3rd Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to financing state and local government; 1.3 providing a sales tax rebate; reducing individual 1.4 income tax rates; making changes to income, sales and 1.5 use, property, excise, mortgage registry and deed, 1.6 health care provider, motor fuels, cigarette and 1.7 tobacco, liquor, insurance premiums, aircraft 1.8 registration, lawful gambling, taconite production, 1.9 solid waste, estate, and special taxes; conforming 1.10 with changes in federal income tax provisions; 1.11 authorizing certain cities to impose sales taxes and 1.12 issue bonds; establishing an agricultural homestead 1.13 credit; changing and allowing tax credits, 1.14 subtractions, and exemptions; changing property tax 1.15 valuation, assessment, levy, classification, 1.16 homestead, credit, aid, exemption, review, appeal, 1.17 abatement, and distribution provisions; extending levy 1.18 limits and changing levy authority; authorizing 1.19 property tax abatements; reducing the rate of health 1.20 care provider taxes; reducing tax rates on lawful 1.21 gambling; changing tax increment financing law and 1.22 providing special authority for certain cities; 1.23 authorizing water and sanitary sewer districts; 1.24 providing for the funding of courts in certain 1.25 judicial districts; changing tax forfeiture and 1.26 delinquency provisions; changing and clarifying tax 1.27 administration, collection, enforcement, and penalty 1.28 provisions; freezing the taconite production tax and 1.29 providing for its distribution; regulating state and 1.30 local business subsidies; authorizing issuance of 1.31 certain local obligations; requiring the metropolitan 1.32 airports commission to provide funding for airport 1.33 noise mitigation projects; modifying payment of 1.34 certain aids to local units of government; providing 1.35 for funding for border cities; changing fiscal note 1.36 requirements; providing for deposit of tobacco 1.37 settlement funds; requiring tax rebates when there is 1.38 a budget surplus; requiring a study; authorizing 1.39 requirements to use alternative dispute resolution 1.40 processes in annexation and similar proceedings; 1.41 transferring funds; appropriating money; amending 1.42 Minnesota Statutes 1998, sections 3.986, subdivision 1.43 2; 3.987, subdivision 1; 16D.09; 60A.19, subdivision 1.44 6; 92.51; 97A.065, subdivision 2; 204B.135, by adding 1.45 a subdivision; 270.07, subdivision 1; 270.65; 270.67, 1.46 by adding a subdivision; 270.78; 270A.03, subdivision 2.1 2; 270A.07, subdivision 2; 270A.08, subdivision 2; 2.2 271.01, subdivision 5; 271.21, subdivision 2; 272.02, 2.3 subdivision 1; 272.027; 272.03, subdivision 6; 273.11, 2.4 subdivisions 1a and 16; 273.111, by adding a 2.5 subdivision; 273.124, subdivisions 1, 7, 8, 13, 14, 2.6 and by adding a subdivision; 273.13, subdivisions 22, 2.7 23, 24, 25, 31, and by adding a subdivision; 273.1382; 2.8 273.1398, subdivisions 1a, 2, 8, and by adding a 2.9 subdivision; 273.1399, subdivision 6; 273.20; 274.01, 2.10 subdivision 1; 275.70, subdivision 5; 275.71, 2.11 subdivisions 2, 3, and 4; 276.131; 279.37, 2.12 subdivisions 1, 1a, and 2; 281.23, subdivisions 2, 4, 2.13 and 6; 282.01, subdivisions 1, 4, and 7; 282.04, 2.14 subdivision 2; 282.05; 282.08; 282.09; 282.241; 2.15 282.261, subdivision 4, and by adding a subdivision; 2.16 283.10; 287.01, subdivision 3, as amended; 287.05, 2.17 subdivisions 1, as amended, and 1a, as amended; 2.18 289A.02, subdivision 7; 289A.18, subdivision 4; 2.19 289A.20, subdivision 4; 289A.31, subdivision 2; 2.20 289A.40, subdivisions 1 and 1a; 289A.50, subdivision 2.21 7, and by adding a subdivision; 289A.55, subdivision 2.22 9; 289A.56, subdivision 4; 289A.60, subdivisions 3 and 2.23 21; 290.01, subdivisions 7, 19, 19a, 19b, 19f, 19g, 2.24 31, and by adding a subdivision; 290.06, subdivisions 2.25 2c, 2d, and by adding subdivisions; 290.0671, 2.26 subdivision 1; 290.0674, subdivisions 1 and 2; 2.27 290.091, subdivisions 1, 2, and 6; 290.0921, 2.28 subdivision 5; 290.095, subdivision 3; 290.17, 2.29 subdivisions 3, 4, and 6; 290.191, subdivisions 2 and 2.30 3; 290.9725; 290.9726, by adding a subdivision; 2.31 290A.03, subdivisions 3, 6, and 15; 290B.03, 2.32 subdivision 1; 290B.04, subdivisions 2, 3, and 4; 2.33 290B.05, subdivision 1; 291.005, subdivision 1; 2.34 295.50, subdivision 4; 295.52, subdivision 7; 295.53, 2.35 subdivision 1; 295.55, subdivisions 2 and 3; 295.57, 2.36 by adding a subdivision; 296A.16, by adding 2.37 subdivisions; 297A.15, subdivision 5; 297A.25, 2.38 subdivisions 9, 63, 73, and by adding subdivisions; 2.39 297A.48, by adding subdivisions; 297E.01, by adding a 2.40 subdivision; 297E.02, subdivisions 1, 3, 4, and 6; 2.41 297F.01, subdivision 23; 297F.17, subdivision 6; 2.42 297H.05; 297H.06, subdivision 2; 298.22, subdivision 2.43 7; 298.24, subdivision 1; 298.28, subdivisions 9a and 2.44 9b; 298.296, subdivision 4; 299D.03, subdivision 5; 2.45 357.021, subdivision 1a; 360.55, by adding a 2.46 subdivision; 373.40, subdivision 1; 375.18, 2.47 subdivision 12; 375.192, subdivision 2; 383C.482, 2.48 subdivision 1; 414.11; 462A.071, subdivision 2; 2.49 465.82, by adding a subdivision; 469.002, subdivision 2.50 10; 469.012, subdivision 1; 469.169, subdivision 12, 2.51 and by adding a subdivision; 469.1735, by adding a 2.52 subdivision; 469.176, subdivision 4g; 469.1763, by 2.53 adding a subdivision; 469.1771, subdivision 1, and by 2.54 adding a subdivision; 469.1791, subdivision 3; 2.55 469.1813, subdivisions 1, 2, 3, 6, and by adding 2.56 subdivisions; 469.1815, subdivision 2; 473.252, 2.57 subdivision 2; 475.52, subdivisions 1, 3, and 4; 2.58 477A.011, subdivision 36; 477A.03, subdivision 2; 2.59 477A.06, subdivision 1; 485.018, subdivision 5; 2.60 487.02, subdivision 2; 487.32, subdivision 3; 487.33, 2.61 subdivision 5; and 574.34, subdivision 1; Laws 1997, 2.62 chapter 231, article 1, section 19, subdivisions 1 and 2.63 3; article 2, section 68, subdivision 3, as amended; 2.64 article 3, section 9; Laws 1997, First Special Session 2.65 chapter 3, section 27; Laws 1997, Second Special 2.66 Session chapter 2, section 6; Laws 1998, chapter 389, 2.67 article 8, section 44, subdivisions 5, 6, and 7, as 2.68 amended; Laws 1998, chapter 645, section 3; and Laws 2.69 1999, chapter 112, section 1, subdivisions 1, 3, 4, 2.70 and 9; proposing coding for new law in Minnesota 2.71 Statutes, chapters 16A; 116J; 275; 290; 383D; 414; and 3.1 469; repealing Minnesota Statutes 1998, sections 3.2 92.22; 116J.991; 273.11, subdivision 10; 280.27; 3.3 281.13; 281.38; 284.01; 284.02; 284.03; 284.04; 3.4 284.05; 284.06; 297E.12, subdivision 3; 297F.19, 3.5 subdivision 4; 297G.18, subdivision 4; 473.252, 3.6 subdivisions 4 and 5; and 477A.05; Laws 1997, chapter 3.7 231, article 1, section 19, subdivision 2; and Laws 3.8 1998, chapter 389, article 3, section 45. 3.9 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 3.10 ARTICLE 1 3.11 SALES TAX REBATE 3.12 Section 1. [STATEMENT OF PURPOSE.] 3.13 (a) The state of Minnesota derives revenues from a variety 3.14 of taxes, fees, and other sources, including the state sales tax. 3.15 (b) It is fair and reasonable to refund the existing state 3.16 budget surplus in the form of a rebate of nonbusiness consumer 3.17 sales taxes paid by individuals in calendar year 1997. 3.18 (c) Information concerning the amount of sales tax paid at 3.19 various income levels is contained in the Minnesota tax 3.20 incidence report, which is written by the commissioner of 3.21 revenue and presented to the legislature according to Minnesota 3.22 Statutes, section 270.0682. 3.23 (d) It is fair and reasonable to use information contained 3.24 in the Minnesota tax incidence report to determine the 3.25 proportionate share of the sales tax rebate due each eligible 3.26 taxpayer since no effective or practical mechanism exists for 3.27 determining the amount of actual sales tax paid by each eligible 3.28 individual. 3.29 Sec. 2. [SALES TAX REBATE.] 3.30 (a) An individual who: 3.31 (1) was eligible for a credit under Laws 1997, chapter 231, 3.32 article 1, section 16, as amended by Laws 1997, First Special 3.33 Session chapter 5, section 35, and Laws 1997, Third Special 3.34 Session chapter 3, section 11, and Laws 1998, chapter 304, and 3.35 Laws 1998, chapter 389, article 1, section 3, and who filed for 3.36 or received that credit on or before June 15, 1999; or 3.37 (2) filed a 1997 Minnesota income tax return on or before 3.38 June 15, 1999, and had a tax liability before refundable credits 3.39 on that return of at least $1 but did not file the claim for 4.1 credit authorized under Laws 1997, chapter 231, article 1, 4.2 section 16, as amended, and who was not allowed to be claimed as 4.3 a dependent on a 1997 federal income tax return filed by another 4.4 person; or 4.5 (3) had the property taxes payable on his or her homestead 4.6 abated to zero under Laws 1997, chapter 231, article 2, section 4.7 64, 4.8 shall receive a sales tax rebate. 4.9 (b) The sales tax rebate for taxpayers who qualify under 4.10 paragraph (a) as married filing joint or head of household must 4.11 be computed according to the following schedule: 4.12 Income Sales Tax Rebate 4.13 less than $2,500 $ 358 4.14 at least $2,500 but less than $5,000 $ 469 4.15 at least $5,000 but less than $10,000 $ 502 4.16 at least $10,000 but less than $15,000 $ 549 4.17 at least $15,000 but less than $20,000 $ 604 4.18 at least $20,000 but less than $25,000 $ 641 4.19 at least $25,000 but less than $30,000 $ 690 4.20 at least $30,000 but less than $35,000 $ 762 4.21 at least $35,000 but less than $40,000 $ 820 4.22 at least $40,000 but less than $45,000 $ 874 4.23 at least $45,000 but less than $50,000 $ 921 4.24 at least $50,000 but less than $60,000 $ 969 4.25 at least $60,000 but less than $70,000 $1,071 4.26 at least $70,000 but less than $80,000 $1,162 4.27 at least $80,000 but less than $90,000 $1,276 4.28 at least $90,000 but less than $100,000 $1,417 4.29 at least $100,000 but less than $120,000 $1,535 4.30 at least $120,000 but less than $140,000 $1,682 4.31 at least $140,000 but less than $160,000 $1,818 4.32 at least $160,000 but less than $180,000 $1,946 4.33 at least $180,000 but less than $200,000 $2,067 4.34 at least $200,000 but less than $400,000 $2,644 4.35 at least $400,000 but less than $600,000 $3,479 4.36 at least $600,000 but less than $800,000 $4,175 5.1 at least $800,000 but less than $1,000,000 $4,785 5.2 $1,000,000 and over $5,000 5.3 (c) The sales tax rebate for individuals who qualify under 5.4 paragraph (a) as single or married filing separately must be 5.5 computed according to the following schedule: 5.6 Income Sales Tax Rebate 5.7 less than $2,500 $ 204 5.8 at least $2,500 but less than $5,000 $ 249 5.9 at least $5,000 but less than $10,000 $ 299 5.10 at least $10,000 but less than $15,000 $ 408 5.11 at least $15,000 but less than $20,000 $ 464 5.12 at least $20,000 but less than $25,000 $ 496 5.13 at least $25,000 but less than $30,000 $ 515 5.14 at least $30,000 but less than $40,000 $ 570 5.15 at least $40,000 but less than $50,000 $ 649 5.16 at least $50,000 but less than $70,000 $ 776 5.17 at least $70,000 but less than $100,000 $ 958 5.18 at least $100,000 but less than $140,000 $1,154 5.19 at least $140,000 but less than $200,000 $1,394 5.20 at least $200,000 but less than $400,000 $1,889 5.21 at least $400,000 but less than $600,000 $2,485 5.22 $600,000 and over $2,500 5.23 (d) Individuals who were not residents of Minnesota for any 5.24 part of 1997 and who paid more than $10 in Minnesota sales tax 5.25 on nonbusiness consumer purchases in that year qualify for a 5.26 rebate under this paragraph only. Qualifying nonresidents must 5.27 file a claim for rebate on a form prescribed by the commissioner 5.28 before the later of June 15, 1999, or 30 days after the date of 5.29 enactment of this act. The claim must include receipts showing 5.30 the Minnesota sales tax paid and the date of the sale. Taxes 5.31 paid on purchases allowed in the computation of federal taxable 5.32 income or reimbursed by an employer are not eligible for the 5.33 rebate. The commissioner shall determine the qualifying taxes 5.34 paid and rebate the lesser of: 5.35 (1) 69.0 percent of that amount; or 5.36 (2) the maximum amount for which the claimant would have 6.1 been eligible as determined under paragraph (b) if the taxpayer 6.2 filed the 1997 federal income tax return as a married taxpayer 6.3 filing jointly or head of household, or as determined under 6.4 paragraph (c) for other taxpayers. 6.5 (e) "Income," for purposes of this section other than 6.6 paragraph (d), is taxable income as defined in section 63 of the 6.7 Internal Revenue Code of 1986, as amended through December 31, 6.8 1996, plus the sum of any additions to federal taxable income 6.9 for the taxpayer under Minnesota Statutes, section 290.01, 6.10 subdivision 19a, and reported on the original 1997 income tax 6.11 return including subsequent adjustments to that return made 6.12 within the time limits specified in paragraph (h). For an 6.13 individual who was a resident of Minnesota for less than the 6.14 entire year, the sales tax rebate equals the sales tax rebate 6.15 calculated under paragraph (b) or (c) multiplied by the 6.16 percentage determined pursuant to Minnesota Statutes, section 6.17 290.06, subdivision 2c, paragraph (e), as calculated on the 6.18 original 1997 income tax return including subsequent adjustments 6.19 to that return made within the time limits specified in 6.20 paragraph (h). For purposes of paragraph (d), "income" is 6.21 taxable income as defined in section 63 of the Internal Revenue 6.22 Code of 1986, as amended through December 31, 1996, and reported 6.23 on the taxpayer's original federal tax return for the first 6.24 taxable year beginning after December 31, 1996. 6.25 (f) Before payment, the commissioner of revenue shall 6.26 adjust the rebate as follows: 6.27 (1) the rebates calculated in paragraphs (b), (c), and (d) 6.28 must be proportionately reduced to account for 1997 income tax 6.29 returns that are filed on or after January 1, 1999, but before 6.30 July 1, 1999, so that the amount of sales tax rebates payable 6.31 under paragraphs (b), (c), and (d) does not exceed 6.32 $1,250,000,000; and 6.33 (2) the commissioner of finance shall certify by July 15, 6.34 1999, preliminary fiscal year 1999 general fund net nondedicated 6.35 revenues. The certification shall exclude the impact of any 6.36 legislation enacted during the 1999 regular session. If 7.1 certified net nondedicated revenues exceed the amount forecast 7.2 in February 1999, up to $50,000,000 of the increase shall be 7.3 added to the total amount rebated. The commissioner of revenue 7.4 shall adjust all rebates proportionally to reflect any 7.5 increases. The total amount of the rebate shall not exceed 7.6 $1,300,000,000. 7.7 The adjustments under this paragraph are not rules subject to 7.8 Minnesota Statutes, chapter 14. 7.9 (g) The commissioner of revenue may begin making sales tax 7.10 rebates by August 1, 1999. Sales tax rebates not paid by 7.11 October 1, 1999, bear interest at the rate specified in 7.12 Minnesota Statutes, section 270.75. 7.13 (h) A sales tax rebate shall not be adjusted based on 7.14 changes to a 1997 income tax return that are made by order of 7.15 assessment after June 15, 1999, or made by the taxpayer that are 7.16 filed with the commissioner of revenue after June 15, 1999. 7.17 (i) Individuals who filed a joint income tax return for 7.18 1997 shall receive a joint sales tax rebate. After the sales 7.19 tax rebate has been issued, but before the check has been 7.20 cashed, either joint claimant may request a separate check for 7.21 one-half of the joint sales tax rebate. Notwithstanding 7.22 anything in this section to the contrary, if prior to payment, 7.23 the commissioner has been notified that persons who filed a 7.24 joint 1997 income tax return are living at separate addresses, 7.25 as indicated on their 1998 income tax return or otherwise, the 7.26 commissioner may issue separate checks to each person. The 7.27 amount payable to each person is one-half of the total joint 7.28 rebate. 7.29 (j) The sales tax rebate is a "Minnesota tax law" for 7.30 purposes of Minnesota Statutes, section 270B.01, subdivision 8. 7.31 (k) The sales tax rebate is "an overpayment of any tax 7.32 collected by the commissioner" for purposes of Minnesota 7.33 Statutes, section 270.07, subdivision 5. For purposes of this 7.34 paragraph, a joint sales tax rebate is payable to each spouse 7.35 equally. 