internal Revenue Code treated 
257.34  as an "S" corporation under section 290.9725, the amount of the 
257.35  corporation's cost recovery allowances that have been deducted 
257.36  in computing federal tax, but have been added to federal taxable 
258.1   income or not deducted in computing tax under this chapter as a 
258.2   result of the application of subdivision 19e, paragraphs (a) and 
258.3   (c) or Minnesota Statutes 1986, section 290.09, subdivision 7, 
258.4   is allowed as a deduction to the shareholders under the 
258.5   provisions of paragraph (a). 
258.6      Sec. 6.  Minnesota Statutes 1996, section 290.01, 
258.7   subdivision 31, is amended to read: 
258.8      Subd. 31.  [INTERNAL REVENUE CODE.] Unless specifically 
258.9   defined otherwise, "Internal Revenue Code" means the Internal 
258.10  Revenue Code of 1986, as amended through March 22 December 31, 
258.11  1996, and includes the provisions of section 1(a) and (b) of 
258.12  Public Law Number 104-117. 
258.13     Sec. 7.  Minnesota Statutes 1996, section 290.014, 
258.14  subdivision 2, is amended to read: 
258.15     Subd. 2.  [NONRESIDENT INDIVIDUALS.] Except as provided in 
258.16  section 290.015, a nonresident individual is subject to the 
258.17  return filing requirements and to tax as provided in this 
258.18  chapter to the extent that the income of the nonresident 
258.19  individual is: 
258.20     (1) allocable to this state under section 290.17, 290.191, 
258.21  or 290.20; 
258.22     (2) taxed to the individual under the Internal Revenue Code 
258.23  (or not taxed under the Internal Revenue Code by reason of its 
258.24  character but of a character which is taxable under this 
258.25  chapter) in the individual's capacity as a beneficiary of an 
258.26  estate with income allocable to this state under section 290.17, 
258.27  290.191, or 290.20 and the income, taking into account the 
258.28  income character provisions of section 662(b) of the Internal 
258.29  Revenue Code, would be allocable to this state under section 
258.30  290.17, 290.191, or 290.20 if realized by the individual 
258.31  directly from the source from which realized by the estate; 
258.32     (3) taxed to the individual under the Internal Revenue Code 
258.33  (or not taxed under the Internal Revenue Code by reason of its 
258.34  character but of a character that is taxable under this chapter) 
258.35  in the individual's capacity as a beneficiary or grantor or 
258.36  other person treated as a substantial owner of a trust with 
259.1   income allocable to this state under section 290.17, 290.191, or 
259.2   290.20 and the income, taking into account the income character 
259.3   provisions of section 652(b), 662(b), or 664(b) of the Internal 
259.4   Revenue Code, would be allocable to this state under section 
259.5   290.17, 290.191, or 290.20 if realized by the individual 
259.6   directly from the source from which realized by the trust; 
259.7      (4) taxed to the individual under the Internal Revenue Code 
259.8   (or not taxed under the Internal Revenue Code by reason of its 
259.9   character but of a character which is taxable under this 
259.10  chapter) in the individual's capacity as a limited or general 
259.11  partner in a partnership with income allocable to this state 
259.12  under section 290.17, 290.191, or 290.20 and the income, taking 
259.13  into account the income character provisions of section 702(b) 
259.14  of the Internal Revenue Code, would be allocable to this state 
259.15  under section 290.17, 290.191, or 290.20 if realized by the 
259.16  individual directly from the source from which realized by the 
259.17  partnership; or 
259.18     (5) taxed to the individual under the Internal Revenue Code 
259.19  (or not taxed under the Internal Revenue Code by reason of its 
259.20  character but of a character which is taxable under this 
259.21  chapter) in the individual's capacity as a shareholder of a 
259.22  corporation having a valid election in effect under section 1362 
259.23  of the Internal Revenue Code treated as an "S" corporation under 
259.24  section 290.9725, and income allocable to this state under 
259.25  section 290.17, 290.191, or 290.20 and the income, taking into 
259.26  account the income character provisions of section 1366(b) of 
259.27  the Internal Revenue Code, would be allocable to this state 
259.28  under section 290.17, 290.191, or 290.20 if realized by the 
259.29  individual directly from the source from which realized by the 
259.30  corporation. 
259.31     Sec. 8.  Minnesota Statutes 1996, section 290.014, 
259.32  subdivision 3, is amended to read: 
259.33     Subd. 3.  [TRUSTS AND ESTATES.] Except as provided in 
259.34  section 290.015, a trust or estate, whether resident or 
259.35  nonresident, is subject to the return filing requirements and to 
259.36  tax as provided in this chapter to the extent that the income of 
260.1   the trust or estate is: 
260.2      (1) allocable to this state under section 290.17, 290.191, 
260.3   or 290.20; 
260.4      (2) taxed to the trust or estate under the Internal Revenue 
260.5   Code (or not taxed under the Internal Revenue Code by reason of 
260.6   its character but of a character which is taxable under this 
260.7   chapter) in its capacity as a beneficiary of a trust or estate 
260.8   with income allocable to this state under section 290.17, 
260.9   290.191, or 290.20 and the income, taking into account the 
260.10  income character provisions of section 662(b) of the Internal 
260.11  Revenue Code, would be allocable to this state under section 
260.12  290.17, 290.191, or 290.20 if realized by the trust or 
260.13  beneficiary estate directly from the source from which realized 
260.14  by the distributing estate; 
260.15     (3) taxed to the trust or estate under the Internal Revenue 
260.16  Code (or not taxed under the Internal Revenue Code by reason of 
260.17  its character but of a character which is taxable under this 
260.18  chapter) in its capacity as a beneficiary or grantor or other 
260.19  person treated as a substantial owner of a trust with income 
260.20  allocable to this state under section 290.17, 290.191, or 290.20 
260.21  and the income, taking into account the income character 
260.22  provisions of section 652(b), 662(b), or 664(b) of the Internal 
260.23  Revenue Code, would be allocable to this state under section 
260.24  290.17, 290.191, or 290.20 if realized by the beneficiary trust 
260.25  or estate directly from the source from which realized by the 
260.26  distributing trust; 
260.27     (4) taxed to the trust or estate under the Internal Revenue 
260.28  Code (or not taxed under the Internal Revenue Code by reason of 
260.29  its character but of a character which is taxable under this 
260.30  chapter) in its capacity as a limited or general partner in a 
260.31  partnership with income allocable to this state under section 
260.32  290.17, 290.191, or 290.20 and the income, taking into account 
260.33  the income character provisions of section 702(b) of the 
260.34  Internal Revenue Code, would be allocable to this state under 
260.35  section 290.17, 290.191, or 290.20 if realized by the trust or 
260.36  estate directly from the source from which realized by the 
261.1   partnership; or 
261.2      (5) taxed to the trust or estate under the Internal Revenue 
261.3   Code (or not taxed under the Internal Revenue Code by reason of 
261.4   its character but of a character which is taxable under this 
261.5   chapter) in its capacity as a shareholder of a 
261.6   corporation having a valid election in effect under section 1362 
261.7   of the Internal Revenue Code treated as an "S" corporation under 
261.8   section 290.9725, and income allocable to this state under 
261.9   section 290.17, 290.191, or 290.20 and the income, taking into 
261.10  account the income character provisions of section 1366(b) of 
261.11  the Internal Revenue Code, would be allocable to this state 
261.12  under section 290.17, 290.191, or 290.20 if realized by the 
261.13  trust or estate directly from the source from which realized by 
261.14  the corporation. 
261.15     Sec. 9.  Minnesota Statutes 1996, section 290.015, 
261.16  subdivision 5, is amended to read: 
261.17     Subd. 5.  [DETERMINATION AT ENTITY LEVEL.] Determinations 
261.18  under this section with respect to trades or businesses 
261.19  conducted by a partnership, trust, estate, or corporation with 
261.20  an election in effect under section 1362 of the Internal Revenue 
261.21  Code treated as an "S" corporation under section 290.9725, or 
261.22  any other entity, the income of which is or may be taxed to its 
261.23  owners or beneficiaries must be made with respect to the entity 
261.24  carrying on the trade or business and not with respect to owners 
261.25  or beneficiaries of the trade or business, the taxability of 
261.26  which under this chapter must be determined under section 
261.27  290.014.  
261.28     Sec. 10.  Minnesota Statutes 1996, section 290.06, 
261.29  subdivision 22, is amended to read: 
261.30     Subd. 22.  [CREDIT FOR TAXES PAID TO ANOTHER STATE.] (a) A 
261.31  taxpayer who is liable for taxes on or measured by net income to 
261.32  another state or province or territory of Canada, as provided in 
261.33  paragraphs (b) through (f), upon income allocated or apportioned 
261.34  to Minnesota, is entitled to a credit for the tax paid to 
261.35  another state or province or territory of Canada if the tax is 
261.36  actually paid in the taxable year or a subsequent taxable year.  
262.1   A taxpayer who is a resident of this state pursuant to section 
262.2   290.01, subdivision 7, clause (2), and who is subject to income 
262.3   tax as a resident in the state of the individual's domicile is 
262.4   not allowed this credit unless the state of domicile does not 
262.5   allow a similar credit. 
262.6      (b) For an individual, estate, or trust, the credit is 
262.7   determined by multiplying the tax payable under this chapter by 
262.8   the ratio derived by dividing the income subject to tax in the 
262.9   other state or province or territory of Canada that is also 
262.10  subject to tax in Minnesota while a resident of Minnesota by the 
262.11  taxpayer's federal adjusted gross income, as defined in section 
262.12  62 of the Internal Revenue Code, modified by the addition 
262.13  required by section 290.01, subdivision 19a, clause (1), and the 
262.14  subtraction allowed by section 290.01, subdivision 19b, clause 
262.15  (1), to the extent the income is allocated or assigned to 
262.16  Minnesota under sections 290.081 and 290.17.  
262.17     (c) If the taxpayer is an athletic team that apportions all 
262.18  of its income under section 290.17, subdivision 5, paragraph 
262.19  (c), the credit is determined by multiplying the tax payable 
262.20  under this chapter by the ratio derived from dividing the total 
262.21  net income subject to tax in the other state or province or 
262.22  territory of Canada by the taxpayer's Minnesota taxable income. 
262.23     (d) The credit determined under paragraph (b) or (c) shall 
262.24  not exceed the amount of tax so paid to the other state or 
262.25  province or territory of Canada on the gross income earned 
262.26  within the other state or province or territory of Canada 
262.27  subject to tax under this chapter, nor shall the allowance of 
262.28  the credit reduce the taxes paid under this chapter to an amount 
262.29  less than what would be assessed if such income amount was 
262.30  excluded from taxable net income. 
262.31     (e) In the case of the tax assessed on a lump sum 
262.32  distribution under section 290.032, the credit allowed under 
262.33  paragraph (a) is the tax assessed by the other state or province 
262.34  or territory of Canada on the lump sum distribution that is also 
262.35  subject to tax under section 290.032, and shall not exceed the 
262.36  tax assessed under section 290.032.  To the extent the total 
263.1   lump sum distribution defined in section 290.032, subdivision 1, 
263.2   includes lump sum distributions received in prior years or is 
263.3   all or in part an annuity contract, the reduction to the tax on 
263.4   the lump sum distribution allowed under section 290.032, 
263.5   subdivision 2, includes tax paid to another state that is 
263.6   properly apportioned to that distribution. 
263.7      (f) If a Minnesota resident reported an item of income to 
263.8   Minnesota and is assessed tax in such other state or province or 
263.9   territory of Canada on that same income after the Minnesota 
263.10  statute of limitations has expired, the taxpayer shall receive a 
263.11  credit for that year under paragraph (a), notwithstanding any 
263.12  statute of limitations to the contrary.  The claim for the 
263.13  credit must be submitted within one year from the date the taxes 
263.14  were paid to the other state or province or territory of 
263.15  Canada.  The taxpayer must submit sufficient proof to show 
263.16  entitlement to a credit. 
263.17     (g) For the purposes of this subdivision, a resident 
263.18  shareholder of a corporation having a valid election in effect 
263.19  under section 1362 of the Internal Revenue Code treated as an "S"
263.20  corporation under section 290.9725, must be considered to have 
263.21  paid a tax imposed on the shareholder in an amount equal to the 
263.22  shareholder's pro rata share of any net income tax paid by the S 
263.23  corporation to another state.  For the purposes of the preceding 
263.24  sentence, the term "net income tax" means any tax imposed on or 
263.25  measured by a corporation's net income. 
263.26     (h) For the purposes of this subdivision, a resident member 
263.27  of a limited liability company taxed as a partnership under the 
263.28  Internal Revenue Code must be considered to have paid a tax 
263.29  imposed on the member in an amount equal to the member's pro 
263.30  rata share of any net income tax paid by the limited liability 
263.31  company to a state that does not measure the income of the 
263.32  member of the limited liability company by reference to the 
263.33  income of the limited liability company.  For purposes of the 
263.34  preceding sentence, the term "net income" tax means any tax 
263.35  imposed on or measured by a limited liability company's net 
263.36  income. 
264.1      Sec. 11.  Minnesota Statutes 1996, section 290.068, 
264.2   subdivision 1, is amended to read: 
264.3      Subdivision 1.  [CREDIT ALLOWED.] A corporation, other than 
264.4   a corporation with a valid election in effect under section 1362 
264.5   of the Internal Revenue Code treated as an "S" corporation under 
264.6   section 290.9725, is allowed a credit against the portion of the 
264.7   franchise tax computed under section 290.06, subdivision 1, for 
264.8   the taxable year equal to: 
264.9      (a) 5 percent of the first $2 million of the excess (if 
264.10  any) of 
264.11     (1) the qualified research expenses for the taxable year, 
264.12  over 
264.13     (2) the base amount; and 
264.14     (b) 2.5 percent on all of such excess expenses over $2 
264.15  million. 
264.16     Sec. 12.  Minnesota Statutes 1996, section 290.0922, 
264.17  subdivision 1, is amended to read: 
264.18     Subdivision 1.  [IMPOSITION.] (a) In addition to the tax 
264.19  imposed by this chapter without regard to this section, the 
264.20  franchise tax imposed on a corporation required to file under 
264.21  section 289A.08, subdivision 3, other than a corporation having 
264.22  a valid election in effect under section 1362 of the Internal 
264.23  Revenue Code treated as an "S" corporation under section 
264.24  290.9725 for the taxable year includes a tax equal to the 
264.25  following amounts: 
264.26       If the sum of the corporation's
264.27  Minnesota property, payrolls, and sales
264.28  or receipts is:                            the tax equals:
264.29             less than $500,000                    $0
264.30     $   500,000 to $   999,999                  $100
264.31     $ 1,000,000 to $ 4,999,999                  $300
264.32     $ 5,000,000 to $ 9,999,999                $1,000 
264.33     $10,000,000 to $19,999,999                $2,000 
264.34     $20,000,000 or more                       $5,000 
264.35     (b) A tax is imposed for each taxable year on a corporation 
264.36  required to file a return under section 289A.12, subdivision 3, 
265.1   that has a valid election in effect for the taxable year under 
265.2   section 1362 of the Internal Revenue Code is treated as an "S" 
265.3   corporation under section 290.9725 and on a partnership required 
265.4   to file a return under section 289A.12, subdivision 3, other 
265.5   than a partnership that derives over 80 percent of its income 
265.6   from farming.  The tax imposed under this paragraph is due on or 
265.7   before the due date of the return for the taxpayer due under 
265.8   section 289A.18, subdivision 1.  The commissioner shall 
265.9   prescribe the return to be used for payment of this tax.  The 
265.10  tax under this paragraph is equal to the following amounts:  
265.11       If the sum of the S corporation's or partnership's 
265.12  Minnesota property, payrolls, and sales
265.13  or receipts is:                        the tax equals:
265.14               less than $500,000                $0 
265.15       $   500,000 to $   999,999              $100 
265.16       $ 1,000,000 to $ 4,999,999              $300 
265.17       $ 5,000,000 to $ 9,999,999            $1,000 
265.18       $10,000,000 to $19,999,999            $2,000 
265.19       $20,000,000 or more                   $5,000 
265.20     Sec. 13.  Minnesota Statutes 1996, section 290.17, 
265.21  subdivision 1, is amended to read: 
265.22     Subdivision 1.  [SCOPE OF ALLOCATION RULES.] (a) The income 
265.23  of resident individuals is not subject to allocation outside 
265.24  this state.  The allocation rules apply to nonresident 
265.25  individuals, estates, trusts, nonresident partners of 
265.26  partnerships, nonresident shareholders of corporations having a 
265.27  valid election in effect under section 1362 of the Internal 
265.28  Revenue Code treated as "S" corporations under section 290.9725, 
265.29  and all corporations not having such an election in effect.  If 
265.30  a partnership or corporation would not otherwise be subject to 
265.31  the allocation rules, but conducts a trade or business that is 
265.32  part of a unitary business involving another legal entity that 
265.33  is subject to the allocation rules, the partnership or 
265.34  corporation is subject to the allocation rules. 
265.35     (b) Expenses, losses, and other deductions (referred to 
265.36  collectively in this paragraph as "deductions") must be 
266.1   allocated along with the item or class of gross income to which 
266.2   they are definitely related for purposes of assignment under 
266.3   this section or apportionment under section 290.191, 290.20, 
266.4   290.35, or 290.36.  Deductions not definitely related to any 
266.5   item or class of gross income are assigned to the taxpayer's 
266.6   domicile. 
266.7      (c) In the case of an individual who is a resident for only 
266.8   part of a taxable year, the individual's income, gains, losses, 
266.9   and deductions from the distributive share of a partnership, S 
266.10  corporation, trust, or estate are not subject to allocation 
266.11  outside this state to the extent of the distributive share 
266.12  multiplied by a ratio, the numerator of which is the number of 
266.13  days the individual was a resident of this state during the tax 
266.14  year of the partnership, S corporation, trust, or estate, and 
266.15  the denominator of which is the number of days in the taxable 
266.16  year of the partnership, S corporation, trust, or estate. 
266.17     Sec. 14.  Minnesota Statutes 1996, section 290.371, 
266.18  subdivision 2, is amended to read: 
266.19     Subd. 2.  [EXEMPTIONS.] A corporation is not required to 
266.20  file a notice of business activities report if:  
266.21     (1) by the end of an accounting period for which it was 
266.22  otherwise required to file a notice of business activities 
266.23  report under this section, it had received a certificate of 
266.24  authority to do business in this state; 
266.25     (2) a timely return has been filed under section 289A.08; 
266.26     (3) the corporation is exempt from taxation under this 
266.27  chapter pursuant to section 290.05; 
266.28     (4) the corporation's activities in Minnesota, or the 
266.29  interests in property which it owns, consist solely of 
266.30  activities or property exempted from jurisdiction to tax under 
266.31  section 290.015, subdivision 3, paragraph (b); or 
266.32     (5) the corporation has a valid election in effect under 
266.33  section 1362 of the Internal Revenue Code is an "S" corporation 
266.34  under section 290.9725. 
266.35     Sec. 15.  Minnesota Statutes 1996, section 290.9725, is 
266.36  amended to read: 
267.1      290.9725 [S CORPORATION.] 
267.2      For purposes of this chapter, the term "S corporation" 
267.3   means any corporation having a valid election in effect for the 
267.4   taxable year under section 1362 of the Internal Revenue Code, 
267.5   except that a corporation which either: 
267.6      (1) is a financial institution to which either section 585 
267.7   or section 593 of the Internal Revenue Code applies; or 
267.8      (2) has a wholly owned subsidiary as described in section 
267.9   362(b)(3) of the Internal Revenue Code which is a financial 
267.10  institution as described above 
267.11  is not an "S" corporation for the purposes of this chapter.  An 
267.12  S corporation shall not be subject to the taxes imposed by this 
267.13  chapter, except the taxes imposed under sections 290.0922, 
267.14  290.92, 290.9727, 290.9728, and 290.9729. 
267.15     Sec. 16.  Minnesota Statutes 1996, section 290.9727, 
267.16  subdivision 1, is amended to read: 
267.17     Subdivision 1.  [TAX IMPOSED.] For a an "S" corporation 
267.18  electing S corporation status pursuant to section 1362 of the 
267.19  Internal Revenue Code after December 31, 1986, and having a 
267.20  recognized built-in gain as defined in section 1374 of the 
267.21  Internal Revenue Code, there is imposed a tax on the taxable 
267.22  income of such S corporation, as defined in this section, at the 
267.23  rate prescribed by section 290.06, subdivision 1.  This 
267.24  subdivision does not apply to any corporation having an S 
267.25  election in effect for each of its taxable years.  An S 
267.26  corporation and any predecessor corporation must be treated as 
267.27  one corporation for purposes of the preceding sentence.  
267.28     Sec. 17.  Minnesota Statutes 1996, section 290.9728, 
267.29  subdivision 1, is amended to read: 
267.30     Subdivision 1.  [TAX IMPOSED.] There is imposed a tax on 
267.31  the taxable income of a an "S" corporation that has:  
267.32     (1) elected S corporation status pursuant to section 1362 
267.33  of the Internal Revenue Code of 1986, as amended through 
267.34  December 31, 1986, before January 1, 1987; 
267.35     (2) a net capital gain for the taxable year (i) in excess 
267.36  of $25,000 and (ii) exceeding 50 percent of the corporation's 
268.1   federal taxable income for the taxable year; and 
268.2      (3) federal taxable income for the taxable year exceeding 
268.3   $25,000.  
268.4      The tax is imposed at the rate prescribed by section 
268.5   290.06, subdivision 1.  For purposes of this section, "federal 
268.6   taxable income" means federal taxable income determined under 
268.7   section 1374(4)(d) of the Internal Revenue Code.  This section 
268.8   does not apply to an S corporation which has had an election 
268.9   under section 1362 of the Internal Revenue Code of 1954, in 
268.10  effect for the three immediately preceding taxable years.  This 
268.11  section does not apply to an S corporation that has been in 
268.12  existence for less than four taxable years and has had an 
268.13  election in effect under section 1362 of the Internal Revenue 
268.14  Code of 1954 for each of the corporation's taxable years.  For 
268.15  purposes of this section, an S corporation and any predecessor 
268.16  corporation are treated as one corporation.  
268.17     Sec. 18.  [290.9743] [ELECTION BY FASIT.] 
268.18     An entity having a valid election as a Financial Asset 
268.19  Securitization Investment Trust in effect for a taxable year 
268.20  under section 860L(a) of the Internal Revenue Code shall not be 
268.21  subject to the taxes imposed by this chapter, except the tax 
268.22  imposed under section 290.92. 
268.23     Sec. 19.  [290.9744] [FASIT INCOME TAXABLE TO HOLDERS OF 
268.24  INTERESTS.] 
268.25     The income of a FASIT is taxable to the holders of 
268.26  interests in the FASIT as provided in sections 860H to 860L of 
268.27  the Internal Revenue Code.  The income of the holders must be 
268.28  computed under the provisions of this chapter. 
268.29     Sec. 20.  Minnesota Statutes 1996, section 291.005, 
268.30  subdivision 1, is amended to read: 
268.31     Subdivision 1.  Unless the context otherwise clearly 
268.32  requires, the following terms used in this chapter shall have 
268.33  the following meanings: 
268.34     (1) "Federal gross estate" means the gross estate of a 
268.35  decedent as valued and otherwise determined for federal estate 
268.36  tax purposes by federal taxing authorities pursuant to the 
269.1   provisions of the Internal Revenue Code. 
269.2      (2) "Minnesota gross estate" means the federal gross estate 
269.3   of a decedent after (a) excluding therefrom any property 
269.4   included therein which has its situs outside Minnesota and (b) 
269.5   including therein any property omitted from the federal gross 
269.6   estate which is includable therein, has its situs in Minnesota, 
269.7   and was not disclosed to federal taxing authorities.  
269.8      (3) "Personal representative" means the executor, 
269.9   administrator or other person appointed by the court to 
269.10  administer and dispose of the property of the decedent.  If 
269.11  there is no executor, administrator or other person appointed, 
269.12  qualified, and acting within this state, then any person in 
269.13  actual or constructive possession of any property having a situs 
269.14  in this state which is included in the federal gross estate of 
269.15  the decedent shall be deemed to be a personal representative to 
269.16  the extent of the property and the Minnesota estate tax due with 
269.17  respect to the property. 
269.18     (4) "Resident decedent" means an individual whose domicile 
269.19  at the time of death was in Minnesota. 
269.20     (5) "Nonresident decedent" means an individual whose 
269.21  domicile at the time of death was not in Minnesota. 
269.22     (6) "Situs of property" means, with respect to real 
269.23  property, the state or country in which it is located; with 
269.24  respect to tangible personal property, the state or country in 
269.25  which it was normally kept or located at the time of the 
269.26  decedent's death; and with respect to intangible personal 
269.27  property, the state or country in which the decedent was 
269.28  domiciled at death. 
269.29     (7) "Commissioner" means the commissioner of revenue or any 
269.30  person to whom the commissioner has delegated functions under 
269.31  this chapter. 
269.32     (8) "Internal Revenue Code" means the United States 
269.33  Internal Revenue Code of 1986, as amended through March 22 
269.34  December 31, 1996, and includes the provisions of section 
269.35  1(a)(4) of Public Law Number 104-117. 
269.36     Sec. 21.  [FEDERAL CHANGES.] 
270.1      The changes made by sections 1118(a), 1305, 1603, 1702(e), 
270.2   and 1702(f) of the Small Business Job Protection Act, Public Law 
270.3   Number 104-188, sections 451(a), 451(b), 909, and 910 of the 
270.4   Personal Responsibility and Work Opportunity Reconciliation Act, 
270.5   Public Law Number 104-193, and the federal changes to taxable 
270.6   income of section 2 of this article which affect the Minnesota 
270.7   definition of wages under Minnesota Statutes, section 290.92, 
270.8   subdivision 1, S corporation status under Minnesota Statutes, 
270.9   section 290.9725, unrelated business income tax under Minnesota 
270.10  Statutes, section 290.05, subdivision 3, corporate alternative 
270.11  minimum tax under Minnesota Statutes, section 290.0921, 
270.12  subdivision 3, estate tax under Minnesota Statutes, sections 
270.13  291.005 and 291.03, the Minnesota working family credit under 
270.14  Minnesota Statutes, section 290.0671, subdivision 1, and the 
270.15  definition of income under Minnesota Statutes, section 290A.03, 
270.16  subdivision 3, shall become effective at the same time the 
270.17  changes become effective for federal purposes. 
270.18     Sec. 22.  [INSTRUCTION TO REVISOR.] 
270.19     In the next edition of Minnesota Statutes, the revisor of 
270.20  statutes shall substitute the phrase "Internal Revenue Code of 
270.21  1986, as amended through December 31, 1996," for the words 
270.22  "Internal Revenue Code of 1986, as amended through April 15, 
270.23  1995," wherever the phrase occurs in chapters 290A, 297, 298, 
270.24  and 469. 
270.25     Sec. 23.  [EFFECTIVE DATE.] 
270.26     Sections 3 to 5, 7 to 19 and the provision of section 2 
270.27  dealing with regulated investment companies are effective for 
270.28  tax years beginning after December 31, 1996.  The remainder of 
270.29  this article is effective at the same time and for the same 
270.30  years as the federal changes made in 1996 were effective for 
270.31  federal purposes. 
270.32                             ARTICLE 11
270.33                      SALES AND SPECIAL TAXES
270.34     Section 1.  Minnesota Statutes 1996, section 289A.56, 
270.35  subdivision 4, is amended to read: 
270.36     Subd. 4.  [CAPITAL EQUIPMENT REFUNDS; REFUNDS TO 
271.1   PURCHASERS.] Notwithstanding subdivision 3, for refunds payable 
271.2   under sections section 297A.15, subdivision 5, and 289A.50, 
271.3   subdivision 2a, interest is computed from the date the refund 
271.4   claim is filed with the commissioner.  For refunds payable under 
271.5   section 289A.50, subdivision 2a, interest is computed from the 
271.6   20th day of the month following the month of the invoice date 
271.7   for the purchase which is the subject of the refund. 
271.8      Sec. 2.  Minnesota Statutes 1996, section 296.141, 
271.9   subdivision 4, is amended to read: 
271.10     Subd. 4.  [CREDIT OR REFUND OF TAX PAID.] The commissioner 
271.11  shall allow the distributor credit or refund of the tax paid on 
271.12  gasoline and special fuel: 
271.13     (1) exported or sold for export from the state, other than 
271.14  in the supply tank of a motor vehicle or of an aircraft; 
271.15     (2) sold to the United States government to be used 
271.16  exclusively in performing its governmental functions and 
271.17  activities or to any "cost plus a fixed fee" contractor employed 
271.18  by the United States government on any national defense project; 
271.19     (3) if the fuel is placed in a tank used exclusively for 
271.20  residential heating; 
271.21     (4) destroyed by accident while in the possession of the 
271.22  distributor; 
271.23     (5) in error; 
271.24     (6) sold for storage in an on-farm bulk storage tank, 
271.25  except undyed diesel fuel, if the tax was not collected on the 
271.26  sale; and 
271.27     (6) (7) in such other cases as the commissioner may permit, 
271.28  not inconsistent with the provisions of this chapter and other 
271.29  laws relating to the gasoline and special fuel excise taxes. 
271.30     Sec. 3.  Minnesota Statutes 1996, section 296.18, 
271.31  subdivision 1, is amended to read: 
271.32     Subdivision 1.  [CLAIM; FUEL USED IN OTHER VEHICLES.] Any 
271.33  person who shall buy and use gasoline for a qualifying purpose 
271.34  other than use in motor vehicles, snowmobiles except as provided 
271.35  in clause (2), or motorboats, or special fuel for a qualifying 
271.36  purpose other than use in licensed motor vehicles, and who shall 
272.1   have paid the Minnesota excise tax directly or indirectly 
272.2   through the amount of the tax being included in the price of the 
272.3   gasoline or special fuel, or otherwise, shall be reimbursed and 
272.4   repaid the amount of the tax paid upon filing with the 
272.5   commissioner a claim in the form and manner prescribed by the 
272.6   commissioner, and containing the information the commissioner 
272.7   shall require.  By signing any such claim which is false or 
272.8   fraudulent, the applicant shall be subject to the penalties 
272.9   provided in this section for knowingly making a false claim.  
272.10  The claim shall set forth the total amount of the gasoline so 
272.11  purchased and used by the applicant other than in motor 
272.12  vehicles, or special fuel so purchased and used by the applicant 
272.13  other than in licensed motor vehicles, and shall state when and 
272.14  for what purpose it was used.  When a claim contains an error in 
272.15  computation or preparation, the commissioner is authorized to 
272.16  adjust the claim in accordance with the evidence shown on the 
272.17  claim or other information available to the commissioner.  The 
272.18  commissioner, on being satisfied that the claimant is entitled 
272.19  to the payments, shall approve the claim and transmit it to the 
272.20  commissioner of finance.  No repayment shall be made unless the 
272.21  claim and invoice shall be filed with the commissioner within 
272.22  one year from the date of the purchase.  The postmark on the 
272.23  envelope in which a written claim is mailed shall determine its 
272.24  date of filing.  The words "gasoline" or "special fuel" as used 
272.25  in this subdivision do not include aviation gasoline or special 
272.26  fuel for aircraft.  Gasoline or special fuel bought and used for 
272.27  a "qualifying purpose" means: 
272.28     (1) Gasoline or special fuel used in carrying on a trade or 
272.29  business, used on a farm situated in Minnesota, and used for a 
272.30  farming purpose.  "Farm" and "farming purpose" have the meanings 
272.31  given them in section 6420(c)(2), (3), and (4) of the Internal 
272.32  Revenue Code of 1986, as amended through December 31, 1988.  
272.33     (2) Gasoline or special fuel used for off-highway business 
272.34  use.  "Off-highway business use" means any use off the public 
272.35  highways by a person in that person's trade, business, or 
272.36  activity for the production of income.  "Off-highway business 
273.1   use" includes: 
273.2      (a) use of a passenger snowmobile off the public highways 
273.3   as part of the operations of a resort as defined in section 
273.4   157.15; and 
273.5      (b) use of gasoline or special fuel to operate a power 
273.6   takeoff unit on a vehicle, but not including fuel consumed 
273.7   during idling time.  
273.8      "Off-highway business use" does not include use as a fuel 
273.9   in a motor vehicle which, at the time of use, is registered or 
273.10  is required to be registered for highway use under the laws of 
273.11  any state or foreign country.  
273.12     (3) Gasoline or special fuel placed in the fuel tanks of 
273.13  new motor vehicles, manufactured in Minnesota, and shipped by 
273.14  interstate carrier to destinations in other states or foreign 
273.15  countries.  
273.16     By July 1, 1998, the commissioner shall adopt rules that 
273.17  determine the rates and percentages necessary to develop 
273.18  formulas for calculating and administering the refund under 
273.19  clause (2)(b). 
273.20     Sec. 4.  Minnesota Statutes 1996, section 297A.01, 
273.21  subdivision 3, is amended to read: 
273.22     Subd. 3.  A "sale" and a "purchase" includes, but is not 
273.23  limited to, each of the following transactions: 
273.24     (a) Any transfer of title or possession, or both, of 
273.25  tangible personal property, whether absolutely or conditionally, 
273.26  and the leasing of or the granting of a license to use or 
273.27  consume tangible personal property other than manufactured homes 
273.28  used for residential purposes for a continuous period of 30 days 
273.29  or more, for a consideration in money or by exchange or barter; 
273.30     (b) The production, fabrication, printing, or processing of 
273.31  tangible personal property for a consideration for consumers who 
273.32  furnish either directly or indirectly the materials used in the 
273.33  production, fabrication, printing, or processing; 
273.34     (c) The furnishing, preparing, or serving for a 
273.35  consideration of food, meals, or drinks.  "Sale" or "purchase" 
273.36  does not include: 
274.1      (1) meals or drinks served to patients, inmates, or persons 
274.2   residing at hospitals, sanitariums, nursing homes, senior 
274.3   citizens homes, and correctional, detention, and detoxification 
274.4   facilities; 
274.5      (2) meals or drinks purchased for and served exclusively to 
274.6   individuals who are 60 years of age or over and their spouses or 
274.7   to the handicapped and their spouses by governmental agencies, 
274.8   nonprofit organizations, agencies, or churches or pursuant to 
274.9   any program funded in whole or part through 42 USCA sections 
274.10  3001 through 3045, wherever delivered, prepared or served; or 
274.11     (3) meals and lunches served at public and private schools, 
274.12  universities, or colleges. 
274.13  Notwithstanding section 297A.25, subdivision 2, taxable food or 
274.14  meals include, but are not limited to, the following:  
274.15     (i) heated food or drinks; prepared by the retailer for 
274.16  immediate consumption either on or off the retailer's premises.  
274.17  For purposes of this subdivision, "food or drinks prepared for 
274.18  immediate consumption" includes any food product upon which an 
274.19  act of preparation including, but not limited to, cooking, 
274.20  mixing, sandwich making, blending, heating, or pouring has been 
274.21  performed by the retailer so the food product may be immediately 
274.22  consumed by the purchaser.  For purposes of this subdivision, 
274.23  "premises" means the total space and facilities, including 
274.24  buildings, grounds, and parking lots that are made available or 
274.25  that are available for use by the retailer or customer for the 
274.26  purpose of sale or consumption of prepared food and drinks.  
274.27  Food and drinks sold within a building or grounds which require 
274.28  an admission charge for entrance are presumed to be sold for 
274.29  consumption on the premises.  The premises of a caterer is the 
274.30  place where the catered food or drinks are served; 
274.31     (ii) sandwiches prepared by the retailer; 
274.32     (iii) single sales of prepackaged ice cream or ice milk 
274.33  novelties prepared by the retailer; 
274.34     (iv) hand-prepared or dispensed ice cream or ice milk (ii) 
274.35  ice cream, ice milk, or frozen yogurt products including 
274.36  novelties, cones, sundaes, and snow cones, sold in single or 
275.1   individual servings.  For purposes of this subdivision, "single 
275.2   or individual servings" does not include products prepackaged 
275.3   and sold in bulk containers or packaging; 
275.4      (v) (iii) soft drinks and other beverages prepared or 
275.5   served by the retailer; including all carbonated and 
275.6   noncarbonated beverages or drinks sold in liquid form except 
275.7   beverages or drinks which contain a primary dairy product or 
275.8   dairy ingredient base, beverages or drinks containing 15 or more 
275.9   percent fruit juice, or noncarbonated and noneffervescent 
275.10  bottled water sold in individual containers of one-half gallon 
275.11  or more in size; 
275.12     (vi) (iv) gum;, candy, and candy products, except when sold 
275.13  for fundraising purposes by a nonprofit organization that 
275.14  provides educational and social activities primarily for young 
275.15  people 18 years of age and under; 
275.16     (vii) (v) ice; 
275.17     (viii) (vi) all food sold in from vending machines, 
275.18  pushcarts, lunch carts, motor vehicles, or any other form of 
275.19  vehicle except home delivery vehicles; 
275.20     (ix) (vii) party trays prepared by the retailers; and 
275.21     (x) (viii) all meals and single servings of packaged snack 
275.22  food, single cans or bottles of pop, sold in restaurants and 
275.23  bars; and 
275.24     (ix) bakery products prepared by the retailer for 
275.25  consumption on the retailer's premises; 
275.26     (d) The granting of the privilege of admission to places of 
275.27  amusement, recreational areas, or athletic events, except a 
275.28  world championship football game sponsored by the national 
275.29  football league, and the privilege of having access to and the 
275.30  use of amusement devices, tanning facilities, reducing salons, 
275.31  steam baths, turkish baths, health clubs, and spas or athletic 
275.32  facilities; 
275.33     (e) The furnishing for a consideration of lodging and 
275.34  related services by a hotel, rooming house, tourist court, motel 
275.35  or trailer camp and of the granting of any similar license to 
275.36  use real property other than the renting or leasing thereof for 
276.1   a continuous period of 30 days or more; 
276.2      (f) The furnishing for a consideration of electricity, gas, 
276.3   water, or steam for use or consumption within this state, or 
276.4   local exchange telephone service, intrastate toll service, and 
276.5   interstate toll service, if that service originates from and is 
276.6   charged to a telephone located in this state.  Telephone service 
276.7   does not include services purchased with prepaid telephone 
276.8   calling cards.  Telephone service includes paging services and 
276.9   private communication service, as defined in United States Code, 
276.10  title 26, section 4252(d), except for private communication 
276.11  service purchased by an agent acting on behalf of the state 
276.12  lottery.  The furnishing for a consideration of access to 
276.13  telephone services by a hotel to its guests is a sale under this 
276.14  clause.  Sales by municipal corporations in a proprietary 
276.15  capacity are included in the provisions of this clause.  The 
276.16  furnishing of water and sewer services for residential use shall 
276.17  not be considered a sale.  The sale of natural gas to be used as 
276.18  a fuel in vehicles propelled by natural gas shall not be 
276.19  considered a sale for the purposes of this section; 
276.20     (g) The furnishing for a consideration of cable television 
276.21  services, including charges for basic service, charges for 
276.22  premium service, and any other charges for any other 
276.23  pay-per-view, monthly, or similar television services; 
276.24     (h) The furnishing for a consideration of parking services, 
276.25  whether on a contractual, hourly, or other periodic basis, 
276.26  except for parking at a meter; 
276.27     (i) The furnishing for a consideration of services listed 
276.28  in this paragraph: 
276.29     (i) laundry and dry cleaning services including cleaning, 
276.30  pressing, repairing, altering, and storing clothes, linen 
276.31  services and supply, cleaning and blocking hats, and carpet, 
276.32  drapery, upholstery, and industrial cleaning.  Laundry and dry 
276.33  cleaning services do not include services provided by coin 
276.34  operated facilities operated by the customer; 
276.35     (ii) motor vehicle washing, waxing, and cleaning services, 
276.36  including services provided by coin-operated facilities operated 
277.1   by the customer, and rustproofing, undercoating, and towing of 
277.2   motor vehicles; 
277.3      (iii) building and residential cleaning, maintenance, and 
277.4   disinfecting and exterminating services; 
277.5      (iv) detective services, security services, burglar, fire 
277.6   alarm, and armored car services; but not including services 
277.7   performed within the jurisdiction they serve by off-duty 
277.8   licensed peace officers as defined in section 626.84, 
277.9   subdivision 1, or services provided by a nonprofit organization 
277.10  for monitoring and electronic surveillance of persons placed on 
277.11  in-home detention pursuant to court order or under the direction 
277.12  of the Minnesota department of corrections; 
277.13     (v) pet grooming services; 
277.14     (vi) lawn care, fertilizing, mowing, spraying and sprigging 
277.15  services; garden planting and maintenance; tree, bush, and shrub 
277.16  pruning, bracing, spraying, and surgery; indoor plant care; 
277.17  tree, bush, shrub and stump removal; and tree trimming for 
277.18  public utility lines.  Services performed under a construction 
277.19  contract for the installation of shrubbery, plants, sod, trees, 
277.20  bushes, and similar items are not taxable; 
277.21     (vii) mixed municipal solid waste management services as 
277.22  described in section 297A.45; 
277.23     (viii) massages, except when provided by a licensed health 
277.24  care facility or professional or upon written referral from a 
277.25  licensed health care facility or professional for treatment of 
277.26  illness, injury, or disease; and 
277.27     (ix) the furnishing for consideration of lodging, board and 
277.28  care services for animals in kennels and other similar 
277.29  arrangements, but excluding veterinary and horse boarding 
277.30  services. 
277.31  The services listed in this paragraph are taxable under section 
277.32  297A.02 if the service is performed wholly within Minnesota or 
277.33  if the service is performed partly within and partly without 
277.34  Minnesota and the greater proportion of the service is performed 
277.35  in Minnesota, based on the cost of performance.  In applying the 
277.36  provisions of this chapter, the terms "tangible personal 
278.1   property" and "sales at retail" include taxable services and the 
278.2   provision of taxable services, unless specifically provided 
278.3   otherwise.  Services performed by an employee for an employer 
278.4   are not taxable under this paragraph.  Services performed by a 
278.5   partnership or association for another partnership or 
278.6   association are not taxable under this paragraph if one of the 
278.7   entities owns or controls more than 80 percent of the voting 
278.8   power of the equity interest in the other entity.  Services 
278.9   performed between members of an affiliated group of corporations 
278.10  are not taxable.  For purposes of this section, "affiliated 
278.11  group of corporations" includes those entities that would be 
278.12  classified as a member of an affiliated group under United 
278.13  States Code, title 26, section 1504, as amended through December 
278.14  31, 1987, and who are eligible to file a consolidated tax return 
278.15  for federal income tax purposes; 
278.16     (j) A "sale" and a "purchase" includes the transfer of 
278.17  computer software, meaning information and directions that 
278.18  dictate the function performed by data processing equipment.  A 
278.19  "sale" and a "purchase" does not include the design, 
278.20  development, writing, translation, fabrication, lease, or 
278.21  transfer for a consideration of title or possession of a custom 
278.22  computer program; and 
278.23     (k) The granting of membership in a club, association, or 
278.24  other organization if: 
278.25     (1) the club, association, or other organization makes 
278.26  available for the use of its members sports and athletic 
278.27  facilities (without regard to whether a separate charge is 
278.28  assessed for use of the facilities); and 
278.29     (2) use of the sports and athletic facilities is not made 
278.30  available to the general public on the same basis as it is made 
278.31  available to members.  
278.32  Granting of membership includes both one-time initiation fees 
278.33  and periodic membership dues.  Sports and athletic facilities 
278.34  include golf courses, tennis, racquetball, handball and squash 
278.35  courts, basketball and volleyball facilities, running tracks, 
278.36  exercise equipment, swimming pools, and other similar athletic 
279.1   or sports facilities.  The provisions of this paragraph do not 
279.2   apply to camps or other recreation facilities owned and operated 
279.3   by an exempt organization under section 501(c)(3) of the 
279.4   Internal Revenue Code of 1986, as amended through December 31, 
279.5   1992, for educational and social activities for young people 
279.6   primarily age 18 and under.  
279.7      Sec. 5.  Minnesota Statutes 1996, section 297A.01, 
279.8   subdivision 4, is amended to read: 
279.9      Subd. 4.  (a) A "retail sale" or "sale at retail" means a 
279.10  sale for any purpose other than resale in the regular course of 
279.11  business.  
279.12     (b) Property utilized by the owner only by leasing such 
279.13  property to others or by holding it in an effort to so lease it, 
279.14  and which is put to no use by the owner other than resale after 
279.15  such lease or effort to lease, shall be considered property 
279.16  purchased for resale.  
279.17     (c) Master computer software programs that are purchased 
279.18  and used to make copies for sale or lease are considered 
279.19  property purchased for resale.  
279.20     (d) Sales of building materials, supplies and equipment to 
279.21  owners, contractors, subcontractors or builders for the erection 
279.22  of buildings or the alteration, repair or improvement of real 
279.23  property are "retail sales" or "sales at retail" in whatever 
279.24  quantity sold and whether or not for purpose of resale in the 
279.25  form of real property or otherwise.  
279.26     (e) A sale of carpeting, linoleum, or other similar floor 
279.27  covering which includes installation of the carpeting, linoleum, 
279.28  or other similar floor covering is a contract for the 
279.29  improvement of real property.  
279.30     (f) A sale of shrubbery, plants, sod, trees, and similar 
279.31  items that includes installation of the shrubbery, plants, sod, 
279.32  trees, and similar items is a contract for the improvement of 
279.33  real property.  
279.34     (g) Aircraft and parts for the repair thereof purchased by 
279.35  a nonprofit, incorporated flying club or association utilized 
279.36  solely by the corporation by leasing such aircraft to 
280.1   shareholders of the corporation shall be considered property 
280.2   purchased for resale.  The leasing of the aircraft to the 
280.3   shareholders by the flying club or association shall be 
280.4   considered a sale.  Leasing of aircraft utilized by a lessee for 
280.5   the purpose of leasing to others, whether or not the lessee also 
280.6   utilizes the aircraft for flight instruction where no separate 
280.7   charge is made for aircraft rental or for charter service, shall 
280.8   be considered a purchase for resale; provided, however, that a 
280.9   proportionate share of the lease payment reflecting use for 
280.10  flight instruction or charter service is subject to tax pursuant 
280.11  to section 297A.14. 
280.12     (h) Tangible personal property that is utilized or employed 
280.13  in the furnishing or providing of services under section 
280.14  297A.01, subdivision 3, paragraph (d), or in conducting lawful 
280.15  gambling under chapter 349 or the state lottery under chapter 
280.16  349A, including property given as promotional items, shall not 
280.17  be considered property purchased for resale.  Machines, 
280.18  equipment, or devices that are used to furnish, provide, or 
280.19  dispense goods or services, including coin-operated devices, 
280.20  shall not be considered property purchased for resale. 
280.21     (i) Tangible personal property that is awarded as prizes 
280.22  shall not be considered property purchased for resale. 
280.23     Sec. 6.  Minnesota Statutes 1996, section 297A.01, 
280.24  subdivision 7, is amended to read: 
280.25     Subd. 7.  "Storage" and "use" do not include the keeping, 
280.26  or retaining or exercising of any right or power over in a 
280.27  public warehouse of tangible personal property or tickets or 
280.28  admissions to places of amusement or athletic events when 
280.29  shipped or brought into Minnesota by common carrier, for the 
280.30  purpose of subsequently being transported outside Minnesota and 
280.31  thereafter used solely outside Minnesota, except in the course 
280.32  of interstate commerce, or for the purpose of being processed, 
280.33  fabricated or manufactured into, attached to or incorporated 
280.34  into other tangible personal property to be transported outside 
280.35  Minnesota and not thereafter returned to a point within 
280.36  Minnesota, except in the course of interstate commerce. 
281.1      Sec. 7.  Minnesota Statutes 1996, section 297A.01, 
281.2   subdivision 11, is amended to read: 
281.3      Subd. 11.  "Tangible personal property" means corporeal 
281.4   personal property of any kind whatsoever, including property 
281.5   which is to become real property as a result of incorporation, 
281.6   attachment, or installation following its acquisition. 
281.7      Personal property does not include: 
281.8      (a) large ponderous machinery and equipment used in a 
281.9   business or production activity which at common law would be 
281.10  considered to be real property; 
281.11     (b) property which is subject to an ad valorem property 
281.12  tax; 
281.13     (c) property described in section 272.02, subdivision 1, 
281.14  clause (8), paragraphs (a) to (d); 
281.15     (d) property described in section 272.03, subdivision 2, 
281.16  clauses (3) and (5). 
281.17     Tangible personal property includes computer software, 
281.18  whether contained on tape, discs, cards, or other 
281.19  devices.  Tangible personal property also includes prepaid 
281.20  telephone calling cards. 
281.21     Sec. 8.  Minnesota Statutes 1996, section 297A.01, 
281.22  subdivision 15, is amended to read: 
281.23     Subd. 15.  "Farm machinery" means new or used machinery, 
281.24  equipment, implements, accessories, and contrivances used 
281.25  directly and principally in the production for sale, but not 
281.26  including the processing, of livestock, dairy animals, dairy 
281.27  products, poultry and poultry products, fruits, 
281.28  vegetables, flowering or ornamental plants including nursery 
281.29  stock, forage, grains and bees and apiary products.  "Farm 
281.30  machinery" includes: 
281.31     (1) machinery for the preparation, seeding or cultivation 
281.32  of soil for growing agricultural crops, as defined in section 
281.33  97A.028, and sod, harvesting and threshing of agricultural 
281.34  products, harvesting or mowing of sod, and certain machinery for 
281.35  dairy, livestock and poultry farms; 
281.36     (2) barn cleaners, milking systems, grain dryers, automatic 
282.1   feeding systems and similar installations, whether or not the 
282.2   equipment is installed by the seller and becomes part of the 
282.3   real property; 
282.4      (3) irrigation equipment sold for exclusively agricultural 
282.5   use, including pumps, pipe fittings, valves, sprinklers and 
282.6   other equipment necessary to the operation of an irrigation 
282.7   system when sold as part of an irrigation system, whether or not 
282.8   the equipment is installed by the seller and becomes part of the 
282.9   real property; 
282.10     (4) logging equipment, including chain saws used for 
282.11  commercial logging; 
282.12     (5) fencing used for the containment of farmed cervidae, as 
282.13  defined in section 17.451, subdivision 2; and 
282.14     (6) primary and backup generator units used to generate 
282.15  electricity for the purpose of operating farm machinery, as 
282.16  defined in this subdivision, or providing light or space heating 
282.17  necessary for the production of livestock, dairy animals, dairy 
282.18  products, or poultry and poultry products.  
282.19     Repair or replacement parts for farm machinery shall not 
282.20  be, except tires, are included in the definition of farm 
282.21  machinery if the part replaces a farm machinery part assigned a 
282.22  specific or generic part number by the manufacturer of the farm 
282.23  machinery.  
282.24     Tools, shop equipment, grain bins, feed bunks, fencing 
282.25  material except fencing material covered by clause (5), 
282.26  communication equipment and other farm supplies shall not be 
282.27  considered to be farm machinery.  "Farm machinery" does not 
282.28  include motor vehicles taxed under chapter 297B, snowmobiles, 
282.29  snow blowers, lawn mowers except those used in the production of 
282.30  sod for sale, garden-type tractors or garden tillers and the 
282.31  repair and replacement parts for those vehicles and machines. 
282.32     Sec. 9.  Minnesota Statutes 1996, section 297A.01, 
282.33  subdivision 16, is amended to read: 
282.34     Subd. 16.  [CAPITAL EQUIPMENT.] (a) Capital equipment means 
282.35  machinery and equipment purchased or leased for use in this 
282.36  state and used by the purchaser or lessee primarily for 
283.1   manufacturing, fabricating, mining, or refining tangible 
283.2   personal property to be sold ultimately at retail and for 
283.3   electronically transmitting results retrieved by a customer of 
283.4   an on-line computerized data retrieval system.  
283.5      (b) Capital equipment includes all machinery and equipment 
283.6   that is essential to the integrated production process.  Capital 
283.7   equipment includes, but is not limited to: 
283.8      (1) machinery and equipment used or required to operate, 
283.9   control, or regulate the production equipment; 
283.10     (2) machinery and equipment used for research and 
283.11  development, design, quality control, and testing activities; 
283.12     (3) environmental control devices that are used to maintain 
283.13  conditions such as temperature, humidity, light, or air pressure 
283.14  when those conditions are essential to and are part of the 
283.15  production process; or 
283.16     (4) materials and supplies necessary to construct and 
283.17  install machinery or equipment.; 
283.18     (5) repair and replacement parts, including accessories, 
283.19  whether purchased as spare parts, repair parts, or as upgrades 
283.20  or modifications to machinery or equipment; 
283.21     (6) materials used for foundations that support machinery 
283.22  or equipment; or 
283.23     (7) materials used to construct and install special purpose 
283.24  buildings used in the production process. 
283.25     (c) Capital equipment does not include the following: 
283.26     (1) repair or replacement parts, including accessories, 
283.27  whether purchased as spare parts, repair parts, or as upgrades 
283.28  or modifications, and whether purchased before or after the 
283.29  machinery or equipment is placed into service.  Parts or 
283.30  accessories are treated as capital equipment only to the extent 
283.31  that they are a part of and are essential to the operation of 
283.32  the machinery or equipment as initially purchased; 
283.33     (2) motor vehicles taxed under chapter 297B; 
283.34     (3) (2) machinery or equipment used to receive or store raw 
283.35  materials; 
283.36     (4) (3) building materials; 
284.1      (5) (4) machinery or equipment used for nonproduction 
284.2   purposes, including, but not limited to, the following:  
284.3   machinery and equipment used for plant security, fire 
284.4   prevention, first aid, and hospital stations; machinery and 
284.5   equipment used in support operations or for administrative 
284.6   purposes; machinery and equipment used solely for pollution 
284.7   control, prevention, or abatement; and machinery and equipment 
284.8   used in plant cleaning, disposal of scrap and waste, plant 
284.9   communications, space heating, lighting, or safety; 
284.10     (6) (5) "farm machinery" as defined by subdivision 15, and 
284.11  "aquaculture production equipment" as defined by subdivision 19, 
284.12  and "replacement capital equipment" as defined by subdivision 
284.13  20; or 
284.14     (7) (6) any other item that is not essential to the 
284.15  integrated process of manufacturing, fabricating, mining, or 
284.16  refining. 
284.17     (d) For purposes of this subdivision: 
284.18     (1) "Equipment" means independent devices or tools separate 
284.19  from machinery but essential to an integrated production 
284.20  process, including computers and software, used in operating, 
284.21  controlling, or regulating machinery and equipment; and any 
284.22  subunit or assembly comprising a component of any machinery or 
284.23  accessory or attachment parts of machinery, such as tools, dies, 
284.24  jigs, patterns, and molds. 
284.25     (2) "Fabricating" means to make, build, create, produce, or 
284.26  assemble components or property to work in a new or different 
284.27  manner. 
284.28     (3) "Machinery" means mechanical, electronic, or electrical 
284.29  devices, including computers and software, that are purchased or 
284.30  constructed to be used for the activities set forth in paragraph 
284.31  (a), beginning with the removal of raw materials from inventory 
284.32  through the completion of the product, including packaging of 
284.33  the product. 
284.34     (4) "Manufacturing" means an operation or series of 
284.35  operations where raw materials are changed in form, composition, 
284.36  or condition by machinery and equipment and which results in the 
285.1   production of a new article of tangible personal property.  For 
285.2   purposes of this subdivision, "manufacturing" includes the 
285.3   generation of electricity or steam to be sold at retail. 
285.4      (5) "Mining" means the extraction of minerals, ores, stone, 
285.5   and peat. 
285.6      (6) "On-line data retrieval system" means a system whose 
285.7   cumulation of information is equally available and accessible to 
285.8   all its customers. 
285.9      (7) "Pollution control equipment" means machinery and 
285.10  equipment used to eliminate, prevent, or reduce pollution 
285.11  resulting from an activity described in paragraph (a). 
285.12     (8) "Primarily" means machinery and equipment used 50 
285.13  percent or more of the time in an activity described in 
285.14  paragraph (a). 
285.15     (9) "Refining" means the process of converting a natural 
285.16  resource to a product, including the treatment of water to be 
285.17  sold at retail. 
285.18     (e) For purposes of this subdivision the requirement that 
285.19  the machinery or equipment "must be used by the purchaser or 
285.20  lessee" means that the person who purchases or leases the 
285.21  machinery or equipment must be the one who uses it for the 
285.22  qualifying purpose.  When a contractor buys and installs 
285.23  machinery or equipment as part of an improvement to real 
285.24  property, only the contractor is considered the purchaser. 
285.25     (f) Notwithstanding prior provisions of this subdivision, 
285.26  machinery and equipment purchased or leased to replace machinery 
285.27  and equipment used in the mining or production of taconite shall 
285.28  qualify as capital equipment. 
285.29     Sec. 10.  Minnesota Statutes 1996, section 297A.02, 
285.30  subdivision 2, is amended to read: 
285.31     Subd. 2.  [MACHINERY AND EQUIPMENT.] Notwithstanding the 
285.32  provisions of subdivision 1, the rate of the excise tax imposed 
285.33  upon sales of farm machinery and aquaculture production 
285.34  equipment is: 
285.35     for purchases prior to July 1, 1998, 2.5 percent, 
285.36     for purchases after June 30, 1998, and prior to July 1, 
286.1   1999, 1.5 percent, 
286.2      purchases after June 30, 1999, are exempt. 
286.3      Sec. 11.  Minnesota Statutes 1996, section 297A.14, 
286.4   subdivision 4, is amended to read: 
286.5      Subd. 4.  [DE MINIMIS EXEMPTION.] Purchases subject to use 
286.6   tax under this section are exempt if (1) the purchase is made by 
286.7   an individual for personal use, and (2) the total amount of 
286.8   purchases made by a person, other than a person who has or is 
286.9   obligated to have a permit under section 297A.04, that are 
286.10  subject to the use tax, do not exceed $770 in the calendar 
286.11  year.  For purposes of this subdivision, "personal use" includes 
286.12  purchases for gifts.  If an individual a person makes purchases, 
286.13  which are subject to use tax, of more than $770 in the calendar 
286.14  year the individual the person must pay the use tax on the 
286.15  entire amount. 
286.16     Sec. 12.  Minnesota Statutes 1996, section 297A.211, 
286.17  subdivision 1, is amended to read: 
286.18     Subdivision 1.  Every person, as defined in this chapter, 
286.19  who is engaged in interstate for-hire transportation of tangible 
286.20  personal property or passengers by motor vehicle may at their 
286.21  option, under rules prescribed by the commissioner, register as 
286.22  retailers and pay the taxes imposed by this chapter in 
286.23  accordance with this section.  Any taxes paid under this section 
286.24  are deemed use taxes, except local sales taxes when no 
286.25  corresponding local use tax is imposed.  Persons referred to 
286.26  herein are:  (1) persons possessing a certificate or permit or 
286.27  having completed a registration process that authorizes for-hire 
286.28  transportation of property or passengers from the United States 
286.29  Department of Transportation, the transportation regulation 
286.30  board, or the department of transportation; or (2) persons 
286.31  transporting commodities defined as "exempt" in for-hire 
286.32  transportation in interstate commerce; or (3) persons who, 
286.33  pursuant to contracts with persons described in clause (1) or 
286.34  (2) above, transport tangible personal property in interstate 
286.35  commerce.  Persons qualifying under clauses (2) and (3) must 
286.36  maintain on a current basis the same type of mileage records 
287.1   that are required by persons specified in clause (1) by the 
287.2   United States Department of Transportation.  Persons who in the 
287.3   course of their business are transporting solely their own goods 
287.4   in interstate commerce may also register as retailers pursuant 
287.5   to rules prescribed by the commissioner and pay the taxes 
287.6   imposed by this chapter in accordance with this section.  
287.7      Sec. 13.  Minnesota Statutes 1996, section 297A.25, 
287.8   subdivision 2, is amended to read: 
287.9      Subd. 2.  [FOOD PRODUCTS.] The gross receipts from the sale 
287.10  of food products including but not limited to cereal and cereal 
287.11  products, butter, cheese, milk and milk products, oleomargarine, 
287.12  meat and meat products, fish and fish products, eggs and egg 
287.13  products, vegetables and vegetable products, fruit and fruit 
287.14  products, spices and salt, sugar and sugar products, coffee and 
287.15  coffee substitutes, tea, cocoa and cocoa products, and food 
287.16  products which are not taxable pursuant to section 297A.01, 
287.17  subdivision 3, clause (c) are exempt.  This exemption does not 
287.18  include the following:  
287.19     (1) candy and candy products, except when sold for 
287.20  fundraising purposes by a nonprofit organization that provides 
287.21  educational and social activities for young people primarily 
287.22  aged 18 and under; 
287.23     (2) carbonated beverages, beverages commonly referred to as 
287.24  soft drinks containing less than 15 percent fruit juice, or 
287.25  bottled water other than noncarbonated and noneffervescent 
287.26  bottled water sold in individual containers of one-half gallon 
287.27  or more in size. 
287.28     Sec. 14.  Minnesota Statutes 1996, section 297A.25, 
287.29  subdivision 3, is amended to read: 
287.30     Subd. 3.  [MEDICINES; MEDICAL DEVICES.] The gross receipts 
287.31  from the sale of prescribed drugs, prescribed medicine and 
287.32  insulin, intended for use, internal or external, in the cure, 
287.33  mitigation, treatment or prevention of illness or disease in 
287.34  human beings are exempt, together with prescription glasses, 
287.35  fever thermometers, therapeutic, and prosthetic devices.  
287.36  "Prescribed drugs" or "prescribed medicine" includes 
288.1   over-the-counter drugs or medicine prescribed by a licensed 
288.2   physician.  "Therapeutic devices" includes reusable finger 
288.3   pricking devices for the extraction of blood, blood glucose 
288.4   monitoring machines, and other diagnostic agents used in 
288.5   diagnosing, monitoring, or treating diabetes.  Nonprescription 
288.6   analgesics consisting principally (determined by the weight of 
288.7   all ingredients) of acetaminophen, acetylsalicylic acid, 
288.8   ibuprofen, ketoprofen, naproxen, and other nonprescription 
288.9   analgesics that are approved by the United States Food and Drug 
288.10  Administration for internal use by human beings, or a 
288.11  combination thereof, are exempt. 
288.12     Sec. 15.  Minnesota Statutes 1996, section 297A.25, 
288.13  subdivision 7, is amended to read: 
288.14     Subd. 7.  [PETROLEUM PRODUCTS.] The gross receipts from the 
288.15  sale of and storage, use or consumption of the following 
288.16  petroleum products are exempt:  
288.17     (1) products upon which a tax has been imposed and paid 
288.18  under the provisions of chapter 296, and no refund has been or 
288.19  will be allowed because the buyer used the fuel for nonhighway 
288.20  use; 
288.21     (2) products which are used in the improvement of 
288.22  agricultural land by constructing, maintaining, and repairing 
288.23  drainage ditches, tile drainage systems, grass waterways, water 
288.24  impoundment, and other erosion control structures; 
288.25     (3) products purchased by a transit system receiving 
288.26  financial assistance under section 174.24 or 473.384; or 
288.27     (4) products used in a passenger snowmobile, as defined in 
288.28  section 296.01, subdivision 27a, for off-highway business use as 
288.29  part of the operations of a resort as provided under section 
288.30  296.18, subdivision 1, clause (2); or 
288.31     (5) products purchased by a state or a political 
288.32  subdivision of a state for use in emergency rescue vehicles and 
288.33  fire trucks and apparatus. 
288.34     Sec. 16.  Minnesota Statutes 1996, section 297A.25, 
288.35  subdivision 11, is amended to read: 
288.36     Subd. 11.  [SALES TO GOVERNMENT.] The gross receipts from 
289.1   all sales, including sales in which title is retained by a 
289.2   seller or a vendor or is assigned to a third party under an 
289.3   installment sale or lease purchase agreement under section 
289.4   465.71, of tangible personal property to, and all storage, use 
289.5   or consumption of such property by, the United States and its 
289.6   agencies and instrumentalities, the University of Minnesota, 
289.7   state universities, community colleges, technical colleges, 
289.8   state academies, the Lola and Rudy Perpich Minnesota center for 
289.9   arts education, and school districts are exempt. 
289.10     As used in this subdivision, "school districts" means 
289.11  public school entities and districts of every kind and nature 
289.12  organized under the laws of the state of Minnesota, including, 
289.13  without limitation, school districts, intermediate school 
289.14  districts, education districts, service cooperatives, secondary 
289.15  vocational cooperative centers, special education cooperatives, 
289.16  joint purchasing cooperatives, telecommunication cooperatives, 
289.17  regional management information centers, and any instrumentality 
289.18  of a school district, as defined in section 471.59. 
289.19     Sales exempted by this subdivision include sales under 
289.20  section 297A.01, subdivision 3, paragraph (f), but do not 
289.21  include sales under section 297A.01, subdivision 3, paragraph 
289.22  (j), clause (vii).  
289.23     Sales to hospitals and nursing homes owned and operated by 
289.24  the state or political subdivisions of the state are exempt 
289.25  under this subdivision.  
289.26     The sales to and exclusively for the use of libraries of 
289.27  books, periodicals, audio-visual materials and equipment, 
289.28  photocopiers for use by the public, and all cataloguing and 
289.29  circulation equipment, and cataloguing and circulation software 
289.30  for library use are exempt under this subdivision.  For purposes 
289.31  of this paragraph "libraries" means libraries as defined in 
289.32  section 134.001, county law libraries under chapter 134A, the 
289.33  state library under section 480.09, and the legislative 
289.34  reference library. 
289.35     Sales of supplies and equipment used in the operation of an 
289.36  ambulance service owned and operated by a political subdivision 
290.1   of the state are exempt under this subdivision provided that the 
290.2   supplies and equipment are used in the course of providing 
290.3   medical care.  Sales to a political subdivision of repair and 
290.4   replacement parts for emergency rescue vehicles and fire trucks 
290.5   and apparatus are exempt under this subdivision.  
290.6      Sales to a political subdivision of machinery and 
290.7   equipment, except for motor vehicles, used directly for mixed 
290.8   municipal solid waste management services at a solid waste 
290.9   disposal facility as defined in section 115A.03, subdivision 10, 
290.10  are exempt under this subdivision.  
290.11     Sales to political subdivisions of chore and homemaking 
290.12  services to be provided to elderly or disabled individuals are 
290.13  exempt. 
290.14     Sales of telephone services to the department of 
290.15  administration that are used to provide telecommunications 
290.16  services through the intertechnologies revolving fund are exempt 
290.17  under this subdivision. 
290.18     This exemption shall not apply to building, construction or 
290.19  reconstruction materials purchased by a contractor or a 
290.20  subcontractor as a part of a lump-sum contract or similar type 
290.21  of contract with a guaranteed maximum price covering both labor 
290.22  and materials for use in the construction, alteration, or repair 
290.23  of a building or facility.  This exemption does not apply to 
290.24  construction materials purchased by tax exempt entities or their 
290.25  contractors to be used in constructing buildings or facilities 
290.26  which will not be used principally by the tax exempt entities. 
290.27     This exemption does not apply to the leasing of a motor 
290.28  vehicle as defined in section 297B.01, subdivision 5, except for 
290.29  leases entered into by the United States or its agencies or 
290.30  instrumentalities.  
290.31     The tax imposed on sales to political subdivisions of the 
290.32  state under this section applies to all political subdivisions 
290.33  other than those explicitly exempted under this subdivision, 
290.34  notwithstanding section 115A.69, subdivision 6, 116A.25, 
290.35  360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 
290.36  469.127, 473.448, 473.545, or 473.608 or any other law to the 
291.1   contrary enacted before 1992. 
291.2      Sales exempted by this subdivision include sales made to 
291.3   other states or political subdivisions of other states, if the 
291.4   sale would be exempt from taxation if it occurred in that state, 
291.5   but do not include sales under section 297A.01, subdivision 3, 
291.6   paragraphs (c) and (e). 
291.7      Sec. 17.  Minnesota Statutes 1996, section 297A.25, 
291.8   subdivision 56, is amended to read: 
291.9      Subd. 56.  [FIREFIGHTERS PERSONAL PROTECTIVE EQUIPMENT.] 
291.10  The gross receipts from the sale of and storage, use, or 
291.11  consumption of firefighters personal protective equipment are 
291.12  exempt if purchased by, or when authorized by and for the use 
291.13  of, an organized fire department, fire protection district, or 
291.14  fire company, regularly charged with the responsibility of 
291.15  providing fire protection to the state or a political 
291.16  subdivision.  For purposes of this subdivision, "personal 
291.17  protective equipment" includes:  helmets (including face 
291.18  shields, chin straps, and neck liners), bunker coats and pants 
291.19  (including pant suspenders), boots, gloves, head covers or 
291.20  hoods, wildfire jackets, protective coveralls, goggles, 
291.21  self-contained breathing apparatuses, canister filter masks, 
291.22  personal alert safety systems, spanner belts, optical or thermal 
291.23  imaging search devices, and all safety equipment required by the 
291.24  Occupational Safety and Health Administration. 
291.25     Sec. 18.  Minnesota Statutes 1996, section 297A.25, 
291.26  subdivision 59, is amended to read: 
291.27     Subd. 59.  [FARM MACHINERY.] From July 1, 1994, until June 
291.28  30, 1997, The gross receipts from the sale of used farm 
291.29  machinery are exempt.  In the case of leased farm machinery, 
291.30  used machinery is machinery which has been used for its intended 
291.31  purpose for a growing season or a harvest season.  
291.32     Sec. 19.  Minnesota Statutes 1996, section 297A.25, is 
291.33  amended by adding a subdivision to read: 
291.34     Subd. 62.  [MATERIALS USED IN PROVIDING TAXABLE 
291.35  SERVICES.] (a) The gross receipts from the sale of and the 
291.36  storage, use, or consumption of all materials used or consumed 
292.1   in providing a taxable service intended to be sold ultimately at 
292.2   retail are exempt. 
292.3      (b) This exemption includes, but is not limited to: 
292.4      (1) chemicals, lubricants, packaging materials, seeds, 
292.5   trees, fertilizers, and herbicides, used or consumed in 
292.6   providing the taxable service; 
292.7      (2) chemicals used to treat waste generated as a result of 
292.8   providing the taxable service; and 
292.9      (3) accessory tools, equipment, and other items that are 
292.10  separate detachable units used in providing the service and that 
292.11  have an ordinary useful life of less than 12 months. 
292.12     (c) This exemption does not include: 
292.13     (1) machinery, equipment, implements, tools, accessories, 
292.14  appliances, contrivances, furniture, and fixtures used in 
292.15  providing the taxable service; and 
292.16     (2) fuel, electricity, gas, and steam used for space 
292.17  heating or lighting. 
292.18     (d) For purposes of this subdivision, "taxable services" 
292.19  means the services listed in section 297A.01, subdivision 3, 
292.20  paragraph (i), except solid waste management services as 
292.21  described in section 297A.45. 
292.22     Sec. 20.  Minnesota Statutes 1996, section 297A.25, is 
292.23  amended by adding a subdivision to read: 
292.24     Subd. 63.  [HOSPITALS.] The gross receipts from the sale of 
292.25  tangible personal property to, and the storage, use, or 
292.26  consumption of such property by, a hospital are exempt, if the 
292.27  property purchased is to be used in providing hospital services 
292.28  to human beings.  For purposes of this subdivision, "hospital" 
292.29  means a hospital organized and operated for charitable purposes 
292.30  within the meaning of section 501(c)(3) of the Internal Revenue 
292.31  Code of 1986, as amended, and licensed under chapter 144 or by 
292.32  any other jurisdiction.  For purposes of this subdivision, 
292.33  "hospital services" are services authorized or required to be 
292.34  performed by a "hospital" under chapter 144 and regulations 
292.35  thereunder or under the applicable licensure law of any other 
292.36  jurisdiction.  Sales exempted by this subdivision do not include 
293.1   sales under section 297A.01, subdivision 3, paragraphs (c), (e), 
293.2   and (i), clause (vii).  This exemption does not apply to 
293.3   building, construction, or reconstruction materials purchased by 
293.4   a contractor or a subcontractor as a part of a lump-sum contract 
293.5   or similar type of contract with a guaranteed maximum price 
293.6   covering both labor and materials for use in the construction, 
293.7   alteration, or repair of a hospital.  This exemption does not 
293.8   apply to construction materials to be used in constructing 
293.9   buildings or facilities which will not be used principally by a 
293.10  hospital.  This exemption does not apply to the leasing of a 
293.11  motor vehicle as defined in section 297B.01, subdivision 5. 
293.12     Sec. 21.  Minnesota Statutes 1996, section 297A.25, is 
293.13  amended by adding a subdivision to read: 
293.14     Subd. 64.  [COPIES OF COURT REPORTER DOCUMENTS.] The gross 
293.15  receipts from sales of, and use, storage, or consumption of, 
293.16  transcripts or copies of transcripts of verbatim testimony 
293.17  produced and sold by court reporters or other transcribers of 
293.18  legal proceedings to individuals or entities that are parties to 
293.19  or representatives of parties to the proceeding to which the 
293.20  transcript relates, are exempt. 
293.21     Sec. 22.  Minnesota Statutes 1996, section 297A.25, is 
293.22  amended by adding a subdivision to read: 
293.23     Subd. 65.  [REGIONWIDE PUBLIC SAFETY RADIO COMMUNICATION 
293.24  SYSTEM; PRODUCTS AND SERVICES.] The gross receipts from the sale 
293.25  of, and the storage, use, or consumption of, products and 
293.26  services including end user equipment used for construction, 
293.27  ownership, operation, maintenance, and enhancement of the 
293.28  backbone system of the regionwide public safety radio 
293.29  communication system established under sections 473.891 to 
293.30  473.905, are exempt.  For purposes of this subdivision, backbone 
293.31  system is defined in section 473.891, subdivision 9. 
293.32     Sec. 23.  Minnesota Statutes 1996, section 297A.25, is 
293.33  amended by adding a subdivision to read: 
293.34     Subd. 66.  [FIREWOOD.] The gross receipts from the sale of 
293.35  wood used for fires for heating, cooking, or any other purpose, 
293.36  except for the generation of electricity, steam, or heat to be 
294.1   sold at retail, are exempt. 
294.2      Sec. 24.  [297A.48] [LOCAL SALES TAX RULES.] 
294.3      Subdivision 1.  [AUTHORIZATION; SCOPE.] (a) A political 
294.4   subdivision of this state may impose a general sales tax if 
294.5   permitted by special law or if the subdivision enacted and 
294.6   imposed the tax before the effective date of section 477A.016 
294.7   and its predecessor provision. 
294.8      (b) This section governs the imposition of a general sales 
294.9   tax by the political subdivision.  The provisions of this 
294.10  section preempt the provisions of any special law: 
294.11     (1) enacted before its effective date, or 
294.12     (2) enacted after its effective date that does not 
294.13  explicitly exempt the special law provision from this section's 
294.14  rules by reference. 
294.15     (c) This section does not apply to or preempt a sales tax 
294.16  on motor vehicles or a special excise tax on motor vehicles. 
294.17     Subd. 2.  [TAX BASE.] (a) The tax applies to sales taxable 
294.18  under this chapter that occur within the political subdivision. 
294.19     (b) Taxable services are subject to a political 
294.20  subdivision's sales tax, if they are performed either: 
294.21     (1) within the political subdivision, or 
294.22     (2) partly within and partly without the political 
294.23  subdivision and more of the service is performed within the 
294.24  political subdivision, based on the cost of performance. 
294.25     Subd. 3.  [TAX RATE.] (a) The tax rate is as specified in 
294.26  the special law authorization and as imposed by the political 
294.27  subdivision. 
294.28     (b) The full political subdivision rate applies to any 
294.29  sales that are taxed at a state rate less than or more than the 
294.30  state general sales and use tax rate. 
294.31     Subd. 4.  [USE TAX.] A compensating use tax applies, at the 
294.32  same rate as the sales tax, on the use, storage, distribution, 
294.33  or consumption of tangible personal property or taxable services.
294.34     Subd. 5.  [EXEMPTIONS.] (a) All goods or services that are 
294.35  otherwise exempt from taxation under this chapter are exempt 
294.36  from a political subdivision's tax. 
295.1      (b) The gross receipts from the sale of tangible personal 
295.2   property that meets the requirement of section 297A.25, 
295.3   subdivision 5, are exempt, except the qualification test applies 
295.4   based on the boundaries of the political subdivision instead of 
295.5   the state of Minnesota. 
295.6      (c) All mobile transportation equipment, and parts and 
295.7   accessories attached to or to be attached to the equipment are 
295.8   exempt, if purchased by a holder of a motor carrier direct pay 
295.9   permit under section 297A.211.  
295.10     Subd. 6.  [CREDIT FOR OTHER LOCAL TAXES.] If a person paid 
295.11  sales or use tax to another political subdivision on tangible 
295.12  personal property or another item subject to tax under this 
295.13  section, a credit applies against the tax imposed under this 
295.14  section.  The credit equals the tax the person paid to the other 
295.15  political subdivision for the item.  
295.16     Subd. 7.  [ENFORCEMENT; COLLECTION; AND ADMINISTRATION.] (a)
295.17  The commissioner of revenue shall collect the taxes subject to 
295.18  this section.  The commissioner may collect the tax with the 
295.19  state sales and use tax.  All taxes under this section are 
295.20  subject to the same penalties, interest, and enforcement 
295.21  provisions as apply to the state sales and use tax. 
295.22     (b) A request for a refund of state sales tax paid in 
295.23  excess of the amount of tax legally due includes a request for a 
295.24  refund of the political subdivision taxes paid on the goods or 
295.25  services.  The commissioner must refund to the taxpayer the full 
295.26  amount of the political subdivision taxes paid on exempt sales 
295.27  or use. 
295.28     (c) A political subdivision that is collecting and 
295.29  administering its own sales and use tax before January 1, 1998, 
295.30  may elect to be exempt from this subdivision and subdivision 8. 
295.31     Subd. 8.  [REVENUES; COST OF COLLECTION.] The commissioner 
295.32  shall remit the proceeds of the tax, less refunds and a 
295.33  proportionate share of the cost of collection, at least 
295.34  quarterly, to the political subdivision.  The commissioner shall 
295.35  deduct from the proceeds remitted an amount that equals 
295.36     (1) the direct and indirect costs of the department to 
296.1   administer, audit, and collect the political subdivision's tax, 
296.2   plus 
296.3      (2) the political subdivision's proportionate share of the 
296.4   indirect cost of administering all taxes under this section. 
296.5      Subd. 9.  [EFFECTIVE DATES; NOTIFICATION.] (a) A political 
296.6   subdivision may impose a tax under this section starting only on 
296.7   the first day of a calendar quarter.  A political subdivision 
296.8   may repeal a tax under this section stopping only on the last 
296.9   day of a calendar quarter. 
296.10     (b) The political subdivision must notify the commissioner 
296.11  of revenue at least 90 days before imposing or repealing a tax 
296.12  under this section. 
296.13     Subd. 10.  [APPLICATION.] This section applies to all local 
296.14  sales taxes authorized on or after the day of enactment of this 
296.15  act.  Starting January 1, 2000, this section applies to all 
296.16  local sales tax that were authorized before the day of enactment 
296.17  of this act. 
296.18     Sec. 25.  Minnesota Statutes 1996, section 297B.01, 
296.19  subdivision 7, is amended to read: 
296.20     Subd. 7.  [SALE, SELLS, SELLING, PURCHASE, PURCHASED, OR 
296.21  ACQUIRED.] "Sale," "sells," "selling," "purchase," "purchased," 
296.22  or "acquired" means any transfer of title of any motor vehicle, 
296.23  whether absolutely or conditionally, for a consideration in 
296.24  money or by exchange or barter for any purpose other than resale 
296.25  in the regular course of business.  Any motor vehicle utilized 
296.26  by the owner only by leasing such vehicle to others or by 
296.27  holding it in an effort to so lease it, and which is put to no 
296.28  other use by the owner other than resale after such lease or 
296.29  effort to lease, shall be considered property purchased for 
296.30  resale.  The terms also shall include any transfer of title or 
296.31  ownership of a motor vehicle by way of gift or by any other 
296.32  manner or by any other means whatsoever, for or without 
296.33  consideration, except that these terms shall not include: 
296.34     (a) the acquisition of a motor vehicle by inheritance from 
296.35  or by bequest of, a decedent who owned it; 
296.36     (b) the transfer of a motor vehicle which was previously 
297.1   licensed in the names of two or more joint tenants and 
297.2   subsequently transferred without monetary consideration to one 
297.3   or more of the joint tenants; 
297.4      (c) the transfer of a motor vehicle by way of gift between 
297.5   a husband and wife or parent and child; or 
297.6      (d) the voluntary or involuntary transfer of a motor 
297.7   vehicle between a husband and wife in a divorce proceeding.; or 
297.8      (e) the transfer of a motor vehicle by way of a gift to an 
297.9   organization that is exempt from federal income taxation under 
297.10  section 501(c)(3) of the Internal Revenue Code, as amended 
297.11  through December 31, 1996, when the motor vehicle will be used 
297.12  exclusively for religious, charitable, or educational purposes. 
297.13     Sec. 26.  Minnesota Statutes 1996, section 297B.01, 
297.14  subdivision 8, is amended to read: 
297.15     Subd. 8.  [PURCHASE PRICE.] "Purchase price" means the 
297.16  total consideration valued in money for a sale, whether paid in 
297.17  money or otherwise.  The purchase price excludes the amount of a 
297.18  manufacturer's rebate paid or payable to the purchaser.  If a 
297.19  motor vehicle is taken in trade as a credit or as part payment 
297.20  on a motor vehicle taxable under this chapter, the credit or 
297.21  trade-in value allowed by the person selling the motor vehicle 
297.22  shall be deducted from the total selling price to establish the 
297.23  purchase price of the vehicle being sold and the trade-in 
297.24  allowance allowed by the seller shall constitute the purchase 
297.25  price of the motor vehicle accepted as a trade-in.  The purchase 
297.26  price in those instances where the motor vehicle is acquired by 
297.27  gift or by any other transfer for a nominal or no monetary 
297.28  consideration shall also include the average value of similar 
297.29  motor vehicles, established by standards and guides as 
297.30  determined by the motor vehicle registrar.  The purchase price 
297.31  in those instances where a motor vehicle is manufactured by a 
297.32  person who registers it under the laws of this state shall mean 
297.33  the manufactured cost of such motor vehicle and manufactured 
297.34  cost shall mean the amount expended for materials, labor and 
297.35  other properly allocable costs of manufacture, except that in 
297.36  the absence of actual expenditures for the manufacture of a part 
298.1   or all of the motor vehicle, manufactured costs shall mean the 
298.2   reasonable value of the completed motor vehicle.  
298.3      The term "purchase price" shall not include the portion of 
298.4   the value of a motor vehicle due solely to modifications 
298.5   necessary to make the motor vehicle handicapped accessible.  The 
298.6   term "purchase price" shall not include the transfer of a motor 
298.7   vehicle by way of gift between a husband and wife or parent and 
298.8   child, or to a nonprofit organization as provided under section 
298.9   297B.01, paragraph (e), nor shall it include the transfer of a 
298.10  motor vehicle by a guardian to a ward when there is no monetary 
298.11  consideration and the title to such vehicle was registered in 
298.12  the name of the guardian, as guardian, only because the ward was 
298.13  a minor.  There shall not be included in "purchase price" the 
298.14  amount of any tax imposed by the United States upon or with 
298.15  respect to retail sales whether imposed upon the retailer or the 
298.16  consumer.  
298.17     The term "purchase price" shall not include the transfer of 
298.18  a motor vehicle as a gift between a foster parent and foster 
298.19  child.  For purposes of this subdivision, a foster relationship 
298.20  exists, regardless of the age of the child, if (1) a foster 
298.21  parent's home is or was licensed as a foster family home under 
298.22  Minnesota Rules, parts 9545.0010 to 9545.0260, and (2) the 
298.23  county verifies that the child was a state ward or in permanent 
298.24  foster care. 