7.36 (l) If the commissioner of revenue cannot locate an 8.1 individual entitled to a sales tax rebate by July 1, 2001, or if 8.2 an individual to whom a sales tax rebate was issued has not 8.3 cashed the check by July 1, 2001, the right to the sales tax 8.4 rebate lapses and the check must be deposited in the general 8.5 fund. 8.6 (m) Individuals entitled to a sales tax rebate pursuant to 8.7 paragraph (a), but who did not receive one, and individuals who 8.8 receive a sales tax rebate that was not correctly computed, must 8.9 file a claim with the commissioner before July 1, 2000, in a 8.10 form prescribed by the commissioner. These claims must be 8.11 treated as if they are a claim for refund under Minnesota 8.12 Statutes, section 289A.50, subdivisions 4 and 7. 8.13 (n) The sales tax rebate is a refund subject to revenue 8.14 recapture under Minnesota Statutes, chapter 270A. The 8.15 commissioner of revenue shall remit the entire refund to the 8.16 claimant agency, which shall, upon the request of the spouse who 8.17 does not owe the debt, refund one-half of the joint sales tax 8.18 rebate to the spouse who does not owe the debt. 8.19 (o) The rebate is a reduction of fiscal year 1999 sales tax 8.20 revenues. The amount necessary to make the sales tax rebates 8.21 and interest provided in this section is appropriated from the 8.22 general fund to the commissioner of revenue in fiscal year 1999 8.23 and is available until June 30, 2001. 8.24 (p) If a sales tax rebate check is cashed by someone other 8.25 than the payee or payees of the check, and the commissioner of 8.26 revenue determines that the check has been forged or improperly 8.27 endorsed, the commissioner may issue an order of assessment for 8.28 the amount of the check against the person or persons cashing 8.29 it. The assessment must be made within two years after the 8.30 check is cashed, but if cashing the check constitutes theft 8.31 under Minnesota Statutes, section 609.52, or forgery under 8.32 Minnesota Statutes, section 609.631, the assessment can be made 8.33 at any time. The assessment may be appealed administratively 8.34 and judicially. The commissioner may take action to collect the 8.35 assessment in the same manner as provided by Minnesota Statutes, 8.36 chapter 289A, for any other order of the commissioner assessing 9.1 tax. 9.2 (q) Notwithstanding Minnesota Statutes, sections 9.031, 9.3 16A.40, 16B.49, 16B.50, and any other law to the contrary, the 9.4 commissioner of revenue may take whatever actions the 9.5 commissioner deems necessary to pay the rebates required by this 9.6 section, and may, in consultation with the commissioner of 9.7 finance and the state treasurer, contract with a private vendor 9.8 or vendors to process, print, and mail the rebate checks or 9.9 warrants required under this section and receive and disburse 9.10 state funds to pay those checks or warrants. 9.11 (r) The commissioner may pay rebates required by this 9.12 section by electronic funds transfer to individuals who 9.13 requested that their 1998 individual income tax refund be paid 9.14 through electronic funds transfer. The commissioner may make 9.15 the electronic funds transfer payments to the same financial 9.16 institution and into the same account as the 1998 individual 9.17 income tax refund. 9.18 Sec. 3. [APPROPRIATIONS.] 9.19 $1,257,000 is appropriated from the general fund to the 9.20 commissioner of revenue to administer the sales tax rebate for 9.21 fiscal year 1999. Any unencumbered balance remaining on June 9.22 30, 1999, does not cancel but is available for expenditure by 9.23 the commissioner of revenue until June 30, 2001. This is a 9.24 one-time appropriation and may not be added to the agency's 9.25 budget base. 9.26 Sec. 4. [EFFECTIVE DATE.] 9.27 Sections 1 to 3 are effective the day following final 9.28 enactment. 9.29 ARTICLE 2 9.30 INCOME AND FRANCHISE TAXES 9.31 Section 1. Minnesota Statutes 1998, section 16D.09, is 9.32 amended to read: 9.33 16D.09 [UNCOLLECTIBLE DEBTS.] 9.34 Subdivision 1. [GENERALLY.] When a debt is determined by a 9.35 state agency to be uncollectible, the debt may be written off by 9.36 the state agency from the state agency's financial accounting 10.1 records and no longer recognized as an account receivable for 10.2 financial reporting purposes. A debt is considered to be 10.3 uncollectible when (1) all reasonable collection efforts have 10.4 been exhausted, (2) the cost of further collection action will 10.5 exceed the amount recoverable, (3) the debt is legally without 10.6 merit or cannot be substantiated by evidence, (4) the debtor 10.7 cannot be located, (5) the available assets or income, current 10.8 or anticipated, that may be available for payment of the debt 10.9 are insufficient, (6) the debt has been discharged in 10.10 bankruptcy, (7) the applicable statute of limitations for 10.11 collection of the debt has expired, or (8) it is not in the 10.12 public interest to pursue collection of the debt. The 10.13 determination of the uncollectibility of a debt must be reported 10.14 by the state agency along with the basis for that decision as 10.15 part of its quarterly reports to the commissioner of finance. 10.16 Determining that the debt is uncollectible does not cancel the 10.17 legal obligation of the debtor to pay the debt, except in the 10.18 case of a debt related to a tax liability that is canceled by 10.19 the department of revenue. 10.20 Subd. 2. [NOTIFICATION OF ACTION BY DEPARTMENT OF 10.21 REVENUE.] When the department of revenue has determined that a 10.22 debt is uncollectible and has written off that debt as provided 10.23 in subdivision 1, the commissioner of revenue must make a 10.24 reasonable attempt to notify the debtor of that action and of 10.25 the release of any liens imposed under section 270.69 related to 10.26 that debt, within 30 days after the determination has been 10.27 reported to the commissioner of finance. 10.28 Sec. 2. Minnesota Statutes 1998, section 290.01, 10.29 subdivision 7, is amended to read: 10.30 Subd. 7. [RESIDENT.] The term "resident" means (1) any 10.31 individual domiciled in Minnesota, except that an individual is 10.32 not a "resident" for the period of time that the individual is a 10.33 "qualified individual" as defined in section 911(d)(1) of the 10.34 Internal Revenue Code, if the qualified individual notifies the 10.35 county within three months of moving out of the country that 10.36 homestead status be revoked for the Minnesota residence of the 11.1 qualified individual, and the property is not classified as a 11.2 homestead while the individual remains a qualified individual; 11.3 and (2) any individual domiciled outside the state who maintains 11.4 a place of abode in the state and spends in the aggregate more 11.5 than one-half of the tax year in Minnesota, unless the 11.6 individual or the spouse of the individual is in the armed 11.7 forces of the United States, or the individual is covered under 11.8 the reciprocity provisions in section 290.081. 11.9 For purposes of this subdivision, presence within the state 11.10 for any part of a calendar day constitutes a day spent in the 11.11 state. Individuals shall keep adequate records to substantiate 11.12 the days spent outside the state. 11.13 The term "abode" means a dwelling maintained by an 11.14 individual, whether or not owned by the individual and whether 11.15 or not occupied by the individual, and includes a dwelling place 11.16 owned or leased by the individual's spouse. 11.17 Neither the commissioner nor any court shall consider 11.18 charitable contributions made by an individual within or without 11.19 the state in determining if the individual is domiciled in 11.20 Minnesota. 11.21 Sec. 3. Minnesota Statutes 1998, section 290.01, 11.22 subdivision 19a, is amended to read: 11.23 Subd. 19a. [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 11.24 individuals, estates, and trusts, there shall be added to 11.25 federal taxable income: 11.26 (1)(i) interest income on obligations of any state other 11.27 than Minnesota or a political or governmental subdivision, 11.28 municipality, or governmental agency or instrumentality of any 11.29 state other than Minnesota exempt from federal income taxes 11.30 under the Internal Revenue Code or any other federal statute, 11.31 and 11.32 (ii) exempt-interest dividends as defined in section 11.33 852(b)(5) of the Internal Revenue Code, except the portion of 11.34 the exempt-interest dividends derived from interest income on 11.35 obligations of the state of Minnesota or its political or 11.36 governmental subdivisions, municipalities, governmental agencies 12.1 or instrumentalities, but only if the portion of the 12.2 exempt-interest dividends from such Minnesota sources paid to 12.3 all shareholders represents 95 percent or more of the 12.4 exempt-interest dividends that are paid by the regulated 12.5 investment company as defined in section 851(a) of the Internal 12.6 Revenue Code, or the fund of the regulated investment company as 12.7 defined in section 851(g) of the Internal Revenue Code, making 12.8 the payment; and 12.9 (iii) for the purposes of items (i) and (ii), interest on 12.10 obligations of an Indian tribal government described in section 12.11 7871(c) of the Internal Revenue Code shall be treated as 12.12 interest income on obligations of the state in which the tribe 12.13 is located; 12.14 (2) the amount of income taxes paid or accrued within the 12.15 taxable year under this chapter and income taxes paid to any 12.16 other state or to any province or territory of Canada, to the 12.17 extent allowed as a deduction under section 63(d) of the 12.18 Internal Revenue Code, but the addition may not be more than the 12.19 amount by which the itemized deductions as allowed under section 12.20 63(d) of the Internal Revenue Code exceeds the amount of the 12.21 standard deduction as defined in section 63(c) of the Internal 12.22 Revenue Code. For the purpose of this paragraph, the 12.23 disallowance of itemized deductions under section 68 of the 12.24 Internal Revenue Code of 1986, income tax is the last itemized 12.25 deduction disallowed; 12.26 (3) the capital gain amount of a lump sum distribution to 12.27 which the special tax under section 1122(h)(3)(B)(ii) of the Tax 12.28 Reform Act of 1986, Public Law Number 99-514, applies; 12.29 (4) the amount of income taxes paid or accrued within the 12.30 taxable year under this chapter and income taxes paid to any 12.31 other state or any province or territory of Canada, to the 12.32 extent allowed as a deduction in determining federal adjusted 12.33 gross income. For the purpose of this paragraph, income taxes 12.34 do not include the taxes imposed by sections 290.0922, 12.35 subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 12.36(5) the amount of loss or expense included in federal13.1taxable income under section 1366 of the Internal Revenue Code13.2flowing from a corporation that has a valid election in effect13.3for the taxable year under section 1362 of the Internal Revenue13.4Code, but which is not allowed to be an "S" corporation under13.5section 290.9725;13.6(6) the amount of any distributions in cash or property13.7made to a shareholder during the taxable year by a corporation13.8that has a valid election in effect for the taxable year under13.9section 1362 of the Internal Revenue Code, but which is not13.10allowed to be an "S" corporation under section 290.9725 to the13.11extent not already included in federal taxable income under13.12section 1368 of the Internal Revenue Code;13.13(7) in the year stock of a corporation that had made a13.14valid election under section 1362 of the Internal Revenue Code13.15but was not an "S" corporation under section 290.9725 is sold or13.16disposed of in a transaction taxable under the Internal Revenue13.17Code, the amount of difference between the Minnesota basis of13.18the stock under subdivision 19f, paragraph (m), and the federal13.19basis if the Minnesota basis is lower than the shareholder's13.20federal basis;13.21(8)(5) the amount of expense, interest, or taxes 13.22 disallowed pursuant to section 290.10; and 13.23(9)(6) the amount of a partner's pro rata share of net 13.24 income which does not flow through to the partner because the 13.25 partnership elected to pay the tax on the income under section 13.26 6242(a)(2) of the Internal Revenue Code. 13.27 Sec. 4. Minnesota Statutes 1998, section 290.01, 13.28 subdivision 19b, is amended to read: 13.29 Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 13.30 individuals, estates, and trusts, there shall be subtracted from 13.31 federal taxable income: 13.32 (1) interest income on obligations of any authority, 13.33 commission, or instrumentality of the United States to the 13.34 extent includable in taxable income for federal income tax 13.35 purposes but exempt from state income tax under the laws of the 13.36 United States; 14.1 (2) if included in federal taxable income, the amount of 14.2 any overpayment of income tax to Minnesota or to any other 14.3 state, for any previous taxable year, whether the amount is 14.4 received as a refund or as a credit to another taxable year's 14.5 income tax liability; 14.6 (3) the amount paid to others, less the credit allowed 14.7 under section 290.0674, not to exceed $1,625 for eachdependent14.8 qualifying child in grades kindergarten to 6 and $2,500 for each 14.9dependentqualifying child in grades 7 to 12, for tuition, 14.10 textbooks, and transportation of eachdependentqualifying child 14.11 in attending an elementary or secondary school situated in 14.12 Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 14.13 wherein a resident of this state may legally fulfill the state's 14.14 compulsory attendance laws, which is not operated for profit, 14.15 and which adheres to the provisions of the Civil Rights Act of 14.16 1964 and chapter 363. For the purposes of this clause, 14.17 "tuition" includes fees or tuition as defined in section 14.18 290.0674, subdivision 1, clause (1). As used in this clause, 14.19 "textbooks" includes books and other instructional materials and 14.20 equipment used in elementary and secondary schools in teaching 14.21 only those subjects legally and commonly taught in public 14.22 elementary and secondary schools in this state. Equipment 14.23 expenses qualifying for deduction includes expenses as defined 14.24 and limited in section 290.0674, subdivision 1, clause (3). 