298.25     Sec. 27.  Minnesota Statutes 1996, section 297E.02, 
298.26  subdivision 6, is amended to read: 
298.27     Subd. 6.  [COMBINED RECEIPTS TAX.] In addition to the taxes 
298.28  imposed under subdivisions 1 and 4, a tax is imposed on the 
298.29  combined receipts of the organization.  As used in this section, 
298.30  "combined receipts" is the sum of the organization's gross 
298.31  receipts from lawful gambling less gross receipts directly 
298.32  derived from the conduct of bingo, raffles, and paddlewheels, as 
298.33  defined in section 297E.01, subdivision 8, for the fiscal year.  
298.34  The combined receipts of an organization are subject to a tax 
298.35  computed according to the following schedule: 
298.36     If the combined receipts for the          The tax is:
299.1      fiscal year are:
299.2      Not over $500,000                   zero
299.3      Over $500,000, but not over
299.4      $700,000                            two percent of the amount
299.5                                          over $500,000, but not
299.6                                          over $700,000
299.7      Over $700,000, but not over
299.8      $900,000                            $4,000 plus four percent
299.9                                          of the amount over
299.10                                         $700,000, but not over
299.11                                         $900,000
299.12     Over $900,000                       $12,000 plus six percent
299.13                                         of the amount over
299.14                                         $900,000
299.15     Not over $700,000                   zero
299.16     Over $700,000, but not over
299.17     $900,000                            two percent of the amount
299.18                                         over $700,000, but not
299.19                                         over $900,000
299.20     Over $900,000, but not over
299.21     $1,100,000                          $4,000 plus four percent
299.22                                         of the amount over
299.23                                         $900,000, but not over
299.24                                         $1,100,000
299.25     Over $1,100,000                     $12,000 plus six percent
299.26                                         of the amount over
299.27                                         $1,100,000
299.28     Sec. 28.  Minnesota Statutes 1996, section 297E.04, 
299.29  subdivision 3, is amended to read: 
299.30     Subd. 3.  [PADDLETICKET CARD MASTER FLARES.] Each sealed 
299.31  grouping of 100 or fewer paddleticket cards must have its own 
299.32  individual master flare.  The manufacturer of the paddleticket 
299.33  cards must affix to or imprint at the bottom of each master 
299.34  flare a bar code that provides: 
299.35     (1) the name of the manufacturer; 
299.36     (2) the first paddleticket card number in the group; 
300.1      (3) the number of paddletickets attached to each 
300.2   paddleticket card in the group; and 
300.3      (4) all other information required by the commissioner.  
300.4   This subdivision applies to paddleticket cards (i) sold by a 
300.5   manufacturer after June 30, 1995, for use or resale in Minnesota 
300.6   or (ii) shipped into or caused to be shipped into Minnesota by a 
300.7   manufacturer after June 30, 1995.  Paddleticket cards that are 
300.8   subject to this subdivision may not have a registration stamp 
300.9   affixed to the master flare. 
300.10     Sec. 29.  Minnesota Statutes 1996, section 349.12, 
300.11  subdivision 26a, is amended to read: 
300.12     Subd. 26a.  [MASTER FLARE.] "Master flare" is the posted 
300.13  display, with registration stamp affixed or bar code imprinted 
300.14  or affixed, that is used in conjunction with sealed groupings of 
300.15  100 or fewer sequentially numbered paddleticket cards. 
300.16     Sec. 30.  Minnesota Statutes 1996, section 349.154, 
300.17  subdivision 2, is amended to read: 
300.18     Subd. 2.  [NET PROFIT REPORTS.] (a) Each licensed 
300.19  organization must report monthly to the board on a form 
300.20  prescribed by the board each expenditure and contribution of net 
300.21  profits from lawful gambling.  The reports must provide for each 
300.22  expenditure or contribution: 
300.23     (1) the name, address, and telephone number of the 
300.24  recipient of the expenditure or contribution; 
300.25     (2) the date the contribution was approved by the 
300.26  organization; 
300.27     (3) the date, amount, and check number of the expenditure 
300.28  or contribution; 
300.29     (4) a brief description of how the expenditure or 
300.30  contribution meets one or more of the purposes in section 
300.31  349.12, subdivision 25; and 
300.32     (5) in the case of expenditures authorized under section 
300.33  349.12, subdivision 25, paragraph (a), clause (7), whether the 
300.34  expenditure is for a facility or activity that primarily 
300.35  benefits male or female participants. 
300.36     (b) The board shall make available to the commissioners of 
301.1   revenue and public safety copies of reports received under this 
301.2   subdivision and requested by them. 
301.3      (c) The report required under this subdivision must provide 
301.4   for a separate accounting for all expenditures made from the 
301.5   reporting organization's tax refund and or credit account 
301.6   authorized under section 297E.02, subdivision 4, paragraph (d). 
301.7      Sec. 31.  Minnesota Statutes 1996, section 349.163, 
301.8   subdivision 8, is amended to read: 
301.9      Subd. 8.  [PADDLETICKET CARD MASTER FLARES.] Each sealed 
301.10  grouping of 100 or fewer paddleticket cards must have its own 
301.11  individual master flare.  The manufacturer must affix to or 
301.12  imprint at the bottom of the master flare a bar code that 
301.13  provides all information required by the commissioner of revenue 
301.14  under section 297E.04, subdivision 3. 
301.15     This subdivision applies to paddleticket cards sold by a 
301.16  manufacturer after June 30, 1995, for use or resale in Minnesota 
301.17  or shipped into or caused to be shipped into Minnesota by a 
301.18  manufacturer after June 30, 1995.  Paddleticket cards which are 
301.19  subject to this subdivision shall not have a registration stamp 
301.20  affixed to the master flare. 
301.21     Sec. 32.  Minnesota Statutes 1996, section 349.19, 
301.22  subdivision 2a, is amended to read: 
301.23     Subd. 2a.  [TAX REFUND AND OR CREDIT ACCOUNT.] (a) Each 
301.24  organization that receives a refund or credit under section 
301.25  297E.02, subdivision 4, paragraph (d), must establish a separate 
301.26  account designated as the tax and credit refund account.  The 
301.27  organization must (1) within four business days of receiving a 
301.28  refund under that paragraph deposit the refund in 
301.29  the organization's gambling account, and (2) within four 
301.30  business days of filing a tax return that claims a credit under 
301.31  that paragraph, transfer from the separate account established 
301.32  under subdivision 2 to the tax refund and credit account an 
301.33  amount equal to the tax credit. 
301.34     (b) The name and address of the bank, the account number 
301.35  for the tax refund and credit account, and the names of 
301.36  organization members authorized as signatories on the account 
302.1   must be provided to the board within 30 days of the date when 
302.2   the organization establishes the account.  Changes in the 
302.3   information must be submitted to the board at least ten days 
302.4   before the change is made. 
302.5      (c) (b) The organization may expend money in the account 
302.6   the tax refund or credit issued under section 297E.02, 
302.7   subdivision 4, paragraph (d), only for lawful purposes, other 
302.8   than lawful purposes described in section 349.012, subdivision 
302.9   25, paragraph (a), clauses (8), (9), and (12).  Amounts in the 
302.10  account received as refunds or allowed as credits must be spent 
302.11  for qualifying lawful purposes no later than one year after the 
302.12  refund or credit is deposited received. 
302.13     Sec. 33.  Minnesota Statutes 1996, section 349.191, 
302.14  subdivision 1b, is amended to read: 
302.15     Subd. 1b.  [CREDIT AND SALES TO DELINQUENT DISTRIBUTORS.] 
302.16  (a) If a manufacturer does not receive payment in full from a 
302.17  distributor within 30 35 days of the delivery of gambling 
302.18  equipment, the manufacturer must notify the board in writing of 
302.19  the delinquency. 
302.20     (b) If a manufacturer who has notified the board under 
302.21  paragraph (a) has not received payment in full from the 
302.22  distributor within 60 days of the notification under paragraph 
302.23  (a), the manufacturer must notify the board of the continuing 
302.24  delinquency. 
302.25     (c) On receipt of a notice under paragraph (a), the board 
302.26  shall order all manufacturers that until further notice from the 
302.27  board, they may sell gambling equipment to the delinquent 
302.28  distributor only on a cash basis with no credit extended.  On 
302.29  receipt of a notice under paragraph (b), the board shall order 
302.30  all manufacturers not to sell any gambling equipment to the 
302.31  delinquent distributor. 
302.32     (d) No manufacturer may extend credit or sell gambling 
302.33  equipment to a distributor in violation of an order under 
302.34  paragraph (c) until the board has authorized such credit or sale.
302.35     Sec. 34.  Laws 1993, chapter 375, article 9, section 45, 
302.36  subdivision 2, is amended to read: 
303.1      Subd. 2.  [USE OF REVENUES.] (a) Revenues received from 
303.2   taxes authorized by subdivision 1 shall be used by Cook county 
303.3   to pay the cost of collecting the tax and to pay all or a 
303.4   portion of the costs of expanding and improving the health care 
303.5   facility located in the county and known as North Shore hospital.
303.6   Authorized costs include, but are not limited to, securing or 
303.7   paying debt service on bonds or other obligations issued to 
303.8   finance the expansion and improvement of North Shore hospital.  
303.9   The total capital expenditures payable from bond proceeds, 
303.10  excluding investment earnings on bond proceeds and tax revenues, 
303.11  shall not exceed $4,000,000. 
303.12     (b) Additional revenues received from taxes authorized by 
303.13  subdivision 1 may be used by Cook county to pay all or a portion 
303.14  of the costs of remodeling North Shore care center and providing 
303.15  additional improvements to North Shore hospital.  Authorized 
303.16  costs include, but are not limited to, securing or paying debt 
303.17  service on bonds or other obligations issued to finance the 
303.18  remodeling of North Shore care center and additional 
303.19  improvements to North Shore hospital.  The total capital 
303.20  expenditures payable from bond proceeds, excluding investment 
303.21  earnings on bond proceeds and tax revenues, shall not exceed 
303.22  $2,200,000. 
303.23     Sec. 35.  Laws 1993, chapter 375, article 9, section 45, 
303.24  subdivision 3, is amended to read: 
303.25     Subd. 3.  [EXPIRATION OF TAXING AUTHORITY AND EXPENDITURE 
303.26  LIMITATION.] The authority granted by subdivision 1 to Cook 
303.27  county to impose a sales tax shall expire when the principal and 
303.28  interest on any bonds or obligations issued under subdivision 4, 
303.29  paragraph (a), to finance the expansion and improvement of North 
303.30  Shore hospital described in subdivision 2, paragraph (a), have 
303.31  been paid, or at an earlier time as the county shall, by 
303.32  resolution, determine.  Any funds remaining after completion of 
303.33  the improvements and retirement or redemption of the bonds may 
303.34  be placed in the general fund of the county. 
303.35     Sec. 36.  Laws 1993, chapter 375, article 9, section 45, 
303.36  subdivision 4, is amended to read: 
304.1      Subd. 4.  [BONDS.] (a) Cook county may issue general 
304.2   obligation bonds in an amount not to exceed $4,000,000 for the 
304.3   expansion and improvement of North Shore hospital,. 
304.4      (b) Additionally, Cook county may issue general obligation 
304.5   bonds in an amount not to exceed $2,200,000 for the remodeling 
304.6   of North Shore care center and additional improvements to North 
304.7   Shore hospital.  
304.8      (c) The bonds may be issued without election under 
304.9   Minnesota Statutes, chapter 475, on the question of issuance of 
304.10  the bonds or a property tax to pay them.  The debt represented 
304.11  by the bonds issued for the expansion and improvement of North 
304.12  Shore hospital shall not be included in computing any debt 
304.13  limitations applicable to Cook county, and the levy of taxes 
304.14  required by Minnesota Statutes, section 475.61, to pay principal 
304.15  of and interest on the bonds shall not be subject to any levy 
304.16  limitation or be included in computing or applying any levy 
304.17  limitation applicable to the county. 
304.18     Sec. 37.  Laws 1993, chapter 375, article 9, section 45, is 
304.19  amended by adding a subdivision to read: 
304.20     Subd. 5a.  [REFERENDUM.] If the governing body of Cook 
304.21  county intends to use the sales tax proceeds as authorized by 
304.22  subdivision 2, paragraph (b), it shall conduct a referendum on 
304.23  the issue.  The question of so using the tax proceeds must be 
304.24  submitted to the voters at a special or general election.  The 
304.25  tax proceeds may not be used as provided in subdivision 2, 
304.26  paragraph (b), unless a majority of votes cast on the question 
304.27  are in the affirmative.  The commissioner of revenue shall 
304.28  prepare a suggested form of question to be presented at the 
304.29  election.  The referendum must be held at a special or general 
304.30  election before December 1, 1997. 
304.31     Sec. 38.  [ITASCA COUNTY; SALES TAX EXEMPTION FOR JAIL 
304.32  CONSTRUCTION MATERIALS.] 
304.33     Subdivision 1.  [JAIL CONSTRUCTION MATERIALS.] In the case 
304.34  of construction materials and supplies purchased for use in a 
304.35  project to expand, reconstruct, and otherwise improve the Itasca 
304.36  county jail, Minnesota Statutes, section 297A.15, subdivision 7, 
305.1   shall apply with the following exceptions: 
305.2      (1) the refund is equal to 100 percent of the taxes paid; 
305.3   and 
305.4      (2) construction materials and supplies used in the 
305.5   expansion, reconstruction, or improvement of the portion of the 
305.6   facility used as a jail qualifies for the refund. 
305.7      Subd. 2.  [EFFECTIVE DATE.] Subdivision 1 is effective the 
305.8   day after compliance with Minnesota Statutes, section 645.021, 
305.9   subdivision 3, and applies to purchases after June 30, 1997. 
305.10     Sec. 39.  [COOK COUNTY; SALES TAX EXEMPTION FOR JAIL AND 
305.11  COURTHOUSE CONSTRUCTION MATERIALS.] 
305.12     Subdivision 1.  [CONSTRUCTION MATERIALS.] In the case of 
305.13  construction materials and supplies purchased for use in a 
305.14  project to construct an addition to and otherwise improve the 
305.15  Cook county jail and courthouse facility, Minnesota Statutes, 
305.16  section 297A.15, subdivision 7, shall apply with the following 
305.17  exceptions: 
305.18     (1) the refund is equal to 100 percent of the taxes paid; 
305.19  and 
305.20     (2) construction materials and supplies used in 
305.21  construction or improvement of the portion of the facility used 
305.22  as a courthouse as well as the portion of the facility used as a 
305.23  jail qualify for the refund. 
305.24     Subd. 2.  [EFFECTIVE DATE.] Subdivision 1 is effective the 
305.25  day after compliance with Minnesota Statutes, section 645.021, 
305.26  subdivision 3, and applies to purchases after June 30, 1997. 
305.27     Sec. 40.  [CITY OF FOSSTON; SALES AND USE TAX.] 
305.28     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] The city of 
305.29  Fosston may, by ordinance, impose for the purposes specified in 
305.30  subdivision 3 a sales and use tax of up to one-half of one 
305.31  percent.  The provisions of Minnesota Statutes, section 297A.48, 
305.32  govern the imposition, administration, collection, and 
305.33  enforcement of the tax authorized under this section. 
305.34     Subd. 2.  [USE OF REVENUES.] Revenues received from the tax 
305.35  authorized by subdivision 1 must be used to pay the costs of 
305.36  collecting the tax, and for economic development and tourism 
306.1   purposes, including the expansion of the heritage center and 
306.2   construction of a business-industrial park and facilities, and 
306.3   including securing or paying debt service on bonds issued for 
306.4   those purposes under subdivision 4.  
306.5      Subd. 3.  [REFERENDUM.] If the Fosston city council 
306.6   proposes to impose the sales and use tax authorized by this 
306.7   section, it shall conduct a referendum on the issue.  The 
306.8   question of imposing the tax must be submitted to the voters at 
306.9   a special or general election.  The tax may not be imposed 
306.10  unless a majority of votes cast on the question of imposing the 
306.11  tax are in the affirmative.  The commissioner of revenue shall 
306.12  prepare a suggested form of question to be presented at the 
306.13  election.  This subdivision applies notwithstanding any city 
306.14  charter provision to the contrary. 
306.15     Subd. 4.  [BONDS.] The city of Fosston, pursuant to the 
306.16  approval of the city voters under subdivision 3, may issue 
306.17  without additional election general obligation bonds of the city 
306.18  to pay capital expenses for the purposes given in subdivision 
306.19  2.  The debt represented by the bonds must not be included in 
306.20  computing any debt limitations applicable to the city, and the 
306.21  levy of taxes required by Minnesota Statutes, section 475.61, to 
306.22  pay the principal of and interest on the bonds must not be 
306.23  subject to any levy limitation or be included in computing or 
306.24  applying any levy limitation applicable to the city.  
306.25     Subd. 5.  [TERMINATION.] The tax authorized under this 
306.26  section terminates at the later of (1) five years after the date 
306.27  of initial imposition of the tax, or (2) on the first day of the 
306.28  second month next succeeding a determination by the city council 
306.29  that sufficient funds have been received from the tax to finance 
306.30  the improvements described in subdivision 2, and to prepay or 
306.31  retire at maturity the principal, interest, and premium due on 
306.32  any bonds issued for the improvements.  Any funds remaining 
306.33  after completion of the improvements and retirement or 
306.34  redemption of the bonds may be placed in the general fund of the 
306.35  city. 
306.36     Subd. 6.  [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 
307.1   effective August 1, 1997, upon compliance with Minnesota 
307.2   Statutes, section 645.021, subdivision 3, by the governing body 
307.3   of the city of Fosston. 
307.4      Sec. 41.  [CITY OF WILLMAR; TAXES.] 
307.5      Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] Pursuant to 
307.6   the approval of the city voters at the general election held on 
307.7   November 5, 1996, the city of Willmar may, by ordinance, impose, 
307.8   for the purposes specified in subdivision 3, a sales and use tax 
307.9   of up to one-half of one percent.  The provisions of Minnesota 
307.10  Statutes, section 297A.48, govern the imposition, 
307.11  administration, collection, and enforcement of the tax 
307.12  authorized under this subdivision. 
307.13     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
307.14  Minnesota Statutes, section 477A.016, or any other contrary 
307.15  provision of law, ordinance, or city charter, the city of 
307.16  Willmar may, by ordinance, impose, for the purposes specified in 
307.17  subdivision 3, an excise tax of up to $20 per motor vehicle, as 
307.18  defined by ordinance, purchased or acquired from any person 
307.19  engaged within the city in the business of selling motor 
307.20  vehicles at retail. 
307.21     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
307.22  authorized by subdivisions 1 and 2 must be used to pay the costs 
307.23  of collecting the taxes, and to pay all or a part of the capital 
307.24  and administrative costs of the acquisition, construction, and 
307.25  improvement of public library facilities, including securing or 
307.26  paying debt service on bonds issued for the project under 
307.27  subdivision 4.  The total capital and administrative 
307.28  expenditures payable from bond proceeds and revenues received 
307.29  from the taxes authorized by subdivisions 1 and 2, excluding 
307.30  investment earnings thereon, must not exceed $4,500,000. 
307.31     Subd. 4.  [BONDS.] The city of Willmar, pursuant to the 
307.32  approval of the city voters at the general election held on 
307.33  November 5, 1996, may issue without additional election general 
307.34  obligation bonds of the city in an amount not to exceed 
307.35  $4,500,000 to pay capital and administrative expenses for the 
307.36  acquisition, construction, and improvement of public library 
308.1   facilities.  The debt represented by the bonds must not be 
308.2   included in computing any debt limitations applicable to the 
308.3   city, and the levy of taxes required by Minnesota Statutes, 
308.4   section 475.61, to pay the principal of and interest on the 
308.5   bonds must not be subject to any levy limitation or be included 
308.6   in computing or applying any levy limitation applicable to the 
308.7   city.  
308.8      Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
308.9   subdivisions 1 and 2 expire when the city council determines 
308.10  that sufficient funds have been received from the taxes to 
308.11  finance the capital and administrative costs for the 
308.12  acquisition, construction, and improvement of public library 
308.13  facilities and to prepay or retire at maturity the principal, 
308.14  interest, and premium due on any bonds issued for the project 
308.15  under subdivision 4.  Any funds remaining after completion of 
308.16  the project and retirement or redemption of the bonds may be 
308.17  placed in the general fund of the city.  The taxes imposed under 
308.18  subdivisions 1 and 2 may expire at an earlier time if the city 
308.19  so determines by ordinance.  
308.20     Subd. 6.  [EFFECTIVE DATE.] This section is effective 
308.21  August 1, 1997, upon compliance by the governing body of the 
308.22  city of Willmar with Minnesota Statutes, section 645.021, 
308.23  subdivision 3. 
308.24     Sec. 42.  [ADVISORY COUNCIL; TAXATION OF TELECOMMUNICATIONS 
308.25  SERVICES.] 
308.26     Subdivision 1.  [CREATION; MEMBERSHIP.] (a) A state 
308.27  advisory council is established to study the taxation of 
308.28  telecommunications services in Minnesota and to make 
308.29  recommendations to the 1998 legislature.  The study shall be 
308.30  completed and findings reported to the legislature by February 
308.31  1, 1998. 
308.32     (b) The advisory council consists of 12 members who serve 
308.33  at the pleasure of the appointing authority as follows: 
308.34     (1) six legislators; three members of the senate, including 
308.35  one member of the minority party, appointed by the subcommittee 
308.36  on committees of the committee on rules and administration and 
309.1   three members of the house of representatives, including one 
309.2   member of the minority party, appointed by the speaker; 
309.3      (2) the commissioner of revenue or the commissioner's 
309.4   designee; and 
309.5      (3) five members of the public including at least two 
309.6   representatives of Internet service businesses who are 
309.7   knowledgeable about technologies and practices of the Internet; 
309.8   two appointed by the subcommittee on committees of the committee 
309.9   on rules and administration of the senate, two appointed by the 
309.10  speaker of the house, and one appointed by the governor.  
309.11     (c) the 12 members will elect a chair from the membership 
309.12  of the council.  
309.13     Subd. 2.  [SCOPE OF STUDY.] (a) The purpose of the advisory 
309.14  council is to: 
309.15     (1) study existing and emerging tax policies, both 
309.16  federally and nationally, that apply to telecommunications and 
309.17  computer industries and identify any inequities which may exist 
309.18  in the current system of taxation as it applies to those 
309.19  industries; 
309.20     (2) identify potential for erosion of the sales tax base as 
309.21  a result of evolving technologies in the telecommunications and 
309.22  computer industries; 
309.23     (3) consider methods of addressing potential impediments to 
309.24  extension of state taxes to emerging technologies; 
309.25     (4) suggest options for changing the tax system to maintain 
309.26  or broaden the sales tax base and to provide equitable tax 
309.27  treatment for users of existing and emerging technologies. 
309.28     Subd. 3.  [STAFF.] The department of revenue and 
309.29  legislative staff shall provide administrative and staff 
309.30  assistance when requested by the advisory council. 
309.31     Subd. 4.  [COOPERATION BY OTHER AGENCIES.] The commissioner 
309.32  of public service, the director of the Minnesota office of 
309.33  technology, and any other state department or agency shall, upon 
309.34  request by the advisory council, provide data or other 
309.35  information that is collected or possessed by their agencies and 
309.36  that is necessary or useful in conducting the study and 
310.1   preparing the report required by this section. 
310.2      Sec. 43.  [STATEMENT OF PURPOSE.] 
310.3      For purchases and sales occurring after December 31, 1992: 
310.4      (a) The purpose of section 5, paragraph (h), is to confirm 
310.5   and clarify the intent of the legislature in enacting an 
310.6   exemption from the sales tax for property to be resold in the 
310.7   normal course of business.  
310.8      (b) Section 5, paragraph (h), ratifies the existing state 
310.9   interpretation that a resale requires the transfer of title to 
310.10  the property or the complete transfer of possession and control 
310.11  over the property.  This section is not intended to affect any 
310.12  litigation pending before the supreme court as of April 22, 1997.
310.13     Sec. 44.  [RECODIFICATION.] 
310.14     In coordination with legislative staff, the revisor of 
310.15  statutes shall prepare a bill for introduction in the 1998 
310.16  session of the legislature that clarifies and recodifies chapter 
310.17  297A.  The department of revenue shall assist in the preparation 
310.18  of the legislation as requested by the revisor.  The revisor may 
310.19  consult professional groups and other interested persons in 
310.20  preparing the legislation.  
310.21     Sec. 45.  [APPLICATION.] 
310.22     Section 22 applies in the counties of Anoka, Carver, 
310.23  Dakota, Hennepin, Ramsey, Scott, and Washington. 
310.24     Sec. 46.  [REPEALER.] 
310.25     Minnesota Statutes 1996, sections 297A.01, subdivision 20; 
310.26  297A.02, subdivision 5; and 297A.25, subdivision 29, are 
310.27  repealed. 
310.28     Sec. 47.  [EFFECTIVE DATES.] 
310.29     Section 1 is effective for refund claims filed after June 
310.30  30, 1997. 
310.31     Sections 2, 6, 7, 14 to 18, 20, 25, 26, 38, and 39 are 
310.32  effective for purchases and sales occurring after June 30, 1997. 
310.33     Section 3 as applied to fuel used to operate well drilling 
310.34  machines is effective the day following final enactment and 
310.35  applies to gasoline and special fuel purchased before, on, or 
310.36  after the date of final enactment of this act, provided that 
311.1   claims for refund must be made within the time period provided 
311.2   in Minnesota Statutes, section 296.18, subdivision 1.  For all 
311.3   other purposes, section 3 is effective on July 1, 1997, or upon 
311.4   adoption of the corresponding rules, whichever occurs earlier. 
311.5      Section 4, paragraph (i), clause (iv), is effective for 
311.6   purchases and sales occurring after September 30, 1987; the 
311.7   remainder of section 4 is effective for purchases and sales 
311.8   occurring after June 30, 1997. 
311.9      Section 5, paragraph (h), is effective for purchases and 
311.10  sales occurring after December 31, 1992, and paragraph (i) is 
311.11  effective for purchases and sales occurring after June 30, 1997. 
311.12     Sections 28, 29, and 31 are effective for purchases and 
311.13  sales occurring after December 31, 1997. 
311.14     Sections 8 to 10, 13, 19, 21, 32, 33, 42, and 46 are 
311.15  effective July 1, 1997. 
311.16     Section 11 is effective January 1, 1998. 
311.17     Sections 12, 24, 43, and 44 are effective the day following 
311.18  final enactment. 
311.19     Sections 19 and 27 are effective July 1, 1998. 
311.20     Section 22 is effective for purchases and sales occurring 
311.21  after July 31, 1997, and before August 1, 2003. 
311.22     Section 23 is effective for sales made after December 31, 
311.23  1989, and before January 1, 1997.  The provisions of Minnesota 
311.24  Statutes, section 289A.50, apply to refunds claimed under 
311.25  section 23.  Refunds claimed under section 23 must be filed by 
311.26  the later of December 31, 1997, or the time limit under 
311.27  Minnesota Statutes, section 289A.40, subdivision 1. 
311.28     Sections 34 to 37 are effective the day after compliance by 
311.29  the governing body of Cook county with Minnesota Statutes, 
311.30  section 645.021, subdivision 3. 
311.31                             ARTICLE 12
311.32                           BUDGET RESERVE
311.33     Section 1.  Minnesota Statutes 1996, section 16A.152, 
311.34  subdivision 2, is amended to read: 
311.35     Subd. 2.  [ADDITIONAL REVENUES; PRIORITY.] If on the basis 
311.36  of a forecast of general fund revenues and expenditures after 
312.1   November 1 in an odd-numbered year, the commissioner of finance 
312.2   determines that there will be a positive unrestricted budgetary 
312.3   general fund balance at the close of the biennium, the 
312.4   commissioner of finance must allocate money to the budget 
312.5   reserve until the total amount in the account is $270,000,000.  
312.6   An amount equal to any additional biennial unrestricted 
312.7   budgetary general fund balance made available as the result of a 
312.8   forecast in an odd-numbered calendar year after November 1 is 
312.9   appropriated in January of the following year to reduce the 
312.10  property tax levy recognition percent under section 121.904, 
312.11  subdivision 4a, to zero before additional money beyond 
312.12  $270,000,000 is allocated to the budget reserve account.  The 
312.13  amount appropriated is the full amount forecast to be available 
312.14  at the end of the biennium and is not limited to the amount 
312.15  forecast to be available at the end of the current fiscal year 
312.16  as follows: 
312.17     (a) first, to the budget reserve until the total amount in 
312.18  the account equals $522,000,000; then 
312.19     (b) 40 percent, to reduce the property tax revenue 
312.20  recognition percent in section 121.904, subdivision 4a, to two 
312.21  percent and any amount of the 40 percent share that is available 
312.22  after the percent is reduced to two is an unrestricted balance 
312.23  in the general fund; and 
312.24     (c) 60 percent to the property tax reform account 
312.25  established in section 16A.1521. 
312.26     The amounts necessary to meet the requirements of this 
312.27  section are appropriated from the general fund within two weeks 
312.28  of the forecast. 
312.29     Sec. 2.  [16A.1521] [PROPERTY TAX REFORM ACCOUNT.] 
312.30     A property tax reform account is established in the general 
312.31  fund.  On July 1, 1997, $487,000,000 is appropriated to the 
312.32  property tax reform account.  The balance in the account does 
312.33  not cancel and remains in the account until appropriated for 
312.34  property tax reform in fiscal years 1999, 2000, and 2001.  
312.35  Investment earnings on the account are credited to the account. 
312.36     Sec. 3.  [BUDGET RESERVE APPROPRIATION.] 
313.1      An amount sufficient to increase the budget reserve to 
313.2   $522,000,000 less any amounts expended under Laws 1997, chapter 
313.3   30, on July 1, 1997, is appropriated from the general fund. 
313.4                              ARTICLE 13
313.5                       TAX INCREMENT FINANCING
313.6      Section 1.  Minnesota Statutes 1996, section 469.174, 
313.7   subdivision 10, is amended to read: 
313.8      Subd. 10.  [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 
313.9   district" means a type of tax increment financing district 
313.10  consisting of a project, or portions of a project, within which 
313.11  the authority finds by resolution that one of the following 
313.12  conditions, reasonably distributed throughout the district, 
313.13  exists: 
313.14     (1) parcels consisting of 70 percent of the area of the 
313.15  district are occupied by buildings, streets, utilities, or other 
313.16  improvements and more than 50 percent of the buildings, not 
313.17  including outbuildings, are structurally substandard to a degree 
313.18  requiring substantial renovation or clearance; or 
313.19     (2) the property consists of vacant, unused, underused, 
313.20  inappropriately used, or infrequently used railyards, rail 
313.21  storage facilities, or excessive or vacated railroad 
313.22  rights-of-way. 
313.23     (b) For purposes of this subdivision, "structurally 
313.24  substandard" shall mean containing defects in structural 
313.25  elements or a combination of deficiencies in essential utilities 
313.26  and facilities, light and ventilation, fire protection including 
313.27  adequate egress, layout and condition of interior partitions, or 
313.28  similar factors, which defects or deficiencies are of sufficient 
313.29  total significance to justify substantial renovation or 
313.30  clearance.  
313.31     (c) A building is not structurally substandard if it is in 
313.32  compliance with the building code applicable to new buildings or 
313.33  could be modified to satisfy the building code at a cost of less 
313.34  than 15 percent of the cost of constructing a new structure of 
313.35  the same square footage and type on the site.  The municipality 
313.36  may find that a building is not disqualified as structurally 
314.1   substandard under the preceding sentence on the basis of 
314.2   reasonably available evidence, such as the size, type, and age 
314.3   of the building, the average cost of plumbing, electrical, or 
314.4   structural repairs, or other similar reliable evidence.  If the 
314.5   evidence supports a reasonable conclusion that the building is 
314.6   not disqualified as structurally substandard, The municipality 
314.7   may not make such a determination without an interior inspection 
314.8   or of the property, but need not have an independent, expert 
314.9   appraisal prepared of the cost of repair and rehabilitation of 
314.10  the building.  An interior inspection of the property is not 
314.11  required, if the municipality finds that (1) the municipality or 
314.12  authority is unable to gain access to the property after using 
314.13  its best efforts to obtain permission from the party that owns 
314.14  or controls the property; and (2) the evidence otherwise 
314.15  supports a reasonable conclusion that the building is 
314.16  structurally substandard.  Items of evidence that support such a 
314.17  conclusion include recent fire or police inspections, on-site 
314.18  property tax appraisals or housing inspections, exterior 
314.19  evidence of deterioration, or other similar reliable evidence.  
314.20  Written documentation of the findings and reasons why an 
314.21  interior inspection was not conducted must be made and retained 
314.22  under section 469.175, subdivision 3, clause (1). 
314.23     (d) A parcel is deemed to be occupied by a structurally 
314.24  substandard building for purposes of the finding under paragraph 
314.25  (a) if all of the following conditions are met: 
314.26     (1) the parcel was occupied by a substandard building 
314.27  within three years of the filing of the request for 
314.28  certification of the parcel as part of the district with the 
314.29  county auditor; 
314.30     (2) the substandard building was demolished or removed by 
314.31  the authority or the demolition or removal was financed by the 
314.32  authority or was done by a developer under a development 
314.33  agreement with the authority; 
314.34     (3) the authority found by resolution before the demolition 
314.35  or removal that the parcel was occupied by a structurally 
314.36  substandard building and that after demolition and clearance the 
315.1   authority intended to include the parcel within a district; and 
315.2      (4) upon filing the request for certification of the tax 
315.3   capacity of the parcel as part of a district, the authority 
315.4   notifies the county auditor that the original tax capacity of 
315.5   the parcel must be adjusted as provided by section 469.177, 
315.6   subdivision 1, paragraph (h). 
315.7      (c) (e) For purposes of this subdivision, a parcel is not 
315.8   occupied by buildings, streets, utilities, or other improvements 
315.9   unless 15 percent of the area of the parcel contains 
315.10  improvements. 
315.11     (d) (f) For districts consisting of two or more 
315.12  noncontiguous areas, each area must qualify as a redevelopment 
315.13  district under paragraph (a) to be included in the district, and 
315.14  the entire area of the district must satisfy paragraph (a). 
315.15     Sec. 2.  Minnesota Statutes 1996, section 469.174, 
315.16  subdivision 19, is amended to read: 
315.17     Subd. 19.  [SOILS CONDITION DISTRICT.] (a) "Soils condition 
315.18  district" means a type of tax increment financing district 
315.19  consisting of a project, or portions of a project, within which 
315.20  the authority finds by resolution that the following conditions 
315.21  exist: 
315.22     (1) the presence of hazardous substances, pollution, or 
315.23  contaminants requires removal or remedial action for use; 
315.24     (2) the estimated cost of the proposed removal and remedial 
315.25  action exceeds the fair market value of the land before 
315.26  completion of the preparation. 
315.27     The requirements of clause (2) need not be satisfied, if 
315.28  each parcel of property in the district either satisfies the 
315.29  requirements of clause (2) or the estimated costs of the 
315.30  proposed removal or remedial action exceeds $2 $4 per square 
315.31  foot for the area of the parcel. 
315.32     (b) The proposed removal or remediation action must be 
315.33  specified in a development action response plan to satisfy the 
315.34  requirements of paragraph (a). 
315.35     Sec. 3.  Minnesota Statutes 1996, section 469.174, is 
315.36  amended by adding a subdivision to read: 
316.1      Subd. 25.  [INCREMENT.] "Increment," "tax increment," "tax 
316.2   increment revenues," "revenues derived from tax increment," and 
316.3   other similar terms for a district include: 
316.4      (1) taxes paid by the captured net tax capacity, but 
316.5   excluding any excess taxes, as computed under section 469.177; 
316.6      (2) the proceeds from the sale or lease of property, 
316.7   tangible or intangible, purchased by the authority with tax 
316.8   increments; 
316.9      (3) repayments of loans or other advances made by the 
316.10  authority with tax increments; and 
316.11     (4) interest or other investment earnings on or from tax 
316.12  increments. 
316.13     Sec. 4.  Minnesota Statutes 1996, section 469.174, is 
316.14  amended by adding a subdivision to read: 
316.15     Subd. 26.  [POPULATION.] "Population" means the population 
316.16  established as of December 31 by the most recent of the 
316.17  following: 
316.18     (1) the federal census; 
316.19     (2) a special census conducted under contract with the 
316.20  United States Bureau of the Census; 
316.21     (3) a population estimate made by the metropolitan council; 
316.22  and 
316.23     (4) a population estimate made by the state demographer 
316.24  under section 4A.02. 
316.25     The population so established applies to the following 
316.26  calendar year. 
316.27     Sec. 5.  Minnesota Statutes 1996, section 469.174, is 
316.28  amended by adding a subdivision to read: 
316.29     Subd. 27.  [SMALL CITY.] "Small city" means any home rule 
316.30  charter or statutory city that has a population of 5,000 or less 
316.31  and that is located ten miles or more from a home rule charter 
316.32  or statutory city, located in this state, with a population of 
316.33  10,000 or more.  For purposes of this definition, the distance 
316.34  between cities is measured by drawing a straight line from the 
316.35  nearest boundaries of the two cities. 
316.36     Sec. 6.  Minnesota Statutes 1996, section 469.175, 
317.1   subdivision 3, is amended to read: 
317.2      Subd. 3.  [MUNICIPALITY APPROVAL.] A county auditor shall 
317.3   not certify the original net tax capacity of a tax increment 
317.4   financing district until the tax increment financing plan 
317.5   proposed for that district has been approved by the municipality 
317.6   in which the district is located.  If an authority that proposes 
317.7   to establish a tax increment financing district and the 
317.8   municipality are not the same, the authority shall apply to the 
317.9   municipality in which the district is proposed to be located and 
317.10  shall obtain the approval of its tax increment financing plan by 
317.11  the municipality before the authority may use tax increment 
317.12  financing.  The municipality shall approve the tax increment 
317.13  financing plan only after a public hearing thereon after 
317.14  published notice in a newspaper of general circulation in the 
317.15  municipality at least once not less than ten days nor more than 
317.16  30 days prior to the date of the hearing.  The published notice 
317.17  must include a map of the area of the district from which 
317.18  increments may be collected and, if the project area includes 
317.19  additional area, a map of the project area in which the 
317.20  increments may be expended.  The hearing may be held before or 
317.21  after the approval or creation of the project or it may be held 
317.22  in conjunction with a hearing to approve the project.  Before or 
317.23  at the time of approval of the tax increment financing plan, the 
317.24  municipality shall make the following findings, and shall set 
317.25  forth in writing the reasons and supporting facts for each 
317.26  determination: 
317.27     (1) that the proposed tax increment financing district is a 
317.28  redevelopment district, a renewal or renovation district, a 
317.29  mined underground space development district, a housing 
317.30  district, a soils condition district, or an economic development 
317.31  district; if the proposed district is a redevelopment district 
317.32  or a renewal or renovation district, the reasons and supporting 
317.33  facts for the determination that the district meets the criteria 
317.34  of section 469.174, subdivision 10, paragraph (a), clauses (1) 
317.35  and (2), or subdivision 10a, must be documented in writing and 
317.36  retained and made available to the public by the authority until 
318.1   the district has been terminated. 
318.2      (2) that the proposed development or redevelopment, in the 
318.3   opinion of the municipality, would not reasonably be expected to 
318.4   occur solely through private investment within the reasonably 
318.5   foreseeable future and that the increased market value of the 
318.6   site that could reasonably be expected to occur without the use 
318.7   of tax increment financing would be less than the increase in 
318.8   the market value estimated to result from the proposed 
318.9   development after subtracting the present value of the projected 
318.10  tax increments for the maximum duration of the district 
318.11  permitted by the plan.  The requirements of this clause do not 
318.12  apply if the district is a qualified housing district, as 
318.13  defined in section 273.1399, subdivision 1. 
318.14     (3) that the tax increment financing plan conforms to the 
318.15  general plan for the development or redevelopment of the 
318.16  municipality as a whole. 
318.17     (4) that the tax increment financing plan will afford 
318.18  maximum opportunity, consistent with the sound needs of the 
318.19  municipality as a whole, for the development or redevelopment of 
318.20  the project by private enterprise. 
318.21     (5) that the municipality elects the method of tax 
318.22  increment computation set forth in section 469.177, subdivision 
318.23  3, clause (b), if applicable. 
318.24     When the municipality and the authority are not the same, 
318.25  the municipality shall approve or disapprove the tax increment 
318.26  financing plan within 60 days of submission by the authority, or 
318.27  the plan shall be deemed approved.  When the municipality and 
318.28  the authority are not the same, the municipality may not amend 
318.29  or modify a tax increment financing plan except as proposed by 
318.30  the authority pursuant to subdivision 4.  Once approved, the 
318.31  determination of the authority to undertake the project through 
318.32  the use of tax increment financing and the resolution of the 
318.33  governing body shall be conclusive of the findings therein and 
318.34  of the public need for the financing. 
318.35     Sec. 7.  Minnesota Statutes 1996, section 469.175, is 
318.36  amended by adding a subdivision to read: 
319.1      Subd. 3a.  [BUT-FOR TEST; MODIFICATIONS.] (a) The 
319.2   provisions of this subdivision apply, if after municipal 
319.3   approval was obtained under subdivision 3, clause (2), the 
319.4   authority: 
319.5      (1) amends the tax increment financing plan, adopts or 
319.6   amends a development or redevelopment plan under the authority's 
319.7   law, enters into or amends a development or similar agreement, 
319.8   or adopts a resolution or approves an amended budget to permit 
319.9   increments to be spent, unless binding official action has 
319.10  already occurred with respect to the expenditure; and 
319.11     (2) the actions taken that satisfy clause (1) are estimated 
319.12  to permit spending of revenues derived from increments of 
319.13  $50,000 or more. 
319.14     (b) No action that satisfies the requirements of paragraph 
319.15  (a) is effective, unless the municipality after notice and 
319.16  hearing in accordance with section 469.175, subdivision 3, finds 
319.17  that, in its opinion: 
319.18     (1) the proposed development or redevelopment to be 
319.19  financed would not reasonably be expected to occur solely 
319.20  through private investment within the reasonably foreseeable 
319.21  future; and 
319.22     (2) the increased taxable market value of the site that 
319.23  could reasonably be expected to occur without the spending of 
319.24  tax increments would be less than the increase in the taxable 
319.25  market value estimated to result from the proposed development 
319.26  after subtracting the present value of the projected tax 
319.27  increments authorized to be spent on the development or 
319.28  redevelopment. 