14.25 "Textbooks" does not include instructional books and materials 14.26 used in the teaching of religious tenets, doctrines, or worship, 14.27 the purpose of which is to instill such tenets, doctrines, or 14.28 worship, nor does it include books or materials for, or 14.29 transportation to, extracurricular activities including sporting 14.30 events, musical or dramatic events, speech activities, driver's 14.31 education, or similar programs. For purposes of the subtraction 14.32 provided by this clause, "qualifying child" has the meaning 14.33 given in section 32(c)(3) of the Internal Revenue Code; 14.34 (4) contributions made in taxable years beginning after 14.35 December 31, 1981, and before January 1, 1985, tothe extent14.36included in federal taxable income, distributions froma 15.1 qualified governmental pension plan, an individual retirement 15.2 account, simplified employee pension, or qualified plan covering 15.3 a self-employed personthat represent a return of contributions15.4 that were included in Minnesota gross income in the taxable year 15.5 for which the contributions were made but were deducted or were 15.6 not included in the computation of federal adjusted gross 15.7 income. The distribution shall be allocated first to return of15.8contributions until the contributions included in Minnesota15.9gross income have been exhausted, less any amount allowed to be 15.10 subtracted as a distribution under this subdivision or a 15.11 predecessor provision in taxable years that began before January 15.12 1, 2000. This subtraction applies onlyto contributions made in15.13a taxable year prior to 1985for taxable years beginning after 15.14 December 31, 1999, and before January 1, 2001; 15.15 (5) income as provided under section 290.0802; 15.16 (6) the amount of unrecovered accelerated cost recovery 15.17 system deductions allowed under subdivision 19g; 15.18 (7) to the extent included in federal adjusted gross 15.19 income, income realized on disposition of property exempt from 15.20 tax under section 290.491; 15.21 (8) to the extent not deducted in determining federal 15.22 taxable income, the amount paid for health insurance of 15.23 self-employed individuals as determined under section 162(l) of 15.24 the Internal Revenue Code, except that the25percent limit does 15.25 not apply. If the taxpayer deducted insurance payments under 15.26 section 213 of the Internal Revenue Code of 1986, the 15.27 subtraction under this clause must be reduced by the lesser of: 15.28 (i) the total itemized deductions allowed under section 15.29 63(d) of the Internal Revenue Code, less state, local, and 15.30 foreign income taxes deductible under section 164 of the 15.31 Internal Revenue Code and the standard deduction under section 15.32 63(c) of the Internal Revenue Code; or 15.33 (ii) the lesser of (A) the amount of insurance qualifying 15.34 as "medical care" under section 213(d) of the Internal Revenue 15.35 Code to the extent not deducted under section 162(1) of the 15.36 Internal Revenue Code or excluded from income or (B) the total 16.1 amount deductible for medical care under section 213(a); 16.2 (9) the exemption amount allowed under Laws 1995, chapter 16.3 255, article 3, section 2, subdivision 3; 16.4 (10) to the extent included in federal taxable income, 16.5 postservice benefits for youth community service under section 16.6 124D.42 for volunteer service under United States Code, title 16.7 42, section 5011(d), as amended; 16.8(11) to the extent not subtracted under clause (1), the16.9amount of income or gain included in federal taxable income16.10under section 1366 of the Internal Revenue Code flowing from a16.11corporation that has a valid election in effect for the taxable16.12year under section 1362 of the Internal Revenue Code which is16.13not allowed to be an "S" corporation under section 290.9725;16.14(12) in the year stock of a corporation that had made a16.15valid election under section 1362 of the Internal Revenue Code16.16but was not an "S" corporation under section 290.9725 is sold or16.17disposed of in a transaction taxable under the Internal Revenue16.18Code, the amount of difference between the Minnesota basis of16.19the stock under subdivision 19f, paragraph (m), and the federal16.20basis if the Minnesota basis is higher than the shareholder's16.21federal basis; and16.22(13) an amount equal to an individual's, trust's, or16.23estate's net federal income tax liability for the tax year that16.24is attributable to items of income, expense, gain, loss, or16.25credits federally flowing to the taxpayer in the tax year from a16.26corporation, having a valid election in effect for federal tax16.27purposes under section 1362 of the Internal Revenue Code but not16.28treated as an "S" corporation for state tax purposes under16.29section 290.9725.16.30 (11) to the extent not deducted in determining federal 16.31 taxable income by an individual who does not itemize deductions 16.32 for federal income tax purposes for the taxable year, an amount 16.33 equal to 50 percent of the excess of charitable contributions 16.34 allowable as a deduction for the taxable year under section 16.35 170(a) of the Internal Revenue Code over $500; and 16.36 (12) to the extent included in federal taxable income, 17.1 holocaust victims' settlement payments for any injury incurred 17.2 as a result of the holocaust, if received by an individual who 17.3 was persecuted for racial or religious reasons by Nazi Germany 17.4 or any other Axis regime or an heir of such a person. 17.5 Sec. 5. Minnesota Statutes 1998, section 290.01, 17.6 subdivision 19f, is amended to read: 17.7 Subd. 19f. [BASIS MODIFICATIONS AFFECTING GAIN OR LOSS ON 17.8 DISPOSITION OF PROPERTY.] (a) For individuals, estates, and 17.9 trusts, the basis of property is its adjusted basis for federal 17.10 income tax purposes except as set forth in paragraphs (f), (g), 17.11 and (m). For corporations, the basis of property is its 17.12 adjusted basis for federal income tax purposes, without regard 17.13 to the time when the property became subject to tax under this 17.14 chapter or to whether out-of-state losses or items of tax 17.15 preference with respect to the property were not deductible 17.16 under this chapter, except that the modifications to the basis 17.17 for federal income tax purposes set forth in paragraphs (b) to 17.18 (j) are allowed to corporations, and the resulting modifications 17.19 to federal taxable income must be made in the year in which gain 17.20 or loss on the sale or other disposition of property is 17.21 recognized. 17.22 (b) The basis of property shall not be reduced to reflect 17.23 federal investment tax credit. 17.24 (c) The basis of property subject to the accelerated cost 17.25 recovery system under section 168 of the Internal Revenue Code 17.26 shall be modified to reflect the modifications in depreciation 17.27 with respect to the property provided for in subdivision 19e. 17.28 For certified pollution control facilities for which 17.29 amortization deductions were elected under section 169 of the 17.30 Internal Revenue Code of 1954, the basis of the property must be 17.31 increased by the amount of the amortization deduction not 17.32 previously allowed under this chapter. 17.33 (d) For property acquired before January 1, 1933, the basis 17.34 for computing a gain is the fair market value of the property as 17.35 of that date. The basis for determining a loss is the cost of 17.36 the property to the taxpayer less any depreciation, 18.1 amortization, or depletion, actually sustained before that 18.2 date. If the adjusted cost exceeds the fair market value of the 18.3 property, then the basis is the adjusted cost regardless of 18.4 whether there is a gain or loss. 18.5 (e) The basis is reduced by the allowance for amortization 18.6 of bond premium if an election to amortize was made pursuant to 18.7 Minnesota Statutes 1986, section 290.09, subdivision 13, and the 18.8 allowance could have been deducted by the taxpayer under this 18.9 chapter during the period of the taxpayer's ownership of the 18.10 property. 18.11 (f) For assets placed in service before January 1, 1987, 18.12 corporations, partnerships, or individuals engaged in the 18.13 business of mining ores other than iron ore or taconite 18.14 concentrates subject to the occupation tax under chapter 298 18.15 must use the occupation tax basis of property used in that 18.16 business. 18.17 (g) For assets placed in service before January 1, 1990, 18.18 corporations, partnerships, or individuals engaged in the 18.19 business of mining iron ore or taconite concentrates subject to 18.20 the occupation tax under chapter 298 must use the occupation tax 18.21 basis of property used in that business. 18.22 (h) In applying the provisions of sections 301(c)(3)(B), 18.23 312(f) and (g), and 316(a)(1) of the Internal Revenue Code, the 18.24 dates December 31, 1932, and January 1, 1933, shall be 18.25 substituted for February 28, 1913, and March 1, 1913, 18.26 respectively. 18.27 (i) In applying the provisions of section 362(a) and (c) of 18.28 the Internal Revenue Code, the date December 31, 1956, shall be 18.29 substituted for June 22, 1954. 18.30 (j) The basis of property shall be increased by the amount 18.31 of intangible drilling costs not previously allowed due to 18.32 differences between this chapter and the Internal Revenue Code. 18.33 (k) The adjusted basis of any corporate partner's interest 18.34 in a partnership is the same as the adjusted basis for federal 18.35 income tax purposes modified as required to reflect the basis 18.36 modifications set forth in paragraphs (b) to (j). The adjusted 19.1 basis of a partnership in which the partner is an individual, 19.2 estate, or trust is the same as the adjusted basis for federal 19.3 income tax purposes modified as required to reflect the basis 19.4 modifications set forth in paragraphs (f) and (g). 19.5 (l) The modifications contained in paragraphs (b) to (j) 19.6 also apply to the basis of property that is determined by 19.7 reference to the basis of the same property in the hands of a 19.8 different taxpayer or by reference to the basis of different 19.9 property. 19.10(m) If a corporation has a valid election in effect for the19.11taxable year under section 1362 of the Internal Revenue Code,19.12but is not allowed to be an "S" corporation under section19.13290.9725, and the corporation is liquidated or the individual19.14shareholder disposes of the stock, the Minnesota basis in the19.15shareholder's stock in the corporation shall be computed as if19.16the corporation were not an "S" corporation for federal tax19.17purposes.19.18 Sec. 6. Minnesota Statutes 1998, section 290.01, 19.19 subdivision 19g, is amended to read: 19.20 Subd. 19g. [ACRS MODIFICATION FOR INDIVIDUALS.] (a) An 19.21 individual is allowed a subtraction from federal taxable income 19.22 for the amount of accelerated cost recovery system deductions 19.23 that were added to federal adjusted gross income in computing 19.24 Minnesota gross income for taxable year 1981, 1982, 1983, or 19.25 1984 and that were not deducted in alatertaxable year 19.26 beginning before January 1, 2000. The deduction is 19.27 allowedbeginningin the first taxable yearafter the entire19.28allowable deduction for the property has been allowed under19.29federal law or the first taxable yearbeginning after December 19.30 31,1987, whichever is later1999. The amount of the 19.31 deductionis computed by deductingequals the amount added to 19.32 federal adjusted gross income in computing Minnesota gross 19.33 income,(less any: 19.34 (1) deductionallowedallowable under Minnesota Statutes 19.35 1986, section 290.01, subdivision 20f) in equal annual amounts19.36over five years.; and 20.1 (2) amount allowable as a subtraction under this 20.2 subdivision in a taxable year beginning before January 1, 2000. 20.3 This paragraph does not apply to property that was sold or 20.4 exchanged in a taxable year beginning before January 1, 2001. 20.5 (b) In the event of a sale or exchange of the 20.6 property occurring during a taxable year beginning after 20.7 December 31, 1999, and before January 1, 2001, a deduction is 20.8 allowed equal to the lesser of (1) the remaining amount that 20.9 would be allowed as a deduction under paragraph (a) or (2) the 20.10 amount of capital gain recognized and the amount of cost 20.11 recovery deductions that were subject to recapture under 20.12 sections 1245 and 1250 of the Internal Revenue Code of 1986 for 20.13 the taxable year. 20.14 (c) In the case of a corporation treated as an "S" 20.15 corporation under section 290.9725, the amount of the 20.16 corporation's cost recovery allowances that have been deducted 20.17 in computing federal tax, but have been added to federal taxable 20.18 income or not deducted in computing tax under this chapter as a 20.19 result of the application of subdivision 19e, paragraphs (a) and 20.20 (c) or Minnesota Statutes 1986, section 290.09, subdivision 7, 20.21 is allowed as a deduction to the shareholders under the 20.22 provisions of paragraph (a). 20.23 Sec. 7. Minnesota Statutes 1998, section 290.01, is 20.24 amended by adding a subdivision to read: 20.25 Subd. 32. [HOLOCAUST SETTLEMENT PAYMENTS.] "Holocaust 20.26 victims' settlement payments" means: 20.27 (1) a payment received as a result of settlement of the 20.28 action entitled In re Holocaust Victims' Asset Litigation, in 20.29 United States district court for the eastern district of New 20.30 York, C.A. No. 96-4849; 20.31 (2) any amount received under the German Act Regulating 20.32 Unresolved Property Claims or any other foreign law providing 20.33 for payments for holocaust claims; and 20.34 (3) a payment received as a result of the settlement of a 20.35 holocaust claim not described in clause (1) or (2), including an 20.36 insurance claim, a claim relating to looted art or financial 21.1 assets, and a claim relating to slave labor wages. 21.2 Sec. 8. Minnesota Statutes 1998, section 290.06, 21.3 subdivision 2c, is amended to read: 21.4 Subd. 2c. [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 21.5 AND TRUSTS.] (a) The income taxes imposed by this chapter upon 21.6 married individuals filing joint returns and surviving spouses 21.7 as defined in section 2(a) of the Internal Revenue Code must be 21.8 computed by applying to their taxable net income the following 21.9 schedule of rates: 21.10 (1) On the first$19,910$25,220,65.5 percent; 21.11 (2) On all over$19,910$25,220, but not 21.12 over$79,120$100,200,87.25 percent; 21.13 (3) On all over$79,120$100,200,8.58 percent. 21.14 Married individuals filing separate returns, estates, and 21.15 trusts must compute their income tax by applying the above rates 21.16 to their taxable income, except that the income brackets will be 21.17 one-half of the above amounts. 21.18 (b) The income taxes imposed by this chapter upon unmarried 21.19 individuals must be computed by applying to taxable net income 21.20 the following schedule of rates: 21.21 (1) On the first$13,620$17,250,65.5 percent; 21.22 (2) On all over$13,620$17,250, but not 21.23 over$44,750$56,680,87.25 percent; 21.24 (3) On all over$44,750$56,680,8.58 percent. 21.25 (c) The income taxes imposed by this chapter upon unmarried 21.26 individuals qualifying as a head of household as defined in 21.27 section 2(b) of the Internal Revenue Code must be computed by 21.28 applying to taxable net income the following schedule of rates: 21.29 (1) On the first$16,770$21,240,65.5 percent; 21.30 (2) On all over$16,770$21,240, but not 21.31 over$67,390$85,350,87.25 percent; 21.32 (3) On all over$67,390$85,350,8.58 percent. 21.33 (d) In lieu of a tax computed according to the rates set 21.34 forth in this subdivision, the tax of any individual taxpayer 21.35 whose taxable net income for the taxable year is less than an 21.36 amount determined by the commissioner must be computed in 22.1 accordance with tables prepared and issued by the commissioner 22.2 of revenue based on income brackets of not more than $100. The 22.3 amount of tax for each bracket shall be computed at the rates 22.4 set forth in this subdivision, provided that the commissioner 22.5 may disregard a fractional part of a dollar unless it amounts to 22.6 50 cents or more, in which case it may be increased to $1. 22.7 (e) An individual who is not a Minnesota resident for the 22.8 entire year must compute the individual's Minnesota income tax 22.9 as provided in this subdivision. After the application of the 22.10 nonrefundable credits provided in this chapter, the tax 22.11 liability must then be multiplied by a fraction in which: 22.12 (1) the numerator is the individual's Minnesota source 22.13 federal adjusted gross income as defined in section 62 of the 22.14 Internal Revenue Codedisregarding income or loss flowing from a22.15corporation having a valid election for the taxable year under22.16section 1362 of the Internal Revenue Code but which is not an22.17"S" corporation under section 290.9725and increased by the 22.18 additions required under section 290.01, subdivision 19a, 22.19 clauses (1) and(9)(6), after applying the allocation and 22.20 assignability provisions of section 290.081, clause (a), or 22.21 290.17; and 22.22 (2) the denominator is the individual's federal adjusted 22.23 gross income as defined in section 62 of the Internal Revenue 22.24 Code of 1986, increased by the amounts specified in section 22.25 290.01, subdivision 19a, clauses (1), (5), (6), (7),and 22.26(9)(6), and reduced by the amounts specified in section 290.01, 22.27 subdivision 19b,clausesclause (1), (11), and (12). 22.28 Sec. 9. Minnesota Statutes 1998, section 290.06, 22.29 subdivision 2d, is amended to read: 22.30 Subd. 2d. [INFLATION ADJUSTMENT OF BRACKETS.] (a) For 22.31 taxable years beginning after December 31,19911999, the 22.32 minimum and maximum dollar amounts for each rate bracket for 22.33 which a tax is imposed in subdivision 2c shall be adjusted for 22.34 inflation by the percentage determined under paragraph (b). For 22.35 the purpose of making the adjustment as provided in this 22.36 subdivision all of the rate brackets provided in subdivision 2c 23.1 shall be the rate brackets as they existed for taxable years 23.2 beginning after December 31,19901998, and before January 23.3 1,19922000. The rate applicable to any rate bracket must not 23.4 be changed. The dollar amounts setting forth the tax shall be 23.5 adjusted to reflect the changes in the rate brackets. The rate 23.6 brackets as adjusted must be rounded to the nearest $10 amount. 23.7 If the rate bracket ends in $5, it must be rounded up to the 23.8 nearest $10 amount. 