319.29     (c) The requirements of this subdivision do not apply to 
319.30  expenditures to assist a development that meets the requirements 
319.31  for a qualified housing district, as defined in section 
319.32  273.1399, subdivision 1. 
319.33     (d) "Binding official action" means, with respect to 
319.34  revenues derived from tax increments considered expended on an 
319.35  activity, that the expenditure is authorized under the tax 
319.36  increment financing plan and that at least one of the following 
320.1   has occurred: 
320.2      (1) the revenues are actually paid to a third party with 
320.3   respect to the activity; 
320.4      (2) bonds, the proceeds of which must be used to finance 
320.5   the activity, are issued and sold to a third party, the revenues 
320.6   are spent to repay the bonds, and the proceeds of the bonds are, 
320.7   on the date of issuance, reasonably expected to be spent before 
320.8   the end of a reasonable temporary period within the meaning of 
320.9   the use of that term under section 148(c)(1) of the Internal 
320.10  Revenue Code, or are deposited in a reasonably required reserve 
320.11  or replacement fund; 
320.12     (3) binding contracts with a third party are entered into 
320.13  for performance of the activity, if the revenues are spent under 
320.14  the contractual obligation; or 
320.15     (4) the costs with respect to the activity are paid, if the 
320.16  revenues are spent to reimburse a party for payment of the 
320.17  costs, including any interest on unreimbursed costs. 
320.18     (e) For purposes of this subdivision, bonds include 
320.19  subsequent refunding bonds if the original refunded bonds meet 
320.20  the requirements of paragraph (d), clause (2). 
320.21     (f) For purposes of this subdivision, the terms "activity" 
320.22  and "third party" have the meanings given in section 469.1763, 
320.23  subdivision 1.  
320.24     Sec. 8.  Minnesota Statutes 1996, section 469.175, is 
320.25  amended by adding a subdivision to read: 
320.26     Subd. 9.  [DEVELOPER FINANCING; RESTRICTIONS.] (a) The 
320.27  provisions of this subdivision apply if the authority enters 
320.28  into an agreement or other arrangement with a developer that 
320.29  provides for the developer to be paid with increments for costs 
320.30  the developer incurs or pays for a project under the tax 
320.31  increment financing plan. 
320.32     (b) A "developer" means a nongovernmental entity that has 
320.33  an ownership interest in or a contract to improve, operate, or 
320.34  manage property in the project area. 
320.35     (c) The agreement with the developer: 
320.36     (1) must be in writing; 
321.1      (2) must require that the developer submit written 
321.2   documentation that it has paid costs for which increments may be 
321.3   spent under sections 469.174 to 469.178 and under the plan for 
321.4   the district before reimbursement may be paid; and 
321.5      (3) may provide for interest on payments at a reasonable 
321.6   rate, not to exceed the authority's cost of borrowing under 
321.7   similar terms. 
321.8      Sec. 9.  Minnesota Statutes 1996, section 469.176, 
321.9   subdivision 1b, is amended to read: 
321.10     Subd. 1b.  [DURATION LIMITS; TERMS.] (a) No tax increment 
321.11  shall in any event be paid to the authority 
321.12     (1) after 25 years from date of receipt by the authority of 
321.13  the first tax increment for a mined underground space 
321.14  development district, 
321.15     (2) after 15 years after receipt by the authority of the 
321.16  first increment for a renewal and renovation district, 
321.17     (3) after 12 20 years from approval of the tax increment 
321.18  financing plan after receipt by the authority of the first 
321.19  increment for a soils condition district, 
321.20     (4) after nine years from the date of the receipt, or 11 
321.21  years from approval of the tax increment financing plan, 
321.22  whichever is less, for an economic development district, 
321.23     (5) for a housing district or a redevelopment district, 
321.24  after 20 years from the date of receipt by the authority of the 
321.25  first tax increment by the authority pursuant to section 
321.26  469.175, subdivision 1, paragraph (b); or, if no provision is 
321.27  made under section 469.175, subdivision 1, paragraph (b), after 
321.28  25 years from the date of receipt by the authority of the first 
321.29  increment. 
321.30     (b) For purposes of determining a duration limit under this 
321.31  subdivision or subdivision 1e that is based on the receipt of an 
321.32  increment, any increments from taxes payable in the year in 
321.33  which the district terminates shall be paid to the authority.  
321.34  This paragraph does not affect a duration limit calculated from 
321.35  the date of approval of the tax increment financing plan or 
321.36  based on the recovery of costs or to a duration limit under 
322.1   subdivision 1c.  This paragraph does not supersede the 
322.2   restrictions on payment of delinquent taxes in subdivision 1f. 
322.3      Sec. 10.  Minnesota Statutes 1996, section 469.176, 
322.4   subdivision 2, is amended to read: 
322.5      Subd. 2.  [EXCESS TAX INCREMENTS.] (a) In any year in which 
322.6   the tax increment exceeds the amount necessary to pay the costs 
322.7   authorized by the tax increment financing plan, including the 
322.8   amount necessary to cancel any tax levy as provided in section 
322.9   475.61, subdivision 3, the authority shall use the excess amount 
322.10  to do any of the following:  (1) prepay any outstanding bonds, 
322.11  (2) discharge the pledge of tax increment therefor, (3) pay into 
322.12  an escrow account dedicated to the payment of such bond, or (4) 
322.13  return the excess amount to the county auditor who shall 
322.14  distribute the excess amount to the municipality, county, and 
322.15  school district in which the tax increment financing district is 
322.16  located in direct proportion to their respective local tax 
322.17  rates.  The county auditor must report to the commissioner of 
322.18  children, families, and learning the amount of any excess tax 
322.19  increment distributed to a school district within 30 days of the 
322.20  distribution. 
322.21     (b) Any revenues derived from tax increments from a 
322.22  district that are unspent or unencumbered upon decertification 
322.23  must be returned to the county auditor as provided in paragraph 
322.24  (a), clause (4).  "Decertification of a district" means the last 
322.25  day of the earlier of (1) the last calendar year in which the 
322.26  district is permitted to collect increments under this section, 
322.27  or (2) the calendar year in which the authority elects to stop 
322.28  collecting increments.  "Unencumbered" means the revenues 
322.29  derived from tax increments have not been designated to pay for 
322.30  goods or services received by the authority or to be received 
322.31  under a binding contract.  This paragraph does not apply to the 
322.32  portion of the increments permitted to be spent outside the 
322.33  district under section 469.1763, subdivision 2, if the district 
322.34  is subject to that subdivision. 
322.35     Sec. 11.  Minnesota Statutes 1996, section 469.176, 
322.36  subdivision 4c, is amended to read: 
323.1      Subd. 4c.  [ECONOMIC DEVELOPMENT DISTRICTS.] (a) Revenue 
323.2   derived from tax increment from an economic development district 
323.3   may not be used to provide improvements, loans, subsidies, 
323.4   grants, interest rate subsidies, or assistance in any form to 
323.5   developments consisting of buildings and ancillary facilities, 
323.6   if more than 15 percent of the buildings and facilities 
323.7   (determined on the basis of square footage) are used for a 
323.8   purpose other than:  
323.9      (1) the manufacturing or production of tangible personal 
323.10  property, including processing resulting in the change in 
323.11  condition of the property; 
323.12     (2) warehousing, storage, and distribution of tangible 
323.13  personal property, excluding retail sales; 
323.14     (3) research and development related to the activities 
323.15  listed in clause (1) or (2); 
323.16     (4) telemarketing if that activity is the exclusive use of 
323.17  the property; 
323.18     (5) tourism facilities; or 
323.19     (6) qualified border retail facilities; 
323.20     (7) space necessary for and related to the activities 
323.21  listed in clauses (1) to (5) (6).  
323.22     (b) Notwithstanding the provisions of this subdivision, 
323.23  revenue derived from tax increment from an economic development 
323.24  district may be used to pay for site preparation and public 
323.25  improvements, if the following conditions are met: 
323.26     (1) bedrock soils conditions are present in 80 percent or 
323.27  more of the acreage of the district; 
323.28     (2) the estimated cost of physical preparation of the site 
323.29  exceeds the fair market value of the land before completion of 
323.30  the preparation; and 
323.31     (3) revenues from tax increments are expended only for the 
323.32  additional costs of preparing the site because of unstable soils 
323.33  and the bedrock soils condition, the additional cost of 
323.34  installing public improvements because of unstable soils or the 
323.35  bedrock soils condition, and reasonable administrative costs. 
323.36     (c)(1) Notwithstanding the provisions of this subdivision, 
324.1   revenues derived from tax increment from an economic development 
324.2   district may be used to provide improvements, loans, subsidies, 
324.3   grants, interest rate subsidies, or assistance in any form for 
324.4   up to 15,000 square feet of any separately owned commercial 
324.5   facility located within the municipal jurisdiction of a small 
324.6   city, if the revenues derived from increments are spent only to 
324.7   assist the facility directly or for administrative costs, the 
324.8   assistance is necessary to develop the facility, and the 
324.9   increments are spent only within the district. 
324.10     (2) A city is a small city for purposes of this paragraph 
324.11  if the city was a small city in the year in which the request 
324.12  for certification was made and applies for the rest of the 
324.13  duration of the district, regardless of whether the city 
324.14  qualifies or ceases to qualify as a small city. 
324.15     (d) For purposes of this subdivision, a qualified border 
324.16  retail facility is a development consisting of a shopping center 
324.17  or one or more retail stores, if the authority finds that all of 
324.18  the following conditions are satisfied: 
324.19     (1) the district is in a small city located within one mile 
324.20  or less of the border of the state; 
324.21     (2) the development is not located in the seven county 
324.22  metropolitan area, as defined in section 473.121, subdivision 2; 
324.23     (3) the development will contain new buildings or will 
324.24  substantially rehabilitate existing buildings that together 
324.25  contain at least 25,000 square feet of retail space; and 
324.26     (4) without the use of tax increment financing for the 
324.27  development, the development or a similar competing development 
324.28  will instead occur in the bordering state or province. 
324.29     Sec. 12.  Minnesota Statutes 1996, section 469.176, 
324.30  subdivision 4g, is amended to read: 
324.31     Subd. 4g.  [GENERAL GOVERNMENT USE PROHIBITED.] (a) These 
324.32  revenues shall not be used to circumvent existing levy limit law.
324.33     (b) No revenues derived from tax increment from any 
324.34  district, whether certified before or after August 1, 1979, 
324.35  shall be used for the acquisition, construction, renovation, 
324.36  operation, or maintenance of a building to be used primarily and 
325.1   regularly for conducting the business of a municipality, county, 
325.2   school district, or any other local unit of government or the 
325.3   state or federal government.  "Conducting the business of the 
325.4   unit of government" includes, but is not limited to, the 
325.5   production or sale of goods or the provision of any service the 
325.6   unit of government provides in its normal course of operations.  
325.7   This provision shall not prohibit the use of revenues derived 
325.8   from tax increments for the construction or renovation of a 
325.9   parking structure, a commons area used as a public park, or a 
325.10  facility used for social, recreational, or conference 
325.11  purposes and not primarily for conducting the business of the 
325.12  municipality or a wastewater treatment facility, water treatment 
325.13  facility, or similar facility used in connection with public 
325.14  utilities, but only (1) if the construction or renovation is 
325.15  necessary to obtain a binding commitment by a third party to 
325.16  construct private taxable improvements as part of the 
325.17  development or redevelopment and (2) a binding commitment has 
325.18  been obtained, in writing, from the third party.  The market 
325.19  value of the taxable improvements must be substantial in 
325.20  relation to the cost of the construction or renovation of the 
325.21  public improvements paid with revenues derived from tax 
325.22  increments.  For purposes of this subdivision, "third party" 
325.23  means any person or entity other than the municipality, the 
325.24  authority, or other entity substantially under the control of 
325.25  the municipality.  
325.26     (b) (c) If any publicly owned facility used for social, 
325.27  recreational, or conference purposes and financed in whole or in 
325.28  part from revenues derived from a district is operated or 
325.29  managed by an entity other than the authority, the operating and 
325.30  management policies of the facility must be approved by the 
325.31  governing body of the authority. 
325.32     Sec. 13.  Minnesota Statutes 1996, section 469.176, 
325.33  subdivision 4j, is amended to read: 
325.34     Subd. 4j.  [REDEVELOPMENT DISTRICTS.] (a) At least 90 
325.35  percent of the revenues derived from tax increments from a 
325.36  redevelopment district or renewal and renovation district must 
326.1   be used to finance the cost of correcting conditions that allow 
326.2   designation of redevelopment and renewal and renovation 
326.3   districts under section 469.174. 
326.4      (b) These costs include and are limited to: 
326.5      (1) acquiring properties containing structurally 
326.6   substandard buildings or improvements, or properties described 
326.7   in section 469.174, subdivision 10, paragraph (a), clause (2); 
326.8      (2) acquiring adjacent parcels necessary to provide a site 
326.9   of sufficient size to permit development, of the parcels 
326.10  containing substandard structures or properties described in 
326.11  section 469.174, subdivision 10, paragraph (a), clause (2); 
326.12     (3) demolition of structures, including any required 
326.13  relocation costs; 
326.14     (4) clearing of the land, and other site preparation; 
326.15     (5) repair or rehabilitation of substandard buildings and 
326.16  improvements where necessary to eliminate unhealthful, 
326.17  unsanitary, or unsafe conditions or to remove or prevent the 
326.18  spread of blight; 
326.19     (6) removal or remediation of hazardous substance; and 
326.20     (7) installation of utilities, roads, sidewalks, and 
326.21  parking facilities for the site. 
326.22     (c) All costs must relate directly to financing 
326.23  redevelopment of the parcels containing substandard structures 
326.24  or property described in section 469.174, subdivision 10, 
326.25  paragraph (a), clause (2).  
326.26     (d) The allocated administrative expenses of the authority, 
326.27  costs required under section 469.175, subdivision 1a, for the 
326.28  district, and expenses under section 469.175, subdivision 7, 
326.29  paragraphs (f) and (g), for the district may be included in the 
326.30  qualifying costs. 
326.31     Sec. 14.  Minnesota Statutes 1996, section 469.176, 
326.32  subdivision 6, is amended to read: 
326.33     Subd. 6.  [ACTION REQUIRED.] If, after four three years 
326.34  from the date of certification of the original net tax capacity 
326.35  of the tax increment financing district pursuant to section 
326.36  469.177, no demolition, rehabilitation, or renovation of 
327.1   property or other site preparation, including qualified 
327.2   improvement of a street adjacent to a parcel but not 
327.3   installation of utility service including sewer or water 
327.4   systems, has been commenced on a parcel located within a tax 
327.5   increment financing district by the authority or by the owner of 
327.6   the parcel in accordance with the tax increment financing plan, 
327.7   no additional tax increment may be taken from that parcel, and 
327.8   the original net tax capacity of that parcel shall be excluded 
327.9   from the original net tax capacity of the tax increment 
327.10  financing district.  If the authority or the owner of the parcel 
327.11  subsequently commences demolition, rehabilitation, or renovation 
327.12  or other site preparation on that parcel including qualified 
327.13  improvement of a street adjacent to that parcel, in accordance 
327.14  with the tax increment financing plan, the authority shall 
327.15  certify to the county auditor that the activity has commenced, 
327.16  and the county auditor shall certify the net tax capacity 
327.17  thereof as most recently certified by the commissioner of 
327.18  revenue and add it to the original net tax capacity of the tax 
327.19  increment financing district.  The county auditor must enforce 
327.20  the provisions of this subdivision.  The authority must submit 
327.21  to the county auditor evidence that the required activity has 
327.22  taken place for each parcel in the district.  The evidence for a 
327.23  parcel must be submitted by February 1 of the fifth fourth year 
327.24  following the year in which the parcel was certified as included 
327.25  in the district.  For purposes of this subdivision, qualified 
327.26  improvements of a street are limited to (1) construction or 
327.27  opening of a new street, (2) relocation of a street, and (3) 
327.28  substantial reconstruction or rebuilding of an existing street.  
327.29  For purposes of this subdivision, a public improvement is only 
327.30  made in accordance with the tax increment financing plan, if it 
327.31  was specifically included in the plan before the improvement was 
327.32  undertaken or if at least 20 percent of the cost of the 
327.33  improvement was financed by increment from the district or 
327.34  obligations secured by increment from the district. 
327.35     Sec. 15.  Minnesota Statutes 1996, section 469.177, 
327.36  subdivision 1, is amended to read: 
328.1      Subdivision 1.  [ORIGINAL NET TAX CAPACITY.] (a) Upon or 
328.2   after adoption of a tax increment financing plan, the auditor of 
328.3   any county in which the district is situated shall, upon request 
328.4   of the authority, certify the original net tax capacity of the 
328.5   tax increment financing district and that portion of the 
328.6   district overlying any subdistrict as described in the tax 
328.7   increment financing plan and shall certify in each year 
328.8   thereafter the amount by which the original net tax capacity has 
328.9   increased or decreased as a result of a change in tax exempt 
328.10  status of property within the district and any subdistrict, 
328.11  reduction or enlargement of the district or changes pursuant to 
328.12  subdivision 4.  
328.13     (b) In the case of a mined underground space development 
328.14  district the county auditor shall certify the original net tax 
328.15  capacity as zero, plus the net tax capacity, if any, previously 
328.16  assigned to any subsurface area included in the mined 
328.17  underground space development district pursuant to section 
328.18  272.04. 
328.19     (c) For districts approved under section 469.175, 
328.20  subdivision 3, or parcels added to existing districts after May 
328.21  1, 1988, if the classification under section 273.13 of property 
328.22  located in a district changes to a classification that has a 
328.23  different assessment ratio, the original net tax capacity of 
328.24  that property must be redetermined at the time when its use is 
328.25  changed as if the property had originally been classified in the 
328.26  same class in which it is classified after its use is changed. 
328.27     (d) The amount to be added to the original net tax capacity 
328.28  of the district as a result of previously tax exempt real 
328.29  property within the district becoming taxable equals the net tax 
328.30  capacity of the real property as most recently assessed pursuant 
328.31  to section 273.18 or, if that assessment was made more than one 
328.32  year prior to the date of title transfer rendering the property 
328.33  taxable, the net tax capacity assessed by the assessor at the 
328.34  time of the transfer.  If substantial taxable improvements were 
328.35  made to a parcel after certification of the district and if the 
328.36  property later becomes tax exempt, in whole or part, as a result 
329.1   of the authority acquiring the property through foreclosure or 
329.2   exercise of remedies under a lease or other revenue agreement or 
329.3   as a result of tax forfeiture, the amount to be added to the 
329.4   original net tax capacity of the district as a result of the 
329.5   property again becoming taxable is the amount of the parcel's 
329.6   value that was included in original net tax capacity when the 
329.7   parcel was first certified.  The amount to be added to the 
329.8   original net tax capacity of the district as a result of 
329.9   enlargements equals the net tax capacity of the added real 
329.10  property as most recently certified by the commissioner of 
329.11  revenue as of the date of modification of the tax increment 
329.12  financing plan pursuant to section 469.175, subdivision 4. 
329.13     (e) For districts approved under section 469.175, 
329.14  subdivision 3, or parcels added to existing districts after May 
329.15  1, 1988, if the net tax capacity of a property increases because 
329.16  the property no longer qualifies under the Minnesota 
329.17  agricultural property tax law, section 273.111; the Minnesota 
329.18  open space property tax law, section 273.112; or the 
329.19  metropolitan agricultural preserves act, chapter 473H, or 
329.20  because platted, unimproved property is improved or three years 
329.21  pass after approval of the plat under section 273.11, 
329.22  subdivision 1, the increase in net tax capacity must be added to 
329.23  the original net tax capacity.  
329.24     (f) Each year the auditor shall also add to the original 
329.25  net tax capacity of each economic development district an amount 
329.26  equal to the original net tax capacity for the preceding year 
329.27  multiplied by the average percentage increase in the market 
329.28  value of all property included in the economic development 
329.29  district during the five years prior to certification of the 
329.30  district.  In computing the average percentage increase in 
329.31  market value, the auditor shall exclude the market value, as 
329.32  estimated by the assessor, that is attributable to new 
329.33  construction; extension of sewer, water, roads, or other public 
329.34  utilities; or platting of the land. 
329.35     (g) The amount to be subtracted from the original net tax 
329.36  capacity of the district as a result of previously taxable real 
330.1   property within the district becoming tax exempt, or a reduction 
330.2   in the geographic area of the district, shall be the amount of 
330.3   original net tax capacity initially attributed to the property 
330.4   becoming tax exempt or being removed from the district.  If the 
330.5   net tax capacity of property located within the tax increment 
330.6   financing district is reduced by reason of a court-ordered 
330.7   abatement, stipulation agreement, voluntary abatement made by 
330.8   the assessor or auditor or by order of the commissioner of 
330.9   revenue, the reduction shall be applied to the original net tax 
330.10  capacity of the district when the property upon which the 
330.11  abatement is made has not been improved since the date of 
330.12  certification of the district and to the captured net tax 
330.13  capacity of the district in each year thereafter when the 
330.14  abatement relates to improvements made after the date of 
330.15  certification.  The county auditor may specify reasonable form 
330.16  and content of the request for certification of the authority 
330.17  and any modification thereof pursuant to section 469.175, 
330.18  subdivision 4.  
330.19     (h) If a parcel of property contained a substandard 
330.20  building that was demolished or removed and if the authority 
330.21  elects to treat the parcel as occupied by a substandard building 
330.22  under section 469.174, subdivision 10, paragraph (b), the 
330.23  auditor shall certify the original net tax capacity of the 
330.24  parcel using the greater of (1) the current net tax capacity of 
330.25  the parcel, or (2) the estimated market value of the parcel for 
330.26  the year in which the building was demolished or removed, but 
330.27  applying the class rates for the current year. 
330.28     Sec. 16.  Minnesota Statutes 1996, section 469.177, 
330.29  subdivision 3, is amended to read: 
330.30     Subd. 3.  [TAX INCREMENT, RELATIONSHIP TO CHAPTERS 276A AND 
330.31  473F.] (a) Unless The governing body elects pursuant to clause 
330.32  (b) may, by resolution approving the tax increment financing 
330.33  plan under section 469.175, subdivision 3, for a redevelopment 
330.34  district, elect that the following method of computation shall 
330.35  apply applies: 
330.36     (1) The original net tax capacity and the current net tax 
331.1   capacity shall be determined before the application of the 
331.2   fiscal disparity provisions of chapter 276A or 473F.  Where the 
331.3   original net tax capacity is equal to or greater than the 
331.4   current net tax capacity, there is no captured net tax capacity 
331.5   and no tax increment determination.  Where the original net tax 
331.6   capacity is less than the current net tax capacity, the 
331.7   difference between the original net tax capacity and the current 
331.8   net tax capacity is the captured net tax capacity.  This amount 
331.9   less any portion thereof which the authority has designated, in 
331.10  its tax increment financing plan, to share with the local taxing 
331.11  districts is the retained captured net tax capacity of the 
331.12  authority.  
331.13     (2) The county auditor shall exclude the retained captured 
331.14  net tax capacity of the authority from the net tax capacity of 
331.15  the local taxing districts in determining local taxing district 
331.16  tax rates.  The local tax rates so determined are to be extended 
331.17  against the retained captured net tax capacity of the authority 
331.18  as well as the net tax capacity of the local taxing districts.  
331.19  The tax generated by the extension of the lesser of (A) the 
331.20  local taxing district tax rates or (B) the original local tax 
331.21  rate to the retained captured net tax capacity of the authority 
331.22  is the tax increment of the authority.  
331.23     (b) The governing body may, by resolution approving the tax 
331.24  increment financing plan pursuant to section 469.175, 
331.25  subdivision 3, elect If no election has been made under 
331.26  paragraph (a), the following method of computation applies to 
331.27  determine the amount of tax increment: 
331.28     (1) The original net tax capacity shall be determined 
331.29  before the application of the fiscal disparity provisions of 
331.30  chapter 276A or 473F.  The current net tax capacity shall 
331.31  exclude any fiscal disparity commercial-industrial net tax 
331.32  capacity increase between the original year and the current year 
331.33  multiplied by the fiscal disparity ratio determined pursuant to 
331.34  section 276A.06, subdivision 7, or 473F.08, subdivision 6.  
331.35  Where the original net tax capacity is equal to or greater than 
331.36  the current net tax capacity, there is no captured net tax 
332.1   capacity and no tax increment determination.  Where the original 
332.2   net tax capacity is less than the current net tax capacity, the 
332.3   difference between the original net tax capacity and the current 
332.4   net tax capacity is the captured net tax capacity.  This amount 
332.5   less any portion thereof which the authority has designated, in 
332.6   its tax increment financing plan, to share with the local taxing 
332.7   districts is the retained captured net tax capacity of the 
332.8   authority.  
332.9      (2) The county auditor shall exclude the retained captured 
332.10  net tax capacity of the authority from the net tax capacity of 
332.11  the local taxing districts in determining local taxing district 
332.12  tax rates.  The local tax rates so determined are to be extended 
332.13  against the retained captured net tax capacity of the authority 
332.14  as well as the net tax capacity of the local taxing districts.  
332.15  The tax generated by the extension of the lesser of (A) the 
332.16  local taxing district tax rates or (B) the original local tax 
332.17  rate to the retained captured net tax capacity of the authority 
332.18  is the tax increment of the authority.  
332.19     (3) An election by the governing body pursuant to paragraph 
332.20  (b) (a) shall be submitted to the county auditor by the 
332.21  authority at the time of the request for certification pursuant 
332.22  to subdivision 1. 
332.23     (c) The method of computation of tax increment applied to a 
332.24  district pursuant to paragraph (a) or (b) shall remain the same 
332.25  for the duration of the district, except that the governing body 
332.26  may elect to change its election from the method of computation 
332.27  in paragraph (a) to the method in paragraph (b). 
332.28     Sec. 17.  Minnesota Statutes 1996, section 469.177, 
332.29  subdivision 4, is amended to read: 
332.30     Subd. 4.  [PRIOR PLANNED IMPROVEMENTS.] The authority 
332.31  shall, after diligent search, accompany its request for 
332.32  certification to the county auditor pursuant to subdivision 1, 
332.33  or its notice of district enlargement pursuant to section 
332.34  469.175, subdivision 4, with a listing of all properties within 
332.35  the tax increment financing district or area of enlargement for 
332.36  which building permits have been issued during the 18 months 
333.1   immediately preceding approval of the tax increment financing 
333.2   plan by the municipality pursuant to section 469.175, 
333.3   subdivision 3.  The county auditor shall increase the original 
333.4   net tax capacity of the district by the net tax capacity of each 
333.5   improvement for which a building permit was issued.  For 
333.6   purposes of this subdivision, the term "building permit" means 
333.7   any permit issued by municipality or another political 
333.8   subdivision as a final condition for construction of an 
333.9   improvement to real property. 
333.10     Sec. 18. [BUFFALO LAKE.] 
333.11     Subdivision 1.  [EXTENSION OF TIME FOR CERTIFICATION.] 
333.12  Notwithstanding the provisions of Minnesota Statutes, section 
333.13  273.1399, subdivision 6, paragraph (b), clause (2), tax 
333.14  increment financing district No. 1-1 in the city of Buffalo Lake 
333.15  is an exempt district under Minnesota Statutes, section 
333.16  273.1399, paragraph (b), if the facility is certified by the 
333.17  commissioner of agriculture by December 31, 1998. 
333.18     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
333.19  approval by the governing body of the city of Buffalo Lake under 
333.20  Minnesota Statutes, section 645.021, subdivision 2. 
333.21     Sec. 19.  [EAST GRAND FORKS] 
333.22     Subdivision 1.  [TIF EXTENSION.] The governing body of the 
333.23  city of East Grand Forks may extend the duration of tax 
333.24  increment financing district No. 2 (Gateway East) by up to 12 
333.25  additional years.  The district terminates no later than the end 
333.26  of calendar year 2012. 
333.27     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
333.28  compliance by the governing body of the city of East Grand Forks 
333.29  with the provisions of Minnesota Statutes, sections 469.1782, 
333.30  subdivision 2; and 645.021. 
333.31     Sec. 20.  [COON RAPIDS; ECONOMIC DEVELOPMENT.] 
333.32     Subdivision 1.  [AUTHORIZATION.] Notwithstanding the 
333.33  provisions of Minnesota Statutes, section 469.176, subdivision 
333.34  1b, upon approval of the governing body of the city of Coon 
333.35  Rapids by resolution, the duration of the tax increment 
333.36  financing districts of the Coon Rapids economic development 
334.1   authority designated 2-1, 2-2, and 2-3 may be extended to 
334.2   December 31, 2010. 
334.3      Subd. 2.  [SPECIAL RULES.] (a) The tax increment financing 
334.4   districts of the Coon Rapids economic development authority 
334.5   designated 2-1, 2-2, and 2-3 are subject to Minnesota Statutes, 
334.6   sections 469.174 to 469.178, except as provided in this 
334.7   subdivision. 
334.8      (b) Tax increment revenues derived from the districts may 
334.9   only be applied to the payment of project costs described in the 
334.10  tax increment plans for the tax increment financing districts on 
334.11  the date of final enactment of this section and to the payment 
334.12  of the costs incurred with respect to the reconstruction and 
334.13  upgrading of the existing state and county bridges and roadways 
334.14  within the project area of the districts. 
334.15     (c) Notwithstanding Minnesota Statutes, section 469.176, 
334.16  subdivision 1, tax increment revenue generated from each 
334.17  district may be paid to the authority until the earlier of (1) 
334.18  December 31, 2010; or (2) the date upon which all bonded 
334.19  indebtedness or contractual obligations of the authority 
334.20  relating to the districts have terminated. 
334.21     Subd. 3.  [EFFECTIVE DATE.] This section is effective upon 
334.22  compliance by the governing bodies of the city of Coon Rapids, 
334.23  the county of Anoka, and independent school district No. 11, 
334.24  Anoka-Hennepin, with Minnesota Statutes, section 645.021, 
334.25  subdivision 2. 
334.26     Sec. 21.  [GAYLORD.] 
334.27     Subdivision 1.  [TIF DISTRICT EXTENSION AND EXPANSION.] 
334.28  Notwithstanding the provisions of Minnesota Statutes, section 
334.29  469.176, subdivision 1c, the city of Gaylord may, by resolution, 
334.30  extend the duration of a tax increment financing district 
334.31  originally certified in 1978.  The city may not extend the 
334.32  duration beyond December 31, 2008. 
334.33     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
334.34  compliance with the requirements of Minnesota Statutes, sections 
334.35  469.1782 and 645.021. 
334.36     Sec. 22.  [BROOKLYN CENTER.] 
335.1      Subdivision 1.  [USE OF TAX INCREMENT FINANCING.] Tax 
335.2   increment financing district No. 3, established on December 19, 
335.3   1994, by Brooklyn Center Resolution No. 94-273, which includes 
335.4   the Brookdale regional shopping center, is exempt from Minnesota 
335.5   Statutes, section 469.1763, subdivision 3, until December 19, 
335.6   2004. 
335.7      Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
335.8   compliance by the city council of Brooklyn Center with the 
335.9   requirements of Minnesota Statutes, section 645.021. 
335.10     Sec. 23.  [ECONOMIC DEVELOPMENT TIF DISTRICT; DOUGLAS 
335.11  COUNTY.] 
335.12     Subdivision 1.  [AUTHORIZATION.] The Douglas county housing 
335.13  and redevelopment authority or the Brandon economic development 
335.14  authority may establish a tax increment financing district for a 
335.15  tourism facility including a theme park, amusement park, 
335.16  cultural facilities, recreational facilities, lodging 
335.17  facilities, retail facilities, and associated commercial 
335.18  development. 
335.19     Subd. 2.  [SPECIAL RULES.] (a) The tax increment financing 
335.20  district is subject to Minnesota Statutes, sections 469.174 to 
335.21  469.179, with the exceptions listed in this subdivision. 
335.22     (b) The tax increment financing district may encompass up 
335.23  to 360 acres and all taxable improvements within the district 
335.24  are deemed a tourism facility and qualified as an economic 
335.25  development district for purposes of Minnesota Statutes, 
335.26  sections 469.174, subdivisions 12 and 22; and 469.176, 
335.27  subdivision 4c. 
335.28     (c) Minnesota Statutes, section 469.1763, subdivision 3, 
335.29  does not apply to the tax increment financing district. 
335.30     (d) Notwithstanding Minnesota Statutes, section 469.176, 
335.31  subdivision 1b, the maximum duration of the tax increment 
335.32  financing district is 20 years from the receipt of the first tax 
335.33  increment financing district.  The authority must decertify the 
335.34  district after all the costs of the public improvements 
335.35  identified in the increment financing plan have been paid. 
335.36     Subd. 3.  [EFFECTIVE DATE.] This section is effective upon 
336.1   approval of the original tax increment financing plan for the 
336.2   tax increment financing district by the affected school board, 
336.3   county board, and township board or city council and upon 
336.4   approval of the governing body of the authority under Minnesota 
336.5   Statutes, section 645.021, subdivision 2. 
336.6      Sec. 24.  [CITY OF MINNETONKA; HOUSING DEVELOPMENT 
336.7   ACCOUNT.] 
336.8      Subdivision 1.  [DEPOSITS IN ACCOUNT.] The Minnetonka 
336.9   economic development authority may deposit the balance of 
336.10  revenues derived from tax increment from housing tax increment 
336.11  financing district No. 1 in the housing development account of 
336.12  the authority.  These increments may be expended for housing 
336.13  activities in accordance with the tax increment financing plan, 
336.14  if before depositing the increments or making any expenditures 
336.15  for housing activities under this section, the authority and 
336.16  city: 
336.17     (1) elect, by resolution, to decertify housing tax 
336.18  increment financing district No. 1 as of December 31, 1997; and 
336.19     (2) identify in the plan the housing activities that will 
336.20  be assisted by the housing development account.  
336.21     The election to decertify and any necessary plan amendment 
336.22  may be approved before or after the effective date of this 
336.23  section. 
336.24     Subd. 2.  [PERMITTED HOUSING ACTIVITIES.] For the purposes 
336.25  of this section, housing activities:  
336.26     (1) may include rehabilitation, acquisition, demolition, 
336.27  and financing of new or existing single family or multifamily 
336.28  housing and public improvements directly related to such 
336.29  activities, together with other related activities specified in 
336.30  the housing action plan approved by the city or the authority in 
336.31  compliance with Minnesota Statutes, sections 473.25 to 473.254; 
336.32     (2) may be located anywhere within the city without regard 
336.33  to the boundaries of any tax increment financing district or 
336.34  project area; and 
336.35     (3) for rental and owner-occupied housing, must meet the 
336.36  income, rent, or sales price limitations established from time 
337.1   to time by the metropolitan council under Minnesota Statutes, 
337.2   sections 473.25 to 473.254. 
337.3      Subd. 3.  [SEPARATE ACCOUNT REQUIRED.] Tax increment to be 
337.4   expended for housing activities under this section must be 
337.5   segregated by the authority into a special housing development 
337.6   account on its official books and records.  The account may also 
337.7   receive funds from other public and private sources. 
337.8      Subd. 4.  [EFFECTIVE DATE.] This section is effective upon 
337.9   approval by the governing body of the city of Minnetonka under 
337.10  Minnesota Statutes, section 645.021, subdivision 2. 
337.11     Sec. 25.  Laws 1995, chapter 264, article 5, section 44, 
337.12  subdivision 4, as amended by Laws 1996, chapter 471, article 7, 
337.13  section 21, is amended to read: 
337.14     Subd. 4.  [AUTHORITY.] For housing replacement projects in 
337.15  the city of Crystal, "authority" means the Crystal economic 
337.16  development authority.  For housing replacement projects in the 
337.17  city of Fridley, "authority" means the housing and redevelopment 
337.18  authority in and for the city of Fridley or a successor in 
337.19  interest.  For housing replacement projects in the city of 
337.20  Minneapolis, "authority" means the Minneapolis community 
337.21  development agency.  For housing replacement projects in the 
337.22  city of St. Paul, "authority" means the St. Paul housing and 
337.23  redevelopment authority.  For housing replacement projects in 
337.24  the city of Duluth, "authority" means the Duluth economic 
337.25  development authority.  For housing replacement projects in the 
337.26  city of Richfield, "authority" is the authority as defined in 
337.27  Minnesota Statutes, section 469.174, subdivision 2, that is 
337.28  designated by the governing body of the city of Richfield.  For 
337.29  housing replacement projects in the city of Columbia Heights, 
337.30  "authority" is the authority as defined in Minnesota Statutes, 
337.31  section 469.174, subdivision 2, that is designated by the 
337.32  governing body of the city of Columbia Heights. 
337.33     Sec. 26.  Laws 1995, chapter 264, article 5, section 45, 
337.34  subdivision 1, as amended by Laws 1996, chapter 471, article 7, 
337.35  section 22, is amended to read: 
337.36     Subdivision 1.  [CREATION OF PROJECTS.] (a) An authority 
338.1   may create a housing replacement project under sections 44 to 
338.2   47, as provided in this section. 
338.3      (b) For the cities of Crystal, Fridley, and Richfield, and 
338.4   Columbia Heights, the authority may designate up to 50 parcels 
338.5   in the city to be included in a housing replacement district.  
338.6   No more than ten parcels may be included in year one of the 
338.7   district, with up to ten additional parcels added to the 
338.8   district in each of the following nine years.  For the cities of 
338.9   Minneapolis, St. Paul, and Duluth, each authority may designate 
338.10  up to 100 parcels in the city to be included in a housing 
338.11  replacement district over the life of the district.  The only 
338.12  parcels that may be included in a district are (1) vacant sites, 
338.13  (2) parcels containing vacant houses, or (3) parcels containing 
338.14  houses that are structurally substandard, as defined in 
338.15  Minnesota Statutes, section 469.174, subdivision 10.  
338.16     (c) The city in which the authority is located must pay at 
338.17  least 25 percent of the housing replacement project costs from 
338.18  its general fund, a property tax levy, or other unrestricted 
338.19  money, not including tax increments. 
338.20     (d) The housing replacement district plan must have as its 
338.21  sole object the acquisition of parcels for the purpose of 
338.22  preparing the site to be sold for market rate housing.  As used 
338.23  in this section, "market rate housing" means housing that has a 
338.24  market value that does not exceed 150 percent of the average 
338.25  market value of single-family housing in that municipality. 
338.26     Sec. 27.  [DEFINITIONS.] 
338.27     Subdivision 1.  [AUTHORITY.] "Authority" or "authorities" 
338.28  means the Minneapolis public housing authority and the 
338.29  Minneapolis community development agency if and to the extent 
338.30  that the governing body has delegated to either the powers and 
338.31  duties hereunder pursuant to section 28, subdivision 4, 
338.32  paragraph (b). 
338.33     Subd. 2.  [CAPTURED NET TAX CAPACITY.] "Captured net tax 
338.34  capacity" means the amount by which the current net tax capacity 
338.35  of the housing transition district exceeds the original net tax 
338.36  capacity, including the value of property normally taxable as 
339.1   personal property by reason of its location on or over property 
339.2   owned by a tax exempt entity. 
339.3      Subd. 3.  [CITY.] "City" means the city of Minneapolis, 
339.4   Minnesota. 
339.5      Subd. 4.  [CONSENT DECREE.] "Consent decree" means the 
339.6   order of the United States District Court issued in connection 
339.7   with Hollman et. al. vs. Cisneros et. al., United States 
339.8   District Court, Civil Case 4-92-712, as may be amended from time 
339.9   to time. 
339.10     Subd. 5.  [COUNTY AUDITOR.] "County auditor" means the 
339.11  county auditor of Hennepin county, Minnesota. 
339.12     Subd. 6.  [GOVERNING BODY.] "Governing body" means the city 
339.13  council of the city. 
339.14     Subd. 7.  [HOUSING TRANSITION DISTRICT; DISTRICT.] "Housing 
339.15  transition district" or "district" means a geographic area 
339.16  within the city designated by the governing body that consists 
339.17  of (1) parcels that contain or contained public housing 
339.18  structures scheduled for demolition or demolished in accordance 
339.19  with the terms of the consent decree and (2) additional parcels 
339.20  not to exceed ten percent of the size of the area under clause 
339.21  (1). 
339.22     Subd. 8.  [NONTAXABLE PARCEL.] "Nontaxable parcel" means a 
339.23  parcel to be included within the housing transition district 
339.24  which at the time of certification is not subject to property 
339.25  taxation by reason of public ownership. 
339.26     Subd. 9.  [ORIGINAL NET TAX CAPACITY.] (a) With respect to 
339.27  nontaxable parcels within the district, "original net tax 
339.28  capacity" means zero. 
339.29     (b) With respect to taxable parcels within the district, 
339.30  "original net tax capacity" means the net tax capacity of the 
339.31  parcels as certified by the commissioner of revenue for the 
339.32  appropriate assessment year.  For purposes of this subdivision, 
339.33  the appropriate assessment year is the previous assessment year, 
339.34  if a request by the authority for certification has been made to 
339.35  the county auditor by June 30.  If the request for certification 
339.36  is filed after June 30, the appropriate assessment year is the 
340.1   current assessment year. 
340.2      Subd. 10.  [PARCEL.] "Parcel" means a tract or plat of land 
340.3   established prior to the certification of the district as a 
340.4   single unit for purposes of assessment. 
340.5      Subd. 11.  [PREEXISTING DISTRICT.] "Preexisting district" 
340.6   means any tax increment district within which is located a 
340.7   parcel proposed to be included within the housing transition 
340.8   district. 
340.9      Subd. 12.  [TAXABLE PARCEL.] "Taxable parcel" means a 
340.10  parcel to be included within the housing transition district 
340.11  which is subject to property taxation at the time of 
340.12  certification. 
340.13     Sec. 28.  [ESTABLISHMENT OF HOUSING TRANSITION DISTRICT.] 
340.14     Subdivision 1.  [CREATION.] The governing body may 
340.15  establish a housing transition district within the city.  The 
340.16  parcels included within the district need not be contiguous but 
340.17  must all be designated and included at the time the district is 
340.18  initially established.  Parcels must not be added to the 
340.19  district after its initial certification. 