23.9 (b) The commissioner shall adjust the rate brackets and by 23.10 the percentage determined pursuant to the provisions of section 23.11 1(f) of the Internal Revenue Code, except that in section 23.12 1(f)(3)(B) the word "19901998" shall be substituted for the 23.13 word "19871992." For19912000, the commissioner shall then 23.14 determine the percent change from the 12 months ending on August 23.15 31,19901998, to the 12 months ending on August 31,19911999, 23.16 and in each subsequent year, from the 12 months ending on August 23.17 31,19901998, to the 12 months ending on August 31 of the year 23.18 preceding the taxable year. The determination of the 23.19 commissioner pursuant to this subdivision shall not be 23.20 considered a "rule" and shall not be subject to the 23.21 Administrative Procedure Act contained in chapter 14. 23.22 No later than December 15 of each year, the commissioner 23.23 shall announce the specific percentage that will be used to 23.24 adjust the tax rate brackets. 23.25 Sec. 10. Minnesota Statutes 1998, section 290.06, is 23.26 amended by adding a subdivision to read: 23.27 Subd. 26. [BANK S CORPORATIONS.] A shareholder of an S 23.28 corporation subject to tax under section 290.9725, clause (2), 23.29 is allowed a credit against the tax imposed under this chapter. 23.30 The credit equals 80 percent of the tax apportioned to the 23.31 shareholder under section 290.9726, subdivision 7, for the 23.32 taxable year. 23.33 Sec. 11. Minnesota Statutes 1998, section 290.06, is 23.34 amended by adding a subdivision to read: 23.35 Subd. 27. [TAX PAID TO ANOTHER STATE; CORPORATIONS.] (a) A 23.36 credit is allowed against the tax imposed under subdivision 1 24.1 for tax paid to another state based on net income. The credit 24.2 must be claimed in a manner prescribed by the commissioner. 24.3 (b) The amount of the credit equals the amount of 24.4 qualifying tax paid to the other state for the taxable year, 24.5 multiplied by the taxpayer's apportionment percentage under 24.6 section 290.191. If the item of income or gain is assigned to 24.7 Minnesota as nonbusiness income, the entire amount of the 24.8 qualifying tax is allowed as a credit. The maximum amount of 24.9 the credit is limited to the tax liability under subdivision 1 24.10 for the taxable year and, in no case, may the credit exceed the 24.11 reduction in the amount of tax under subdivision 1 if the item 24.12 of income or gain were excluded from net income. 24.13 (c) For purposes of this subdivision, "qualifying tax" 24.14 means the amount of tax paid to another state on an item of 24.15 income or gain for the taxable year, if: 24.16 (1) the law of another state requires and the taxpayer 24.17 assigns the entire amount of the income or gain to one other 24.18 state; and 24.19 (2) the income or gain is included in the measure of the 24.20 exercise of the corporate franchise that is taxable under 24.21 subdivision 1. 24.22 (d) The amount of tax paid to another state on an item of 24.23 income or gain is the difference between the tax paid to the 24.24 state and the amount of tax that would have been paid to the 24.25 state if the item of income or gain had not been included in the 24.26 net income of that state. 24.27 (e) The taxpayer must report to the commissioner of revenue 24.28 any change in tax in the other state, the change in qualifying 24.29 tax, and a copy of the final determination of the tax by the 24.30 taxing authority of the other state. A taxpayer who claims the 24.31 credit consents to extend the period of limitation for the 24.32 commissioner to recompute the credit and reassess the tax due, 24.33 including a refund, for a period of one year following a report 24.34 by the taxpayer of a final determination of tax by the state in 24.35 which the entire amount of income or gain is reported, 24.36 notwithstanding any period of limitations to the contrary, or 25.1 within any applicable period of limitations, whichever is 25.2 longer. If a taxpayer fails to report as required by this 25.3 paragraph, the commissioner may recompute the tax, including a 25.4 refund, based on the information available to the commissioner. 25.5 The tax may be recomputed within six years after the report 25.6 should have been filed, notwithstanding any period of 25.7 limitations to the contrary. 25.8 Sec. 12. Minnesota Statutes 1998, section 290.0671, 25.9 subdivision 1, is amended to read: 25.10 Subdivision 1. [CREDIT ALLOWED.] (a) An individual is 25.11 allowed a credit against the tax imposed by this chapter equal 25.12 to a percentage of earned income. To receive a credit, a 25.13 taxpayer must be eligible for a credit under section 32 of the 25.14 Internal Revenue Code. 25.15 (b) For individuals with no qualifying children, the credit 25.16 equals 1.1475 percent of the first $4,460 of earned income. The 25.17 credit is reduced by 1.1475 percent of earned income or modified 25.18 adjusted gross income, whichever is greater, in excess of 25.19 $5,570, but in no case is the credit less than zero. 25.20 (c) For individuals with one qualifying child, the credit 25.21 equals6.87.45 percent of the first $6,680 of earned income and 25.22 8.5 percent of earned income over $11,650 but less than $12,990. 25.23 The credit is reduced by4.775.13 percent of earned income or 25.24 modified adjusted gross income, whichever is greater, in excess 25.25 of $14,560, but in no case is the credit less than zero. 25.26 (d) For individuals with two or more qualifying children, 25.27 the credit equalseight8.8 percent of the first $9,390 of 25.28 earned income and 20 percent of earned income over $14,350 but 25.29 less than $16,230. The credit is reduced by8.89.38 percent of 25.30 earned income or modified adjusted gross income, whichever is 25.31 greater, in excess of $17,280, but in no case is the credit less 25.32 than zero. 25.33 (e) For a nonresident or part-year resident, the credit 25.34 must be allocated based on the percentage calculated under 25.35 section 290.06, subdivision 2c, paragraph (e). 25.36 (f) For a person who was a resident for the entire tax year 26.1 and has earned income not subject to tax under this chapter, the 26.2 credit must be allocated based on the ratio of federal adjusted 26.3 gross income reduced by the earned income not subject to tax 26.4 under this chapter over federal adjusted gross income. 26.5 (g) The commissioner shall construct tables showing the 26.6 amount of the credit at various income levels and make them 26.7 available to taxpayers. The tables shall follow the schedule 26.8 contained in this subdivision, except that the commissioner may 26.9 graduate the transition between income brackets. 26.10 Sec. 13. Minnesota Statutes 1998, section 290.0674, 26.11 subdivision 1, is amended to read: 26.12 Subdivision 1. [CREDIT ALLOWED.] An individual is allowed 26.13 a credit against the tax imposed by this chapter in an amount 26.14 equal to the amount paid for education-related expenses for 26.15 adependentqualifying child in kindergarten through grade 12. 26.16 For purposes of this section, "education-related expenses" means: 26.17 (1) fees or tuition for instruction by an instructor under 26.18 section 120A.22, subdivision 10, clause (1), (2), (3), (4), or 26.19 (5), or by a member of the Minnesota music teachers association, 26.20 for instruction outside the regular school day or school year, 26.21 including tutoring, driver's education offered as part of school 26.22 curriculum, regardless of whether it is taken from a public or 26.23 private entity or summer camps, in grade or age appropriate 26.24 curricula that supplement curricula and instruction available 26.25 during the regular school year, that assists a dependent to 26.26 improve knowledge of core curriculum areas or to expand 26.27 knowledge and skills under the graduation rule under section 26.28 120B.02 and that do not include the teaching of religious 26.29 tenets, doctrines, or worship, the purpose of which is to 26.30 instill such tenets, doctrines, or worship; 26.31 (2) expenses for textbooks, including books and other 26.32 instructional materials and equipment used in elementary and 26.33 secondary schools in teaching only those subjects legally and 26.34 commonly taught in public elementary and secondary schools in 26.35 this state. "Textbooks" does not include instructional books 26.36 and materials used in the teaching of religious tenets, 27.1 doctrines, or worship, the purpose of which is to instill such 27.2 tenets, doctrines, or worship, nor does it include books or 27.3 materials for extracurricular activities including sporting 27.4 events, musical or dramatic events, speech activities, driver's 27.5 education, or similar programs; 27.6 (3) a maximum expense of $200 per family for personal 27.7 computer hardware, excluding single purpose processors, and 27.8 educational software that assists a dependent to improve 27.9 knowledge of core curriculum areas or to expand knowledge and 27.10 skills under the graduation rule under section 120B.02 purchased 27.11 for use in the taxpayer's home and not used in a trade or 27.12 business regardless of whether the computer is required by the 27.13 dependent's school; and 27.14 (4) the amount paid to others for transportation of a 27.15dependentqualifying child attending an elementary or secondary 27.16 school situated in Minnesota, North Dakota, South Dakota, Iowa, 27.17 or Wisconsin, wherein a resident of this state may legally 27.18 fulfill the state's compulsory attendance laws, which is not 27.19 operated for profit, and which adheres to the provisions of the 27.20 Civil Rights Act of 1964 and chapter 363. 27.21 For purposes of this section, "qualifying child" has the 27.22 meaning given in section 32(c)(3) of the Internal Revenue Code. 27.23 Sec. 14. Minnesota Statutes 1998, section 290.0674, 27.24 subdivision 2, is amended to read: 27.25 Subd. 2. [LIMITATIONS.] (a) For claimants with income not 27.26 greater than $33,500, the maximum credit allowed is $1,000 per 27.27 qualifying child and $2,000 per family. No credit is allowed 27.28 for education-related expenses for claimants with income greater 27.29 than$33,500$37,500. The maximum credit per child is reduced 27.30 by $1 for each $4 of household income over $33,500, and the 27.31 maximum credit per family is reduced by $2 for each $4 of 27.32 household income over $33,500, but in no case is the credit less 27.33 than zero. 27.34 For purposes of this section "income" has the meaning given 27.35 in section 290.067, subdivision 2a. In the case of a married 27.36 claimant, a credit is not allowed unless a joint income tax 28.1 return is filed. 28.2 (b) For a nonresident or part-year resident, the credit 28.3 determined under subdivision 1 and the maximum credit amount in 28.4 paragraph (a) must be allocated using the percentage calculated 28.5 in section 290.06, subdivision 2c, paragraph (e). 28.6 Sec. 15. [290.0675] [MARRIAGE PENALTY CREDIT.] 28.7 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 28.8 section the following terms have the meanings given. 28.9 (b) "Earned income" means earned income as defined in 28.10 section 32(c)(2) of the Internal Revenue Code. 28.11 (c) "Taxable income" means net income as defined in section 28.12 290.01, subdivision 19. 28.13 (d) "Earned income of lesser-earning spouse" means the 28.14 earned income of the spouse with the lesser amount of earned 28.15 income as defined in paragraph (b) for the taxable year. 28.16 Subd. 2. [CREDIT ALLOWED.] A married couple filing a joint 28.17 return is allowed a credit against the tax imposed under section 28.18 290.06. 28.19 The minimum taxable income for the married couple to be 28.20 eligible for the credit is $25,000, and the minimum earned 28.21 income in order for the couple to be eligible for the credit is 28.22 $14,000 for each spouse. 28.23 Subd. 3. [CREDIT AMOUNT.] The credit amount is as shown in 28.24 the table in this subdivision, based on the couple's taxable 28.25 income for the tax year and on the earned income of the 28.26 lesser-earning spouse. 28.27 Credit For Credit For 28.28 Earned Income of Taxable Income Taxable Income 28.29 Lesser Earning Spouse $25,000-$99,999 $100,000-over 28.30 $14,000 - $14,999 $9 $0 28.31 $15,000 - $15,999 $27 $0 28.32 $16,000 - $16,999 $44 $0 28.33 $17,000 - $17,999 $62 $0 28.34 $18,000 - $18,999 $79 $0 28.35 $19,000 - $19,999 $97 $0 28.36 $20,000 - $20,999 $114 $0 29.1 $21,000 - $21,999 $132 $0 29.2 $22,000 - $22,999 $149 $0 29.3 $23,000 - $23,999 $162 $0 29.4 $24,000 - $24,999 $162 $0 29.5 $25,000 - $25,999 $162 $0 29.6 $26,000 - $26,999 $162 $0 29.7 $27,000 - $27,999 $162 $0 29.8 $28,000 - $28,999 $162 $9 29.9 $29,000 - $29,999 $162 $16 29.10 $30,000 - $30,999 $162 $24 29.11 $31,000 - $31,999 $162 $31 29.12 $32,000 - $32,999 $162 $39 29.13 $33,000 - $33,999 $162 $46 29.14 $34,000 - $34,999 $162 $54 29.15 $35,000 - $35,999 $162 $61 29.16 $36,000 - $36,999 $162 $69 29.17 $37,000 - $37,999 $162 $76 29.18 $38,000 - $38,999 $162 $84 29.19 $39,000 - $39,999 $162 $91 29.20 $40,000 - $40,999 $162 $99 29.21 $41,000 - $41,999 $162 $106 29.22 $42,000 - $42,999 $162 $114 29.23 $43,000 - $43,999 $162 $121 29.24 $44,000 - $44,999 $162 $129 29.25 $45,000 - $45,999 $162 $136 29.26 $46,000 - $46,999 $162 $144 29.27 $47,000 - $47,999 $162 $151 29.28 $48,000 - $48,999 $162 $159 29.29 $49,000 - $49,999 $162 $166 29.30 $50,000 - $50,999 $162 $174 29.31 $51,000 - $51,999 $162 $181 29.32 $52,000 - $52,999 $162 $189 29.33 $53,000 - $53,999 $162 $196 29.34 $54,000 - $54,999 $162 $204 29.35 $55,000 - $55,999 $162 $211 29.36 $56,000 - $56,999 $162 $219 30.1 $57,000 - $57,999 $162 $226 30.2 $58,000 - $58,999 $162 $234 30.3 $59,000 - $59,999 $162 $241 30.4 $60,000 - $60,999 $162 $249 30.5 $61,000 - $61,999 $162 $256 30.6 $62,000 and over $162 $261 30.7 Subd. 4. [NONRESIDENTS AND PART-YEAR RESIDENTS.] For a 30.8 nonresident or part-year resident, the credit must be allocated 30.9 based on the percentage calculated under section 290.06, 30.10 subdivision 2c, paragraph (e). 30.11 Subd. 5. [INFLATION ADJUSTMENT.] The dollar amount of 30.12 earned income of the lesser-earning spouse, taxable income, and 30.13 marriage penalty credit in the table in subdivision 3 must be 30.14 adjusted for inflation. The commissioner shall adjust the 30.15 amounts by the percentage determined under section 290.06, 30.16 subdivision 2d, for the taxable year. 30.17 Sec. 16. Minnesota Statutes 1998, section 290.091, 30.18 subdivision 1, is amended to read: 30.19 Subdivision 1. [IMPOSITION OF TAX.] In addition to all 30.20 other taxes imposed by this chapter a tax is imposed on 30.21 individuals, estates, and trusts equal to the excess (if any) of 30.22 (a) an amount equal toseven6.5 percent of alternative 30.23 minimum taxable income after subtracting the exemption amount, 30.24 over 30.25 (b) the regular tax for the taxable year. 30.26 Sec. 17. Minnesota Statutes 1998, section 290.091, 30.27 subdivision 2, is amended to read: 30.28 Subd. 2. [DEFINITIONS.] For purposes of the tax imposed by 30.29 this section, the following terms have the meanings given: 30.30 (a) "Alternative minimum taxable income" means the sum of 30.31 the following for the taxable year: 30.32 (1) the taxpayer's federal alternative minimum taxable 30.33 income as defined in section 55(b)(2) of the Internal Revenue 30.34 Code; 30.35 (2) the taxpayer's itemized deductions allowed in computing 30.36 federal alternative minimum taxable income, but excluding: 31.1 (i) the Minnesota charitable contribution deduction; 31.2 (ii) the medical expense deduction; 31.3 (iii) the casualty, theft, and disaster loss deduction;and31.4 (iv) the impairment-related work expenses of a disabled 31.5 person; and 31.6 (v) holocaust victims' settlement payments to the extent 31.7 allowed under section 290.01, subdivision 19b; and 31.8 (3) for depletion allowances computed under section 613A(c) 31.9 of the Internal Revenue Code, with respect to each property (as 31.10 defined in section 614 of the Internal Revenue Code), to the 31.11 extent not included in federal alternative minimum taxable 31.12 income, the excess of the deduction for depletion allowable 31.13 under section 611 of the Internal Revenue Code for the taxable 31.14 year over the adjusted basis of the property at the end of the 31.15 taxable year (determined without regard to the depletion 31.16 deduction for the taxable year); 31.17 (4) to the extent not included in federal alternative 31.18 minimum taxable income, the amount of the tax preference for 31.19 intangible drilling cost under section 57(a)(2) of the Internal 31.20 Revenue Code determined without regard to subparagraph (E); 31.21 (5) to the extent not included in federal alternative 31.22 minimum taxable income, the amount of interest income as 31.23 provided by section 290.01, subdivision 19a, clause (1); 31.24(6) amounts added to federal taxable income as provided by31.25section 290.01, subdivision 19a, clauses (5), (6), and (7);31.26 less the sum of the amounts determined under the following 31.27clauses (1) to (4): 31.28 (1) interest income as defined in section 290.01, 31.29 subdivision 19b, clause (1); 31.30 (2) an overpayment of state income tax as provided by 31.31 section 290.01, subdivision 19b, clause (2), to the extent 31.32 included in federal alternative minimum taxable income; and 31.33 (3) the amount of investment interest paid or accrued 31.34 within the taxable year on indebtedness to the extent that the 31.35 amount does not exceed net investment income, as defined in 31.36 section 163(d)(4) of the Internal Revenue Code. Interest does 32.1 not include amounts deducted in computing federal adjusted gross 32.2 income; and. 32.3(4) amounts subtracted from federal taxable income as32.4provided by section 290.01, subdivision 19b, clauses (11) and32.5(12).32.6 In the case of an estate or trust, alternative minimum 32.7 taxable income must be computed as provided in section 59(c) of 32.8 the Internal Revenue Code. 32.9 (b) "Investment interest" means investment interest as 32.10 defined in section 163(d)(3) of the Internal Revenue Code. 32.11 (c) "Tentative minimum tax" equalsseven6.5 percent of 32.12 alternative minimum taxable income after subtracting the 32.13 exemption amount determined under subdivision 3. 32.14 (d) "Regular tax" means the tax that would be imposed under 32.15 this chapter (without regard to this section and section 32.16 290.032), reduced by the sum of the nonrefundable credits 32.17 allowed under this chapter. 32.18 (e) "Net minimum tax" means the minimum tax imposed by this 32.19 section. 32.20 (f) "Minnesota charitable contribution deduction" means a 32.21 charitable contribution deduction under section 170 of the 32.22 Internal Revenue Code to or for the use of an entity described 32.23 in section 290.21, subdivision 3, clauses (a) to (e). When the 32.24 federal deduction for charitable contributions is limited under 32.25 section 170(b) of the Internal Revenue Code, the allowable 32.26 contributions in the year of contribution are deemed to be first 32.27 contributions to entities described in section 290.21, 32.28 subdivision 3, clauses (a) to (e). 32.29 Sec. 18. Minnesota Statutes 1998, section 290.091, 32.30 subdivision 6, is amended to read: 32.31 Subd. 6. [CREDIT FOR PRIOR YEARS' LIABILITY.] (a) A credit 32.32 is allowed against the tax imposed by this chapter on 32.33 individuals, trusts, and estates equal to the minimum tax credit 32.34 for the taxable year. The minimum tax credit equals the 32.35 adjusted net minimum tax for taxable years beginning after 32.36 December 31, 1988, reduced by the minimum tax credits allowed in 33.1 a prior taxable year. The credit may not exceed the excess (if 33.2 any) for the taxable year of 33.3 (1) the regular tax, over 33.4 (2) the greater of (i) the tentative alternative minimum 33.5 tax, or (ii) zero. 33.6 (b) The adjusted net minimum tax for a taxable year equals 33.7 the lesser of the net minimum tax or the excess (if any) of 33.8 (1) the tentative minimum tax, over 33.9 (2)seven6.5 percent of the sum of 33.10 (i) adjusted gross income as defined in section 62 of the 33.11 Internal Revenue Code, 33.12 (ii) interest income as defined in section 290.01, 33.13 subdivision 19a, clause (1), 33.14 (iii)the amount added to federal taxable income as33.15provided by section 290.01, subdivision 19a, clauses (5), (6),33.16and (7),33.17(iv)interest on specified private activity bonds, as 33.18 defined in section 57(a)(5) of the Internal Revenue Code, to the 33.19 extent not included under clause (ii), 33.20(v)(iv) depletion as defined in section 57(a)(1), 33.21 determined without regard to the last sentence of paragraph (1), 33.22 of the Internal Revenue Code, less 33.23(vi)(v) the deductions allowed in computing alternative 33.24 minimum taxable income provided in subdivision 2, paragraph (a), 33.25 clause (2) of the first series of clauses and clauses (1), 33.26 (2), and (3), and (4)of the second series of clauses, and 33.27(vii)(vi) the exemption amount determined under 33.28 subdivision 3. 33.29 In the case of an individual who is not a Minnesota 33.30 resident for the entire year, adjusted net minimum tax must be 33.31 multiplied by the fraction defined in section 290.06, 33.32 subdivision 2c, paragraph (e). In the case of a trust or 33.33 estate, adjusted net minimum tax must be multiplied by the 33.34 fraction defined under subdivision 4, paragraph (b). 33.35 Sec. 19. Minnesota Statutes 1998, section 290.0921, 33.36 subdivision 5, is amended to read: 34.1 Subd. 5. [CHARITABLE CONTRIBUTIONS.] (a) A deduction from 34.2 alternative minimum taxable net income is allowed equal to 34.3 the contributions subject to the deduction for charitable 34.4 contributions under section 290.21, subdivision 3, without 34.5 application of the limitation in section 290.21, subdivision 3. 34.6 The deduction allowable for capital gain property is limited to 34.7 the adjusted basis of the property as defined in section 290.01, 34.8 subdivision 19f. The term capital gain property has the meaning 34.9 given by section 170(b)(1)(C)(iv) of the Internal Revenue Code, 34.10 but does not include property to which an election under section 34.11 170(b)(1)(C)(iii) of the Internal Revenue Code applies. 34.12 (b) The amount of the deduction may not exceed 15 percent 34.13 of alternative minimum taxable net income less the deduction 34.14 allowed under subdivision 6. 34.15 Sec. 20. Minnesota Statutes 1998, section 290.095, 34.16 subdivision 3, is amended to read: 34.17 Subd. 3. [CARRYOVER.] (a) A net operating loss incurred in 34.18 a taxable year: (i) beginning after December 31, 1986, shall be 34.19 a net operating loss carryover to each of the 15 taxable years 34.20 following the taxable year of such loss; (ii) beginning before 34.21 January 1, 1987, shall be a net operating loss carryover to each 34.22 of the five taxable years following the taxable year of such 34.23 loss subject to the provisions of Minnesota Statutes 1986, 34.24 section 290.095; and (iii) beginning before January 1, 1987, 34.25 shall be a net operating loss carryback to each of the three 34.26 taxable years preceding the loss year subject to the provisions 34.27 of Minnesota Statutes 1986, section 290.095. 34.28 (b) The entire amount of the net operating loss for any 34.29 taxable year shall be carried to the earliest of the taxable 34.30 years to which such loss may be carried. The portion of such 34.31 loss which shall be carried to each of the other taxable years 34.32 shall be the excess, if any, of the amount of such loss over the 34.33 sum of the taxable net income, adjusted by the modifications 34.34 specified in subdivision 4, for each of the taxable years to 34.35 which such loss may be carried. 34.36 (c) Where a corporationdoes business both within and35.1without Minnesota, andapportions its income under the 35.2 provisions of section 290.191, the net operating loss deduction 35.3 incurred in any taxable year shall be allowed to the extent of 35.4 the apportionment ratio of the loss year. 35.5 (d) The provisions of sections 381, 382, and 384 of the 35.6 Internal Revenue Code apply to carryovers in certain corporate 35.7 acquisitions and special limitations on net operating loss 35.8 carryovers. The limitation amount determined under section 382 35.9 shall be applied to net income, before apportionment, in each 35.10 post change year to which a loss is carried. 35.11 Sec. 21. Minnesota Statutes 1998, section 290.17, 35.12 subdivision 3, is amended to read: 35.13 Subd. 3. [TRADE OR BUSINESS INCOME; GENERAL RULE.] All 35.14 income of a trade or business is subject to apportionment except 35.15 nonbusiness income. Income derived from carrying on a trade or 35.16 business must be assigned to this state if the trade or business 35.17 is conducted wholly within this state, assigned outside this 35.18 state if conducted wholly without this state and apportioned 35.19 between this state and other states and countries under this 35.20 subdivision if conducted partly within and partly without this 35.21 state. For purposes of determining whether a trade or business 35.22 is carried on exclusively within or without this state: 35.23 (a) A trade or business physically located exclusively 35.24 within this state is nevertheless carried on partly within and 35.25 partly without this state if any of the principles set forth in 35.26 section 290.191 for the allocation of sales or receipts within 35.27 or without this state when applied to the taxpayer's situation 35.28 result in the allocation of any sales or receipts without this 35.29 state. 35.30 (b) A trade or business physically located exclusively 35.31 without this state is nevertheless carried on partly within and 35.32 partly without this state if any of the principles set forth in 35.33 section 290.191 for the allocation of sales or receipts within 35.34 or without this state when applied to the taxpayer's situation 35.35 result in the allocation of any sales or receipts without this 35.36 state. The jurisdiction to tax such a business under this 36.1 chapter must be determined in accordance with sections 290.014 36.2 and 290.015. 36.3 Sec. 22. Minnesota Statutes 1998, section 290.17, 36.4 subdivision 4, is amended to read: 36.5 Subd. 4. [UNITARY BUSINESS PRINCIPLE.] (a) If a trade or 36.6 business conducted wholly within this state or partly within and 36.7 partly without this state is part of a unitary business, the 36.8 entire income of the unitary business is subject to 36.9 apportionment pursuant to section 290.191. Notwithstanding 36.10 subdivision 2, paragraph (c), none of the income of a unitary 36.11 business is considered to be derived from any particular source 36.12 and none may be allocated to a particular place except as 36.13 provided by the applicable apportionment formula. The 36.14 provisions of this subdivision do not apply tofarm income36.15subject to subdivision 5, paragraph (a),business income subject 36.16 to subdivision 5,paragraph (b) or (c),income of an insurance 36.17 company determined under section 290.35, or income of an 36.18 investment company determined under section 290.36. 36.19 (b) The term "unitary business" means business activities 36.20 or operations whichare of mutual benefit, dependent upon, or36.21contributory to one another, individually or as a groupresult 36.22 in a flow of value between them. The term may be applied within 36.23 a single legal entity or between multiple entities and without 36.24 regard to whether each entity is a sole proprietorship, a 36.25 corporation, a partnership or a trust. 36.26 (c) Unity is presumed whenever there is unity of ownership, 36.27 operation, and use, evidenced by centralized management or 36.28 executive force, centralized purchasing, advertising, 36.29 accounting, or other controlled interaction, but the absence of 36.30 these centralized activities will not necessarily evidence a 36.31 nonunitary business. Unity is also presumed when business 36.32 activities or operations are of mutual benefit, dependent upon 36.33 or contributory to one another, either individually or as a 36.34 group. 36.35 (d) Where a business operation conducted in Minnesota is 36.36 owned by a business entity that carries on business activity 37.1 outside the state different in kind from that conducted within 37.2 this state, and the other business is conducted entirely outside 37.3 the state, it is presumed that the two business operations are 37.4 unitary in nature, interrelated, connected, and interdependent 37.5 unless it can be shown to the contrary. 37.6 (e) Unity of ownership is not deemed to exist when a 37.7 corporation is involved unless that corporation is a member of a 37.8 group of two or more business entities and more than 50 percent 37.9 of the voting stock of each member of the group is directly or 37.10 indirectly owned by a common owner or by common owners, either 37.11 corporate or noncorporate, or by one or more of the member 37.12 corporations of the group. For this purpose, the term "voting 37.13 stock" shall include membership interests of mutual insurance 37.14 holding companies formed under section 60A.077. 37.15 (f) The net income and apportionment factors under section 37.16 290.191 or 290.20 of foreign corporations and other foreign 37.17 entities which are part of a unitary business shall not be 37.18 included in the net income or the apportionment factors of the 37.19 unitary business. A foreign corporation or other foreign entity 37.20 which is required to file a return under this chapter shall file 37.21 on a separate return basis. The net income and apportionment 37.22 factors under section 290.191 or 290.20 of foreign operating 37.23 corporations shall not be included in the net income or the 37.24 apportionment factors of the unitary business except as provided 37.25 in paragraph (g). 37.26 (g) The adjusted net income of a foreign operating 37.27 corporation shall be deemed to be paid as a dividend on the last 37.28 day of its taxable year to each shareholder thereof, in 37.29 proportion to each shareholder's ownership, with which such 37.30 corporation is engaged in a unitary business. Such deemed 37.31 dividend shall be treated as a dividend under section 290.21, 37.32 subdivision 4. 37.33 Dividends actually paid by a foreign operating corporation 37.34 to a corporate shareholder which is a member of the same unitary 37.35 business as the foreign operating corporation shall be 37.36 eliminated from the net income of the unitary business in 38.1 preparing a combined report for the unitary business. The 38.2 adjusted net income of a foreign operating corporation shall be 38.3 its net income adjusted as follows: 38.4 (1) any taxes paid or accrued to a foreign country, the 38.5 commonwealth of Puerto Rico, or a United States possession or 38.6 political subdivision of any of the foregoing shall be a 38.7 deduction; and 38.8 (2) the subtraction from federal taxable income for 38.9 payments received from foreign corporations or foreign operating 38.10 corporations under section 290.01, subdivision 19d, clause (11), 38.11 shall not be allowed. 38.12 If a foreign operating corporation incurs a net loss, 38.13 neither income nor deduction from that corporation shall be 38.14 included in determining the net income of the unitary business. 38.15 (h) For purposes of determining the net income of a unitary 38.16 business and the factors to be used in the apportionment of net 38.17 income pursuant to section 290.191 or 290.20, there must be 38.18 included only the income and apportionment factors of domestic 38.19 corporations or other domestic entities other than foreign 38.20 operating corporations that are determined to be part of the 38.21 unitary business pursuant to this subdivision, notwithstanding 38.22 that foreign corporations or other foreign entities might be 38.23 included in the unitary business. 38.24 (i) Deductions for expenses, interest, or taxes otherwise 38.25 allowable under this chapter that are connected with or 38.26 allocable against dividends, deemed dividends described in 38.27 paragraph (g), or royalties, fees, or other like income 38.28 described in section 290.01, subdivision 19d, clause (11), shall 38.29 not be disallowed. 38.30 (j) Each corporation or other entity, except a sole 38.31 proprietorship, that is part of a unitary business must file 38.32 combined reports as the commissioner determines. On the 38.33 reports, all intercompany transactions between entities included 38.34 pursuant to paragraph (h) must be eliminated and the entire net 38.35 income of the unitary business determined in accordance with 38.36 this subdivision is apportioned among the entities by using each 39.1 entity's Minnesota factors for apportionment purposes in the 39.2 numerators of the apportionment formula and the total factors 39.3 for apportionment purposes of all entities included pursuant to 39.4 paragraph (h) in the denominators of the apportionment formula. 39.5 (k) If a corporation has been divested from a unitary 39.6 business and is included in a combined report for a fractional 39.7 part of the common accounting period of the combined report: 39.8 (1) its income includable in the combined report is its 39.9 income incurred for that part of the year determined by 39.10 proration or separate accounting; and 39.11 (2) its sales, property, and payroll included in the 39.12 apportionment formula must be prorated or accounted for 39.13 separately. 