340.20     Subd. 2.  [TAX INCREMENT.] (a) Upon request of the 
340.21  authority, the county auditor shall certify the original net tax 
340.22  capacity of the district and shall certify in each year 
340.23  thereafter the amount by which the original net tax capacity 
340.24  increases as a result of the conditions described in Minnesota 
340.25  Statutes, section 469.177, subdivision 4, or decreases as a 
340.26  result of the conditions described in Minnesota Statutes, 
340.27  section 469.177, subdivision 1, paragraph (g).  No other changes 
340.28  shall be made in original net tax capacity once certified by the 
340.29  county auditor. 
340.30     (b) The provisions of Minnesota Statutes, section 469.177, 
340.31  subdivisions 1a and 3 to 10, apply to the computation of tax 
340.32  increment for the housing transition district created under 
340.33  sections 27 to 29. 
340.34     (c) If an authority request for certification includes 
340.35  nontaxable parcels then within a preexisting district, the 
340.36  county auditor shall remove such parcels from the preexisting 
341.1   district.  If an authority request for certification includes 
341.2   taxable parcels then within a preexisting district, the county 
341.3   auditor shall allocate all taxes derived from the captured net 
341.4   tax capacity attributable thereto to the preexisting district. 
341.5      Subd. 3.  [HOUSING TRANSITION DISTRICT PLAN.] To establish 
341.6   a housing transition district, the governing body shall adopt a 
341.7   housing transition district plan which constitutes a tax 
341.8   increment financing plan, as used in those provisions of 
341.9   Minnesota Statutes, sections 469.174 to 469.1781, made 
341.10  applicable by sections 27 to 30, and contains the following: 
341.11     (1) a general description of the plans for development of 
341.12  the district; 
341.13     (2) a description of the parcels to be included in the 
341.14  district, including such information regarding each as shall 
341.15  establish that the district meets the conditions described in 
341.16  section 27, subdivision 7; 
341.17     (3) the most recent net tax capacity of each parcel 
341.18  included in the district; 
341.19     (4) a budget containing estimated tax increment collections 
341.20  and expenditures as authorized or permitted by sections 27 to 
341.21  29; 
341.22     (5) estimates of the sources of revenue, public and 
341.23  private, other than tax increment to pay estimated or budgeted 
341.24  costs; 
341.25     (6) statements of the alternate estimated impacts of the 
341.26  housing transition district on the net tax capacities of all 
341.27  taxing jurisdictions in which the housing transition district is 
341.28  located in whole or in part.  For purposes of one statement, the 
341.29  statement shall assume that the estimated captured net tax 
341.30  capacity would be available to the taxing jurisdictions without 
341.31  creation of the housing transition district, and for purposes of 
341.32  the second statement, it shall be assumed that none of the 
341.33  estimated captured net tax capacity would be available to the 
341.34  taxing jurisdictions without creation of the housing transition 
341.35  district. 
341.36     Subd. 4.  [PROCEDURE.] (a) The provisions of Minnesota 
342.1   Statutes, section 469.175, subdivisions 3, 5, 6, and 6a, apply 
342.2   to the establishment and operation of the housing transition 
342.3   district created under sections 27 to 29, except the 
342.4   determinations required by Minnesota Statutes, section 469.175, 
342.5   subdivision 3, clauses (1) and (2), are not required. 
342.6      (b) Upon approval of the housing transition district plan, 
342.7   the governing body shall delegate to one or both of the 
342.8   authorities the powers and duties regarding the implementation 
342.9   and administration of the housing transition district it 
342.10  determines appropriate. 
342.11     Sec. 29.  [LIMITATIONS.] 
342.12     Subdivision 1.  [DURATION.] Tax increment generated by the 
342.13  district must cease to be paid to the authority after 20 years 
342.14  from the receipt by the authority of the first tax increment 
342.15  from the district. 
342.16     Subd. 2.  [USE.] (a) All tax increment received by the 
342.17  authority from the district must be used in accordance with the 
342.18  housing transition district plan. 
342.19     (b) Tax increment may be used to pay the costs of: 
342.20     (1) acquiring title to or an ownership interest in any 
342.21  property within the district; 
342.22     (2) relocating owners of or tenants in any property within 
342.23  the district; 
342.24     (3) demolishing all or a part of any structures or other 
342.25  improvements within the district; 
342.26     (4) site preparation, soil correction, and infrastructure 
342.27  improvements within the district; 
342.28     (5) rehabilitating or constructing any housing structures 
342.29  or other improvements within the district; 
342.30     (6) constructing public improvements associated with 
342.31  development within the district; 
342.32     (7) making loans or grants to public or private entities in 
342.33  order to facilitate development within the district; and 
342.34     (8) administering the creation and operation of the 
342.35  district or the implementation of the consent decree, including 
342.36  reimbursement for costs previously incurred or advanced and not 
343.1   reimbursed. 
343.2      (c) The authority may pay the costs authorized by this 
343.3   subdivision, directly, through the issuance and sale of 
343.4   obligations pursuant to Minnesota Statutes, section 469.178, by 
343.5   means of loans or grants to the current or future owners of 
343.6   property within the district, or through the exercise of any 
343.7   authority contained in Minnesota Statutes, sections 469.001 to 
343.8   469.047. 
343.9      (d) Minnesota Statutes, section 469.176, subdivision 4g, 
343.10  applies to the district.  Minnesota Statutes, section 469.176, 
343.11  subdivision 3, applies to the district, except "15" is 
343.12  substituted for "ten" in paragraph (a) of subdivision 3. 
343.13     Sec. 30.  [APPLICABILITY OF OTHER LAWS.] 
343.14     Minnesota Statutes, sections 469.174 to 469.179, apply to 
343.15  the housing transition district or tax increment generated 
343.16  pursuant to sections 27 to 29 only to the extent specified in 
343.17  sections 27 to 29.  The housing transition district does not 
343.18  have a longer duration than permitted by general law for 
343.19  purposes of Minnesota Statutes, section 469.1782. 
343.20     Sec. 31.  [REPEALER.] 
343.21     Minnesota Statutes, section 469.176, subdivision 1a and 5, 
343.22  are repealed. 
343.23     Sec. 32.  [EFFECTIVE DATE.] 
343.24     Sections 1, 2, 4, 5, 6, 9, 11, 14, 15, and 17 and section 
343.25  31's repeal of Minnesota Statutes, section 469.176, subdivision 
343.26  1a, are effective for districts for which the requests for 
343.27  certification are made after June 1, 1997. 
343.28     Section 3 and section 31's repeal of Minnesota Statutes, 
343.29  section 469.176, subdivision 5, are effective for districts for 
343.30  which the request for certification was made after July 31, 
343.31  1979, and section 3 is intended to confirm the intent of the 
343.32  original law, except that the provisions of clauses (2) and (3) 
343.33  apply only to proceeds from sales and leases of properties 
343.34  purchased by the authority after June 1, 1997, and repayments of 
343.35  advances and loans that were made after June 1, 1997. 
343.36     Sections 7 and 12 are effective for spending of tax 
344.1   increments finally approved after June 1, 1997. 
344.2      Section 8 is effective for agreements entered into after 
344.3   June 1, 1997. 
344.4      Section 10 is effective for tax increment financing 
344.5   districts that are decertified after June 1, 1997. 
344.6      Section 13 is effective for tax increment financing 
344.7   districts for which the request for certification was made after 
344.8   October 4, 1989, and is intended to confirm the intent of the 
344.9   original law. 
344.10     Section 16 is effective for districts for which the 
344.11  requests for certifications are made after August 1, 1997.  
344.12     Sections 25 and 26 are effective on the day the chief 
344.13  clerical officer of the city of Columbia Heights complies with 
344.14  Minnesota Statutes, sections 645.021, subdivision 3. 
344.15     Sections 27 to 30 are effective on the day following final 
344.16  enactment and upon compliance by the governing body with 
344.17  Minnesota Statutes, section 645.021, subdivision 3. 
344.18                             ARTICLE 14
344.19                    INTERGOVERNMENTAL RELATIONS 
344.20     Section 1.  [3.986] [DEFINITIONS.] 
344.21     Subdivision 1.  [SCOPE.] The terms used in sections 3.986 
344.22  to 3.989 have the meanings given them in this section. 
344.23     Subd. 2.  [COSTS MANDATED BY THE STATE.] (a) "Costs 
344.24  mandated by the state" means increased costs that a political 
344.25  subdivision is required to incur as a result of a law enacted or 
344.26  an executive order issued after June 30, 1997: 
344.27     (1) a law that mandates a new program or an increased level 
344.28  of service of an existing program; 
344.29     (2) an executive order that mandates a new program; 
344.30     (3) an executive order that implements or interprets a 
344.31  state law and, by its implementation or interpretation, 
344.32  increases program levels above the levels required before July 
344.33  1, 1997; 
344.34     (4) a law or executive order that implements or interprets 
344.35  federal law and, by its implementation or interpretation, 
344.36  increases program or service levels above the levels required by 
345.1   the federal law; 
345.2      (5) a law or executive order that implements or interprets 
345.3   a statute or amendment adopted or enacted pursuant to the 
345.4   approval of a statewide ballot measure by the voters and, by its 
345.5   implementation or interpretation, increases program or service 
345.6   levels above the levels required by the ballot measure; 
345.7      (6) a law or executive order that removes an option 
345.8   previously available to political subdivisions and thus 
345.9   increases program or service levels or prohibits a specific 
345.10  activity and so forces political subdivisions to use a more 
345.11  costly alternative to provide a mandated program or service; 
345.12     (7) a law or executive order that requires that an existing 
345.13  program or service be provided in a shorter time period and thus 
345.14  increases the cost of the program or service; 
345.15     (8) a law or executive order that adds new requirements to 
345.16  an existing optional program or service and thus increases the 
345.17  cost of the program or service because the political 
345.18  subdivisions have no reasonable alternative other than to 
345.19  continue the optional program; 
345.20     (9) a law or executive order that creates new revenue 
345.21  losses by new property or sales and use tax exemptions; 
345.22     (10) a law or executive order that requires costs 
345.23  previously incurred at local option that have subsequently been 
345.24  mandated by the state; or 
345.25     (11) a law enacted or an executive order that requires 
345.26  payment of a new fee or increases the amount of an existing fee. 
345.27     (b) When state law or executive actions are intended to 
345.28  achieve compliance with federal law or court orders, state 
345.29  mandates are determined as follows:  
345.30     (1) if the federal law or court order is discretionary, the 
345.31  state law or executive action is a state mandate; 
345.32     (2) if the state law or executive action exceeds what is 
345.33  required by the federal law or court order, only the provisions 
345.34  of the state action that exceed the federal requirements are a 
345.35  state mandate; and 
345.36     (3) if the state statutory or executive action does not 
346.1   exceed what is required by the federal statute or regulation or 
346.2   court order, the state action is not a state mandate.  
346.3      (c) Costs mandated by the state include the costs of a rule 
346.4   issued after June 30, 1997, that:  
346.5      (1) mandates a new responsibility; and 
346.6      (2) implements or interprets a state statute, and by doing 
346.7   so increases program levels above the levels required before 
346.8   June 30, 1997. 
346.9      Subd. 3.  [EXECUTIVE ORDER.] "Executive order" means an 
346.10  order, plan, requirement, or rule issued by the governor, an 
346.11  official serving at the pleasure of the governor, or an agency, 
346.12  department, board, or commission of state government.  Executive 
346.13  order does not include an order, plan, requirement, or rule 
346.14  issued by a regional water quality control board.  
346.15     Subd. 4.  [MANDATE.] A "mandate" is a requirement imposed 
346.16  upon a political subdivision in a law by a state agency or by 
346.17  judicial authority that, if not complied with, results in (1) 
346.18  civil liability, (2) criminal penalty, or (3) administrative 
346.19  sanctions such as reduction or loss of funding. 
346.20     Subd. 5.  [POLITICAL SUBDIVISION.] A "political 
346.21  subdivision" is a county, home rule charter or statutory city, 
346.22  town, or other taxing district or municipal corporation except a 
346.23  school district.  
346.24     Subd. 6.  [REQUIRING AN INCREASED LEVEL OF 
346.25  SERVICE.] "Requiring an increased level of service" includes 
346.26  requiring that an existing service be provided in a shorter time.
346.27     Subd. 7.  [RULE.] "Rule" means a rule, order, or standard 
346.28  of general application adopted by a state agency to implement, 
346.29  interpret, or make specific the law it enforces or administers 
346.30  or to govern its procedure.  Rule includes an amendment to a 
346.31  rule.  Rule does not include a rule that relates only to the 
346.32  internal management of a state agency.  
346.33     Subd. 8.  [SAVINGS.] "Savings" includes budget reductions 
346.34  and the freeing of staff or resources to be reassigned to a 
346.35  political subdivision's other areas of concern.  
346.36     Sec. 2.  [3.987] [FISCAL NOTES FOR STATE-MANDATED ACTIONS.] 
347.1      Subdivision 1.  [STATE AND LOCAL MANDATES OFFICE.] When the 
347.2   state proposes to mandate that a political subdivision take an 
347.3   action, and when reasonable compliance with that action would 
347.4   force the political subdivision to incur costs mandated by the 
347.5   state, a fiscal note must be prepared as provided in section 
347.6   3.98, subdivision 2, and made available to the public upon 
347.7   request.  If the action is among the exceptions listed in 
347.8   section 3.988, a fiscal note need not be prepared.  
347.9      An office of state and local mandates in the department of 
347.10  finance is created.  The commissioner shall make a reasonable 
347.11  and timely determination of the estimated and actual financial 
347.12  effects on each political subdivision of each program mandated 
347.13  by law including each rulemaking proposed by an administrative 
347.14  agency.  The commissioner of finance may require the 
347.15  commissioner of the appropriate administrative agency of the 
347.16  state to supply in a timely manner any information determined by 
347.17  the division to be necessary to determine local financial 
347.18  effects.  The commissioner shall convey the requested 
347.19  information to the commissioner of finance with a signed 
347.20  statement to the effect that the information is accurate and 
347.21  complete to the best of the commissioner's ability.  
347.22     The commissioner, when requested, shall update the 
347.23  determination of financial effects based on either actual cost 
347.24  figures or improved estimates or both.  
347.25     Subd. 2.  [MANDATE EXPLANATIONS.] Any bill introduced in 
347.26  the legislature after June 30, 1997, that seeks to impose 
347.27  program or financial mandates on political subdivisions must 
347.28  include an attachment that gives appropriate responses to the 
347.29  following guidelines.  It must state and list:  
347.30     (1) the policy goals that are sought to be attained, the 
347.31  performance standards that are to be imposed, and an explanation 
347.32  why the goals and standards will best be served by requiring 
347.33  compliance by political subdivisions; 
347.34     (2) performance standards that will allow political 
347.35  subdivisions flexibility and innovation of method in achieving 
347.36  these goals; 
348.1      (3) the reasons for each prescribed standard and the 
348.2   process by which each standard governs inputs such as staffing 
348.3   and other administrative aspects of the program; 
348.4      (4) the sources of additional revenue, in addition to 
348.5   existing funding for similar programs, that are directly linked 
348.6   to imposition of the mandates that will provide adequate and 
348.7   stable funding for their requirements; 
348.8      (5) what input has been obtained to ensure that the 
348.9   implementing agencies have the capacity to carry out the 
348.10  delegated responsibilities; and 
348.11     (6) the reasons why less intrusive measures such as 
348.12  financial incentives or voluntary compliance would not yield the 
348.13  equity, efficiency, or desired level of statewide uniformity in 
348.14  the proposed program.  
348.15     Subd. 3.  [LOCAL INVOLVEMENT; LAWS.] Any bill introduced in 
348.16  the legislature after June 30, 1997, that seeks to impose a 
348.17  program or financial mandate on political subdivisions must 
348.18  include as an attachment a description of the efforts put forth, 
348.19  if any, to involve political subdivisions in the creation or 
348.20  development of the proposed mandate.  
348.21     Subd. 4.  [NO MANDATE RESTRICTION.] Except as specifically 
348.22  provided, nothing in sections 3.986 to 3.989 and 14.431 
348.23  restricts or eliminates the authority of the state to create or 
348.24  impose programs by law upon political subdivisions. 
348.25     Sec. 3.  [3.988] [EXCEPTIONS TO FISCAL NOTES.] 
348.26     Subdivision 1.  [COSTS RESULTING FROM INFLATION.] A fiscal 
348.27  note need not be prepared for increases in the cost of providing 
348.28  an existing service if the increases result directly from 
348.29  inflation.  "Resulting directly from inflation" means 
348.30  attributable to maintaining an existing level of service rather 
348.31  than increasing the level of service.  A cost-of-living increase 
348.32  in welfare benefits is an example of a cost resulting directly 
348.33  from inflation.  
348.34     Subd. 2.  [COSTS NOT THE RESULT OF A NEW PROGRAM OR 
348.35  INCREASED SERVICE.] A fiscal note need not be prepared for 
348.36  increased local costs that do not result from a new program or 
349.1   an increased level of service. 
349.2      Subd. 3.  [MISCELLANEOUS EXCEPTIONS.] A fiscal note or an 
349.3   attachment as provided in section 3.987, subdivision 2, need not 
349.4   be prepared for the cost of a mandated action if the law, 
349.5   including a rulemaking, containing the mandate:  
349.6      (1) accommodates a specific local request; 
349.7      (2) results in no new local government duties; 
349.8      (3) leads to revenue losses from exemptions to taxes; 
349.9      (4) provided only clarifying or conforming, nonsubstantive 
349.10  charges on local government; 
349.11     (5) imposes additional net local costs that are minor (less 
349.12  than $200 for any single local government if the mandate does 
349.13  not apply statewide or less than $3,000,000 if the mandate is 
349.14  statewide) and do not cause a financial burden on local 
349.15  government; 
349.16     (6) is a law or executive order enacted before July 1, 
349.17  1997, or a rule initially implementing a law enacted before July 
349.18  1, 1997; 
349.19     (7) implements something other than a law or executive 
349.20  order, such as a federal, court, or voter-approved mandate; 
349.21     (8) defines a new crime or redefines an existing crime or 
349.22  infraction; 
349.23     (9) results in savings that equal or exceed costs; 
349.24     (10) requires the holding of elections; 
349.25     (11) ensures due process or equal protection; 
349.26     (12) provides for the notification and conduct of public 
349.27  meetings; 
349.28     (13) establishes the procedures for administrative and 
349.29  judicial review of actions taken by political subdivisions; 
349.30     (14) protects the public from malfeasance, misfeasance, or 
349.31  nonfeasance by officials of political subdivisions; 
349.32     (15) relates directly to financial administration, 
349.33  including the levy, assessment, and collection of taxes; 
349.34     (16) relates directly to the preparation and submission of 
349.35  financial audits necessary to the administration of state laws; 
349.36  or 
350.1      (17) requires uniform standards to apply to public and 
350.2   private institutions without differentiation. 
350.3      Sec. 4.  [3.989] [REIMBURSEMENT TO LOCAL POLITICAL 
350.4   SUBDIVISIONS FOR COSTS OF STATE MANDATES.] 
350.5      Subdivision 1.  [DEFINITIONS.] In this section: 
350.6      (1) "Class A state mandates" means those laws under which 
350.7   the state mandates to political subdivisions, their 
350.8   participation, the organizational structure of the program, and 
350.9   the procedural regulations under which the law must be 
350.10  administered; and 
350.11     (2) "Class B state mandates" means those mandates that 
350.12  allow the political subdivisions to opt for administration of a 
350.13  law with program elements mandated beforehand and with an 
350.14  assured revenue level from the state of 90 percent of full 
350.15  program and administrative costs.  
350.16     Subd. 2.  [REPORT.] The commissioner of finance shall 
350.17  prepare by September 1, 1998, and by September 1 of each year 
350.18  thereafter, a report by political subdivisions of the costs of 
350.19  class A state mandates established after June 30, 1997.  
350.20     The commissioner shall annually include the statewide total 
350.21  of the statement of costs of class A mandates as a notation in 
350.22  the state budget for the next fiscal year.  
350.23     Subd. 3.  [CERTAIN POLITICAL SUBDIVISIONS; REPORT.] The 
350.24  political subdivisions that have opted to administer class B 
350.25  state mandates shall report to the commissioner of finance by 
350.26  September 1, 1998, and by September 1 of each year thereafter, 
350.27  identifying each instance when revenue for a class B state 
350.28  mandate has fallen below 85 percent of the total cost of the 
350.29  program and the political subdivision intends to cease 
350.30  administration of the program.  
350.31     The commissioner shall forward a copy of the report to the 
350.32  chairs of the appropriate funding committees of the senate and 
350.33  the house for proposed inclusion of the shortfall as a line item 
350.34  appropriation in the state budget for the next fiscal year.  
350.35     The political subdivision may exercise its option to cease 
350.36  administration only if the legislature has failed to include the 
351.1   shortfall as an appropriation in the state budget for the next 
351.2   fiscal year.  
351.3      Subd. 4.  [EXEMPTIONS.] Laws and executive orders 
351.4   enumerated in section 3.988 are exempted from this section. 
351.5      Sec. 5.  [14.431] [PERIODIC REVIEW OF ADMINISTRATIVE 
351.6   RULES.] 
351.7      Subdivision 1.  [DEFINITIONS.] The terms defined in section 
351.8   3.986, subdivision 1, apply to this section. 
351.9      Subd. 2.  [SIGNIFICANT FINANCIAL IMPACT.] The commissioner 
351.10  of finance shall review, every five years, rules adopted after 
351.11  June 30, 1997, that have significant financial impact upon 
351.12  political subdivisions.  In this section, "significant financial 
351.13  impact" means requiring local political subdivisions to expand 
351.14  existing services, employ additional personnel, or increase 
351.15  local expenditures.  The commissioner shall determine the costs 
351.16  and benefits of each rulemaking and submit a report to the 
351.17  legislative coordinating commission with its opinion, if any, 
351.18  for the continuation, modification, or elimination of the rules 
351.19  in the rulemaking.  
351.20     Sec. 6.  Minnesota Statutes 1996, section 273.1398, is 
351.21  amended by adding a subdivision to read: 
351.22     Subd. 9.  [DEDUCTION FROM AID PAYMENTS.] (a) The 
351.23  commissioner of finance shall bill the commissioner of revenue 
351.24  for the cost of preparation of fiscal notes as required by 
351.25  section 3.897 only to the extent to which those costs exceed 
351.26  those costs incurred in fiscal year 1997 and for any other new 
351.27  costs attributable to the operation of the state and local 
351.28  mandates office required by section 3.897, not to exceed $50,000 
351.29  per year. 
351.30     (b) The commissioner of revenue shall reduce the aid 
351.31  amounts determined under subdivision 2 for counties, cities, and 
351.32  towns by whatever uniform percentage is necessary to recover the 
351.33  costs billed in paragraph (a). 
351.34     (c) The amount billed under paragraph (a) is appropriated 
351.35  to the commissioner of finance for the preparation of fiscal 
351.36  notes under section 3.897. 
352.1      Sec. 7.  Minnesota Statutes 1996, section 477A.05, is 
352.2   amended to read: 
352.3      477A.05 [LOCAL PERFORMANCE AID.] 
352.4      Subdivision 1.  [QUALIFICATION.] By May 15, 1996, and March 
352.5   31 25 of each year thereafter, the commissioner shall send a 
352.6   local performance aid qualification form to each county and city 
352.7   in the state.  Jurisdictions that are eligible to receive the 
352.8   aid must return the completed form by June 30 in order to 
352.9   receive aid in the following calendar year.  For each 
352.10  determinator specified in subdivision 2, the form shall have a 
352.11  space for the jurisdiction to indicate that it has satisfied the 
352.12  conditions of the determinator.  For counties, the form must be 
352.13  signed by the chair of the county board.  For cities, the form 
352.14  must be signed by the mayor, if the city has a mayor, and a 
352.15  member the chair of the city council.  Applications may be filed 
352.16  jointly by jurisdictions planning to spend the aid jointly. 
352.17     Subd. 2.  [ELIGIBILITY DETERMINATOR.] For calendar year 
352.18  1997 1998 and subsequent calendar years, a jurisdiction is 
352.19  eligible to receive local performance aid if the jurisdiction 
352.20  affirms that it (1) the aid will result in a reduction in 
352.21  property taxes at least equal to the amount of aid received, and 
352.22  (2) the jurisdiction will spend the aid on programs for which it 
352.23  has developed a system of performance measures for the services 
352.24  provided by the jurisdiction, and that these measures are will 
352.25  allow for the measurement of continuous improvement and will be 
352.26  regularly compiled and presented to the county board or the city 
352.27  council at least once a year.  The jurisdiction must identify 
352.28  the program or programs that are to be funded with the aid.  A 
352.29  jurisdiction is also eligible for aid under this determinator if 
352.30  it affirms that it is in the process of developing and 
352.31  implementing a system of performance measures for the program or 
352.32  programs for which the aid is being sought; however, eligibility 
352.33  based upon being in the process of development may not be used 
352.34  for more than two consecutive years aid amounts under this 
352.35  section may not be spent on the program or programs until the 
352.36  performance measurement system has been instituted, unless the 
353.1   aid is being used to establish the performance measurement 
353.2   system. 
353.3      Subd. 3.  [DETERMINATION OF AID AMOUNT.] (a) The 
353.4   commissioner shall sum the populations of all jurisdictions that 
353.5   have met the condition conditions specified in subdivision 2.  
353.6   The commissioner shall determine a per capita aid amount by 
353.7   dividing the aggregate aid available under subdivision 5 by the 
353.8   sum of the populations for all qualifying jurisdictions, 
353.9   separately for counties and cities.  Each jurisdiction shall 
353.10  then be eligible for aid equal to the jurisdictions's population 
353.11  times the per capita aid amount.  For purposes of this 
353.12  subdivision, population means the most recent population 
353.13  established under section 477A.011, subdivision 3, in the year 
353.14  in which the aid is determined. 
353.15     (b) If the program qualifying for aid is either (1) a 
353.16  collaborative program involving two or more jurisdictions, at 
353.17  least one of which is a county, (2) a program that is efficient, 
353.18  meaning that future total costs for providing the service will 
353.19  be reduced as a result of the program, or (3) a program that is 
353.20  innovative, in that it restructures the relationship between the 
353.21  governments responsible for providing the services or 
353.22  substantively changes the method for providing services, the 
353.23  jurisdiction's population will be increased by a factor of 1.5 
353.24  for the purposes of this subdivision.  A school district is 
353.25  considered to be a jurisdiction for the purposes of qualifying 
353.26  as a collaborative program under clause (1).  If the program is 
353.27  both collaborative and efficient, or both collaborative and 
353.28  innovative, the jurisdiction's population will be increased by a 
353.29  factor of two for the purposes of this subdivision.  The 
353.30  jurisdiction shall indicate on its application whether it 
353.31  qualifies for treatment under this paragraph. 
353.32     Subd. 4.  [NOTIFICATION AND PAYMENT.] Jurisdictions shall 
353.33  be notified of their aid under this section at the same time as 
353.34  the notification for aid under section 477A.014, subdivision 1.  
353.35  Payments of aid under this section shall be made on the dates 
353.36  prescribed in section 477A.015. 
354.1      Subd. 5.  [APPROPRIATION.] (a) For payments to counties 
354.2   under this section, there is annually appropriated from the 
354.3   general fund to the commissioner of revenue an amount equal to 
354.4   the sum of $558,625 plus the amount by which county aids were 
354.5   reduced under Laws 1996, chapter 471, article 3, section 49, 
354.6   adjusted for inflation as provided under section 477A.03, 
354.7   subdivision 3.  For payments to cities under this section, there 
354.8   is annually appropriated from the general fund to the 
354.9   commissioner of revenue an amount equal to the sum of $441,735 
354.10  plus the amount by which city aids were reduced under Laws 1996, 
354.11  chapter 471, article 3, section 49, adjusted for inflation as 
354.12  provided under section 477A.03, subdivision 3. 
354.13     (b) For aids payable in 1998 and 1999 under this section, 
354.14  an additional amount of $2,790,000 for counties and $2,210,000 
354.15  for cities is appropriated from the general fund to the 
354.16  commissioner of revenue. 
354.17     Sec. 8.  [REPEALER.] 
354.18     Minnesota Statutes 1996, section 3.982, is repealed. 
354.19     Sec. 9.  [EFFECTIVE DATE.] 
354.20     Section 7 is effective beginning with aids payable in 1998. 
354.21                             ARTICLE 15
354.22                         FISCAL DISPARITIES
354.23     Section 1.  Minnesota Statutes 1996, section 276A.04, is 
354.24  amended to read: 
354.25     276A.04 [INCREASE IN NET TAX CAPACITY.] 
354.26     By July August 15 of 1997 and each subsequent year, the 
354.27  auditor of each county in the area shall determine the amount, 
354.28  if any, by which the net tax capacity determined in the 
354.29  preceding year pursuant to section 276A.03, of 
354.30  commercial-industrial property subject to taxation within each 
354.31  municipality in the county exceeds the net tax capacity in 1995 
354.32  of commercial-industrial property subject to taxation within 
354.33  that municipality.  If a municipality is located in two or more 
354.34  counties within the area, the auditors of those counties shall 
354.35  certify the data required by section 276A.03 to the county 
354.36  auditor responsible for allocating the levies of that 
355.1   municipality between or among the affected counties.  That 
355.2   county auditor shall determine the amount of the net excess, if 
355.3   any, for the municipality under this section, and certify that 
355.4   amount under section 276A.05.  The increase in total net tax 
355.5   capacity determined by this section must be reduced by the 
355.6   amount of any decreases in the net tax capacity of 
355.7   commercial-industrial property resulting from any court 
355.8   decisions, court-related stipulation agreements, or abatements 
355.9   for a prior year, and only in the amount of such decreases made 
355.10  during the 12-month period ending on May 1 of the current 
355.11  assessment year, where the decreases, if originally reflected in 
355.12  the determination of a prior year's net tax capacity under 
355.13  section 276A.03, would have resulted in a smaller contribution 
355.14  from the municipality in that year.  An adjustment for the 
355.15  decreases shall be made only if the municipality made a 
355.16  contribution in a prior year based on the higher net tax 
355.17  capacity of the commercial-industrial property. 
355.18     Sec. 2.  Minnesota Statutes 1996, section 276A.05, 
355.19  subdivision 1, is amended to read: 
355.20     Subdivision 1.  [AREAWIDE NET TAX CAPACITY.] Each county 
355.21  auditor shall certify the determinations under sections 276A.03 
355.22  and 276A.04 to the administrative auditor on or before August 1 
355.23  15 of each year.  The administrative auditor shall determine an 
355.24  amount equal to 40 percent of the sum of the amounts certified 
355.25  pursuant to section 276A.04.  The resulting amount shall be 
355.26  known as the "areawide net tax capacity for ........(year)."  
355.27     Sec. 3.  Minnesota Statutes 1996, section 276A.05, 
355.28  subdivision 5, is amended to read: 
355.29     Subd. 5.  [CERTIFICATION.] The product of the procedure 
355.30  prescribed by subdivision 4 shall be known as the "areawide net 
355.31  tax capacity for ......(year) attributable to 
355.32  ..........(municipality)."  The administrative auditor shall 
355.33  certify the product to the auditor of the county in which the 
355.34  municipality is located on or before August September 15. 
355.35     Sec. 4.  Minnesota Statutes 1996, section 276A.06, 
355.36  subdivision 2, is amended to read: 
356.1      Subd. 2.  [DEFINITION.] The net tax capacity of a 
356.2   governmental unit is its net tax capacity as determined in 
356.3   accordance with other provisions of law including section 
356.4   469.177, subdivision 3, subject to the following adjustments:  
356.5      (a) There must be subtracted from its net tax capacity, in 
356.6   each municipality in which the governmental unit exercises ad 
356.7   valorem taxing jurisdiction, an amount that bears the same 
356.8   proportion to 40 percent of the amount certified in that year 
356.9   pursuant to sections 276A.04 and 276A.05 for the municipality as 
356.10  the total preceding year's net tax capacity of 
356.11  commercial-industrial property which is subject to the taxing 
356.12  jurisdiction of the governmental unit within the municipality, 
356.13  determined without regard to section 469.177, subdivision 3, 
356.14  bears to the total preceding year's net tax capacity of 
356.15  commercial-industrial property within the municipality, 
356.16  determined without regard to section 469.177, subdivision 3.  
356.17     (b) There must be added to its net tax capacity, in each 
356.18  municipality in which the governmental unit exercises ad valorem 
356.19  taxing jurisdiction, an amount which bears the same proportion 
356.20  to the areawide net tax capacity for the year attributable to 
356.21  that municipality as the total preceding year's net tax capacity 
356.22  of residential property which is subject to the taxing 
356.23  jurisdiction of the governmental unit within the municipality 
356.24  bears to the total preceding year's net tax capacity of 
356.25  residential property of the municipality.  
356.26     Sec. 5.  Minnesota Statutes 1996, section 276A.06, 
356.27  subdivision 3, is amended to read: 
356.28     Subd. 3.  [APPORTIONMENT OF LEVY.] The county auditor shall 
356.29  apportion the levy of each governmental unit in the county in 
356.30  the manner prescribed by this subdivision.  The auditor shall: 
356.31     (a) by August 20 of 1997 and each subsequent year, 
356.32  determine the areawide portion of the levy for each governmental 
356.33  unit by multiplying the local tax rate of the governmental unit 
356.34  for the preceding current levy year times the distribution value 
356.35  set forth in subdivision 2, clause (b); and 
356.36     (b) by September 5 of 1997 and each subsequent year, 
357.1   determine the local portion of the current year's levy by 
357.2   subtracting the resulting amount from clause (a) from the 
357.3   governmental unit's current year's levy. 
357.4      Sec. 6.  Minnesota Statutes 1996, section 276A.06, 
357.5   subdivision 5, is amended to read: 
357.6      Subd. 5.  [AREAWIDE TAX RATE.] (a) On or before August 25 
357.7   February 5 of 1997 and each subsequent year, the county auditor 
357.8   shall certify to the administrative auditor that portion of the 
357.9   levy of each governmental unit determined pursuant to 
357.10  subdivision 3, clause (a).  The administrative auditor shall 
357.11  then determine the areawide tax rate sufficient to yield an 
357.12  amount equal to the sum of the levies from the areawide net tax 
357.13  capacity.  
357.14     (b) On or before September 1 February 10 of each year, the 
357.15  administrative auditor shall certify the areawide tax rate to 
357.16  each of the county auditors. 
357.17     For the purposes of the notice required under section 
357.18  275.065, the deadline for the certification under paragraph (a) 
357.19  is October 10, and the deadline for certification under 
357.20  paragraph (b) is October 15. 
357.21     For any governmental unit for which the county auditor has 
357.22  not yet determined the local tax rate by January 31, the county 
357.23  auditor shall determine the areawide portion of the levy based 
357.24  on an estimated tax rate.  In the following year, the 
357.25  distribution levy of the unit must be adjusted to correct for 
357.26  the difference between the distribution levy actually received 
357.27  and the distribution levy that would have been received if the 
357.28  actual tax rate had been used. 
357.29     Sec. 7.  Minnesota Statutes 1996, section 473F.06, is 
357.30  amended to read: 
357.31     473F.06 [INCREASE IN NET TAX CAPACITY.] 
357.32     On or before July August 15 of each year, the auditor of 
357.33  each county in the area shall determine the amount, if any, by 
357.34  which the net tax capacity determined in the preceding year 
357.35  under section 473F.05, of commercial-industrial property subject 
357.36  to taxation within each municipality in the auditor's county 
358.1   exceeds the net tax capacity in 1971 of commercial-industrial 
358.2   property subject to taxation within that municipality.  If a 
358.3   municipality is located in two or more counties within the area, 
358.4   the auditors of those counties shall certify the data required 
358.5   by section 473F.05 to the county auditor who is responsible 
358.6   under other provisions of law for allocating the levies of that 
358.7   municipality between or among the affected counties.  That 
358.8   county auditor shall determine the amount of the net excess, if 
358.9   any, for the municipality under this section, and certify that 
358.10  amount under section 473F.07.  Notwithstanding any other 
358.11  provision of sections 473F.01 to 473F.13 to the contrary, in the 
358.12  case of a municipality which is designated on July 24, 1971, as 
358.13  a redevelopment area under section 401(a)(4) of the Public Works 
358.14  and Economic Development Act of 1965, Public Law Number 89-136, 
358.15  the increase in its net tax capacity of commercial-industrial 
358.16  property for purposes of this section shall be determined in 
358.17  each year by using as a base the net tax capacity of 
358.18  commercial-industrial property in that municipality in the 1989 
358.19  assessment year, rather than the net tax capacity of such 
358.20  property in 1971.  The increase in total net tax capacity 
358.21  determined by this section shall be reduced by the amount of any 
358.22  decreases in net tax capacity of commercial-industrial property 
358.23  resulting from any court decisions, court related stipulation 
358.24  agreements, or abatements for a prior year, and only in the 
358.25  amount of such decreases made during the 12-month period ending 
358.26  on May 1 of the current assessment year, where such decreases, 
358.27  if originally reflected in the determination of a prior year's 
358.28  net tax capacity under section 473F.05, would have resulted in a 
358.29  smaller contribution from the municipality in that year.  An 
358.30  adjustment for such decreases shall be made only if the 
358.31  municipality made a contribution in a prior year based on the 
358.32  higher net tax capacity of the commercial-industrial property. 
358.33     Sec. 8.  Minnesota Statutes 1996, section 473F.07, 
358.34  subdivision 1, is amended to read: 
358.35     Subdivision 1.  [AREAWIDE NET TAX CAPACITY.] Each county 
358.36  auditor shall certify the determinations under sections 473F.05 
359.1   and 473F.06 to the administrative auditor on or before August 1 
359.2   15 of each year.  
359.3      The administrative auditor shall determine an amount equal 
359.4   to 40 percent of the sum of the amounts certified under section 
359.5   473F.06.  The resulting amount shall be known as the "areawide 
359.6   net tax capacity for ........(year)." 
359.7      Sec. 9.  Minnesota Statutes 1996, section 473F.07, 
359.8   subdivision 5, is amended to read: 
359.9      Subd. 5.  [CERTIFICATION TO COUNTY AUDITOR.] The result of 
359.10  the procedure prescribed by subdivision 4 shall be known as the 
359.11  "areawide net tax capacity for ........(year) attributable to 
359.12  ..................(municipality)."  The administrative auditor 
359.13  shall certify such product to the auditor of the county in which 
359.14  the municipality is located on or before August September 15. 
359.15     Sec. 10.  Minnesota Statutes 1996, section 473F.08, 
359.16  subdivision 2, is amended to read: 
359.17     Subd. 2.  [COMPUTATION OF NET TAX CAPACITY.] The net tax 
359.18  capacity of a governmental unit is its net tax capacity, as 
359.19  determined in accordance with other provisions of law including 
359.20  section 469.177, subdivision 3, subject to the following 
359.21  adjustments:  
359.22     (a) There shall be subtracted from its net tax capacity, in 
359.23  each municipality in which the governmental unit exercises ad 
359.24  valorem taxing jurisdiction, an amount which bears the same 
359.25  proportion to 40 percent of the amount certified in that year 
359.26  under sections 473F.06 and 473F.07 for the municipality as the 
359.27  total preceding year's net tax capacity of commercial-industrial 
359.28  property which is subject to the taxing jurisdiction of the 
359.29  governmental unit within the municipality, determined without 
359.30  regard to section 469.177, subdivision 3, bears to the total 
359.31  preceding year's net tax capacity of commercial-industrial 
359.32  property within the municipality, determined without regard to 
359.33  section 469.177, subdivision 3; 
359.34     (b) There shall be added to its net tax capacity, in each 
359.35  municipality in which the governmental unit exercises ad valorem 
359.36  taxing jurisdiction, an amount which bears the same proportion 
360.1   to the areawide net tax capacity for the year attributable to 
360.2   that municipality as the total preceding year's net tax capacity 
360.3   of residential property which is subject to the taxing 
360.4   jurisdiction of the governmental unit within the municipality 
360.5   bears to the total preceding year's net tax capacity of 
360.6   residential property of the municipality.  
360.7      Sec. 11.  Minnesota Statutes 1996, section 473F.08, 
360.8   subdivision 3, is amended to read: 
360.9      Subd. 3.  [APPORTIONMENT OF LEVY.] The county auditor shall 
360.10  apportion the levy of each governmental unit in the auditor's 
360.11  county in the manner prescribed by this subdivision.  The 
360.12  auditor shall: 
360.13     (a) by August 20, determine the areawide portion of the 
360.14  levy for each governmental unit by multiplying the local tax 
360.15  rate of the governmental unit for the preceding current levy 
360.16  year times the distribution value set forth in subdivision 2, 
360.17  clause (b); and 
360.18     (b) by September 5, determine the local portion of the 
360.19  current year's levy by subtracting the resulting amount from 
360.20  clause (a) from the governmental unit's current year's levy. 
360.21     Sec. 12.  Minnesota Statutes 1996, section 473F.08, 
360.22  subdivision 5, is amended to read: 
360.23     Subd. 5.  [AREAWIDE TAX RATE.] (a) On or before August 25 
360.24  February 5 of each year, the county auditor shall certify to the 
360.25  administrative auditor that portion of the levy of each 
360.26  governmental unit determined under subdivisions 3, clause (a), 
360.27  3a, and 3b.  The administrative auditor shall then determine the 
360.28  areawide tax rate sufficient to yield an amount equal to the sum 
360.29  of such levies from the areawide net tax capacity. 
360.30     (b) On or before September 1 February 10 of each year, the 
360.31  administrative auditor shall certify the areawide tax rate to 
360.32  each of the county auditors. 
360.33     For the purposes of the notice required under section 
360.34  275.065, the deadline for the certification under paragraph (a) 
360.35  is October 10, and the deadline for certification under 
360.36  paragraph (b) is October 15. 