39.14 Sec. 23. Minnesota Statutes 1998, section 290.17, 39.15 subdivision 6, is amended to read: 39.16 Subd. 6. [NONBUSINESS INCOME.]For a trade or business for39.17which allocation of income within and without this state is39.18required, if the taxpayer has any income not connected with the39.19trade or business carried on partly within and partly without39.20this state that income must be allocated under subdivision 2.39.21Intangible property is employed in a trade or business if the39.22owner of the property holds it as a means of furthering the39.23trade or business.Nonbusiness income is income of the trade or 39.24 business that cannot be apportioned by this state because of the 39.25 United States Constitution or the constitution of the state of 39.26 Minnesota and includes income that cannot constitutionally be 39.27 apportioned to this state because it is derived from a capital 39.28 transaction that solely serves an investment function. 39.29 Nonbusiness income must be allocated under subdivision 2. 39.30 Sec. 24. Minnesota Statutes 1998, section 290.191, 39.31 subdivision 2, is amended to read: 39.32 Subd. 2. [APPORTIONMENT FORMULA OF GENERAL APPLICATION.] 39.33 Except for those trades or businesses required to use a 39.34 different formula under subdivision 3 or section 290.35 or 39.35 290.36, and for those trades or businesses that receive 39.36 permission to use some other method under section 290.20 or 40.1 under subdivision 4, a trade or business required to apportion 40.2 its net income must apportion its income to this state on the 40.3 basis of the percentage obtained by taking the sum of: 40.4 (1)7075 percent of the percentage which the sales made 40.5 within this state in connection with the trade or business 40.6 during the tax period are of the total sales wherever made in 40.7 connection with the trade or business during the tax period;40.8 (2)1512.5 percent of the percentage which the total 40.9 tangible property used by the taxpayer in this state in 40.10 connection with the trade or business during the tax period is 40.11 of the total tangible property, wherever located, used by the 40.12 taxpayer in connection with the trade or business during the tax 40.13 period; and 40.14 (3)1512.5 percent of the percentage which the taxpayer's 40.15 total payrolls paid or incurred in this state or paid in respect 40.16 to labor performed in this state in connection with the trade or 40.17 business during the tax period are of the taxpayer's total 40.18 payrolls paid or incurred in connection with the trade or 40.19 business during the tax period. 40.20 Sec. 25. Minnesota Statutes 1998, section 290.191, 40.21 subdivision 3, is amended to read: 40.22 Subd. 3. [APPORTIONMENT FORMULA FOR FINANCIAL 40.23 INSTITUTIONS.] Except for an investment company required to 40.24 apportion its income under section 290.36, a financial 40.25 institution that is required to apportion its net income must 40.26 apportion its net income to this state on the basis of the 40.27 percentage obtained by taking the sum of: 40.28 (1)7075 percent of the percentage which the receipts from 40.29 within this state in connection with the trade or business 40.30 during the tax period are of the total receipts in connection 40.31 with the trade or business during the tax period, from wherever 40.32 derived; 40.33 (2)1512.5 percent of the percentage which the sum of the 40.34 total tangible property used by the taxpayer in this state and 40.35 the intangible property owned by the taxpayer and attributed to 40.36 this state in connection with the trade or business during the 41.1 tax period is of the sum of the total tangible property, 41.2 wherever located, used by the taxpayer and the intangible 41.3 property owned by the taxpayer and attributed to all states in 41.4 connection with the trade or business during the tax period; and 41.5 (3)1512.5 percent of the percentage which the taxpayer's 41.6 total payrolls paid or incurred in this state or paid in respect 41.7 to labor performed in this state in connection with the trade or 41.8 business during the tax period are of the taxpayer's total 41.9 payrolls paid or incurred in connection with the trade or 41.10 business during the tax period. 41.11 Sec. 26. Minnesota Statutes 1998, section 290.9725, is 41.12 amended to read: 41.13 290.9725 [S CORPORATION.] 41.14 For purposes of this chapter, the term "S corporation" 41.15 means any corporation having a valid election in effect for the 41.16 taxable year under section 1362 of the Internal Revenue Code,41.17except that a corporation which either:41.18(1) is a financial institution to which either section 58541.19or section 593 of the Internal Revenue Code applies; or41.20(2) has a wholly owned subsidiary as described in section41.211361(b)(3)(B) of the Internal Revenue Code which is a financial41.22institution as described above41.23is not an "S" corporation for the purposes of this chapter. An 41.24 S corporation shall not be subject to the taxes imposed by this 41.25 chapter, except: 41.26 (1) the taxes imposed under sections 290.0922, 290.92, 41.27 290.9727, 290.9728, and 290.9729; and 41.28 (2) the tax under sections 290.06, subdivision 1, and 41.29 290.0921 apply to a financial institution to which either 41.30 section 585 or 593 of the Internal Revenue Code applies or that 41.31 has a wholly owned subsidiary as described in section 41.32 1361(b)(3)(B) of the Internal Revenue Code which is a financial 41.33 institution under section 585 or 593 of the Internal Revenue 41.34 Code. 41.35 Sec. 27. Minnesota Statutes 1998, section 290.9726, is 41.36 amended by adding a subdivision to read: 42.1 Subd. 7. [FINANCIAL INSTITUTIONS.] An S corporation that 42.2 is subject to the tax under section 290.9725, clause (2), must 42.3 report to each shareholder an apportionment of the S 42.4 corporation's tax obligation for the taxable year for purposes 42.5 of the credit under section 290.06, subdivision 26. The 42.6 apportionment to a shareholder must be made in proportion to the 42.7 amount of taxable income of the S corporation apportioned to the 42.8 shareholder. 42.9 Sec. 28. Minnesota Statutes 1998, section 290A.03, 42.10 subdivision 3, is amended to read: 42.11 Subd. 3. [INCOME.] (1) "Income" means the sum of the 42.12 following: 42.13 (a) federal adjusted gross income as defined in the 42.14 Internal Revenue Code; and 42.15 (b) the sum of the following amounts to the extent not 42.16 included in clause (a): 42.17 (i) all nontaxable income; 42.18 (ii) the amount of a passive activity loss that is not 42.19 disallowed as a result of section 469, paragraph (i) or (m) of 42.20 the Internal Revenue Code and the amount of passive activity 42.21 loss carryover allowed under section 469(b) of the Internal 42.22 Revenue Code; 42.23 (iii) an amount equal to the total of any discharge of 42.24 qualified farm indebtedness of a solvent individual excluded 42.25 from gross income under section 108(g) of the Internal Revenue 42.26 Code; 42.27 (iv) cash public assistance and relief; 42.28 (v) any pension or annuity (including railroad retirement 42.29 benefits, all payments received under the federal Social 42.30 Security Act, supplemental security income, and veterans 42.31 benefits), which was not exclusively funded by the claimant or 42.32 spouse, or which was funded exclusively by the claimant or 42.33 spouse and which funding payments were excluded from federal 42.34 adjusted gross income in the years when the payments were made; 42.35 (vi) interest received from the federal or a state 42.36 government or any instrumentality or political subdivision 43.1 thereof; 43.2 (vii) workers' compensation; 43.3 (viii) nontaxable strike benefits; 43.4 (ix) the gross amounts of payments received in the nature 43.5 of disability income or sick pay as a result of accident, 43.6 sickness, or other disability, whether funded through insurance 43.7 or otherwise; 43.8 (x) a lump sum distribution under section 402(e)(3) of the 43.9 Internal Revenue Code; 43.10 (xi) contributions made by the claimant to an individual 43.11 retirement account, including a qualified voluntary employee 43.12 contribution; simplified employee pension plan; self-employed 43.13 retirement plan; cash or deferred arrangement plan under section 43.14 401(k) of the Internal Revenue Code; or deferred compensation 43.15 plan under section 457 of the Internal Revenue Code; and 43.16 (xii) nontaxable scholarship or fellowship grants. 43.17 In the case of an individual who files an income tax return 43.18 on a fiscal year basis, the term "federal adjusted gross income" 43.19 shall mean federal adjusted gross income reflected in the fiscal 43.20 year ending in the calendar year. Federal adjusted gross income 43.21 shall not be reduced by the amount of a net operating loss 43.22 carryback or carryforward or a capital loss carryback or 43.23 carryforward allowed for the year. 43.24 (2) "Income" does not include: 43.25 (a) amounts excluded pursuant to the Internal Revenue Code, 43.26 sections 101(a) and 102; 43.27 (b) amounts of any pension or annuity which was exclusively 43.28 funded by the claimant or spouse and which funding payments were 43.29 not excluded from federal adjusted gross income in the years 43.30 when the payments were made; 43.31 (c) surplus food or other relief in kind supplied by a 43.32 governmental agency; 43.33 (d) relief granted under this chapter;or43.34 (e) child support payments received under a temporary or 43.35 final decree of dissolution or legal separation; or 43.36 (f) holocaust settlement payments as defined in section 44.1 290.01, subdivision 32. 44.2 (3) The sum of the following amounts may be subtracted from 44.3 income: 44.4 (a) for the claimant's first dependent, the exemption 44.5 amount multiplied by 1.4; 44.6 (b) for the claimant's second dependent, the exemption 44.7 amount multiplied by 1.3; 44.8 (c) for the claimant's third dependent, the exemption 44.9 amount multiplied by 1.2; 44.10 (d) for the claimant's fourth dependent, the exemption 44.11 amount multiplied by 1.1; 44.12 (e) for the claimant's fifth dependent, the exemption 44.13 amount; and 44.14 (f) if the claimant or claimant's spouse was disabled or 44.15 attained the age of 65 on or before December 31 of the year for 44.16 which the taxes were levied or rent paid, the exemption amount. 44.17 For purposes of this subdivision, the "exemption amount" 44.18 means the exemption amount under section 151(d) of the Internal 44.19 Revenue Code for the taxable year for which the income is 44.20 reported. 44.21 Sec. 29. [NONBUSINESS INCOME; PRE-1999 TAX YEARS.] 44.22 If all items of income, gain, or loss are reported by a 44.23 taxpayer as business income or loss on an original or amended 44.24 return for a tax year to which this section applies, the 44.25 commissioner of revenue shall not adjust the tax liability for 44.26 that tax year, or for any other tax year affected by a carryover 44.27 from that tax year, by treating any of the items as nonbusiness 44.28 income or loss under Minnesota Statutes, section 290.17, 44.29 subdivision 6. Any adjustment treating an item as nonbusiness 44.30 income or loss ordered by the commissioner before the effective 44.31 date of this section must be reversed if the order is subject to 44.32 administrative or judicial challenge on the effective date and 44.33 such a challenge is timely filed. The reporting of any item as 44.34 nonbusiness income, gain, or loss does not preclude the 44.35 application of this section if the taxpayer may not 44.36 constitutionally be required to treat the item as business 45.1 income, gain, or loss. 45.2 Sec. 30. [BANK S CORPORATION SHAREHOLDERS; ALTERNATIVE 45.3 MINIMUM TAX.] 45.4 For taxable years beginning after December 31, 1997, and 45.5 before January 1, 1999, a taxpayer is allowed a deduction in 45.6 computing alternative minimum taxable income under Minnesota 45.7 Statutes 1998, section 290.091, subdivision 2, paragraph (a), 45.8 equal to the amount of the subtraction under Minnesota Statutes 45.9 1998, section 290.01, subdivision 19b, clause (13). 45.10 Sec. 31. [APPROPRIATION.] 45.11 (a) $100,000 is appropriated from the general fund to the 45.12 commissioner of revenue to make grants to one or more nonprofit 45.13 organizations, qualifying under section 501(c)(3) of the 45.14 Internal Revenue Code of 1986, to coordinate, facilitate, 45.15 encourage, and aid in the provision of taxpayer assistance 45.16 services. In making grants under this appropriation, the 45.17 commissioner shall give preference to organizations that will 45.18 use the grants to attract new and train new and existing 45.19 volunteers to provide taxpayer assistance. This appropriation 45.20 is available for fiscal years 2000 and 2001 and does not become 45.21 a part of the base. 45.22 (b) "Taxpayer assistance services" means accounting and tax 45.23 preparation services provided by volunteers to low-income and 45.24 disadvantaged Minnesota residents to help them file federal and 45.25 state income tax returns and Minnesota property tax refund 45.26 claims and to provide personal representation before the 45.27 department of revenue and the Internal Revenue Service. 45.28 Sec. 32. [EFFECTIVE DATE.] 45.29 (a) Section 1 applies to claims written off after June 30, 45.30 1999. 45.31 (b) Section 2 is intended to clarify rather than to change 45.32 the definition of resident and is effective for all 45.33 examinations, claims for refund, administrative appeals, and 45.34 court proceedings that are pending or begin on or after the day 45.35 following final enactment. 45.36 (c) Except as otherwise provided, sections 3 to 5, 7 to 11, 46.1 13 to 18, 21, 22, the changes to clauses (b), (c), and (j), 23, 46.2 and 26 to 28 are effective for tax years beginning after 46.3 December 31, 1998. The provisions substituting qualifying child 46.4 for dependent in sections 4 and 13 are effective for taxable 46.5 years beginning after December 31, 1999. 46.6 (d) Section 4, clause (4), and section 6 are effective for 46.7 taxable years beginning after December 31, 1999. 46.8 (e) Section 12, clause (g), is effective for tax years 46.9 beginning after December 31, 1997. The rest of section 12 is 46.10 effective for taxable years beginning after December 31, 1998. 46.11 (f) Sections 19, 20, and 22, the changes to clause (a), are 46.12 effective for tax years beginning on or after the day following 46.13 final enactment. 46.14 (g) Sections 24 and 25 are effective for taxable years 46.15 beginning after December 31, 2000. 46.16 (h) Section 29 is effective on the day after final 46.17 enactment and applies to tax years beginning before January 1, 46.18 1999. 46.19 (i) Section 30 is effective for tax years after December 46.20 31, 1997, and beginning before January 1, 1999. 46.21 (j) Section 31 is effective the day following final 46.22 enactment. 46.23 ARTICLE 3 46.24 FEDERAL UPDATE 46.25 Section 1. Minnesota Statutes 1998, section 289A.02, 46.26 subdivision 7, is amended to read: 46.27 Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically 46.28 defined otherwise, "Internal Revenue Code" means the Internal 46.29 Revenue Code of 1986, as amended through December 31,19971998. 46.30 Sec. 2. Minnesota Statutes 1998, section 290.01, 46.31 subdivision 19, is amended to read: 46.32 Subd. 19. [NET INCOME.] The term "net income" means the 46.33 federal taxable income, as defined in section 63 of the Internal 46.34 Revenue Code of 1986, as amended through the date named in this 46.35 subdivision, incorporating any elections made by the taxpayer in 46.36 accordance with the Internal Revenue Code in determining federal 47.1 taxable income for federal income tax purposes, and with the 47.2 modifications provided in subdivisions 19a to 19f. 47.3 In the case of a regulated investment company or a fund 47.4 thereof, as defined in section 851(a) or 851(g) of the Internal 47.5 Revenue Code, federal taxable income means investment company 47.6 taxable income as defined in section 852(b)(2) of the Internal 47.7 Revenue Code, except that: 47.8 (1) the exclusion of net capital gain provided in section 47.9 852(b)(2)(A) of the Internal Revenue Code does not apply; 47.10 (2) the deduction for dividends paid under section 47.11 852(b)(2)(D) of the Internal Revenue Code must be applied by 47.12 allowing a deduction for capital gain dividends and 47.13 exempt-interest dividends as defined in sections 852(b)(3)(C) 47.14 and 852(b)(5) of the Internal Revenue Code; and 47.15 (3) the deduction for dividends paid must also be applied 47.16 in the amount of any undistributed capital gains which the 47.17 regulated investment company elects to have treated as provided 47.18 in section 852(b)(3)(D) of the Internal Revenue Code. 47.19 The net income of a real estate investment trust as defined 47.20 and limited by section 856(a), (b), and (c) of the Internal 47.21 Revenue Code means the real estate investment trust taxable 47.22 income as defined in section 857(b)(2) of the Internal Revenue 47.23 Code. 47.24 The net income of a designated settlement fund as defined 47.25 in section 468B(d) of the Internal Revenue Code means the gross 47.26 income as defined in section 468B(b) of the Internal Revenue 47.27 Code. 47.28 The Internal Revenue Code of 1986, as amended through 47.29 December 31, 1986, shall be in effect for taxable years 47.30 beginning after December 31, 1986. The provisions of sections 47.31 10104, 10202, 10203, 10204, 10206, 10212, 10221, 10222, 10223, 47.32 10226, 10227, 10228, 10611, 10631, 10632, and 10711 of the 47.33 Omnibus Budget Reconciliation Act of 1987, Public Law Number 47.34 100-203, the provisions of sections 1001, 1002, 1003, 1004, 47.35 1005, 1006, 1008, 1009, 1010, 1011, 1011A, 1011B, 1012, 1013, 47.36 1014, 1015, 1018, 2004, 3041, 4009, 6007, 6026, 6032, 6137, 48.1 6277, and 6282 of the Technical and Miscellaneous Revenue Act of 48.2 1988, Public Law Number 100-647, the provisions of sections 48.3 7811, 7816, and 7831 of the Omnibus Budget Reconciliation Act of 48.4 1989, Public Law Number 101-239, the provisions of sections 48.5 1305, 1704(r), and 1704(e)(1) of the Small Business Job 48.6 Protection Act, Public Law Number 104-188, and the provisions of 48.7 sections 975 and 1604(d)(2) and (e) of the Taxpayer Relief Act 48.8 of 1997, Public Law Number 105-34, and the provisions of section 48.9 4004 of the Omnibus Consolidated and Emergency Supplemental 48.10 Appropriations Act, 1999, Public Law Number 105-277 shall be 48.11 effective at the time they become effective for federal income 48.12 tax purposes. 48.13 The Internal Revenue Code of 1986, as amended through 48.14 December 31, 1987, shall be in effect for taxable years 48.15 beginning after December 31, 1987. The provisions of sections 48.16 4001, 4002, 4011, 5021, 5041, 5053, 5075, 6003, 6008, 6011, 48.17 6030, 6031, 6033, 6057, 6064, 6066, 6079, 6130, 6176, 6180, 48.18 6182, 6280, and 6281 of the Technical and Miscellaneous Revenue 48.19 Act of 1988, Public Law Number 100-647, the provisions of 48.20 sections 7815 and 7821 of the Omnibus Budget Reconciliation Act 48.21 of 1989, Public Law Number 101-239, and the provisions of 48.22 section 11702 of the Revenue Reconciliation Act of 1990, Public 48.23 Law Number 101-508, shall become effective at the time they 48.24 become effective for federal tax purposes. 48.25 The Internal Revenue Code of 1986, as amended through 48.26 December 31, 1988, shall be in effect for taxable years 48.27 beginning after December 31, 1988. The provisions of sections 48.28 7101, 7102, 7104, 7105, 7201, 7202, 7203, 7204, 7205, 7206, 48.29 7207, 7210, 7211, 7301, 7302, 7303, 7304, 7601, 7621, 7622, 48.30 7641, 7642, 7645, 7647, 7651, and 7652 of the Omnibus Budget 48.31 Reconciliation Act of 1989, Public Law Number 101-239, the 48.32 provision of section 1401 of the Financial Institutions Reform, 48.33 Recovery, and Enforcement Act of 1989, Public Law Number 101-73, 48.34 the provisions of sections 11701 and 11703 of the Revenue 48.35 Reconciliation Act of 1990, Public Law Number 101-508, and the 48.36 provisions of sections 1702(g) and 1704(f)(2)(A) and (B) of the 49.1 Small Business Job Protection Act, Public Law Number 104-188, 49.2 shall become effective at the time they become effective for 49.3 federal tax purposes. 49.4 The Internal Revenue Code of 1986, as amended through 49.5 December 31, 1989, shall be in effect for taxable years 49.6 beginning after December 31, 1989. The provisions of sections 49.7 11321, 11322, 11324, 11325, 11403, 11404, 11410, and 11521 of 49.8 the Revenue Reconciliation Act of 1990, Public Law Number 49.9 101-508, and the provisions of sections 13224 and 13261 of the 49.10 Omnibus Budget Reconciliation Act of 1993, Public Law Number 49.11 103-66, shall become effective at the time they become effective 49.12 for federal purposes. 49.13 The Internal Revenue Code of 1986, as amended through 49.14 December 31, 1990, shall be in effect for taxable years 49.15 beginning after December 31, 1990. 49.16 The provisions of section 13431 of the Omnibus Budget 49.17 Reconciliation Act of 1993, Public Law Number 103-66, shall 49.18 become effective at the time they became effective for federal 49.19 purposes. 49.20 The Internal Revenue Code of 1986, as amended through 49.21 December 31, 1991, shall be in effect for taxable years 49.22 beginning after December 31, 1991. 49.23 The provisions of sections 1936 and 1937 of the 49.24 Comprehensive National Energy Policy Act of 1992, Public Law 49.25 Number 102-486, the provisions of sections 13101, 13114, 13122, 49.26 13141, 13150, 13151, 13174, 13239, 13301, and 13442 of the 49.27 Omnibus Budget Reconciliation Act of 1993, Public Law Number 49.28 103-66, and the provisions of section 1604(a)(1), (2), and (3) 49.29 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 49.30 shall become effective at the time they become effective for 49.31 federal purposes. 49.32 The Internal Revenue Code of 1986, as amended through 49.33 December 31, 1992, shall be in effect for taxable years 49.34 beginning after December 31, 1992. 49.35 The provisions of sections 13116, 13121, 13206, 13210, 49.36 13222, 13223, 13231, 13232, 13233, 13239, 13262, and 13321 of 50.1 the Omnibus Budget Reconciliation Act of 1993, Public Law Number 50.2 103-66, the provisions of sections 1703(a), 1703(d), 1703(i), 50.3 1703(l), and 1703(m) of the Small Business Job Protection Act, 50.4 Public Law Number 104-188, and the provision of section 1604(c) 50.5 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 50.6 shall become effective at the time they become effective for 50.7 federal purposes. 50.8 The Internal Revenue Code of 1986, as amended through 50.9 December 31, 1993, shall be in effect for taxable years 50.10 beginning after December 31, 1993. 50.11 The provision of section 741 of Legislation to Implement 50.12 Uruguay Round of General Agreement on Tariffs and Trade, Public 50.13 Law Number 103-465, the provisions of sections 1, 2, and 3, of 50.14 the Self-Employed Health Insurance Act of 1995, Public Law 50.15 Number 104-7, the provision of section 501(b)(2) of the Health 50.16 Insurance Portability and Accountability Act, Public Law Number 50.17 104-191, the provisions of sections 1604 and 1704(p)(1) and (2) 50.18 of the Small Business Job Protection Act, Public Law Number 50.19 104-188, and the provisions of sections 1011, 1211(b)(1), and 50.20 1602(f) of the Taxpayer Relief Act of 1997, Public Law Number 50.21 105-34, shall become effective at the time they become effective 50.22 for federal purposes. 50.23 The Internal Revenue Code of 1986, as amended through 50.24 December 31, 1994, shall be in effect for taxable years 50.25 beginning after December 31, 1994. 50.26 The provisions of sections 1119(a), 1120, 1121, 1202(a), 50.27 1444, 1449(b), 1602(a), 1610(a), 1613, and 1805 of the Small 50.28 Business Job Protection Act, Public Law Number 104-188, the 50.29 provision of section 511 of the Health Insurance Portability and 50.30 Accountability Act, Public Law Number 104-191, and the 50.31 provisions of sections 1174 and 1601(i)(2) of the Taxpayer 50.32 Relief Act of 1997, Public Law Number 105-34, shall become 50.33 effective at the time they become effective for federal purposes. 50.34 The Internal Revenue Code of 1986, as amended through March 50.35 22, 1996, is in effect for taxable years beginning after 50.36 December 31, 1995. 51.1 The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 51.2 1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 51.3 1616, 1617, 1704(l), and 1704(m) of the Small Business Job 51.4 Protection Act, Public Law Number 104-188, the provisions of 51.5 Public Law Number 104-117,andthe provisions of sections 313(a) 51.6 and (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 51.7 1002, 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 51.8 1087, 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 51.9 1601(f)(5) and (h), and 1604(d)(1) of the Taxpayer Relief Act of 51.10 1997, Public Law Number 105-34, the provisions of section 6010 51.11 of the Internal Revenue Service Restructuring and Reform Act of 51.12 1998, Public Law Number 105-206, and the provisions of section 51.13 4003 of the Omnibus Consolidated and Emergency Supplemental 51.14 Appropriations Act, 1999, Public Law Number 105-277, shall 51.15 become effective at the time they become effective for federal 51.16 purposes. 51.17 The Internal Revenue Code of 1986, as amended through 51.18 December 31, 1996, shall be in effect for taxable years 51.19 beginning after December 31, 1996. 51.20 The provisions of sections 202(a) and (b), 221(a), 225, 51.21 312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 51.22 (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 51.23 1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 51.24 1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 51.25 of the Taxpayer Relief Act of 1997, Public Law Number 51.26 105-34, the provisions of sections 6004, 6005, 6012, 6013, 6015, 51.27 6016, 7002, and 7003 of the Internal Revenue Service 51.28 Restructuring and Reform Act of 1998, Public Law Number 105-206, 51.29 and the provisions of section 3001 of the Omnibus Consolidated 51.30 and Emergency Supplemental Appropriations Act, 1999, Public Law 51.31 Number 105-277, shall become effective at the time they become 51.32 effective for federal purposes. 51.33 The Internal Revenue Code of 1986, as amended through 51.34 December 31, 1997, shall be in effect for taxable years 51.35 beginning after December 31, 1997. 51.36 The provisions of sections 5002, 6009, 6011, and 7001 of 52.1 the Internal Revenue Service Restructuring and Reform Act of 52.2 1998, Public Law Number 105-206, the provisions of section 9010 52.3 of the Transportation Equity Act for the 21st Century, Public 52.4 Law Number 105-178, the provisions of sections 1004, 4002, and 52.5 5301 of the Omnibus Consolidation and Emergency Supplemental 52.6 Appropriations Act, 1999, Public Law Number 105-277, and the 52.7 provision of section 303 of the Ricky Ray Hemophilia Relief Fund 52.8 Act of 1998, Public Law Number 105-369, shall become effective 52.9 at the time they become effective for federal purposes. 52.10 The Internal Revenue Code of 1986, as amended through 52.11 December 31, 1998, shall be in effect for taxable years 52.12 beginning after December 31, 1998. 52.13 Except as otherwise provided, references to the Internal 52.14 Revenue Code in subdivisions 19a to 19g mean the code in effect 52.15 for purposes of determining net income for the applicable year. 52.16 Sec. 3. Minnesota Statutes 1998, section 290.01, 52.17 subdivision 19b, is amended to read: 52.18 Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 52.19 individuals, estates, and trusts, there shall be subtracted from 52.20 federal taxable income: 52.21 (1) interest income on obligations of any authority, 52.22 commission, or instrumentality of the United States to the 52.23 extent includable in taxable income for federal income tax 52.24 purposes but exempt from state income tax under the laws of the 52.25 United States; 52.26 (2) if included in federal taxable income, the amount of 52.27 any overpayment of income tax to Minnesota or to any other 52.28 state, for any previous taxable year, whether the amount is 52.29 received as a refund or as a credit to another taxable year's 52.30 income tax liability; 52.31 (3) the amount paid to others, less the credit allowed 52.32 under section 290.0674, not to exceed $1,625 for each dependent 52.33 in grades kindergarten to 6 and $2,500 for each dependent in 52.34 grades 7 to 12, for tuition, textbooks, and transportation of 52.35 each dependent in attending an elementary or secondary school 52.36 situated in Minnesota, North Dakota, South Dakota, Iowa, or 53.1 Wisconsin, wherein a resident of this state may legally fulfill 53.2 the state's compulsory attendance laws, which is not operated 53.3 for profit, and which adheres to the provisions of the Civil 53.4 Rights Act of 1964 and chapter 363. For the purposes of this 53.5 clause, "tuition" includes fees or tuition as defined in section 53.6 290.0674, subdivision 1, clause (1). As used in this clause, 53.7 "textbooks" includes books and other instructional materials and 53.8 equipment used in elementary and secondary schools in teaching 53.9 only those subjects legally and commonly taught in public 53.10 elementary and secondary schools in this state. Equipment 53.11 expenses qualifying for deduction includes expenses as defined 53.12 and limited in section 290.0674, subdivision 1, clause (3). 53.13 "Textbooks" does not include instructional books and materials 53.14 used in the teaching of religious tenets, doctrines, or worship, 53.15 the purpose of which is to instill such tenets, doctrines, or 53.16 worship, nor does it include books or materials for, or 53.17 transportation to, extracurricular activities including sporting 53.18 events, musical or dramatic events, speech activities, driver's 53.19 education, or similar programs; 53.20 (4) to the extent included in federal taxable income, 53.21 distributions from a qualified governmental pension plan, an 53.22 individual retirement account, simplified employee pension, or 53.23 qualified plan covering a self-employed person that represent a 53.24 return of contributions that were included in Minnesota gross 53.25 income in the taxable year for which the contributions were made 53.26 but were deducted or were not included in the computation of 53.27 federal adjusted gross income. The distribution shall be 53.28 allocated first to return of contributions until the 53.29 contributions included in Minnesota gross income have been 53.30 exhausted. This subtraction applies only to contributions made 53.31 in a taxable year prior to 1985; 53.32 (5) income as provided under section 290.0802; 53.33 (6) the amount of unrecovered accelerated cost recovery 53.34 system deductions allowed under subdivision 19g; 53.35 (7) to the extent included in federal adjusted gross 53.36 income, income realized on disposition of property exempt from 54.1 tax under section 290.491; 54.2 (8) to the extent not deducted in determining federal 54.3 taxable income, the amount paid for health insurance of 54.4 self-employed individuals as determined under section 162(l) of 54.5 the Internal Revenue Code, except that the25percent limit does 54.6 not apply. If the taxpayer deducted insurance payments under 54.7 section 213 of the Internal Revenue Code of 1986, the 54.8 subtraction under this clause must be reduced by the lesser of: 54.9 (i) the total itemized deductions allowed under section 54.10 63(d) of the Internal Revenue Code, less state, local, and 54.11 foreign income taxes deductible under section 164 of the 54.12 Internal Revenue Code and the standard deduction under section 54.13 63(c) of the Internal Revenue Code; or 54.14 (ii) the lesser of (A) the amount of insurance qualifying 54.15 as "medical care" under section 213(d) of the Internal Revenue 54.16 Code to the extent not deducted under section 162(1) of the 54.17 Internal Revenue Code or excluded from income or (B) the total 54.18 amount deductible for medical care under section 213(a); 54.19 (9) the exemption amount allowed under Laws 1995, chapter 54.20 255, article 3, section 2, subdivision 3; 54.21 (10) to the extent included in federal taxable income, 54.22 postservice benefits for youth community service under section 54.23 124D.42 for volunteer service under United States Code, title 54.24 42, section 5011(d), as amended; 54.25 (11) to the extent not subtracted under clause (1), the 54.26 amount of income or gain included in federal taxable income 54.27 under section 1366 of the Internal Revenue Code flowing from a 54.28 corporation that has a valid election in effect for the taxable 54.29 year under section 1362 of the Internal Revenue Code which is 54.30 not allowed to be an "S" corporation under section 290.9725; 54.31 (12) in the year stock of a corporation that had made a 54.32 valid election under section 1362 of the Internal Revenue Code 54.33 but was not an "S" corporation under section 290.9725 is sold or 54.34 disposed of in a transaction taxable under the Internal Revenue 54.35 Code, the amount of difference between the Minnesota basis of 54.36 the stock under subdivision 19f, paragraph (m), and the federal 55.1 basis if the Minnesota basis is higher than the shareholder's 55.2 federal basis; and 55.3 (13) an amount equal to an individual's, trust's, or 55.4 estate's net federal income tax liability for the tax year that 55.5 is attributable to items of income, expense, gain, loss, or 55.6 credits federally flowing to the taxpayer in the tax year from a 55.7 corporation, having a valid election in effect for federal tax 55.8 purposes under section 1362 of the Internal Revenue Code but not 55.9 treated as an "S" corporation for state tax purposes under 55.10 section 290.9725. 