361.1      For any governmental unit for which the county auditor has 
361.2   not yet determined the local tax rate by January 31, the county 
361.3   auditor shall determine the areawide portion of the levy based 
361.4   on an estimated tax rate.  In the following year, the 
361.5   distribution levy of the unit must be adjusted to correct for 
361.6   the difference between the distribution levy actually received 
361.7   and the distribution levy that would have been received if the 
361.8   actual tax rate had been used. 
361.9      Sec. 13.  [REPEALER.] 
361.10     Minnesota Statutes 1996, sections 276A.06, subdivision 9; 
361.11  and 473F.08, subdivision 8a, are repealed. 
361.12     Sec. 14.  [EFFECTIVE DATE.] 
361.13     Sections 1 to 13 are effective for taxes payable in 1999 
361.14  and subsequent years. 
361.15                             ARTICLE 16
361.16                  REGIONAL DEVELOPMENT COMMISSIONS
361.17     Section 1.  Minnesota Statutes 1996, section 462.381, is 
361.18  amended to read: 
361.19     462.381 [TITLE.] 
361.20     Sections 462.381 to 462.398 may be cited as the "regional 
361.21  development act of 1969."  
361.22     Sec. 2.  Minnesota Statutes 1996, section 462.383, is 
361.23  amended to read: 
361.24     462.383 [PURPOSE:  GOVERNMENT COOPERATION AND 
361.25  COORDINATION.] 
361.26     Subdivision 1.  [LEGISLATIVE FINDINGS.] The legislature 
361.27  finds that problems of growth and development in urban and rural 
361.28  regions of the state so transcend the boundary lines of local 
361.29  government units that no single unit can plan for their solution 
361.30  without affecting other units in the region; that various 
361.31  multicounty planning activities conducted under various laws of 
361.32  the United States are presently being conducted in an 
361.33  uncoordinated manner that coordination of multijurisdictional 
361.34  activities is essential to the development and implementation of 
361.35  effective policies and programs; that intergovernmental 
361.36  cooperation on a regional basis is an effective means of pooling 
362.1   the resources of local government to approach common problems; 
362.2   and that the assistance of the state is needed to make the most 
362.3   effective use of local, state, federal, and private programs in 
362.4   serving the citizens of such urban and rural regions.  
362.5      Subd. 2.  [BY CREATING REGIONAL COMMISSION.] It is the 
362.6   purpose of sections 462.381 to 462.398 to facilitate 
362.7   intergovernmental cooperation and to insure the orderly and 
362.8   harmonious coordination of state, federal, and local 
362.9   comprehensive planning and development programs for the solution 
362.10  of economic, social, physical, and governmental problems of the 
362.11  state and its citizens by providing for the creation of regional 
362.12  development commissions authorize the establishment of regional 
362.13  development commissions to work with and on behalf of local 
362.14  units of government to develop plans or implement programs to 
362.15  address economic, social, physical, and governmental concerns of 
362.16  each region of the state.  The commissions may assist with, 
362.17  develop, or implement plans or programs for individual local 
362.18  units of government.  
362.19     Sec. 3.  Minnesota Statutes 1996, section 462.384, 
362.20  subdivision 5, is amended to read: 
362.21     Subd. 5.  [DEVELOPMENT REGION, REGION.] "Development 
362.22  region" or "region" means a geographic region composed of a 
362.23  grouping of counties embodied in an executive order of the 
362.24  governor or as otherwise established by sections 462.381 to 
362.25  462.398.  
362.26     Sec. 4.  Minnesota Statutes 1996, section 462.385, is 
362.27  amended to read: 
362.28     462.385 [DESIGNATION OF REGIONS; REGIONAL BOUNDARIES; 
362.29  MODIFICATION.] 
362.30     Subdivision 1.  [BY GOVERNOR'S ORDER; HEARINGS.] 
362.31  Development regions for the state shall be those regions so 
362.32  designated by the governor by executive order.  The order shall 
362.33  provide for public hearings within each proposed region after 
362.34  which any county may request assignment to a region other than 
362.35  that proposed by the order.  If a request for reassignment is 
362.36  unacceptable to the commissioner, the county shall remain in the 
363.1   originally designated region until the next session of the 
363.2   legislature for its review and final assignment. consist of the 
363.3   following counties: 
363.4      Region 1:  Kittson, Roseau, Marshall, Pennington, Red Lake, 
363.5   Polk, and Norman. 
363.6      Region 2:  Lake of the Woods, Beltrami, Mahnomen, 
363.7   Clearwater, and Hubbard. 
363.8      Region 3:  Koochiching, Itasca, St. Louis, Lake, Cook, 
363.9   Aitkin, and Carlton. 
363.10     Region 4:  Clay, Becker, Wilkin, Otter Tail, Grant, 
363.11  Douglas, Traverse, Stevens, and Pope. 
363.12     Region 5:  Cass, Wadena, Crow Wing, Todd, and Morrison. 
363.13     Region 6E:  Kandiyohi, Meeker, Renville, and McLeod. 
363.14     Region 6W:  Big Stone, Swift, Chippewa, Lac Qui Parle, and 
363.15  Yellow Medicine. 
363.16     Region 7E:  Mille Lacs, Kanabec, Pine, Isanti, and Chisago. 
363.17     Region 7W:  Stearns, Benton, Sherburne, and Wright. 
363.18     Region 8:  Lincoln, Lyon, Redwood, Pipestone, Murray, 
363.19  Cottonwood, Rock, Nobles, and Jackson. 
363.20     Region 9:  Sibley, Nicollet, LeSueur, Brown, Blue Earth, 
363.21  Waseca, Watonwan, Martin, and Faribault. 
363.22     Region 10:  Rice, Goodhue, Wabasha, Steele, Dodge, Olmsted, 
363.23  Winona, Freeborn, Mower, Fillmore, and Houston. 
363.24     Region 11:  Anoka, Hennepin, Ramsey, Washington, Carver, 
363.25  Scott, and Dakota. 
363.26     Subd. 2.  [EXISTING DEVELOPMENT DISTRICT BOUNDARIES.] The 
363.27  boundaries of any economic development district established 
363.28  under Section 403 of the United States Public Works and Economic 
363.29  Development Act of 1965 shall not be modified without the 
363.30  approval of an affected county and the development district. 
363.31     Subd. 3.  [ONGOING BOUNDARY STUDIES; CHANGES.] The 
363.32  commissioner shall conduct continuous studies and analysis of 
363.33  the boundaries of regions and shall make recommendations for 
363.34  their modification where necessary.  Modification of regional 
363.35  boundaries may be initiated by a county, a commission, or by the 
363.36  commissioner and will be accomplished in accordance with this 
364.1   section as in the case of initial designation requesting 
364.2   assignment to a region other than that within which it is 
364.3   designated.  If a request for reassignment is unacceptable to 
364.4   the commission whose boundaries would be modified, the county 
364.5   requesting reassignment shall remain in the originally 
364.6   designated region until the legislature determines the final 
364.7   assignment. 
364.8      Sec. 5.  Minnesota Statutes 1996, section 462.386, 
364.9   subdivision 1, is amended to read: 
364.10     Subdivision 1.  [EXCEPTION, WORKING AGREEMENTS.] All 
364.11  coordination, planning, and development regions assisted or 
364.12  created by the state of Minnesota or pursuant to federal 
364.13  legislation shall conform to the regions designated by the 
364.14  executive order except where, after review and approval by the 
364.15  commissioner governor or designee, nonconformance is clearly 
364.16  justified.  The commissioner governor or designee shall develop 
364.17  working agreements with state and federal departments and 
364.18  agencies to insure conformance with this subdivision. 
364.19     Sec. 6.  Minnesota Statutes 1996, section 462.387, is 
364.20  amended to read: 
364.21     462.387 [REGIONAL DEVELOPMENT COMMISSIONS; ESTABLISHMENT.] 
364.22     Subdivision 1.  [PETITION.] Any combination of counties or 
364.23  municipalities representing a majority of the population of the 
364.24  region for which a commission is proposed may petition the 
364.25  commissioner governor or designee by formal resolution setting 
364.26  forth its desire to establish, and the need for, the 
364.27  establishment of a regional development commission.  For 
364.28  purposes of this section the population of a county does not 
364.29  include the population of a municipality within the county. 
364.30     Subd. 1a.  [OPERATING COMMISSION.] Regional development 
364.31  commissions shall be those organizations operating pursuant to 
364.32  sections 462.381 to 462.398 which were formed by formal 
364.33  resolution of local units of government and those which may 
364.34  petition by formal resolution to establish a regional 
364.35  development commission. 
364.36     Subd. 3.  [ESTABLISHMENT.] Upon receipt of a petition as 
365.1   provided in subdivision 1 a regional development commission 
365.2   shall be established by the commissioner governor or designee 
365.3   and the notification of all local government units within the 
365.4   region for which the commission is proposed shall be notified.  
365.5   The notification shall be made within 60 days of 
365.6   the commissioner's governor's receipt of a petition under 
365.7   subdivision 1. 
365.8      Subd. 4.  [SELECTION OF MEMBERSHIP.] The commissioner 
365.9   governor or designee shall call together each of the membership 
365.10  classifications except citizen groups, defined in section 
365.11  462.388, within 60 days of the establishment of a regional 
365.12  development commission for the purpose of selecting the 
365.13  commission membership. 
365.14     Subd. 5.  [NAME OF COMMISSION.] The name of the 
365.15  organization shall be determined by formal resolution of the 
365.16  commission. 
365.17     Sec. 7.  Minnesota Statutes 1996, section 462.388, is 
365.18  amended to read: 
365.19     462.388 [COMMISSION MEMBERSHIP.] 
365.20     Subdivision 1.  [REPRESENTATION OF VARIOUS MEMBERS.] A 
365.21  commission shall consist of the following members: 
365.22     (1) one member from each county board of every county in 
365.23  the development region; 
365.24     (2) one additional county board member from each county of 
365.25  over 100,000 population; 
365.26     (3) the town clerk, town treasurer, or one member of a town 
365.27  board of supervisors from each county containing organized 
365.28  towns; 
365.29     (4) one additional member selected by the county board of 
365.30  any county containing no townships; 
365.31     (5) one mayor or council member from a municipality of 
365.32  under 10,000 population from each county, selected by the mayors 
365.33  of all such municipalities in the county; 
365.34     (6) one mayor or council member from each municipality of 
365.35  over 10,000 in each county; 
365.36     (7) two school board members elected by a majority of the 
366.1   chairs of school boards in the development region; 
366.2      (8) one member from each council of governments; 
366.3      (9) one member appointed by each native American tribal 
366.4   council located in each region; and 
366.5      (10) citizens representing public interests within the 
366.6   region including members of minority groups to be selected after 
366.7   adoption of the bylaws of the commission; and 
366.8      (10) the chair, who shall be selected by the commission. 
366.9      Subd. 2.  [TERMS, SELECTION METHOD.] The terms of office 
366.10  and method of selection of members other than the chair shall be 
366.11  provided in the bylaws of the commission which shall not be 
366.12  inconsistent with the provisions of subdivision 1.  The 
366.13  commission shall adopt rules setting forth its procedures. 
366.14     Subd. 5.  [PER DIEM; BOARD MEMBERS.] Members of the 
366.15  regional commission may receive a per diem of not over $35 $50, 
366.16  the amount to be determined by the commission, and shall be 
366.17  reimbursed for their reasonable expenses as determined by the 
366.18  commission.  The commission shall may provide for the election 
366.19  of a board of directors, who need not be commission members, and 
366.20  provide, at its discretion, for a per diem of not over $35 $50 a 
366.21  day for meetings of the board and expenses.  A member of the 
366.22  board of directors who is a member of the commission shall 
366.23  receive only the per diem payable to board members when meetings 
366.24  of the board of directors and the commission are held on the 
366.25  same day. 
366.26     Sec. 8.  Minnesota Statutes 1996, section 462.389, 
366.27  subdivision 1, is amended to read: 
366.28     Subdivision 1.  [CHAIR.] The chair of the commission shall 
366.29  have been a resident of the region for at least one year and 
366.30  shall be a person experienced in the field of government 
366.31  affairs.  The chair shall preside at the meetings of the 
366.32  commission and board of directors, appoint all employees 
366.33  thereof, subject to the approval of the commission, and be 
366.34  responsible for carrying out all policy decisions of the 
366.35  commission.  The chair's expense allowances shall be fixed by 
366.36  the commission.  The term of the first chair shall be one year, 
367.1   and the chair shall serve until a successor is selected and 
367.2   qualifies.  At the expiration of the term of the first chair, 
367.3   the chair shall be elected from the membership of the commission 
367.4   according to procedures established in its bylaws.  
367.5      Sec. 9.  Minnesota Statutes 1996, section 462.389, 
367.6   subdivision 3, is amended to read: 
367.7      Subd. 3.  [EXECUTIVE DIRECTOR.] Upon the recommendation of 
367.8   the chair, The commission may appoint an executive director to 
367.9   serve as the chief administrative officer.  The director may be 
367.10  chosen from among the citizens of the nation at large, and shall 
367.11  be selected on the basis of training and experience in the field 
367.12  of government affairs. 
367.13     Sec. 10.  Minnesota Statutes 1996, section 462.389, 
367.14  subdivision 4, is amended to read: 
367.15     Subd. 4.  [EMPLOYEES.] The commission may prepare, in 
367.16  consultation with the state commissioner of employee relations, 
367.17  and may adopt a merit personnel system for its officers and 
367.18  employees including terms and conditions for the employment, the 
367.19  fixing of compensation, their classification, benefits, and the 
367.20  filing of performance and fidelity bonds, and such policies of 
367.21  insurance as it may deem advisable, the premiums for which, 
367.22  however, shall be paid for by the commission.  Officers and 
367.23  employees are public employees within the meaning of chapter 
367.24  353.  The commission shall make the employer's contributions to 
367.25  pension funds of its employees.  
367.26     Sec. 11.  Minnesota Statutes 1996, section 462.39, 
367.27  subdivision 2, is amended to read: 
367.28     Subd. 2.  [FEDERAL REGIONAL PROGRAMS.] The commission is 
367.29  the authorized agency to receive state and federal grants public 
367.30  and private funds for regional purposes from the following 
367.31  programs: 
367.32     (1) Section 403 of the Public Works and Economic 
367.33  Development Act of 1965 (economic development districts); 
367.34     (2) Section 701 of the Housing Act of 1954, as amended 
367.35  (multicounty comprehensive planning); 
367.36     (3) Omnibus Crime Control Act of 1968; 
368.1      and for the following to the extent feasible as determined 
368.2   by the governor: 
368.3      (a) Economic Opportunity Act of 1964; 
368.4      (b) Comprehensive Health Planning Act of 1965; 
368.5      (c) Federal regional manpower planning programs; 
368.6      (d) Resource, conservation, and development districts; or 
368.7      (e) Any state and federal programs providing funds 
368.8   for including, but not limited to program administration, 
368.9   multicounty planning, coordination, and development 
368.10  purposes. The director shall, where consistent with state and 
368.11  federal statutes and regulations, review applications for all 
368.12  state and federal regional planning and development grants to a 
368.13  commission. 
368.14     Sec. 12.  Minnesota Statutes 1996, section 462.39, 
368.15  subdivision 3, is amended to read: 
368.16     Subd. 3.  [PLANNING.] The commission shall may prepare and 
368.17  adopt submit for adoption, after appropriate study and such 
368.18  public hearings as may be necessary, a comprehensive development 
368.19  plan plans for local units of government, individually or 
368.20  collectively, within the region.  The plan shall Plans may 
368.21  consist of a compilation of policy statements, goals, standards, 
368.22  programs, and maps prescribing guides for an orderly and 
368.23  economic development, public and private, of the region.  The 
368.24  comprehensive development plan within the jurisdiction subject 
368.25  to the plan.  The plans shall recognize and incorporate planning 
368.26  principles which encompass physical, social, or economic needs 
368.27  of the region, and those future developments which will have an 
368.28  impact on the entire region including but not limited to such 
368.29  matters as land use, parks and open space land needs, access to 
368.30  direct sunlight for solar energy systems, the necessity for and 
368.31  location of airports, highways, transit facilities, public 
368.32  hospitals, libraries, schools, public and private, housing, and 
368.33  other public buildings.  In preparing the development plan plans 
368.34  the commission shall use to the maximum extent feasible the 
368.35  resources studies and data available from other planning 
368.36  agencies within the region, including counties, municipalities, 
369.1   special districts, and subregional planning agencies, and it 
369.2   shall utilize the resources of the director state agencies to 
369.3   the same purpose.  No development plan or portion thereof for 
369.4   the region shall be adopted by the commission until it has been 
369.5   submitted to the director for review and comment and a period of 
369.6   60 days has elapsed after such submission.  When a development 
369.7   plan has been adopted, the commission shall distribute it to all 
369.8   local government units within the region. 
369.9      Sec. 13.  Minnesota Statutes 1996, section 462.391, is 
369.10  amended by adding a subdivision to read: 
369.11     Subd. 1a.  [REVIEW OF LOCAL PLANS.] The commission may 
369.12  review and provide comments and recommendations on local plans 
369.13  or development proposals which in the judgment of the commission 
369.14  have a substantial effect on regional development.  Local units 
369.15  of government may request that a regional commission review, 
369.16  comment, and provide advisory recommendations on local plans or 
369.17  development proposals. 
369.18     Sec. 14.  Minnesota Statutes 1996, section 462.391, is 
369.19  amended by adding a subdivision to read: 
369.20     Subd. 2a.  [STAFF SERVICES.] To avoid duplication of staff 
369.21  for various regional bodies assisted by federal or state 
369.22  government, the commission may provide basic administrative, 
369.23  research, and planning services for all regional planning and 
369.24  development bodies.  The commissions may contract to obtain or 
369.25  perform services with state agencies, for-profit or nonprofit 
369.26  entities, subdistricts organized as the result of federal or 
369.27  state programs, councils of governments organized under section 
369.28  471.59, or any other law, and with local governments. 
369.29     Sec. 15.  Minnesota Statutes 1996, section 462.391, is 
369.30  amended by adding a subdivision to read: 
369.31     Subd. 3a.  [DATA AND INFORMATION.] The commission may be 
369.32  designated as a regional data center providing data collection, 
369.33  storage, analysis, and dissemination to be used by it and other 
369.34  governmental and private users, and may accept gifts or grants 
369.35  to provide this service. 
369.36     Sec. 16.  Minnesota Statutes 1996, section 462.391, 
370.1   subdivision 5, is amended to read: 
370.2      Subd. 5.  [URBAN AND RURAL RESEARCH.] Where studies have 
370.3   not been otherwise authorized by law the commission may study 
370.4   the feasibility of programs relating including, but not limited 
370.5   to, water, land use, economic development, minority problems 
370.6   housing, demographics, cultural issues, governmental problems 
370.7   issues, human and services, natural resources, 
370.8   communication, technology, transportation, and other subjects of 
370.9   concern to the citizens of the region, may institute 
370.10  demonstration projects in connection therewith, and may enter 
370.11  into contracts or accept gifts or grants for such purposes as 
370.12  otherwise authorized in sections 462.381 to 462.398.  
370.13     Sec. 17.  Minnesota Statutes 1996, section 462.391, is 
370.14  amended by adding a subdivision to read: 
370.15     Subd. 11.  [PROGRAM OPERATION.] Upon approval of the 
370.16  appropriate authority from local, state, and federal government 
370.17  units, commissions may be regarded as general purpose units of 
370.18  government to receive funds and operate programs on a regional 
370.19  or subregional basis to provide economies of scale or to enhance 
370.20  program efficiency. 
370.21     Sec. 18.  Minnesota Statutes 1996, section 462.391, is 
370.22  amended by adding a subdivision to read: 
370.23     Subd. 12.  [PROPERTY OWNERSHIP.] A commission may buy, 
370.24  lease, acquire, own, hold, improve, and use real or personal 
370.25  property or an interest in property, wherever located in the 
370.26  state for purposes of housing the administrative office of the 
370.27  regional commission. 
370.28     Sec. 19.  Minnesota Statutes 1996, section 462.391, is 
370.29  amended by adding a subdivision to read: 
370.30     Subd. 13.  [PROPERTY DISPOSITION.] A commission may sell, 
370.31  convey, mortgage, create a security interest in, lease, 
370.32  exchange, transfer, or dispose of all or part of its real or 
370.33  personal property or an interest in property, wherever located 
370.34  in the state. 
370.35     Sec. 20.  Minnesota Statutes 1996, section 462.393, is 
370.36  amended to read: 
371.1      462.393 [ANNUAL REPORT TO UNITS, PUBLIC, GOVERNOR, 
371.2   LEGISLATURE.] 
371.3      Subdivision 1.  [CONTENTS.] On or before August September 1 
371.4   of each year, the commission shall prepare a report for the 
371.5   governmental units, the public within the region, the 
371.6   legislature and the governor.  The report shall include: 
371.7      (1) A statement of the commission's receipts and 
371.8   expenditures by category since the preceding report; 
371.9      (2) A detailed budget for the year in which the report is 
371.10  filed and a tentative budget for the following year including an 
371.11  outline of its program for such period; 
371.12     (3) A description of any comprehensive plan adopted in 
371.13  whole or in part for the region; 
371.14     (4) Summaries of any studies and the recommendations 
371.15  resulting therefrom made for the region; 
371.16     (5) A listing of all applications for federal grants or 
371.17  loans made by governmental units within the region together with 
371.18  the action taken by the commission in relation thereto summary 
371.19  of significant accomplishments; 
371.20     (6) A listing of plans of local governmental units 
371.21  submitted to the region, and actions taken in relationship 
371.22  thereto; 
371.23     (7) Recommendations of the commission regarding federal and 
371.24  state programs, cooperation, funding, and legislative needs; and 
371.25     (8) A summary of any audit report made during the previous 
371.26  year by the state auditor relative to the commission.  
371.27     Subd. 2.  [ASSESSMENT EVERY 5 YEARS.] In 1981 2001 and 
371.28  every five years thereafter the commission shall review its 
371.29  activities and issue a report assessing its performance in 
371.30  fulfilling the purposes of the regional development act of 
371.31  1969.  The report shall state address whether the existence of 
371.32  the commission is in the public welfare and interest.  The 
371.33  report shall be included in the report required by subdivision 1.
371.34     Sec. 21.  Minnesota Statutes 1996, section 462.394, is 
371.35  amended to read: 
371.36     462.394 [CITIZEN PARTICIPATION AND ADVISORY COMMITTEES.] 
372.1      The commission may appoint advisory committees of 
372.2   interested and affected citizens to assist in the review of 
372.3   plans, programs, and other matters referred for review by the 
372.4   commission.  Whenever a special advisory committee is required 
372.5   by any federal or state regional program the commission chair 
372.6   shall, as far as practical, appoint such committees as advisory 
372.7   groups to the commission.  Members of the advisory committees 
372.8   shall serve without compensation but shall be reimbursed for 
372.9   their reasonable expenses as determined by the commission.  
372.10     Sec. 22.  Minnesota Statutes 1996, section 462.396, is 
372.11  amended to read: 
372.12     462.396 [GRANTS; LEVIES; BUDGET; ACCOUNTS; AUDITS; BIDS; 
372.13  DEPOSITS FINANCIAL.] 
372.14     Subdivision 1.  [GRANTMAKING, TAX LEVY.] The director 
372.15  governor and the legislature shall determine the amount of state 
372.16  assistance and designate an agency to make grants to any 
372.17  commission created under sections 462.381 to 462.398 from 
372.18  appropriations made available for those purposes, provided a 
372.19  work program is submitted acceptable to the director.  Any 
372.20  regional commission may levy a tax on all taxable property in 
372.21  the region to provide money for the purposes of sections 462.381 
372.22  to 462.398. 
372.23     Subd. 2.  [BUDGET; HEARING; LEVY LIMITS.] On or before 
372.24  August 20 each year, the commission shall submit its proposed 
372.25  budget for the ensuing calendar year showing anticipated 
372.26  receipts, disbursements, and ad valorem tax levy with a written 
372.27  notice of the time and place of the public hearing on the 
372.28  proposed budget to each county auditor and municipal clerk 
372.29  within the region and those town clerks who in advance have 
372.30  requested a copy of the budget and notice of public hearing.  On 
372.31  or before September 15 each year, the commission shall adopt, 
372.32  after a public hearing held not later than September 15, a 
372.33  budget covering its anticipated receipts and disbursements for 
372.34  the ensuing year and shall decide upon the total amount 
372.35  necessary to be raised from ad valorem tax levies to meet its 
372.36  budget.  After adoption of the budget and no later than 
373.1   September 15, the secretary of the commission shall certify to 
373.2   the auditor of each county within the region the county share of 
373.3   the tax, which shall be an amount bearing the same proportion to 
373.4   the total levy agreed on by the commission as the net tax 
373.5   capacity of the county bears to the net tax capacity of the 
373.6   region.  For taxes levied in 1990 and thereafter 1997 and 
373.7   thereafter, the maximum amounts amount of levies levy made for 
373.8   the purposes of sections 462.381 to 462.398 are the following 
373.9   amounts, less the sum of regional planning grants from the 
373.10  commissioner to that region:  for Region 1, $180,337; for Region 
373.11  2, $150,000; for Region 3, $353,110; for Region 5, $195,865; for 
373.12  Region 6E, $197,177; for Region 6W, $150,000; for Region 7E, 
373.13  $158,653; for Region 8, $206,107; for Region 9, $343,572 is 103 
373.14  percent of the amount of the previous year's levy, except that 
373.15  for any year in which the legislature imposes a percentage 
373.16  increase limit on general purpose local government levies that 
373.17  is less than three percent, the same levy limit shall apply to 
373.18  each commission.  The auditor of each county in the region shall 
373.19  add the amount of any levy made by the commission within the 
373.20  limits imposed by this subdivision to other tax levies of the 
373.21  county for collection by the county treasurer with other taxes.  
373.22  When collected the county treasurer shall make settlement of the 
373.23  taxes with the commission in the same manner as other taxes are 
373.24  distributed to political subdivisions. 
373.25     Subd. 3.  [GIFTS, GRANTS, LOANS.] The commission is a 
373.26  special purpose unit of government which may accept gifts, apply 
373.27  for and use grants or loans of money or other property from the 
373.28  United States, the state, or any person, local or governmental 
373.29  body for any commission purpose and may enter into agreements 
373.30  required in connection therewith and may hold, use, and dispose 
373.31  of such moneys or property in accordance with the terms of the 
373.32  gift, grant, loan, agreement, or contract relating thereto.  
373.33     For purposes of receipt of state or federal funds for 
373.34  community and economic development, regional commissions shall 
373.35  be considered general purpose units of government. 
373.36     Subd. 4.  [ACCOUNTING; CHECKS; ANNUAL AUDIT.] The 
374.1   commission shall keep an accurate account of its receipts and 
374.2   disbursement.  Disbursements of funds of the commission shall be 
374.3   made by check signed by the chair or vice-chair or secretary of 
374.4   the commission and countersigned by the executive director or an 
374.5   authorized deputy thereof after such auditing and approval of 
374.6   the expenditure as may be provided by rules of the commission.  
374.7   The state auditor shall may audit the books and accounts of the 
374.8   commission once each year, or as often as funds and personnel of 
374.9   the state auditor permit.  The commission shall pay to the state 
374.10  the total cost and expenses of such examination, including the 
374.11  salaries paid to the auditors while actually engaged in making 
374.12  such examination.  The general fund shall be credited with all 
374.13  collections made for any such examination.  In lieu of an annual 
374.14  audit by the state auditor, the commission may shall contract 
374.15  with a certified public accountant for the annual audit of the 
374.16  books and accounts of the commission.  If a certified public 
374.17  accountant performs the audit, the commission shall send a copy 
374.18  of the audit to the state auditor. 
374.19     Subd. 5.  [BID LAW.] Every contract of the commission for 
374.20  the purchase of merchandise, materials, or supplies shall be let 
374.21  in accordance with the provisions of section 471.345.  
374.22     Subd. 6.  [DEPOSITORIES.] The commission shall from time to 
374.23  time designate one or more national or state banks, or trust 
374.24  companies authorized to do a banking business, as official 
374.25  depositories for money of the commission, and thereupon shall 
374.26  require the treasurer to deposit all or part of such money in 
374.27  such bank or banks.  Such designation shall be in writing and 
374.28  set forth all the terms and conditions upon which the deposits 
374.29  are made, and shall be signed by the chair and secretary, and 
374.30  made a part of the minutes of the commission.  Any bank or trust 
374.31  company so designated shall qualify as a depository by 
374.32  furnishing a corporate surety bond or collateral as required by 
374.33  chapter 118, and shall thereafter, as long as money of the 
374.34  commission is on deposit therein, maintain such bond or 
374.35  collateral and shall be required to secure any deposit, insofar 
374.36  as it is insured under federal law, as provided in section 
375.1   118A.03. 
375.2      Sec. 23.  Minnesota Statutes 1996, section 462.398, is 
375.3   amended to read: 
375.4      462.398 [TERMINATION OF COMMISSION.] 
375.5      Subdivision 1.  [PETITION; POPULATION.] Any combination of 
375.6   counties or municipalities representing a majority of the 
375.7   population of the region for which a commission exists may 
375.8   petition the director by formal resolution stating that the 
375.9   existence of the commission is no longer in the public welfare 
375.10  and interest and is not needed to accomplish the purposes of the 
375.11  regional development act of 1969.  For purposes of this section 
375.12  the population of a county does not include the population of a 
375.13  municipality within the county.  Any formal resolution adopted 
375.14  by the governing body of a county or municipality for the 
375.15  termination of a commission shall be effective for a period of 
375.16  one year for the purpose of determining the requisite population 
375.17  of the region needed to petition the director governor. 
375.18     Subd. 2.  [HEARINGS; RECOMMENDATION, TERMINATION DATE.] 
375.19  Within 35 days of the receipt filing of the petition, the 
375.20  director governor or designee shall fix a time and place within 
375.21  the region for a hearing.  The director shall give notice of the 
375.22  hearing by publication once each week for two successive weeks 
375.23  before the date of the hearing in a legal newspaper in each of 
375.24  the counties which the commission represents.  The hearing shall 
375.25  be conducted by members of the commission.  If the commission 
375.26  determines that the existence of the commission is no longer in 
375.27  the public welfare and interest and that it is not needed to 
375.28  accomplish the purposes of the regional development act of 1969, 
375.29  the commission shall recommend to the director governor or 
375.30  designee that the director governor or designee terminate the 
375.31  commission.  Within 60 days after receipt of the recommendation, 
375.32  the director shall terminate the commission by giving notice of 
375.33  the termination to all government units within the region for 
375.34  which the commission was established.  Unless otherwise provided 
375.35  by this subdivision, the hearing shall be in accordance with 
375.36  sections 14.001 to 14.69. 
376.1      Subd. 3.  [30 MONTHS BETWEEN PETITIONS.] The 
376.2   director governor or designee shall not accept a petition for 
376.3   termination more than once in 30 months for each regional 
376.4   development commission. 
376.5      Sec. 24.  [REPEALER.] 
376.6      Minnesota Statutes 1996, sections 462.384, subdivision 7; 
376.7   462.385, subdivision 2; 462.389, subdivision 5; 462.391, 
376.8   subdivisions 1, 2, 3, 4, 6, 7, 8, and 9; and 462.392, are 
376.9   repealed. 
376.10                             ARTICLE 17
376.11                     SCORE AND THE SOLID WASTE
376.12                        GENERATOR ASSESSMENT
376.13     Section 1.  Minnesota Statutes 1996, section 116.07, 
376.14  subdivision 10, is amended to read: 
376.15     Subd. 10.  [SOLID WASTE GENERATOR ASSESSMENTS.] (a) For the 
376.16  purposes of this subdivision: 
376.17     (1) "assessed waste" means mixed municipal solid waste as 
376.18  defined in section 115A.03, subdivision 21, infectious waste as 
376.19  defined in section 116.76, subdivision 12, pathological waste as 
376.20  defined in section 116.76, subdivision 14, industrial waste as 
376.21  defined in section 115A.03, subdivision 13a, and construction 
376.22  debris as defined in section 115A.03, subdivision 7; provided 
376.23  that all types of assessed waste listed in this clause do not 
376.24  include: 
376.25     (i) materials that are separated for recycling by the 
376.26  generator and that are collected separately from other waste and 
376.27  delivered to a waste facility for the purpose of recycling and 
376.28  recycled; 
376.29     (ii) materials that are separated for recycling by the 
376.30  generator, collected and delivered to a waste facility that 
376.31  recycles at least 85 percent of its waste, and are collected 
376.32  with mixed municipal solid waste that is segregated in leakproof 
376.33  bags, provided that the mixed municipal solid waste does not 
376.34  exceed five percent of the total weight of the materials 
376.35  delivered to the facility and is ultimately delivered to a 
376.36  facility designated under sections 115A.80 to 115A.893; and 
377.1      (iii) waste generated outside of Minnesota; 
377.2      (2) "noncompacted cubic yard" means a loose cubic yard of 
377.3   assessed waste; 
377.4      (3) "nonresidential customer" means: 
377.5      (i) an owner or operator of a business, including a home 
377.6   operated business, industry, church, nursing home, nonprofit 
377.7   organization, school, or any other commercial or institutional 
377.8   enterprise; 
377.9      (ii) an owner of a building or site containing multiple 
377.10  residences, including a townhome or manufactured home park, 
377.11  where no resident has separate trash pickup, and no resident is 
377.12  separately assessed for such service billed by the person that 
377.13  collects assessed waste; and 
377.14     (iii) any other generator of assessed waste that is not a 
377.15  residential customer as defined in clause (6); 
377.16     (4) "periodic waste collection" means each time a waste 
377.17  container is emptied by the person that collects the assessed 
377.18  waste; 
377.19     (5) "person that collects assessed waste" means each person 
377.20  that is required to pay sales tax on solid waste collection 
377.21  services under section 297A.45, or would pay sales tax under 
377.22  that section if the assessed waste was mixed municipal solid 
377.23  waste; and 
377.24     (6) "residential customer" means: 
377.25     (i) a detached single family residence that generates only 
377.26  household mixed municipal solid waste; and 
377.27     (ii) a person residing in a building or at a site 
377.28  containing multiple residences, including a townhome or a 
377.29  manufactured home park, where each resident either (A) is 
377.30  separately assessed for waste collection billed by the person 
377.31  that collects assessed waste; or (B) has separate waste 
377.32  collection for each resident, even if the resident pays to the 
377.33  owner or an association a monthly maintenance fee which includes 
377.34  the expense of waste collection, and the owner or association 
377.35  pays the waste collector for waste collection in one lump sum; 
377.36  or (C) in the case of a manufactured home park provides separate 
378.1   waste collection for each resident. 
378.2      (b) A residential customer and a nonresidential customer 
378.3   shall pay the solid waste generator assessment imposed under 
378.4   this subdivision to the person that collects the assessed waste 
378.5   from the customer. 
378.6      (c) A person that collects assessed waste shall collect and 
378.7   remit to the commissioner of revenue a solid waste generator 
378.8   assessment from each of the person's customers as provided in 
378.9   paragraphs (c) and (d) and (e).  A waste management facility 
378.10  that accepts assessed waste shall collect and remit to the 
378.11  commissioner of revenue the solid waste assessment as provided 
378.12  in paragraph (e) (f). 
378.13     (c) (d) Except as provided in paragraph (f) (g), the amount 
378.14  of the assessment for each residential customer is $2 per year.  
378.15  Each person that collects assessed waste shall collect the 
378.16  assessment annually from each residential customer that is 
378.17  receiving mixed municipal solid waste collection service on July 
378.18  1 of each year and shall remit the amount actually collected 
378.19  along with the person's first remittance of the sales tax on 
378.20  solid waste collection services, described in section 297A.45, 
378.21  made after October 1 of each year.  For buildings or sites that 
378.22  contain multiple residences that are not separately billed for 
378.23  collection services, the person who that collects assessed waste 
378.24  shall collect the assessment for all the residences from the 
378.25  person who is billed for the collection service.  Any amount of 
378.26  the assessment that is received by the person that collects 
378.27  assessed waste after October 1 of each year must be remitted 
378.28  along with the person's next remittance of sales tax after 
378.29  receipt of the assessment. 
378.30     (d) (e)(1) Except as provided in clause (2), the amount of 
378.31  the assessment for each nonresidential customer is 60 cents per 
378.32  noncompacted cubic yard of periodic waste collection capacity 
378.33  purchased by the customer, based on the size of the container 
378.34  for the assessed waste.  For a residential customer that 
378.35  generates assessed waste that is not mixed municipal solid 
378.36  waste, the amount of the assessment is 60 cents per noncompacted 
379.1   cubic yard of collection capacity purchased for the waste that 
379.2   is not mixed municipal solid waste, based on the size of the 
379.3   container for the waste.  If the capacity purchased is for 
379.4   compacted cubic yards of mixed municipal solid waste, the 
379.5   noncompacted capacity purchased is based on the compaction ratio 
379.6   of 3:1.  The commissioner of revenue, after consultation with 
379.7   the commissioner of the pollution control agency, shall 
379.8   determine, and may publish by notice, compaction rates for other 
379.9   types of waste where they exist and conversion schedules for 
379.10  waste that is managed by measurements other than cubic yards.  
379.11  Each person that collects assessed waste shall collect the 
379.12  assessment from each nonresidential customer as part of each 
379.13  statement for payment of waste collection charges and shall 
379.14  remit the amount actually collected along with the next 
379.15  remittance of sales tax after receipt of the assessment. 
379.16     (2) The assessment for nonresidential customers for the 
379.17  mixed municipal solid waste that is collected with 
379.18  source-separated recyclable materials as described in paragraph 
379.19  (a), clause (1), item (ii), is three-tenths of a cent per 
379.20  gallon.  The customer must pay by purchasing specific collection 
379.21  bags or stickers that include the cost of the collection service 
379.22  and assessment. 
379.23     (e) (f) A person who that transports assessed waste 
379.24  generated by that person or by another person without 
379.25  compensation shall pay an assessment of 60 cents per 
379.26  noncompacted cubic yard or the equivalent to the operator of the 
379.27  waste management facility to which the waste is delivered.  The 
379.28  operator shall remit the assessments actually collected under 
379.29  this paragraph to the commissioner of revenue.  This subdivision 
379.30  does not apply to a person who transports industrial waste 
379.31  generated by that person to a facility owned and operated by 
379.32  that person. 
379.33     (f) (g) The amount of the assessment for each residential 
379.34  customer that is subject to a mixed municipal solid waste 
379.35  collection service for which the customer pays, based on the 
379.36  volume of waste collected, by purchasing specific collection 
380.1   bags or stickers from the waste collector, municipality, or 
380.2   other vendor is either: 
380.3      (1) determined by a method developed by the waste collector 
380.4   or municipality and approved by the commissioner of revenue, 
380.5   which yields the equivalent of approximately a $2 annual 
380.6   assessment per household; or 
380.7      (2) three cents per each 35 gallon unit or less.  If the 
380.8   per unit fee method under this clause is used, it is the 
380.9   responsibility of the waste collector or the municipality who is 
380.10  selling the bags or stickers to remit the amount of the 
380.11  assessment to the department of revenue, according to a payment 
380.12  schedule provided by the commissioner of revenue.  The 
380.13  collection service and assessment under this clause shall be 
380.14  included in the price of the bag or sticker.  
380.15     (g) (h) The commissioner of revenue shall redesign sales 
380.16  tax forms for persons that collect assessed waste to accommodate 
380.17  payment of the assessment.  The amounts remitted under this 
380.18  subdivision must be deposited in the state treasury and credited 
380.19  to the solid waste fund established in section 115B.42. 
380.20     (h) (i) For persons that collect assessed waste and 
380.21  operators of waste management facilities who are required to 
380.22  collect the solid waste generator assessments under this 
380.23  subdivision, and persons who are required to remit the 
380.24  assessment under paragraph (f) (g), and who do not collect and 
380.25  remit the sales tax on solid waste collection services under 
380.26  section 297A.45, the commissioner of revenue shall determine 
380.27  when and in what manner the persons and operators must remit the 
380.28  assessment amounts actually collected. 
380.29     (i) (j) For the purposes of this subdivision, the 
380.30  requirement to "collect" the solid waste generator assessment 
380.31  under paragraph (b) (c) means that the person to whom the 
380.32  requirement applies shall: 
380.33     (i) include (1) separately and accurately state the amount 
380.34  of the assessment in the appropriate statement of charges for 
380.35  waste collection and waste management services and in any action 
380.36  to enforce payment on delinquent accounts; 
381.1      (ii) (2) accurately account for and remit assessments 
381.2   received; 
381.3      (iii) (3) indicate to generators that payment of the 
381.4   assessment by the waste generator is required by law and inform 
381.5   generators, using information supplied by the commissioner of 
381.6   the agency, of the purposes for which revenue from the 
381.7   assessment will be spent; and 
381.8      (iv) (4) cooperate fully with the commissioner of revenue 
381.9   to identify generators of assessed waste who fail to remit 
381.10  payment of the assessment. 
381.11     (j) (k) The audit, assessment, penalty, interest, 
381.12  enforcement, collection remedies, appeal rights, and 
381.13  administrative provisions applicable to taxes imposed under 
381.14  chapter 297A apply to the assessments imposed under this 
381.15  subdivision required to be paid under paragraphs (b) and (f). 
381.16     (l) A person that collects assessed waste and fails to 
381.17  comply with the provisions of paragraph (c), is liable for an 
381.18  amount equal to the solid waste generator assessment that was 
381.19  either: 
381.20     (1) received by the person but not timely remitted to the 
381.21  commissioner of revenue; or 
381.22     (2) not received by the person and the person failed to 
381.23  separately and accurately state the amount of the assessment in 
381.24  the appropriate statement of charges for waste collection and 
381.25  waste management services and in any action to enforce payment 
381.26  on delinquent accounts.  The audit, assessment, penalty, 
381.27  interest, enforcement, collection remedies, appeal rights, and 
381.28  administrative provisions applicable to taxes imposed under 
381.29  chapter 297A apply to the liability imposed under this 
381.30  paragraph.  A person who is liable under this paragraph is not 
381.31  prohibited from recovering from that person's customer the 
381.32  amount of the liability paid to the commissioner of revenue that 
381.33  is equal to the solid waste generator assessment owed by the 
381.34  customer. 
381.35     (k) (m) If less than $25,000,000 is projected to be 
381.36  available for new encumbrances in any fiscal year after fiscal 
382.1   year 1996 from all existing dedicated revenue sources for 
382.2   landfill cleanup and reimbursement costs under sections 115B.39 
382.3   to 115B.46, by April 1 before the next fiscal year in which the 
382.4   shortfall is projected the commissioner of the agency shall 
382.5   certify to the commissioner of revenue the amount of the 
382.6   shortfall.  To provide for the shortfall, the commissioner of 
382.7   revenue shall increase the assessment under paragraphs (d) 
382.8   and (e) and (f) by an amount sufficient to generate revenue 
382.9   equal to the amount of the shortfall effective the following 
382.10  July 1 and shall provide notice of the increased assessment by 
382.11  May 1 following certification to persons who are required to 
382.12  collect and remit the solid waste generator assessments under 
382.13  this subdivision. 
382.14     Sec. 2.  Minnesota Statutes 1996, section 297A.45, is 
382.15  amended to read: 
382.16     297A.45 [MIXED MUNICIPAL SOLID WASTE MANAGEMENT SERVICES.] 
382.17     Subdivision 1.  [DEFINITIONS.] The definitions in sections 
382.18  115A.03 and 297A.01 apply to this section. (a) When used in this 
382.19  section, the following terms shall have the meanings given to 
382.20  them in this subdivision, unless specifically stated otherwise.  
382.21  For terms not defined in this section, the definitions contained 
382.22  in chapter 115A.03 are incorporated into this chapter.  
382.23     (b) "Mixed municipal solid waste" means mixed municipal 
382.24  solid waste as defined in section 115A.03, subdivision 21. 
382.25     (c) "Mixed municipal solid waste management services" means 
382.26  collection, including a central canister system, transportation, 
382.27  processing, and disposal of mixed municipal solid waste. 
382.28     (d) "Waste management service provider" means the person 
382.29  that bills for mixed municipal solid waste management service; 
382.30  or if the service is not billed, the person who provides the 
382.31  waste management service, or that person's lawful designee, and 
382.32  includes, but is not limited to, waste haulers, waste management 
382.33  facilities, utility services, and political subdivisions. 
382.34     (e) "Sales price" means total consideration valued in money 
382.35  for mixed municipal solid waste management services, excluding 
382.36  separately stated charges for exemptions listed under 
383.1   subdivision 3. 
383.2      (f) "Self-hauler" means a person that transports mixed 
383.3   municipal solid waste generated by that person or by another 
383.4   person without compensation. 
383.5      Subd. 2.  [APPLICATION.] The tax imposed by section 297A.02 
383.6   applies to all public and private mixed municipal solid waste 
383.7   management services.  
383.8      Notwithstanding section 297A.25, subdivision 11, a 
383.9   political subdivision that purchases waste management services 
383.10  on behalf of its citizens shall pay the taxes. 
383.11     If a political subdivision provides a waste management 
383.12  service to its residents at a cost in excess of the total direct 
383.13  charge to the residents for the service, the political 
383.14  subdivision shall pay the taxes based on its cost of providing 
383.15  the service in excess of the direct charges.  
383.16     A person who transports mixed municipal solid waste 
383.17  generated by that person or by another person without 
383.18  compensation shall pay the taxes at the waste facility based on 
383.19  the disposal charge or tipping fee. 
383.20     A person who segregates mixed municipal waste from 
383.21  recyclable materials as described in subdivision 3, paragraph 
383.22  (a), clause (2), shall pay the taxes by purchasing specific 
383.23  collection bags or stickers.  The collection service and taxes 
383.24  must be included in the price of the bag or sticker.  (a) The 
383.25  tax imposed by this section applies to all public and private 
383.26  mixed municipal solid waste management services.  
383.27     (b) The tax, based on market price, is imposed upon the 
383.28  political subdivision in those cases where the waste management 
383.29  service provider provides waste management services (1) without 
383.30  charge, (2) with a service charge or fee under section 400.08, 
383.31  (3) billed on the property tax statement, or (4) any combination 
383.32  of clauses (1) to (3).  The commissioners of revenue and the 
383.33  pollution control agency shall determine market price.  In 
383.34  establishing market price, the commissioner of the pollution 
383.35  control agency may consult with the director of the office of 
383.36  environmental assistance.  
384.1      (c) A self-hauler of mixed municipal solid waste shall pay 
384.2   the tax to the operator of the waste management facility to 
384.3   which the waste is delivered, at the rate imposed under 
384.4   subdivision 5. 
384.5      Subd. 3.  [EXEMPTIONS.] (a) The cost of a service or the 
384.6   portion of a service to collect and manage recyclable materials 
384.7   is exempt from the tax imposed in section 297A.02 Charges to 
384.8   collect and manage recyclable materials are exempt if: 
384.9      (1) the recyclable materials are separated from mixed 
384.10  municipal solid waste by the waste generator, collected 
384.11  separately from other waste, and recycled; or 
384.12     (2) the recyclable materials are separated from mixed 
384.13  municipal solid waste by the generator, collected and delivered 
384.14  to a waste facility that recycles at least 85 percent of its 
384.15  waste, and are collected with mixed municipal solid waste that 
384.16  is segregated in leakproof bags, provided that the mixed 
384.17  municipal solid waste does not exceed five percent of the total 
384.18  weight of the materials delivered to the facility and is 
384.19  ultimately delivered to a facility designated under sections 
384.20  115A.80 to 115A.893.  
384.21     (b) The amount of a surcharge or fee imposed under section 
384.22  115A.919, 115A.921, 115A.923, or 473.843 is exempt from the tax 
384.23  imposed in section 297A.02. 
384.24     (c) Waste from a recycling facility that separates or 
384.25  processes recyclable materials and that reduces the volume of 
384.26  the waste by at least 85 percent is exempt from the tax imposed 
384.27  in section 297A.02.  To qualify for the exemption under this 
384.28  paragraph, the waste exempted must be managed separately from 
384.29  other solid waste. 
384.30     (d) The following costs are exempt from the tax imposed in 
384.31  section 297A.02: 
384.32     (1) costs of providing educational materials and other 
384.33  information to residents; 
384.34     (2) costs of managing solid waste other than mixed 
384.35  municipal solid waste, including household hazardous waste; and 
384.36     (3) costs of court litigation and associated damages. 
385.1      (e) The cost of a waste management service is exempt from 
385.2   the tax imposed in section 297A.02 to the extent that the cost 
385.3   was previously subject to the tax. 
385.4      (f) Through December 31, 2002, the gross receipts from the 
385.5   sales of source-separated compostable waste management services 
385.6   are exempt from the tax imposed in section 297A.02 if the waste 
385.7   is delivered to a facility exempted as described in this 
385.8   paragraph.  To initially qualify for an exemption, a facility 
385.9   must apply for an exemption in its application for a new or 
385.10  amended solid waste permit to the pollution control agency.  The 
385.11  first time a facility applies to the agency, it must certify in 
385.12  its application that it will comply with the criteria in clauses 
385.13  (1) to (5), and the commissioner of the agency shall so certify 
385.14  to the commissioner of revenue who must grant the exemption.  
385.15  For each subsequent calendar year, by October 1 of the preceding 
385.16  year, the facility must apply to the agency for certification to 
385.17  renew its exemption for the following year.  The application 
385.18  must be filed according to the procedures and contain the 
385.19  information required by the agency.  The commissioner of revenue 
385.20  shall grant the exemption if the commissioner of the agency 
385.21  finds and certifies to the commissioner of revenue that based on 
385.22  an evaluation of the composition of incoming waste and residuals 
385.23  and the quality and use of the product: 
385.24     (1) generators separate materials at the source; 
385.25     (2) the separation is performed in a manner appropriate to 
385.26  the technology specific to the facility that: 
385.27     (i) maximizes the quality of the product; 
385.28     (ii) minimizes the toxicity and quantity of residuals; and 
385.29     (iii) provides an opportunity for significant improvement 
385.30  in the environmental efficiency of the operation; 
385.31     (3) the operator of the facility educates generators, in 
385.32  coordination with each county using the facility, about 
385.33  separating the waste to maximize the quality of the waste stream 
385.34  for the technology specific to the facility; 
385.35     (4) process residuals do not exceed 15 percent of the 
385.36  weight of the total material delivered to the facility; and 
386.1      (5) the final product is accepted for use. 
386.2      Subd. 4.  [CITY LOCAL SALES TAX MAY NOT BE IMPOSED.] 
386.3   Notwithstanding any other law or charter provision to the 
386.4   contrary, a home rule charter or statutory city political 
386.5   subdivision that imposes a general sales tax may shall not 
386.6   impose the sales tax on solid waste management services that are 
386.7   subject to the tax under this section.  
386.8      Subd. 5.  [RATE.] Except as provided in subdivision 2, 
386.9   paragraph (b), the tax imposed by section 297A.02 applies to the 
386.10  sales price of waste management services billed by a waste 
386.11  management service provider.  
386.12     Subd. 6.  [SEPARATE ACCOUNTING SALES PRICE OF BAGS, 
386.13  STICKERS, OR OTHER INDICIA.] The commissioner shall account for 
386.14  revenue collected from public and private mixed municipal solid 
386.15  waste management services under this section separately from 
386.16  other tax revenue collected under this chapter. (a) When the 
386.17  sales price of a bag, sticker, or other indicia includes mixed 
386.18  municipal solid waste management services, the tax on the bag, 
386.19  sticker, and other indicia, sold by vendors on behalf of a 
386.20  political subdivision or waste hauler, shall be collected when 
386.21  the bag, sticker, or other indicia are sold to the vendor by the 
386.22  political subdivision or waste hauler, and shall be taxed at the 
386.23  rate imposed under subdivision 5. 
386.24     (b) The solid waste management services and tax under this 
386.25  section shall be included in the price of the bag, sticker, or 
386.26  other indicia. 
386.27     Subd. 7.  [BILLING.] The amount of the tax imposed under 
386.28  this section shall be itemized separately on the generator's 
386.29  bill.  
386.30     Subd. 8.  [PENALTY.] A penalty is imposed on any person or 
386.31  political subdivision that fails to separately report the amount 
386.32  of tax due under this chapter.  The specified penalties are ten 
386.33  percent 
386.34     Subd. 9.  [SEPARATE ACCOUNTING.] The commissioner shall 
386.35  account for revenue collected from public and private mixed 
386.36  municipal solid waste management services under this section 
387.1   separately from other tax revenue collected under this chapter.  
387.2      Sec. 3.  [MORATORIUM.] 
387.3      The commissioner of revenue shall not initiate or continue 
387.4   any action to collect any underpayment from political 
387.5   subdivisions, or to reimburse any overpayment to any political 
387.6   subdivisions, of use taxes on solid waste management services 
387.7   under Minnesota Statutes, section 297A.45, for the period from 
387.8   January 1, 1990, through December 31, 1996. 
387.9      Sec. 4.  [REPEALER.] 
387.10     Minnesota Statutes 1996, section 297A.01, subdivision 21, 
387.11  is repealed. 
387.12     Sec. 5.  [EFFECTIVE DATE.] 
387.13     Section 1 is effective for services provided after December 
387.14  31, 1996. 
387.15     Sections 2 and 4 are effective for services provided 
387.16  beginning October 1, 1997. 
387.17                             ARTICLE 18
387.18               SENIOR CITIZENS PROPERTY TAX DEFERRAL
387.19     Section 1.  Minnesota Statutes 1996, section 270B.12, is 
387.20  amended by adding a subdivision to read: 
387.21     Subd. 12.  [PROPERTY TAX DEFERRAL.] The commissioner may 
387.22  disclose to a county auditor and treasurer, and to their 
387.23  designated agents or employees, the annual deferral amounts and 
387.24  the cumulative deferral and interest as determined by the 
387.25  commissioner under chapter 290B for each parcel of homestead 
387.26  property in the county that is enrolled in the senior citizen 
387.27  property tax deferral program under chapter 290B. 
387.28     Sec. 2.  Minnesota Statutes 1996, section 275.065, 
387.29  subdivision 3, is amended to read: 
387.30     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
387.31  county auditor shall prepare and the county treasurer shall 
387.32  deliver after November 10 and on or before November 24 each 
387.33  year, by first class mail to each taxpayer at the address listed 
387.34  on the county's current year's assessment roll, a notice of 
387.35  proposed property taxes and, in the case of a town, final 
387.36  property taxes.  
388.1      (b) The commissioner of revenue shall prescribe the form of 
388.2   the notice. 
388.3      (c) The notice must inform taxpayers that it contains the 
388.4   amount of property taxes each taxing authority other than a town 
388.5   proposes to collect for taxes payable the following year and, 
388.6   for a town, the amount of its final levy.  It must clearly state 
388.7   that each taxing authority, including regional library districts 
388.8   established under section 134.201, and including the 
388.9   metropolitan taxing districts as defined in paragraph (i), but 
388.10  excluding all other special taxing districts and towns, will 
388.11  hold a public meeting to receive public testimony on the 
388.12  proposed budget and proposed or final property tax levy, or, in 
388.13  case of a school district, on the current budget and proposed 
388.14  property tax levy.  It must clearly state the time and place of 
388.15  each taxing authority's meeting and an address where comments 
388.16  will be received by mail.  
388.17     (d) The notice must state for each parcel: 
388.18     (1) the market value of the property as determined under 
388.19  section 273.11, and used for computing property taxes payable in 
388.20  the following year and for taxes payable in the current year; 
388.21  and, in the case of residential property, whether the property 
388.22  is classified as homestead or nonhomestead.  The notice must 
388.23  clearly inform taxpayers of the years to which the market values 
388.24  apply and that the values are final values; 
388.25     (2) by county, city or town, school district excess 
388.26  referenda levy, remaining school district levy, regional library 
388.27  district, if in existence, the total of the metropolitan special 
388.28  taxing districts as defined in paragraph (i) and the sum of the 
388.29  remaining special taxing districts, and as a total of the taxing 
388.30  authorities, including all special taxing districts, the 
388.31  proposed or, for a town, final net tax on the property for taxes 
388.32  payable the following year and the actual tax for taxes payable 
388.33  the current year.  If a school district has certified under 
388.34  section 124A.03, subdivision 2, that a referendum will be held 
388.35  in the school district at the November general election, the 
388.36  county auditor must note next to the school district's proposed 
389.1   amount that a referendum is pending and that, if approved by the 
389.2   voters, the tax amount may be higher than shown on the notice.  
389.3   For the purposes of this subdivision, "school district excess 
389.4   referenda levy" means school district taxes for operating 
389.5   purposes approved at referendums, including those taxes based on 
389.6   net tax capacity as well as those based on market value.  
389.7   "School district excess referenda levy" does not include school 
389.8   district taxes for capital expenditures approved at referendums 
389.9   or school district taxes to pay for the debt service on bonds 
389.10  approved at referenda.  In the case of the city of Minneapolis, 
389.11  the levy for the Minneapolis library board and the levy for 
389.12  Minneapolis park and recreation shall be listed separately from 
389.13  the remaining amount of the city's levy.  In the case of a 
389.14  parcel where tax increment or the fiscal disparities areawide 
389.15  tax under chapter 276A or 473F applies, the proposed tax levy on 
389.16  the captured value or the proposed tax levy on the tax capacity 
389.17  subject to the areawide tax must each be stated separately and 
389.18  not included in the sum of the special taxing districts; and 
389.19     (3) the increase or decrease in the amounts in clause (2) 
389.20  from taxes payable in the current year to proposed or, for a 
389.21  town, final taxes payable the following year, expressed as a 
389.22  dollar amount and as a percentage. 
389.23     For purposes of this section, the amount of the tax on 
389.24  homesteads qualifying under the senior citizens' property tax 
389.25  deferral program under chapter 290B is the total amount of 
389.26  property tax before subtraction of the deferred property tax 
389.27  amount. 
389.28     (e) The notice must clearly state that the proposed or 
389.29  final taxes do not include the following: 
389.30     (1) special assessments; 
389.31     (2) levies approved by the voters after the date the 
389.32  proposed taxes are certified, including bond referenda, school 
389.33  district levy referenda, and levy limit increase referenda; 
389.34     (3) amounts necessary to pay cleanup or other costs due to 
389.35  a natural disaster occurring after the date the proposed taxes 
389.36  are certified; 
390.1      (4) amounts necessary to pay tort judgments against the 
390.2   taxing authority that become final after the date the proposed 
390.3   taxes are certified; and 
390.4      (5) the contamination tax imposed on properties which 
390.5   received market value reductions for contamination. 
390.6      (f) Except as provided in subdivision 7, failure of the 
390.7   county auditor to prepare or the county treasurer to deliver the 
390.8   notice as required in this section does not invalidate the 
390.9   proposed or final tax levy or the taxes payable pursuant to the 
390.10  tax levy. 
390.11     (g) If the notice the taxpayer receives under this section 
390.12  lists the property as nonhomestead and the homeowner provides 
390.13  satisfactory documentation to the county assessor that the 
390.14  property is owned and used as the owner's homestead, the 
390.15  assessor shall reclassify the property to homestead for taxes 
390.16  payable in the following year. 
390.17     (h) In the case of class 4 residential property used as a 
390.18  residence for lease or rental periods of 30 days or more, the 
390.19  taxpayer must either: 
390.20     (1) mail or deliver a copy of the notice of proposed 
390.21  property taxes to each tenant, renter, or lessee; or 
390.22     (2) post a copy of the notice in a conspicuous place on the 
390.23  premises of the property.  
390.24     The notice must be mailed or posted by the taxpayer by 
390.25  November 27 or within three days of receipt of the notice, 
390.26  whichever is later.  A taxpayer may notify the county treasurer 
390.27  of the address of the taxpayer, agent, caretaker, or manager of 
390.28  the premises to which the notice must be mailed in order to 
390.29  fulfill the requirements of this paragraph. 
390.30     (i) For purposes of this subdivision, subdivisions 5a and 
390.31  6, "metropolitan special taxing districts" means the following 
390.32  taxing districts in the seven-county metropolitan area that levy 
390.33  a property tax for any of the specified purposes listed below: 
390.34     (1) metropolitan council under section 473.132, 473.167, 
390.35  473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
390.36     (2) metropolitan airports commission under section 473.667, 
391.1   473.671, or 473.672; and 
391.2      (3) metropolitan mosquito control commission under section 
391.3   473.711. 
391.4      For purposes of this section, any levies made by the 
391.5   regional rail authorities in the county of Anoka, Carver, 
391.6   Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
391.7   398A shall be included with the appropriate county's levy and 
391.8   shall be discussed at that county's public hearing. 
391.9      (j) For taxes levied in 1996, payable in 1997 only, in the 
391.10  case of a statutory or home rule charter city or town that 
391.11  exercises the local levy option provided in section 473.388, 
391.12  subdivision 7, the notice of its proposed taxes may include a 
391.13  statement of the amount by which its proposed tax increase for 
391.14  taxes payable in 1997 is attributable to its exercise of that 
391.15  option, together with a statement that the levy of the 
391.16  metropolitan council was decreased by a similar amount because 
391.17  of the exercise of that option. 
391.18     Sec. 3.  Minnesota Statutes 1996, section 276.04, 
391.19  subdivision 2, is amended to read: 
391.20     Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
391.21  shall provide for the printing of the tax statements.  The 
391.22  commissioner of revenue shall prescribe the form of the property 
391.23  tax statement and its contents.  The statement must contain a 
391.24  tabulated statement of the dollar amount due to each taxing 
391.25  authority from the parcel of real property for which a 
391.26  particular tax statement is prepared.  The dollar amounts due 
391.27  the county, township or municipality, the total of the 
391.28  metropolitan special taxing districts as defined in section 
391.29  275.065, subdivision 3, paragraph (i), school district excess 
391.30  referenda levy, remaining school district levy, and the total of 
391.31  other voter approved referenda levies based on market value 
391.32  under section 275.61 must be separately stated.  The amounts due 
391.33  all other special taxing districts, if any, may be aggregated.  
391.34  The amount of the tax on homesteads qualifying under the senior 
391.35  citizens' property tax deferral program under chapter 290B is 
391.36  the total amount of property tax before subtraction of the 
392.1   deferred property tax amount.  For the purposes of this 
392.2   subdivision, "school district excess referenda levy" means 
392.3   school district taxes for operating purposes approved at 
392.4   referenda, including those taxes based on net tax capacity as 
392.5   well as those based on market value.  "School district excess 
392.6   referenda levy" does not include school district taxes for 
392.7   capital expenditures approved at referendums or school district 
392.8   taxes to pay for the debt service on bonds approved at 
392.9   referenda.  The amount of the tax on contamination value imposed 
392.10  under sections 270.91 to 270.98, if any, must also be separately 
392.11  stated.  The dollar amounts, including the dollar amount of any 
392.12  special assessments, may be rounded to the nearest even whole 
392.13  dollar.  For purposes of this section whole odd-numbered dollars 
392.14  may be adjusted to the next higher even-numbered dollar.  The 
392.15  amount of market value excluded under section 273.11, 
392.16  subdivision 16, if any, must also be listed on the tax 
392.17  statement.  The statement shall include the following sentence, 
392.18  printed in upper case letters in boldface print:  "THE STATE OF 
392.19  MINNESOTA DOES NOT RECEIVE ANY PROPERTY TAX REVENUES.  THE STATE 
392.20  OF MINNESOTA REDUCES YOUR PROPERTY TAX BY PAYING CREDITS AND 
392.21  REIMBURSEMENTS TO LOCAL UNITS OF GOVERNMENT."  
392.22     (b) The property tax statements for manufactured homes and 
392.23  sectional structures taxed as personal property shall contain 
392.24  the same information that is required on the tax statements for 
392.25  real property.  
392.26     (c) Real and personal property tax statements must contain 
392.27  the following information in the order given in this paragraph.  
392.28  The information must contain the current year tax information in 
392.29  the right column with the corresponding information for the 
392.30  previous year in a column on the left: 
392.31     (1) the property's estimated market value under section 
392.32  273.11, subdivision 1; 
392.33     (2) the property's taxable market value after reductions 
392.34  under section 273.11, subdivisions 1a and 16; 
392.35     (3) the property's gross tax, calculated by multiplying the 
392.36  property's gross tax capacity times the total local tax rate and 
393.1   adding to the result the sum of the aids enumerated in clause 
393.2   (4); 
393.3      (4) a total of the following aids: 
393.4      (i) education aids payable under chapters 124 and 124A; 
393.5      (ii) local government aids for cities, towns, and counties 
393.6   under chapter 477A; and 
393.7      (iii) disparity reduction aid under section 273.1398; 
393.8      (5) for homestead residential and agricultural properties, 
393.9   the homestead and agricultural credit aid apportioned to the 
393.10  property.  This amount is obtained by multiplying the total 
393.11  local tax rate by the difference between the property's gross 
393.12  and net tax capacities under section 273.13.  This amount must 
393.13  be separately stated and identified as "homestead and 
393.14  agricultural credit."  For purposes of comparison with the 
393.15  previous year's amount for the statement for taxes payable in 
393.16  1990, the statement must show the homestead credit for taxes 
393.17  payable in 1989 under section 273.13, and the agricultural 
393.18  credit under section 273.132 for taxes payable in 1989; 
393.19     (6) any credits received under sections 273.119; 273.123; 
393.20  273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 
393.21  473H.10, except that the amount of credit received under section 
393.22  273.135 must be separately stated and identified as "taconite 
393.23  tax relief"; and 
393.24     (7) any deferred property tax amount under the senior 
393.25  citizens' property tax deferral program under chapter 290B, as 
393.26  well as the total deferred amount plus accrued interest; and 
393.27     (8) the net tax payable in the manner required in paragraph 
393.28  (a). 
393.29     (d) If the county uses envelopes for mailing property tax 
393.30  statements and if the county agrees, a taxing district may 
393.31  include a notice with the property tax statement notifying 
393.32  taxpayers when the taxing district will begin its budget 
393.33  deliberations for the current year, and encouraging taxpayers to 
393.34  attend the hearings.  If the county allows notices to be 
393.35  included in the envelope containing the property tax statement, 
393.36  and if more than one taxing district relative to a given 
394.1   property decides to include a notice with the tax statement, the 
394.2   county treasurer or auditor must coordinate the process and may 
394.3   combine the information on a single announcement.  
394.4      The commissioner of revenue shall certify to the county 
394.5   auditor the actual or estimated aids enumerated in clauses (3) 
394.6   and (4) that local governments will receive in the following 
394.7   year.  In the case of a county containing a city of the first 
394.8   class, for taxes levied in 1991, and for all counties for taxes 
394.9   levied in 1992 and thereafter, the commissioner must certify 
394.10  this amount by September 1.  
394.11     Sec. 4.  [290B.01] [PURPOSE.] 
394.12     Minnesota's system of ad valorem property taxation does not 
394.13  adequately recognize the unique financial circumstances of 
394.14  homestead property owned and occupied by low-income senior 
394.15  citizens.  It is therefore declared to be in the public interest 
394.16  of this state to stabilize tax burdens on homestead property 
394.17  owned by qualifying low-income senior citizens through a 
394.18  deferral of certain property taxes. 
394.19     Sec. 5.  [290B.02] [CITATION.] 
394.20     This program shall be named the "senior citizens' property 
394.21  tax deferral program." 
394.22     Sec. 6.  [290B.03] [DEFERRAL OF PROPERTY TAXES.] 
394.23     Subdivision 1.  [PROGRAM QUALIFICATIONS.] The 
394.24  qualifications for the senior citizens' property tax deferral 
394.25  program are as follows: 
394.26     (1) the property must be owned and occupied as a homestead 
394.27  by a person 65 years of age or older.  In the case of a married 
394.28  couple, both of the spouses must be at least 65 years old at the 
394.29  time the first property tax deferral is granted, regardless of 
394.30  whether the property is titled in the name of one spouse or both 
394.31  spouses, or titled in another way that permits the property to 
394.32  have homestead status; 
394.33     (2) the total household income of the qualifying 
394.34  homeowners, as defined in section 290A.03, subdivision 5, for 
394.35  the calendar year preceding the year of the initial application 
394.36  may not exceed $30,000; 
395.1      (3) the homestead must have been owned and occupied as the 
395.2   homestead of at least one of the qualifying homeowners for at 
395.3   least 15 years prior to the year the initial application is 
395.4   filed; 
395.5      (4) there are no delinquent property taxes, penalties, or 
395.6   interest on the homesteaded property; 
395.7      (5) there are no delinquent special assessments on the 
395.8   homesteaded property; 
395.9      (6) there are no state or federal tax liens or judgment 
395.10  liens on the homesteaded property; 
395.11     (7) there are no mortgages or other liens on the property 
395.12  that secure future advances, except for those subject to credit 
395.13  limits that result in compliance with clause (8); and 
395.14     (8) the total unpaid balances of debts secured by mortgages 
395.15  and other liens on the property, including unpaid special 
395.16  assessments, but not including property taxes payable during the 
395.17  year, does not exceed 30 percent of the assessor's estimated 
395.18  market value for the year. 
395.19     Subd. 2.  [QUALIFYING HOMESTEAD; DEFINED.] Qualifying 
395.20  homestead property is defined as the dwelling occupied as the 
395.21  homeowner's principal residence and so much of the land 
395.22  surrounding it, not exceeding one acre, as is reasonably 
395.23  necessary for use of the dwelling as a home and any other 
395.24  property used for purposes of a homestead as defined in section 
395.25  273.13, subdivisions 22 and 23.  The homestead may be part of a 
395.26  multidwelling building and the land on which it is built. 
395.27     Sec. 7.  [290B.04] [APPLICATION FOR DEFERRAL.] 
395.28     Subdivision 1.  [INITIAL APPLICATION.] A taxpayer meeting 
395.29  the program qualifications under section 290B.03 may apply to 
395.30  the commissioner of revenue for the deferral of taxes.  
395.31  Applications are due on or before July 1 for deferral of any of 
395.32  the following year's property taxes.  A taxpayer may apply in 
395.33  the year in which the taxpayer becomes 65 years old, provided 
395.34  that no deferral of property taxes will be made until the 
395.35  calendar year after the taxpayer becomes 65 years old.  The 
395.36  application, which shall be prescribed by the commissioner of 
396.1   revenue, shall include the following items and any other 
396.2   information which the commissioner deems necessary: 
396.3      (1) the name, address, and social security number of the 
396.4   owner or owners; 
396.5      (2) a copy of the property tax statement for the current 
396.6   payable year for the homesteaded property; 
396.7      (3) the initial year of ownership and occupancy as a 
396.8   homestead; 
396.9      (4) the owner's household income for the previous calendar 
396.10  year; and 
396.11     (5) information on any mortgage loans or other amounts 
396.12  secured by mortgages or other liens against the property, for 
396.13  which purpose the commissioner may require the applicant to 
396.14  provide a copy of the mortgage note, the mortgage, or a 
396.15  statement of the balance owing on the mortgage loan provided by 
396.16  the mortgage holder.  The commissioner may require the 
396.17  appropriate documents in connection with obtaining and 
396.18  confirming information on unpaid amounts secured by other liens. 
396.19     The application must state that program participation is 
396.20  voluntary.  The application must also state that the deferred 
396.21  amount depends directly on the applicant's household income, and 
396.22  that program participation includes authorization for the 
396.23  deferred amount for each year and the cumulative deferral and 
396.24  interest to appear on each year's property tax statement as 
396.25  public data. 
396.26     Subd. 2.  [APPROVAL; RECORDING.] The commissioner shall 
396.27  approve all initial applications that qualify under this chapter 
396.28  and shall notify qualifying homeowners on or before December 1.  
396.29  The commissioner may investigate the facts or require 
396.30  confirmation in regard to an application.  The commissioner 
396.31  shall record or file a notice of qualification for deferral, 
396.32  including the names of the qualifying homeowners and a legal 
396.33  description of the property, in the office of the county 
396.34  recorder, or registrar of titles, whichever is applicable, in 
396.35  the county where the qualifying property is located.  The notice 
396.36  must state that it serves as a notice of lien and that it 
397.1   includes deferrals under this section for future years.  The 
397.2   homeowner shall pay the recording or filing fees. 
397.3      Subd. 3.  [ANNUAL CERTIFICATION BY TAXPAYER.] Annually on 
397.4   or before July 1, a taxpayer whose initial application has been 
397.5   approved under subdivision 2, shall complete the certification 
397.6   form and return it to the commissioner of revenue.  The 
397.7   certification must state whether or not the taxpayer wishes to 
397.8   have property taxes deferred for the following year provided the 
397.9   taxes exceed the maximum property tax amount under section 
397.10  290B.05.  If the taxpayer does wish to have property taxes 
397.11  deferred, the certification must state the homeowner's total 
397.12  household income for the previous calendar year and any other 
397.13  information which the commissioner deems necessary.  
397.14     Sec. 8.  [290B.05] [MAXIMUM PROPERTY TAX AMOUNT AND 
397.15  DEFERRED PROPERTY TAX AMOUNT.] 
397.16     Subdivision 1.  [DETERMINATION BY COMMISSIONER.] The 
397.17  commissioner shall annually determine the qualifying homeowner's 
397.18  "maximum property tax amount" and "maximum allowable deferral."  
397.19  The maximum property tax amount calculated for taxes payable in 
397.20  the following year is equal to five percent of the homeowner's 
397.21  total household income for the previous calendar year.  No tax 
397.22  may be deferred for any homeowner whose total household income 
397.23  for the previous year exceeds $30,000.  No tax shall be deferred 
397.24  in any year in which the homeowner does not meet the program 
397.25  qualifications in section 290B.03.  The maximum allowable total 
397.26  deferral is equal to 75 percent of the assessor's estimated 
397.27  market value for the year, less (1) the balance of any mortgage 
397.28  loans and other amounts secured by liens against the property at 
397.29  the time of application, including any unpaid special 
397.30  assessments but not including property taxes payable during the 
397.31  year; and (2) any outstanding deferral and interest.  
397.32     Subd. 2.  [CERTIFICATION BY COMMISSIONER.] On or before 
397.33  December 1, the commissioner shall certify to the county auditor 
397.34  of the county in which the qualifying homestead is located (1) 
397.35  the maximum property tax amount; (2) the maximum allowable 
397.36  deferral for the year; and (3) the cumulative deferral and 
398.1   interest for all years preceding the next taxes payable year. 
398.2      Subd. 3.  [CALCULATION OF DEFERRED PROPERTY TAX AMOUNT.] 
398.3   When final property tax amounts for the following year have been 
398.4   determined, the county auditor shall calculate the "deferred 
398.5   property tax amount."  The deferred property tax amount is equal 
398.6   to the lesser of (1) the maximum allowable deferral for the 
398.7   year; or (2) the difference between the total amount of property 
398.8   taxes levied upon the qualifying homestead by all taxing 
398.9   jurisdictions and the maximum property tax amount.  Any special 
398.10  assessments levied by any local unit of government must not be 
398.11  included in the total tax used to calculate the deferred tax 
398.12  amount.  No deferral of the current year's property taxes is 
398.13  allowed if there are any delinquent property taxes or delinquent 
398.14  special assessments for any previous year.  Any tax attributable 
398.15  to new improvements made to the property after the initial 
398.16  application has been approved under section 290B.04, subdivision 
398.17  2, must be excluded when determining any subsequent deferred 
398.18  property tax amount.  The county auditor shall annually, on or 
398.19  before April 15, certify to the commissioner of revenue the 
398.20  property tax deferral amounts determined under this subdivision 
398.21  by property and by owner.  
398.22     Subd. 4.  [LIMITATION ON TOTAL AMOUNT OF DEFERRED TAXES.] 
398.23  On or before September 1 of each year, the commissioner shall 
398.24  request, and each county or city assessor shall provide, the 
398.25  current year's estimated market value of each property on the 
398.26  list supplied by the commissioner that may be eligible for 
398.27  deferral under this section for taxes payable in the following 
398.28  year.  The total amount of deferred taxes and interest on a 
398.29  property, when added to (1) the balance owing on any mortgages 
398.30  on the property at the time of initial application; and (2) 
398.31  other amounts secured by liens on the property at the time of 
398.32  the initial application, may not exceed 75 percent of the 
398.33  assessor's current estimated market value of the property. 
398.34     Sec. 9.  [290B.06] [PROPERTY TAX REFUNDS.] 
398.35     For purposes of qualifying for the regular property tax 
398.36  refund or the special refund for homeowners under chapter 290A, 
399.1   the qualifying tax is the full amount of taxes, including the 
399.2   deferred portion of the tax.  In any year in which a program 
399.3   participant chooses to have property taxes deferred under this 
399.4   section, any regular or special property tax refund awarded 
399.5   based upon those property taxes must be taken first as a 
399.6   deduction from the amount of the deferred tax for that year, and 
399.7   second as a deduction against any outstanding deferral from 
399.8   previous years, rather than as a cash payment to the homeowner.  
399.9   The commissioner shall cancel any current year's deferral or 
399.10  previous years' deferral and interest that is offset by the 
399.11  property tax refunds.  If the total of the regular and the 
399.12  special property tax refund amounts exceeds the sum of the 
399.13  deferred tax for the current year and cumulative deferred tax 
399.14  and interest for previous years, the commissioner shall then 
399.15  remit the excess amount to the homeowner.  On or before the date 
399.16  on which the commissioner issues property tax refunds, the 
399.17  commissioner shall notify program participants of any reduction 
399.18  in the deferred amount for the current and previous years 
399.19  resulting from property tax refunds. 
399.20     Sec. 10.  [290B.07] [LIEN; DEFERRED PORTION.] 
399.21     Payment by the state to the county treasurer of taxes 
399.22  deferred under this section is deemed a loan from the state to 
399.23  the program participant.  The commissioner must compute the 
399.24  interest as provided in section 270.75, subdivision 5, but not 
399.25  to exceed five percent, and maintain records of the total 
399.26  deferred amount and interest for each participant.  Interest 
399.27  shall accrue beginning September 1 of the payable year for which 
399.28  the taxes are deferred.  The lien created under section 272.31 
399.29  continues to secure payment by the taxpayer, or by the 
399.30  taxpayer's successors or assigns, of the amount deferred, 
399.31  including interest, with respect to all years for which amounts 
399.32  are deferred.  The lien for deferred taxes and interest has the 
399.33  same priority as any other lien under section 272.31, except 
399.34  that liens, including mortgages, recorded or filed prior to the 
399.35  recording or filing of the notice under section 290B.04, 
399.36  subdivision 2, have priority over the lien for deferred taxes 
400.1   and interest.  A seller's interest in a contract for deed, in 
400.2   which a qualifying homeowner is the purchaser or an assignee of 
400.3   the purchaser, has priority over deferred taxes and interest on 
400.4   deferred taxes, regardless of whether the contract for deed is 
400.5   recorded or filed.  The lien for deferred taxes and interest for 
400.6   future years has the same priority as the lien for deferred 
400.7   taxes and interest for the first year, which is always higher in 
400.8   priority than any mortgages or other liens filed, recorded, or 
400.9   created after the notice recorded or filed under section 
400.10  290B.04, subdivision 2.  The county treasurer or auditor shall 
400.11  maintain records of the deferred portion and shall list the 
400.12  amount of deferred taxes for the year and the cumulative 
400.13  deferral and interest for all previous years as a lien against 
400.14  the property on the property tax statement.  In any 
400.15  certification of unpaid taxes for a tax parcel, the county 
400.16  auditor shall clearly distinguish between taxes payable in the 
400.17  current year, deferred taxes and interest, and delinquent 
400.18  taxes.  Payment of the deferred portion becomes due and owing at 
400.19  the time specified in section 290B.08.  Upon receipt of the 
400.20  payment, the commissioner shall issue a receipt for it to the 
400.21  person making the payment upon request and shall notify the 
400.22  auditor of the county in which the parcel is located, within ten 
400.23  days, identifying the parcel to which the payment applies.  Upon 
400.24  receipt by the commissioner of revenue of collected funds in the 
400.25  amount of the deferral, the state's loan to the program 
400.26  participant is deemed paid in full. 
400.27     Sec. 11.  [290B.08] [TERMINATION OF DEFERRAL; PAYMENT OF 
400.28  DEFERRED TAXES.] 
400.29     Subdivision 1.  [TERMINATION.] (a) The deferral of taxes 
400.30  granted under this chapter terminates when one of the following 
400.31  occurs: 
400.32     (1) the property is sold or transferred; 
400.33     (2) the death of the qualifying homeowner(s); 
400.34     (3) the homeowner notifies the commissioner in writing that 
400.35  the homeowner desires to discontinue the deferral; or 
400.36     (4) the property no longer qualifies as a homestead. 
401.1      (b) A property is not terminated from the program because 
401.2   no deferred property tax amount is determined on the homestead 
401.3   for any given year after the homestead's initial enrollment into 
401.4   the program. 
401.5      Subd. 2.  [PAYMENT UPON TERMINATION.] Upon the termination 
401.6   of the deferral under subdivision 1, the amount of deferred 
401.7   taxes and interest plus the recording or filing fees under both 
401.8   section 290B.04, subdivision 2, and this subdivision becomes due 
401.9   and payable to the commissioner within 90 days of termination of 
401.10  the deferral.  No additional interest is due on the deferral if 
401.11  timely paid.  On receipt of payment, the commissioner shall 
401.12  within ten days notify the auditor of the county in which the 
401.13  parcel is located, identifying the parcel to which the payment 
401.14  applies and shall remit the recording or filing fees under 
401.15  section 290B.04, subdivision 2, and this subdivision to the 
401.16  auditor.  A notice of termination of deferral, containing the 
401.17  legal description and the recording or filing data for the 
401.18  notice of qualification for deferral under section 290B.04, 
401.19  subdivision 2, shall be prepared and recorded or filed by the 
401.20  county auditor in the same office in which the notice of 
401.21  qualification for deferral under section 290B.04, subdivision 2, 
401.22  was recorded or filed, and the county auditor shall mail a copy 
401.23  of the notice of termination to the property owner.  The 
401.24  property owner shall pay the recording or filing fees.  Upon 
401.25  recording or filing of the notice of termination of deferral, 
401.26  the notice of qualification for deferral under section 290B.04, 
401.27  subdivision 2, and the lien created by it are discharged.  If 
401.28  the deferral is not timely paid, the penalty, interest, lien, 
401.29  forfeiture, and other rules for the collection of ad valorem 
401.30  property taxes apply. 
401.31     Sec. 12.  [290B.09] [STATE REIMBURSEMENT.] 
401.32     Subdivision 1.  [DETERMINATION; PAYMENT.] The commissioner 
401.33  of revenue shall determine the deferred amount of property tax 
401.34  in each county, basing determinations on a review of abstracts 
401.35  of tax lists submitted by the county auditors under section 
401.36  275.29.  The commissioner may make changes in the abstracts of 
402.1   tax lists as deemed necessary.  The commissioner of revenue, 
402.2   after such review, shall pay the deferred amount of property tax 
402.3   to each county treasurer on or before August 31.  
402.4      At least once each year, the commissioner shall report to 
402.5   the county auditor the total cumulative amount of deferred taxes 
402.6   and interest that constitute a lien against the property.  
402.7      The county treasurer shall distribute as part of the 
402.8   October settlement the funds received as if they had been 
402.9   collected as a part of the property tax. 
402.10     Subd. 2.  [APPROPRIATION.] An amount sufficient to pay the 
402.11  total amount of property tax determined under subdivision 1 is 
402.12  annually appropriated from the general fund to the commissioner 
402.13  of revenue. 
402.14     Sec. 13.  [DEPARTMENT OF REVENUE APPROPRIATION.] 
402.15     There is appropriated to the commissioner of revenue, 
402.16  $33,000 for fiscal year 1998, and $34,000 for fiscal year 1999, 
402.17  for the purposes of administering the provisions of this article.
402.18     Sec. 14.  [EFFECTIVE DATE.] 
402.19     Sections 1 to 12 are effective the day following final 
402.20  enactment for deferral of property taxes payable in 1998, and 
402.21  thereafter. 
402.22                             ARTICLE 19
402.23                           MISCELLANEOUS
402.24     Section 1.  Minnesota Statutes 1996, section 6.76, is 
402.25  amended to read: 
402.26     6.76 [LOCAL GOVERNMENTAL EXPENDITURES FOR LOBBYISTS.] 
402.27     On or before January 31, 1990, and of each year thereafter, 
402.28  all counties, cities, school districts, metropolitan agencies, 
402.29  regional railroad authorities, and the metropolitan council 
402.30  shall report to the state auditor, on forms prescribed by the 
402.31  auditor, their estimated expenditures paid for the previous 
402.32  calendar year to a lobbyist as defined in section 10A.01, 
402.33  subdivision 11, and to any staff person not registered as a 
402.34  lobbyist, over 25 percent of whose time is spent during the 
402.35  legislative session on legislative matters, and for lobbying 
402.36  purposes to an association that retains or employs a lobbyist as 
403.1   defined in section 10A.01, subdivision 11. 
403.2      Sec. 2.  Minnesota Statutes 1996, section 115A.554, is 
403.3   amended to read: 
403.4      115A.554 [AUTHORITY OF SANITARY DISTRICTS.] 
403.5      A sanitary district has the authorities and duties of 
403.6   counties within the district's boundary for purposes of sections 
403.7   115A.0716; 115A.46, subdivisions 4 and 5; 115A.48; 115A.551; 
403.8   115A.552; 115A.553; 115A.919; 115A.929; 115A.93; 115A.96, 
403.9   subdivision 6; 115A.961; 116.072; 375.18, subdivision 14; 
403.10  400.08, except subdivision 4, paragraph (b); 400.16; and 400.161.
403.11     Sec. 3.  Minnesota Statutes 1996, section 117.155, is 
403.12  amended to read: 
403.13     117.155 [PAYMENTS; PARTIAL PAYMENT PENDING APPEAL.] 
403.14     Except as otherwise provided herein payment of damages 
403.15  awarded may be made or tendered at any time after the filing of 
403.16  the report; and the duty of the petitioner to pay the amount of 
403.17  any award or final judgment upon appeal shall, for all purposes, 
403.18  be held and construed to be full and just compensation to the 
403.19  respective owners or the persons interested in the lands.  If 
403.20  either the petitioner or any respondent appeals from an award, 
403.21  the respondent or respondents, if there is more than one, except 
403.22  encumbrancers having an interest in the award which has been 
403.23  appealed, may demand of the petitioner a partial payment of the 
403.24  award pending the final determination thereof, and it shall be 
403.25  the duty of the petitioner to comply with such demand and to 
403.26  promptly pay the amount demanded but not in excess of an amount 
403.27  equal to three-fourths of the award of damages for the parcel 
403.28  which has been appealed, less any payments made by petitioner 
403.29  pursuant to section 117.042; provided, however, that the 
403.30  petitioner may by motion after due notice to all interested 
403.31  parties request, and the court may order, reduction in the 
403.32  amount of the partial payment for cause shown.  If an appeal is 
403.33  taken from an award the petitioner may, but it cannot be 
403.34  compelled to, pay the entire amount of the award pending the 
403.35  final determination thereof.  If any respondent or respondents 
403.36  having an interest in the award refuses to accept such payment 
404.1   the petitioner may pay the amount thereof to the court 
404.2   administrator of district court to be paid out under direction 
404.3   of the court.  A partial or full payment as herein provided 
404.4   shall not draw interest from the condemner from the date of 
404.5   payment or deposit, and upon final determination of any appeal 
404.6   the total award of damages shall be reduced by the amount of the 
404.7   partial or full payment.  If any partial or full payment exceeds 
404.8   the amount of the award of compensation as finally determined, 
404.9   the petitioner shall have a claim against the respondents 
404.10  receiving such payment for the amount thereof, to be recoverable 
404.11  in the same manner as in any civil action upon petitioner's 
404.12  motion, final judgment must be entered in the condemnation 
404.13  action in favor of the petitioner in the amount of the balance 
404.14  owed to the petitioner and is recoverable within the original 
404.15  condemnation action. 
404.16     Sec. 4.  Minnesota Statutes 1996, section 121.15, is 
404.17  amended by adding a subdivision to read: 
404.18     Subd. 1a.  [PROJECT.] The construction, remodeling, or 
404.19  improvement of a building or site of an educational facility at 
404.20  an estimated cost exceeding $100,000 is a project under section 
404.21  177.42, subdivision 2. 
404.22     Sec. 5.  Minnesota Statutes 1996, section 161.45, is 
404.23  amended by adding a subdivision to read: 
404.24     Subd. 3.  [UTILITY INTERESTS WHEN REAL PROPERTY 
404.25  CONVEYED.] In proceedings to vacate, transfer, turn back, or 
404.26  otherwise convey an interest in real property owned or 
404.27  controlled by the department, when the property is owned in fee 
404.28  by the state, the commissioner may specify that the conveyance 
404.29  of the department's interest does not affect a prior, existing 
404.30  utility easement in the property or use of the property granted 
404.31  to a utility under permit issued by the department.  In 
404.32  addition, the commissioner may convey interests in real 
404.33  property, including an easement, subject to the right of a 
404.34  utility to enter upon the right-of-way to maintain, repair, 
404.35  replace, reconstruct, improve, remove, or otherwise attend to 
404.36  its equipment.  Where the utility had no preexisting easement 
405.1   over the real property, this subdivision does not prohibit a 
405.2   political subdivision, government agency, or private entity from 
405.3   negotiating or contracting with a utility with regard to the 
405.4   utility's easement or other interest in the property, but the 
405.5   utility shall continue to hold the interest in the property and 
405.6   the right of reasonable entry unless and until the utility 
405.7   agrees in writing to relinquish its interests. 
405.8      Sec. 6.  Minnesota Statutes 1996, section 216B.16, is 
405.9   amended by adding a subdivision to read: 
405.10     Subd. 16.  [WIND AND BIOMASS MANDATES.] Upon the petition 
405.11  of a public utility, the commission shall approve or disapprove 
405.12  power purchase contracts or investments entered into or made by 
405.13  the utility to satisfy the wind and biomass mandates contained 
405.14  in sections 216B.2423 and 216B.2424.  The contract expenses 
405.15  incurred and investments made by a public utility with the 
405.16  approval of the commission shall be fully recognized for the 
405.17  entire term of the contract or investment period without 
405.18  reduction and shall be included by the commission in its 
405.19  determination of just and reasonable rates.  The commission 
405.20  shall permit a public utility to file rate schedules providing 
405.21  for recovery of the costs of the wind and biomass mandates. 
405.22     Sec. 7. [270.0683] [REVENUE ESTIMATES OF LEGISLATIVE 
405.23  PROPOSALS.] 
405.24     Subdivision 1.  [DUTY TO PREPARE.] The commissioner of 
405.25  revenue shall prepare estimates of the effect of a bill or other 
405.26  proposal to change Minnesota tax law on state or local tax 
405.27  collections and state aid payments: 
405.28     (1) for bills being heard in a legislative committee with 
405.29  jurisdiction over bills relating to taxation; 
405.30     (2) in response to a request from the chair of a 
405.31  legislative committee with jurisdiction over bills relating to 
405.32  taxation; 
405.33     (3) in response to a request, approved by a majority of a 
405.34  legislative committee with jurisdiction over bills relating to 
405.35  taxation; and 
405.36     (4) to the extent possible, in response to a request from a 
406.1   member of the legislature. 
406.2      Subd. 2.  [METHODOLOGY.] Given the limitations of time and 
406.3   available resources, the commissioner shall use the best 
406.4   available data and methods to estimate, as accurately as 
406.5   possible, the actual effect of proposed changes on tax 
406.6   collections or payment of refunds.  To the extent practicable, 
406.7   in preparing the estimates the commissioner must specifically 
406.8   take into account actual and likely levels of compliance with 
406.9   both present and proposed tax law, including the effect of 
406.10  ongoing or planned compliance efforts by the commissioner.  The 
406.11  estimates must include a description of the methods and data 
406.12  used to prepare the estimate. 
406.13     Subd. 3.  [EDUCATION AIDS EXCLUDED.] This section does not 
406.14  require the commissioner to estimate the effect of changes in 
406.15  state education aids. 
406.16     Sec. 8.  Minnesota Statutes 1996, section 270.60, is 
406.17  amended by adding a subdivision to read: 
406.18     Subd. 4.  [PAYMENTS TO COUNTIES.] (a) The commissioner 
406.19  shall pay to a county in which an Indian gaming casino is 
406.20  located ten percent of the state share of all taxes generated 
406.21  from activities on reservations and collected under a tax 
406.22  agreement under this section with the tribal government for the 
406.23  reservation located in the county.  If the tribe has casinos 
406.24  located in more than one county, the payment must be divided 
406.25  equally among the counties in which the casinos are located. 
406.26     (b) If a tribe agrees in writing with a county in which an 
406.27  Indian gaming casino is located to make cash payments to the 
406.28  county, the commissioner shall pay an additional amount to the 
406.29  county equal to the tribal payment.  The total amount paid under 
406.30  this paragraph and paragraph (a) must not exceed 15 percent of 
406.31  the state share of the tax generated under the agreement for a 
406.32  year.  A county that has entered into a written agreement with a 
406.33  tribe shall provide to the commissioner a copy of the agreement 
406.34  plus proof of payments made by the tribe under the agreement.  
406.35  The commissioner shall not make any additional payments under 
406.36  this paragraph unless the required documents are received by the 
407.1   commissioner by January 31 of the year following the year the 
407.2   payments are made by the tribe.  
407.3      (c) The commissioner shall make the payments required under 
407.4   this subdivision by February 28 of the year following the year 
407.5   the taxes are collected. 
407.6      (d) The amounts necessary to make the payments authorized 
407.7   by this subdivision are appropriated from the general fund to 
407.8   the commissioner. 
407.9      Sec. 9.  Minnesota Statutes 1996, section 271.19, is 
407.10  amended to read: 
407.11     271.19 [COSTS AND DISBURSEMENTS.] 
407.12     Upon the determination of any appeal under this chapter 
407.13  before the tax court, or of any review hereunder by the supreme 
407.14  court, the costs and disbursements shall be taxed and allowed in 
407.15  favor of the prevailing party and against the losing party as in 
407.16  civil actions or, if there has been an offer of judgment or 
407.17  settlement by a party prior to ten days before the court hears 
407.18  the appeal, pursuant to Minnesota Rules of Civil Procedure, rule 
407.19  68.  In any case where a person liable for a tax or other 
407.20  obligation has lost an appeal or review instituted by the 
407.21  person, and the tax court or court shall determine that the 
407.22  person instituted the same merely for the purposes of delay, or 
407.23  that the taxpayer's position in the proceedings is frivolous, 
407.24  additional costs, commensurate with the expense incurred and 
407.25  services performed by the agencies of the state in connection 
407.26  with the appeal, but not exceeding $5,000 in any case, may be 
407.27  allowed against the taxpayer, in the discretion of the tax court 
407.28  or court.  Costs and disbursements allowed against any such 
407.29  person shall be added to the tax or other obligation determined 
407.30  to be due, and shall be payable therewith.  To the extent 
407.31  described in section 15.471, where an award of costs and 
407.32  attorney fees is authorized under section 15.472, the costs and 
407.33  fees shall be allowed against the state, including expenses 
407.34  incurred by the taxpayer to administratively protest or appeal 
407.35  to the department of revenue the order, decision, or report of 
407.36  the commissioner that is the subject of the tax court 
408.1   proceedings.  Costs and disbursements allowed against the state 
408.2   or other public agencies shall be paid out of funds received 
408.3   from taxes or other obligations of the kind involved in the 
408.4   proceeding, or other funds of the agency concerned appropriated 
408.5   and available therefor.  Witnesses in proceedings under this 
408.6   chapter shall receive like fees as in the district court, to be 
408.7   paid in the first instance by the parties by whom the witnesses 
408.8   were called, and to be taxed and allowed as herein provided. 
408.9      Sec. 10.  Minnesota Statutes 1996, section 278.07, is 
408.10  amended to read: 
408.11     278.07 [JUDGMENT; AMOUNT; COSTS.] 
408.12     Judgment shall be for the amount of the taxes for the year 
408.13  as the court shall determine the same, less the amount paid 
408.14  thereon, if any.  If the tax is sustained in the full amount 
408.15  levied or increased, costs and disbursements may, in the 
408.16  discretion of the court, be taxed and allowed as in delinquent 
408.17  tax proceedings and shall be included in the judgment.  If the 
408.18  tax so determined shall be less than is decreased from the 
408.19  amount thereof as originally levied, the court may, in its 
408.20  discretion, award disbursements to the petitioner, which shall 
408.21  be taxed and allowed and be deducted from the amount of the 
408.22  taxes as determined unless there has been a previous offer of 
408.23  reduced taxes that was rejected by the petitioner, in which case 
408.24  the award of costs and disbursements is governed by Minnesota 
408.25  Rules of Civil Procedure, rule 68.  If there be no judgment for 
408.26  taxes, a judgment may be entered determining the right of the 
408.27  parties and for the costs and disbursements as taxed and allowed.
408.28     Sec. 11.  Minnesota Statutes 1996, section 287.22, is 
408.29  amended to read: 
408.30     287.22 [EXCEPTIONS.] 
408.31     The tax imposed by section 287.21 shall not apply to: 
408.32     A.  Any executory contract for the sale of land under which 
408.33  the vendee is entitled to or does take possession thereof, or 
408.34  any assignment or cancellation thereof.  
408.35     B.  Any mortgage or any assignment, extension, partial 
408.36  release, or satisfaction thereof.  
409.1      C.  Any will.  
409.2      D.  Any plat.  
409.3      E.  Any lease.  
409.4      F.  Any deed, instrument, or writing in which the United 
409.5   States or any agency or instrumentality thereof is the grantor, 
409.6   assignor, transferor, conveyor, grantee or assignee. 
409.7      G.  Deeds for cemetery lots.  
409.8      H.  Deeds of distribution by personal representatives.  
409.9      I.  Deeds to or from coowners partitioning undivided 
409.10  interests in the same piece of property. 
409.11     J.  Any deed or other instrument of conveyance issued 
409.12  pursuant to a land exchange under section 92.121 and related 
409.13  laws.  
409.14     K.  A referee's or sheriff's certificate of sale in a 
409.15  mortgage or lien foreclosure sale. 
409.16     L.  A referee's or sheriff's certificate of redemption from 
409.17  a mortgage or lien foreclosure sale issued to the redeeming 
409.18  mortgagor or lienee. 
409.19     M.  A decree of marriage dissolution, as defined in section 
409.20  287.01, subdivision 4, or any deed or other instrument between 
409.21  the parties to the dissolution made pursuant to the terms of the 
409.22  decree. 
409.23     Sec. 12.  Minnesota Statutes 1996, section 295.50, 
409.24  subdivision 6, is amended to read: 
409.25     Subd. 6.  [HOME HEALTH CARE SERVICES.] "Home health care 
409.26  services" are services: 
409.27     (1) defined under the state medical assistance program as 
409.28  home health agency services provided by a home health agency, 
409.29  personal care services and supervision of personal care 
409.30  services, private duty nursing services, and waivered 
409.31  services or services by home care providers required to be 
409.32  licensed under chapter 144A; and 
409.33     (2) provided at a recipient's residence, if the recipient 
409.34  does not live in a hospital, nursing facility, as defined in 
409.35  section 62A.46, subdivision 3, or intermediate care facility for 
409.36  persons with mental retardation as defined in section 256B.055, 
410.1   subdivision 12, paragraph (d). 
410.2      Home health care services include medical supplies only 
410.3   when used in providing home health care services. 
410.4      Sec. 13.  Minnesota Statutes 1996, section 295.58, is 
410.5   amended to read: 
410.6      295.58 [DEPOSIT OF REVENUES AND PAYMENT OF REFUNDS.] 
410.7      (a) The commissioner shall deposit all revenues, including 
410.8   penalties and interest, derived from the taxes imposed by 
410.9   sections 295.50 to 295.57 and from the insurance premiums tax on 
410.10  health maintenance organizations, community integrated service 
410.11  networks, integrated service networks, and nonprofit health 
410.12  service plan corporations in the health care access fund in the 
410.13  state treasury.  Refunds of overpayments must be paid from the 
410.14  health care access fund in the state treasury.  There is 
410.15  annually appropriated from the health care access fund to the 
410.16  commissioner of revenue the amount necessary to make any refunds 
410.17  required under section 295.54. 
410.18     (b) The revenues, including penalties and interest, derived 
410.19  from the tax on insurance premiums imposed by section 60A.15 on 
410.20  health maintenance organizations, community integrated service 
410.21  networks, integrated service networks, and nonprofit health 
410.22  service plan corporations must be deposited in the general fund 
410.23  and are annually appropriated to the Minnesota comprehensive 
410.24  health association to offset assessments made to subsidize the 
410.25  costs of the Minnesota comprehensive insurance plan established 
410.26  under chapter 62E. 
410.27     Sec. 14.  Minnesota Statutes 1996, section 298.75, 
410.28  subdivision 1, is amended to read: 
410.29     Subdivision 1.  [DEFINITIONS.] Except as may otherwise be 
410.30  provided, the following words, when used in this section, shall 
410.31  have the meanings herein ascribed to them.  
410.32     (1) "Aggregate material" shall mean nonmetallic natural 
410.33  mineral aggregate including, but not limited to sand, silica 
410.34  sand, gravel, building stone, crushed rock, limestone, and 
410.35  granite.  Aggregate material shall not include dimension stone 
410.36  and dimension granite.  Aggregate material must be measured or 
411.1   weighed after it has been extracted from the pit, quarry, or 
411.2   deposit.  
411.3      (2) "Person" shall mean any individual, firm, partnership, 
411.4   corporation, organization, trustee, association, or other entity.
411.5      (3) "Operator" shall mean any person engaged in the 
411.6   business of removing aggregate material from the surface or 
411.7   subsurface of the soil, for the purpose of sale, either directly 
411.8   or indirectly, through the use of the aggregate material in a 
411.9   marketable product or service.  
411.10     (4) "Extraction site" shall mean a pit, quarry, or deposit 
411.11  containing aggregate material and any contiguous property to the 
411.12  pit, quarry, or deposit which is used by the operator for 
411.13  stockpiling the aggregate material.  
411.14     (5) "Importer" shall mean any person who buys aggregate 
411.15  material produced from a county not listed in paragraph (6) or 
411.16  another state and causes the aggregate material to be imported 
411.17  into a county in this state which imposes a tax on aggregate 
411.18  material.  
411.19     (6) "County" shall mean the counties of Pope, Stearns, 
411.20  Benton, Sherburne, Carver, Scott, Dakota, Le Sueur, Kittson, 
411.21  Marshall, Pennington, Red Lake, Polk, Norman, Mahnomen, Clay, 
411.22  Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, 
411.23  Sibley, Hennepin, Washington, Chisago, and Ramsey.  
411.24     Sec. 15.  Minnesota Statutes 1996, section 298.75, 
411.25  subdivision 4, is amended to read: 
411.26     Subd. 4.  If the county auditor has not received the report 
411.27  by the 15th day after the last day of each calendar quarter from 
411.28  the operator or importer as required by subdivision 3 or has 
411.29  received an erroneous report, the county auditor shall estimate 
411.30  the amount of tax due and notify the operator or importer by 
411.31  registered mail of the amount of tax so estimated within the 
411.32  next 14 days.  An operator or importer may, within 30 days from 
411.33  the date of mailing the notice, and upon payment of the amount 
411.34  of tax determined to be due, file in the office of the county 
411.35  auditor a written statement of objections to the amount of taxes 
411.36  determined to be due.  The statement of objections shall be 
412.1   deemed to be a petition within the meaning of chapter 278, and 
412.2   shall be governed by sections 278.02 to 278.13. 
412.3      Sec. 16.  Minnesota Statutes 1996, section 298.75, is 
412.4   amended by adding a subdivision to read: 
412.5      Subd. 8.  The county auditor or its duly authorized agent 
412.6   may examine records, including computer records, maintained by 
412.7   an importer or operator.  The term "record" includes, but is not 
412.8   limited to, all accounts of an importer or operator.  The county 
412.9   auditor must have access at all reasonable times to inspect and 
412.10  copy all business records related to an importer's or operator's 
412.11  collection, transportation, and disposal of aggregate to the 
412.12  extent necessary to ensure that all aggregate material 
412.13  production taxes required to be paid have been remitted to the 
412.14  county.  The records must be maintained by the importer or 
412.15  operator for no less than six years. 
412.16     Sec. 17.  Minnesota Statutes 1996, section 298.28, 
412.17  subdivision 9a, is amended to read: 
412.18     Subd. 9a.  [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 15.4 
412.19  cents per ton for distributions in 1996, 1998, and 1999 and 20.4 
412.20  cents per ton for distributions in 1997, 1998, and 1999 shall be 
412.21  paid to the taconite economic development fund.  No distribution 
412.22  shall be made under this paragraph in any year in which total 
412.23  industry production falls below 30 million tons. 
412.24     (b) An amount equal to 50 percent of the tax under section 
412.25  298.24 for concentrate sold in the form of pellet chips and 
412.26  fines not exceeding 5/16 inch in size and not including crushed 
412.27  pellets shall be paid to the taconite economic development 
412.28  fund.  The amount paid shall not exceed $700,000 annually for 
412.29  all companies.  If the initial amount to be paid to the fund 
412.30  exceeds this amount, each company's payment shall be prorated so 
412.31  the total does not exceed $700,000. 
412.32     Sec. 18.  Minnesota Statutes 1996, section 298.28, is 
412.33  amended by adding a subdivision to read: 
412.34     Subd. 9b.  [TACONITE ENVIRONMENTAL FUND.] Five cents per 
412.35  ton for distributions in 1998 and 1999 shall be paid to the 
412.36  taconite environmental fund for use under section 298.2961.  No 
413.1   distribution may be made under this paragraph in any year in 
413.2   which total industry production falls below 30,000,000 tons. 
413.3      Sec. 19.  Minnesota Statutes 1996, section 298.2961, 
413.4   subdivision 1, is amended to read: 
413.5      Subdivision 1.  [APPROPRIATION.] (a) $10,000,000 is 
413.6   appropriated from the northeast Minnesota economic protection 
413.7   trust fund to a special account in the taconite area 
413.8   environmental protection fund for grants or loans to producers 
413.9   on a project-by-project basis as provided in this section. 
413.10     (b) The proceeds of the tax designated under section 
413.11  298.28, subdivision 9b, are appropriated for grants and loans to 
413.12  producers on a project-by-project basis as provided in this 
413.13  section. 
413.14     Sec. 20.  Minnesota Statutes 1996, section 325D.33, 
413.15  subdivision 3, is amended to read: 
413.16     Subd. 3.  [REBATES OR CONCESSIONS.] It is unlawful for a 
413.17  wholesaler to offer a rebate in price, to give a rebate in 
413.18  price, to offer a concession of any kind, or to give a 
413.19  concession of any kind in connection with the sale of 
413.20  cigarettes.  For purposes of this chapter, the term "discount" 
413.21  is included in the definition of a rebate.  For purposes of this 
413.22  subdivision, the term "wholesaler" does not include a 
413.23  manufacturer or manufacturer's representative.  Payments or 
413.24  other compensation for using the manufacturer's displays or 
413.25  advertising materials are not rebates, discounts, or concessions 
413.26  for purposes of this chapter. 
413.27     Sec. 21.  Minnesota Statutes 1996, section 373.40, 
413.28  subdivision 7, is amended to read: 
413.29     Subd. 7.  [REPEALER.] This section is repealed effective 
413.30  for bonds issued after July 1, 1998 2003, but continues to apply 
413.31  to bonds issued before that date. 
413.32     Sec. 22. [383A.80] [RAMSEY COUNTY DEED AND MORTGAGE TAX.] 
413.33     Subdivision 1.  [AUTHORITY TO IMPOSE; RATE.] (a) The 
413.34  governing body of Ramsey county may impose a mortgage registry 
413.35  and deed tax. 
413.36     (b) The rate of the mortgage registry tax equals one cent 
414.1   for each $100 or fraction of the principal. 
414.2      (c) The rate of the deed tax equals five cents for each 
414.3   $500 or fraction of the amount. 
414.4      Subd. 2.  [GENERAL LAW PROVISIONS APPLY.] The taxes under 
414.5   this section apply to the same base and must be imposed, 
414.6   collected, administered, and enforced in the same manner as 
414.7   provided under chapter 287 for the state mortgage registry and 
414.8   deed taxes.  All the provisions of chapter 287 apply to these 
414.9   taxes, except the rate is as specified in subdivision 1, the 
414.10  term "Ramsey county" must be substituted for "the state," and 
414.11  the revenue must be deposited as provided in subdivision 3. 
414.12     Subd. 3.  [DEPOSIT OF REVENUES.] All revenues from the tax 
414.13  are for the use of the Ramsey county board of commissioners and 
414.14  must be deposited in the county's environmental response fund 
414.15  under section 383B.81. 
414.16     Subd. 4.  [EXPIRATION.] The authority to impose the tax 
414.17  under this section expires January 1, 2003. 
414.18     Sec. 23. [383A.81] [ENVIRONMENTAL RESPONSE FUND.] 
414.19     Subdivision 1.  [CREATION.] An environmental response fund 
414.20  is created for the purposes specified in this section.  The 
414.21  taxes imposed by section 383B.80 must be deposited in the fund.  
414.22  The board of county commissioners shall administer the fund 
414.23  either as a county board, a housing and redevelopment authority, 
414.24  or a regional rail authority. 
414.25     Subd. 2.  [USES OF FUND.] The fund created in subdivision 1 
414.26  must be used for the following purposes: 
414.27     (1) acquisition through purchase or condemnation of lands 
414.28  or property which are polluted or contaminated with hazardous 
414.29  substances; 
414.30     (2) paying the costs associated with indemnifying or 
414.31  holding harmless the entity taking title to lands or property 
414.32  from any liability arising out of the ownership, remediation, or 
414.33  use of the land or property; 
414.34     (3) paying for the costs of remediating the acquired land 
414.35  or property; 
414.36     (4) paying the costs associated with remediating lands or 
415.1   property which are polluted or contaminated with hazardous 
415.2   substances; or 
415.3      (5) paying for the costs associated with improving the 
415.4   property for economic development, recreational, housing, 
415.5   transportation or rail traffic. 
415.6      Subd. 3.  [MATCHING FUNDS.] In expending funds under this 
415.7   section, the county shall seek matching funds from contamination 
415.8   clean up funds administered by the commissioner of the 
415.9   department of trade and economic development, the metropolitan 
415.10  council, the federal government, the private sector, and any 
415.11  other source. 
415.12     Subd. 4.  [BONDS.] The county may pledge the proceeds from 
415.13  the taxes imposed by section 383B.80 to bonds issued under this 
415.14  chapter and chapters 398A, 462, 469, and 475. 
415.15     Subd. 5.  [PRIORITIES.] The first priority for the use of 
415.16  the environmental response fund created in this section is to 
415.17  clean up the site located in the city of St. Paul known as the 
415.18  Dale Street Shops and Maxson Steel site or other sites at or 
415.19  near rail lines that are blighted and the clean up of which will 
415.20  lead to living wage jobs, and to improve the land for economic 
415.21  development. 
415.22     Subd. 6.  [LAND SALES.] Land or property acquired under 
415.23  this section may be resold at fair market value.  Proceeds from 
415.24  the sale of the land must be deposited in the environmental 
415.25  response fund. 
415.26     Subd. 7.  [DOT ASSISTANCE.] The commissioner of 
415.27  transportation shall collaborate with the county and any 
415.28  affected municipality by providing technical assistance and 
415.29  support in cleaning up a contaminated site. 
415.30     Sec. 24. [383B.80] [HENNEPIN COUNTY DEED AND MORTGAGE TAX.] 
415.31     Subdivision 1.  [AUTHORITY TO IMPOSE; RATE.] (a) The 
415.32  governing body of Hennepin county may impose a mortgage registry 
415.33  and deed tax. 
415.34     (b) The rate of the mortgage registry tax equals one cent 
415.35  for each $100 or fraction of the principal. 
415.36     (c) The rate of the deed tax equals five cents for each 
416.1   $500 or fraction of the amount. 
416.2      Subd. 2.  [GENERAL LAW PROVISIONS APPLY.] The taxes under 
416.3   this section apply to the same base and must be imposed, 
416.4   collected, administered, and enforced in the same manner as 
416.5   provided under Minnesota Statutes, chapter 287 for the state 
416.6   mortgage registry and deed taxes.  All the provisions of chapter 
416.7   287 apply to these taxes, except the rate is as specified in 
416.8   subdivision 1, the term "Hennepin county" must be substituted 
416.9   for the "state," and the revenue must be deposited as provided 
416.10  in subdivision 3. 
416.11     Subd. 3.  [DEPOSIT OF REVENUES.] All revenues from the tax 
416.12  are for the use of the Hennepin county board of commissioners 
416.13  and must be deposited in the county's environmental response 
416.14  fund under section 383B.81. 
416.15     Subd. 4.  [EXPIRATION.] The authority to impose the tax 
416.16  under this section expires January 1, 2003. 
416.17     Sec. 25. [383B.81] [ENVIRONMENTAL RESPONSE FUND.] 
416.18     Subdivision 1.  [CREATION.] An environmental response fund 
416.19  is created for the purposes specified in this section.  The 
416.20  taxes imposed by section 383B.80 must be deposited in the fund.  
416.21  The board of county commissioners shall administer the fund 
416.22  either as a county board, a housing and redevelopment authority, 
416.23  or a regional rail authority. 
416.24     Subd. 2.  [USES OF FUND.] The fund created in subdivision 1 
416.25  must be used for the following purposes: 
416.26     (1) acquisition through purchase or condemnation of lands 
416.27  or property which are polluted or contaminated with hazardous 
416.28  substances; 
416.29     (2) paying the costs associated with indemnifying or 
416.30  holding harmless the entity taking title to lands or property 
416.31  from any liability arising out of the ownership, remediation, or 
416.32  use of the land or property; 
416.33     (3) paying for the costs of remediating the acquired land 
416.34  or property; 
416.35     (4) paying the costs associated with remediating lands or 
416.36  property which are polluted or contaminated with hazardous 
417.1   substances; or 
417.2      (5) paying for the costs associated with improving the 
417.3   property for economic development, recreational, housing, 
417.4   transportation or rail traffic. 
417.5      Subd. 3.  [MATCHING FUNDS.] In expending funds under this 
417.6   section the county shall seek matching funds from contamination 
417.7   cleanup funds administered by the commissioners of the 
417.8   department of trade and economic development, the metropolitan 
417.9   council, the federal government, the private sector and any 
417.10  other source. 
417.11     Subd. 4.  [BONDS.] The county may pledge the proceeds from 
417.12  the taxes imposed by section 383B.80 to bonds issued under this 
417.13  chapter and chapters 398A, 462, 469, and 475. 
417.14     Subd. 5.  [PRIORITIES.] The first priority for the use of 
417.15  the the environmental response fund created in this section is 
417.16  to clean up the site located in the city of St. Louis Park known 
417.17  as NL Industries/Tarce Corporation/Golden Auto, EPA I.D. No. 
417.18  MND097891634 and to provide adequate right-of-way for a portion 
417.19  of the rail line to replace the 29th street line in the city of 
417.20  Minneapolis, including making rail improvements, changing the 
417.21  curve of the railroad track and eliminating a switching 
417.22  facility, and improving the land for economic development. 
417.23     Subd. 6.  [LAND SALES.] Land or property acquired under 
417.24  this section may be resold at fair market value.  Proceeds from 
417.25  the sale of the land must be deposited in the environmental 
417.26  response fund. 
417.27     Subd. 7.  [DOT ASSISTANCE.] The commissioner of 
417.28  transportation shall collaborate with the county and any 
417.29  affected municipality by providing technical assistance and 
417.30  support in facilitating the railroad improvement and cleaning up 
417.31  a contaminated site. 
417.32     Sec. 26.  Minnesota Statutes 1996, section 398A.04, 
417.33  subdivision 1, is amended to read: 
417.34     Subdivision 1.  [GENERAL.] An authority may exercise all 
417.35  the powers necessary or desirable to implement the powers 
417.36  specifically granted in this section, and in exercising the 
418.1   powers is deemed to be performing an essential governmental 
418.2   function and exercising a part of the sovereign power of the 
418.3   state, and is a local government unit and political subdivision 
418.4   of the state.  Without limiting the generality of the foregoing, 
418.5   the authority may: 
418.6      (a) Sue and be sued, have a seal, which may but need not be 
418.7   affixed to documents as directed by the board, make and perform 
418.8   contracts, and have perpetual succession; 
418.9      (b) Acquire real and personal property within or outside 
418.10  its taxing jurisdiction, by purchase, gift, devise, 
418.11  condemnation, conditional sale, lease, lease purchase, or 
418.12  otherwise; or for purposes, including the facilitation of an 
418.13  economic development project pursuant to section 469.091 or 
418.14  469.175, subdivision 7, that also improve rail service; and 
418.15     (c) Hold, manage, control, sell, convey, lease, mortgage, 
418.16  or otherwise dispose of real or personal property. 
418.17     Sec. 27.  [458D.111] [COLLECTION OF SOLID WASTE MANAGEMENT 
418.18  SERVICE CHARGES.] 
418.19     Subdivision 1.  [AUTHORITY.] The board shall have the 
418.20  powers of a county as specified in section 400.08. 
418.21     Subd. 2.  [METHOD OF COLLECTING CERTAIN SERVICE 
418.22  CHARGES.] The board shall determine the method of collecting 
418.23  service charges in a service area by resolution. 
418.24     Subd. 3.  [SERVICE CHARGES ON REAL ESTATE INCLUDING EXEMPT 
418.25  PROPERTY.] In addition to any methods provided in section 
418.26  400.08, the board may assess and collect service charges as 
418.27  follows.  On or before October 15 of each year, the board shall 
418.28  certify to each county auditor an itemized list of solid waste 
418.29  management service charges and a description of parcels of lands 
418.30  against which the charges arise.  It shall be the duty of the 
418.31  county auditors to include the charges upon the tax rolls of the 
418.32  county for the taxes due and payable for the following year.  
418.33  The solid waste management service charge shall be enforced and 
418.34  collected in the manner provided for the enforcement and 
418.35  collection of real property taxes.  The service charges shall be 
418.36  subject to the same penalties, interest, and other conditions 
419.1   provided for the collection of property taxes.  The board shall 
419.2   reimburse each county auditor for the costs of collection of the 
419.3   service charge. 
419.4      Sec. 28.  [PUBLIC SAFETY TRAINING FACILITY.] 
419.5      Subdivision 1.  [JOINT POWERS AGREEMENT; BONDS.] Each of 
419.6   the cities of Bloomington, Chanhassen, Eden Prairie, Edina, 
419.7   Minnetonka, and Richfield may issue general obligation bonds of 
419.8   the city in an amount not to exceed $1,000,000 for its share of 
419.9   the cost of the acquisition, construction, and equipping of a 
419.10  public safety training facility to be jointly operated by a 
419.11  joint powers association consisting of two or more municipal or 
419.12  public corporations of which that city is a member.  The 
419.13  issuance of the bonds is subject to Minnesota Statutes, chapter 
419.14  475, except that no election shall be required except as 
419.15  provided in subdivision 2. 
419.16     Subd. 2.  [REVERSE REFERENDUM.] Before the adoption by the 
419.17  governing body of a city of any resolution authorizing the 
419.18  issuance of any bonds authorized by subdivision 1, the city 
419.19  shall publish a notice in the official newspaper of the city 
419.20  stating that the governing body of the city intends to consider 
419.21  the authorization of the issuance of the bonds, stating the 
419.22  amount, purpose, and, in general, the security and source of 
419.23  payment for the bonds.  The resolution authorizing the issuance 
419.24  of the bonds shall not be adopted by the governing body of the 
419.25  city for at least 15 days after publication of the notice of 
419.26  intention.  If within 15 days after publication of the notice of 
419.27  intention a petition asking for an election on the proposition 
419.28  that the city issue the bonds signed by the voters equal to at 
419.29  least ten percent of the registered voters in the city is filed 
419.30  with the clerk, no bonds may be issued by the city unless 
419.31  approved by a majority of the voters of the city voting on the 
419.32  question of the issuance at a regular or special election.  
419.33     Subd. 3.  [EFFECTIVE DATE; LOCAL APPROVAL.] This section is 
419.34  effective with respect to any of the cities of Bloomington, 
419.35  Chanhassen, Eden Prairie, Edina, Minnetonka, and Richfield the 
419.36  day after compliance by that city with Minnesota Statutes, 
420.1   section 645.021, subdivision 3. 
420.2      Sec. 29.  [ST. LOUIS COUNTY TOWNS.] 
420.3      If the St. Louis county board does not approve section 14, 
420.4   as provided in section 33, each of the following towns in St. 
420.5   Louis county may impose the aggregate materials tax under 
420.6   Minnesota Statutes, section 298.75:  the towns of Alden, 
420.7   Brevator, Canosia, Duluth, Fredenberg, Gnesen, Grand Lake, 
420.8   Industrial, Lakewood, Midway, Normanna, North Star, Rice Lake, 
420.9   and Solway. 
420.10     For purposes of exercising the powers contained in 
420.11  Minnesota Statutes, section 298.75, the "town" is deemed to be 
420.12  the "county." 
420.13     In those towns located in St. Louis County that impose the 
420.14  tax under Minnesota Statutes, section 298.75, all provisions in 
420.15  that section shall apply to those towns, except that in lieu of 
420.16  the distribution of the tax proceeds under subdivision 7, all 
420.17  proceeds from this tax shall be retained by each of the towns 
420.18  that impose the tax. 
420.19     Sec. 30.  [DEED TAX.] 
420.20     The commissioner of revenue may not enforce a deed tax 
420.21  assessment in the case of new residential construction if, at or 
420.22  before the time the first residential owners of the improvement 
420.23  take possession, the deed tax has been paid on the consideration 
420.24  paid for the improvement. 
420.25     Sec. 31.  [APPROPRIATION FOR REIMBURSEMENT INCREASES.] 
420.26     Subdivision 1.  [APPROPRIATION.] $5,000,000 is appropriated 
420.27  for fiscal year 1998 from the general fund to the commissioner 
420.28  of human services for reimbursement increases as provided in 
420.29  subdivision 2.  This amount is available until June 30, 1999. 
420.30     Subd. 2.  [REIMBURSEMENT INCREASES.] Effective for services 
420.31  rendered on or after July 1, 1997, the commissioner shall use 
420.32  the amount appropriated under subdivision 1 to increase 
420.33  reimbursement rates for home- and community-based waiver 
420.34  services for persons with mental retardation or related 
420.35  conditions under Minnesota Statutes, section 256B.501; home- and 
420.36  community-based waiver services for the elderly under Minnesota 
421.1   Statutes, section 256B.0915; community alternatives for disabled 
421.2   individuals waiver services under Minnesota Statutes, section 
421.3   256B.49; community alternative care waiver services under 
421.4   Minnesota Statutes, section 256B.49; traumatic brain injury 
421.5   waiver services under Minnesota Statutes, section 256B.49; 
421.6   nursing services and home health services under Minnesota 
421.7   Statutes, section 256B.0625, subdivision 6a; personal care 
421.8   services and nursing supervision of personal care services under 
421.9   Minnesota Statutes, section 256B.0625, subdivision 19a; private 
421.10  duty nursing services under Minnesota Statutes, section 
421.11  256B.0625, subdivision 7; day training and habilitation services 
421.12  for adults with mental retardation or related conditions under 
421.13  Minnesota Statutes, sections 252.40 to 252.47; physical therapy 
421.14  services under Minnesota Statutes, sections 256B.0625, 
421.15  subdivision 8, and 256D.03, subdivision 4; occupational therapy 
421.16  services under Minnesota Statutes, sections 256B.0625, 
421.17  subdivision 8a, and 256D.03, subdivision 4; speech-language 
421.18  therapy services under Minnesota Statutes, section 256D.03, 
421.19  subdivision 4, and Minnesota Rules, part 9505.0390; respiratory 
421.20  therapy services under Minnesota Statutes, section 256D.03, 
421.21  subdivision 4, and Minnesota Rules, part 9505.0295; dental 
421.22  services under Minnesota Statutes, sections 256B.0625, 
421.23  subdivision 9, and 256D.03, subdivision 4; alternative care 
421.24  services under Minnesota Statutes, section 256B.0913; and 
421.25  semi-independent living services under Minnesota Statutes, 
421.26  section 252.275. 
421.27     Sec. 32.  [APPROPRIATION; PAYMENT OF CLAIMS.] 
421.28     $16,600,000 is appropriated in fiscal year 1998 from the 
421.29  general fund to the commissioner of revenue to pay claims filed 
421.30  under the Cambridge Bank Judgment. 
421.31     Sec. 33.  [APPROPRIATION; ADMINISTRATION OF ACT.] 
421.32     Subdivision 1.  [PROPERTY TAX CREDIT.] $235,000 is 
421.33  appropriated from the general fund for fiscal year 1998 to the 
421.34  commissioner of revenue to pay the costs of administering the 
421.35  1997 property tax credit provided in article 1, section 14. 
421.36     Subd. 2.  [OTHER COSTS.] $416,000 is appropriated from the 
422.1   general fund for fiscal years 1998 and 1999 to the commissioner 
422.2   of revenue to pay the other costs of administering the 
422.3   provisions of this act. 
422.4      Sec. 34.  [EFFECTIVE DATE.] 
422.5      Section 11 is effective for decrees of marriage 
422.6   dissolution, deeds, or other instruments executed and delivered 
422.7   after July 1, 1997. 
422.8      Section 13 is effective for revenues attributable to taxes 
422.9   due after June 30, 1997. 
422.10     Section 14 is effective for Pope county the day after 
422.11  compliance by Pope county with the requirements of Minnesota 
422.12  Statutes, section 645.021, subdivision 3. 
422.13     Section 14 is effective for Carlton county the day after 
422.14  compliance by Carlton county with the requirements of Minnesota 
422.15  Statutes, section 645.021, subdivision 3. 
422.16     Section 14 is effective for St. Louis county the day after 
422.17  compliance by St. Louis county with the requirements of 
422.18  Minnesota Statutes, section 645.021, subdivision 3. 
422.19     Section 21 is effective the day following final enactment. 
422.20     Section 30 is effective for assessments made on or after 
422.21  the effective date of Laws 1996, chapter 471, article 2, section 
422.22  32.