55.11 Sec. 4. Minnesota Statutes 1998, section 290.01, 55.12 subdivision 31, is amended to read: 55.13 Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically 55.14 defined otherwise, "Internal Revenue Code" means the Internal 55.15 Revenue Code of 1986, as amended through December 31,19971998. 55.16 Sec. 5. Minnesota Statutes 1998, section 290A.03, 55.17 subdivision 15, is amended to read: 55.18 Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 55.19 means the Internal Revenue Code of 1986, as amended through 55.20 December 31,19971998. 55.21 Sec. 6. Minnesota Statutes 1998, section 291.005, 55.22 subdivision 1, is amended to read: 55.23 Subdivision 1. Unless the context otherwise clearly 55.24 requires, the following terms used in this chapter shall have 55.25 the following meanings: 55.26 (1) "Federal gross estate" means the gross estate of a 55.27 decedent as valued and otherwise determined for federal estate 55.28 tax purposes by federal taxing authorities pursuant to the 55.29 provisions of the Internal Revenue Code. 55.30 (2) "Minnesota gross estate" means the federal gross estate 55.31 of a decedent after (a) excluding therefrom any property 55.32 included therein which has its situs outside Minnesota and (b) 55.33 including therein any property omitted from the federal gross 55.34 estate which is includable therein, has its situs in Minnesota, 55.35 and was not disclosed to federal taxing authorities. 55.36 (3) "Personal representative" means the executor, 56.1 administrator or other person appointed by the court to 56.2 administer and dispose of the property of the decedent. If 56.3 there is no executor, administrator or other person appointed, 56.4 qualified, and acting within this state, then any person in 56.5 actual or constructive possession of any property having a situs 56.6 in this state which is included in the federal gross estate of 56.7 the decedent shall be deemed to be a personal representative to 56.8 the extent of the property and the Minnesota estate tax due with 56.9 respect to the property. 56.10 (4) "Resident decedent" means an individual whose domicile 56.11 at the time of death was in Minnesota. 56.12 (5) "Nonresident decedent" means an individual whose 56.13 domicile at the time of death was not in Minnesota. 56.14 (6) "Situs of property" means, with respect to real 56.15 property, the state or country in which it is located; with 56.16 respect to tangible personal property, the state or country in 56.17 which it was normally kept or located at the time of the 56.18 decedent's death; and with respect to intangible personal 56.19 property, the state or country in which the decedent was 56.20 domiciled at death. 56.21 (7) "Commissioner" means the commissioner of revenue or any 56.22 person to whom the commissioner has delegated functions under 56.23 this chapter. 56.24 (8) "Internal Revenue Code" means the United States 56.25 Internal Revenue Code of 1986, as amended through December 31, 56.2619971998. 56.27 Sec. 7. [EFFECTIVE DATES.] 56.28 Sections 1, 4, 5, and 6 are effective at the same time 56.29 federal changes made by the Internal Revenue Service 56.30 Restructuring and Reform Act of 1998, Public Law Number 105-206 56.31 and the Omnibus Consolidation and Emergency Supplemental 56.32 Appropriations Act, 1999, Public Law Number 105-277 which are 56.33 incorporated into Minnesota Statutes, chapters 289A, 290, 290A, 56.34 and 291 by these sections become effective for federal tax 56.35 purposes. Section 3 is effective for tax years beginning after 56.36 December 31, 1998. 57.1 ARTICLE 4 57.2 SALES AND USE TAXES 57.3 Section 1. Minnesota Statutes 1998, section 289A.18, 57.4 subdivision 4, is amended to read: 57.5 Subd. 4. [SALES AND USE TAX RETURNS.] (a) Sales and use 57.6 tax returns must be filed on or before the 20th day of the month 57.7 following the close of the preceding reporting period, except 57.8 that annual use tax returns provided for under section 289A.11, 57.9 subdivision 1, must be filed by April 15 following the close of 57.10 the calendar year, in the case of individuals. Annual use tax 57.11 returns of businesses, including sole proprietorships, and 57.12 annual sales tax returns must be filed by February 5 following 57.13 the close of the calendar year. 57.14 (b) Except for the return for the June reporting period, 57.15 which is due on the following August 25, returns filed by 57.16 retailers required to remit liabilities by means of funds 57.17 transfer under section 289A.20, subdivision 4, paragraph (d), 57.18 are due on or before the 25th day of the month following the 57.19 close of the preceding reporting period. 57.20 (c) If a retailer has an average sales and use tax 57.21 liability, including local sales and use taxes administered by 57.22 the commissioner, equal to or less than $500 per month in any 57.23 quarter of a calendar year, and has substantially complied with 57.24 the tax laws during the preceding four calendar quarters, the 57.25 retailer may request authorization to file and pay the taxes 57.26 quarterly in subsequent calendar quarters. The authorization 57.27 remains in effect during the period in which the retailer's 57.28 quarterly returns reflect sales and use tax liabilities of less 57.29 than $1,500 and there is continued compliance with state tax 57.30 laws. 57.31 (d) If a retailer has an average sales and use tax 57.32 liability, including local sales and use taxes administered by 57.33 the commissioner, equal to or less than $100 per month during a 57.34 calendar year, and has substantially complied with the tax laws 57.35 during that period, the retailer may request authorization to 57.36 file and pay the taxes annually in subsequent years. The 58.1 authorization remains in effect during the period in which the 58.2 retailer's annual returns reflect sales and use tax liabilities 58.3 of less than $1,200 and there is continued compliance with state 58.4 tax laws. 58.5 (e) The commissioner may also grant quarterly or annual 58.6 filing and payment authorizations to retailers if the 58.7 commissioner concludes that the retailers' future tax 58.8 liabilities will be less than the monthly totals identified in 58.9 paragraphs (c) and (d). An authorization granted under this 58.10 paragraph is subject to the same conditions as an authorization 58.11 granted under paragraphs (c) and (d). 58.12 (f) A taxpayer who is a materials supplier may report gross 58.13 receipts either on: 58.14 (1) the cash basis as the consideration is received; or 58.15 (2) the accrual basis as sales are made. 58.16 As used in this paragraph, "materials supplier" means a person 58.17 who provides materials for the improvement of real property; who 58.18 is primarily engaged in the sale of lumber and building 58.19 materials-related products to owners, contractors, 58.20 subcontractors, repairers, or consumers; who is authorized to 58.21 file a mechanics lien upon real property and improvements under 58.22 chapter 514; and who files with the commissioner an election to 58.23 file sales and use tax returns on the basis of this paragraph. 58.24 Sec. 2. Minnesota Statutes 1998, section 289A.20, 58.25 subdivision 4, is amended to read: 58.26 Subd. 4. [SALES AND USE TAX.] (a) The taxes imposed by 58.27 chapter 297A are due and payable to the commissioner monthly on 58.28 or before the 20th day of the month following the month in which 58.29 the taxable event occurred, or following another reporting 58.30 period as the commissioner prescribes or as allowed under 58.31 section 289A.18, subdivision 4, paragraph (f), except that use 58.32 taxes due on an annual use tax return as provided under section 58.33 289A.11, subdivision 1, are payable by April 15 following the 58.34 close of the calendar year. 58.35 (b) A vendor having a liability of $120,000 or more during 58.36 a fiscal year ending June 30 must remit the June liability for 59.1 the next year in the following manner: 59.2 (1) Two business days before June 30 of the year, the 59.3 vendor must remit 75 percent of the estimated June liability to 59.4 the commissioner. 59.5 (2) On or before August 14 of the year, the vendor must pay 59.6 any additional amount of tax not remitted in June. 59.7 (c) A vendor having a liability of $120,000 or more during 59.8 a fiscal year ending June 30 must remit all liabilities in the 59.9 subsequent calendar year by means of a funds transfer as defined 59.10 in section 336.4A-104, paragraph (a). The funds transfer 59.11 payment date, as defined in section 336.4A-401, must be on or 59.12 before the 14th day of the month following the month in which 59.13 the taxable event occurred, or on or before the 14th day of the 59.14 month following the month in which the sale is reported under 59.15 section 289A.18, subdivision 4, except for 75 percent of the 59.16 estimated June liability, which is due two business days before 59.17 June 30. The remaining amount of the June liability is due on 59.18 August 14. If the date the tax is due is not a funds transfer 59.19 business day, as defined in section 336.4A-105, paragraph (a), 59.20 clause (4), the payment date must be on or before the funds 59.21 transfer business day next following the date the tax is due. 59.22 (d) If the vendor required to remit by electronic funds 59.23 transfer as provided in paragraph (c) is unable due to 59.24 reasonable cause to determine the actual sales and use tax due 59.25 on or before the due date for payment, the vendor may remit an 59.26 estimate of the tax owed using one of the following options: 59.27 (1) 100 percent of the tax reported on the previous month's 59.28 sales and use tax return; 59.29 (2) 100 percent of the tax reported on the sales and use 59.30 tax return for the same month in the previous calendar year; or 59.31 (3) 95 percent of the actual tax due. 59.32 Any additional amount of tax that is not remitted on or 59.33 before the due date for payment, must be remitted with the 59.34 return. If a vendor fails to remit the actual liability or does 59.35 not remit using one of the estimate options by the due date for 59.36 payment, the vendor must remit actual liability as provided in 60.1 paragraph (c) in all subsequent periods. This paragraph does 60.2 not apply to the June sales and use tax liability. 60.3 Sec. 3. Minnesota Statutes 1998, section 289A.56, 60.4 subdivision 4, is amended to read: 60.5 Subd. 4. [CAPITAL EQUIPMENT REFUNDS; REFUNDS TO 60.6 PURCHASERS.] Notwithstanding subdivision 3, for refunds payable 60.7 under section 297A.15, subdivision 5, interest is computed from 60.8 the date the refund claim is filed with the commissioner. For 60.9 refunds payable under section 289A.50, subdivision 2a, interest 60.10 is computed from the 20th day of the month following the month 60.11 of the invoice date for the purchase which is the subject of the 60.12 refund, if the refund claim includes a detailed schedule of 60.13 purchases made during each of the periods in the claim. If the 60.14 refund claim submitted does not contain a schedule reflecting 60.15 purchases made in each period, interest is computed from the 60.16 date the claim was filed. 60.17 Sec. 4. Minnesota Statutes 1998, section 297A.25, 60.18 subdivision 9, is amended to read: 60.19 Subd. 9. [MATERIALS CONSUMED IN PRODUCTION.] The gross 60.20 receipts from the sale of and the storage, use, or consumption 60.21 of all materials, including chemicals, fuels, petroleum 60.22 products, lubricants, packaging materials, including returnable 60.23 containers used in packaging food and beverage products, feeds, 60.24 seeds, fertilizers, electricity, gas and steam, used or consumed 60.25 in agricultural or industrial production of personal property 60.26 intended to be sold ultimately at retail, whether or not the 60.27 item so used becomes an ingredient or constituent part of the 60.28 property produced are exempt. Seeds, trees, fertilizers, and 60.29 herbicides purchased for use by farmers in the Conservation 60.30 Reserve Program under United States Code, title 16, section 60.31 590h, as amended through December 31, 1991, the Integrated Farm 60.32 Management Program under section 1627 of Public Law Number 60.33 101-624, the Wheat and Feed Grain Programs under sections 301 to 60.34 305 and 401 to 405 of Public Law Number 101-624, and the 60.35 conservation reserve program under sections 103F.505 to 60.36 103F.531, are included in this exemption. Sales to a 61.1 veterinarian of materials used or consumed in the care, 61.2 medication, and treatment of horses and agricultural production 61.3 animals are exempt under this subdivision. Chemicals used for 61.4 cleaning food processing machinery and equipment are included in 61.5 this exemption. Materials, including chemicals, fuels, and 61.6 electricity purchased by persons engaged in agricultural or 61.7 industrial production to treat waste generated as a result of 61.8 the production process are included in this exemption. Such 61.9 production shall include, but is not limited to, research, 61.10 development, design or production of any tangible personal 61.11 property, manufacturing, processing (other than by restaurants 61.12 and consumers) of agricultural products whether vegetable or 61.13 animal, commercial fishing, refining, smelting, reducing, 61.14 brewing, distilling, printing, mining, quarrying, lumbering, 61.15 generating electricity and the production of road building 61.16 materials. Such production shall not include painting, 61.17 cleaning, repairing or similar processing of property except as 61.18 part of the original manufacturing process. Machinery, 61.19 equipment, implements, tools, accessories, appliances, 61.20 contrivances, furniture and fixtures, used in such production 61.21 and fuel, electricity, gas or steam used for space heating or 61.22 lighting, are not included within this exemption; however, 61.23 accessory tools, equipment and other short lived items, which 61.24 are separate detachable units used in producing a direct effect 61.25 upon the product, where such items have an ordinary useful life 61.26 of less than 12 months, are included within the exemption 61.27 provided herein. The following materials, tools, and equipment 61.28 used in metalcasting are exempt under this subdivision: 61.29 crucibles, thermocouple protection sheaths and tubes, stalk 61.30 tubes, refractory materials, molten metal filters and filter 61.31 boxes, and degassing lances. Electricity used to make snow for 61.32 outdoor use for ski hills, ski slopes, or ski trails is included 61.33 in this exemption. Petroleum and special fuels used in 61.34 producing or generating power for propelling ready-mixed 61.35 concrete trucks on the public highways of this state are not 61.36 included in this exemption. 62.1 Sec. 5. Minnesota Statutes 1998, section 297A.25, 62.2 subdivision 63, is amended to read: 62.3 Subd. 63. [HOSPITALS AND OUTPATIENT SURGICAL CENTERS.] (a) 62.4 The gross receipts from the sale of tangible personal property 62.5 to, and the storage, use, or consumption of such property by, a 62.6 hospital are exempt, if the property purchased is to be used in 62.7 providing hospital services to human beings. For purposes of 62.8 this subdivision, "hospital" means a hospital organized and 62.9 operated for charitable purposes within the meaning of section 62.10 501(c)(3) of the Internal Revenue Code of 1986, as amended, and 62.11 licensed under chapter 144 or by any other jurisdiction. For 62.12 purposes of this subdivision, "hospital services"aremeans 62.13 services authorized or required to be performed by 62.14 a"hospital"hospital under chapter 144 andregulationsrules 62.15 thereunder or under the applicable licensure law of any other 62.16 jurisdiction.This exemption does62.17 (b) The gross receipts from the sale of tangible personal 62.18 property to, and the storage, use, or consumption of such 62.19 property by, an outpatient surgical center are exempt, if the 62.20 property purchased is to be used in providing outpatient 62.21 surgical services to human beings. For purposes of this 62.22 subdivision, "outpatient surgical center" means an outpatient 62.23 surgical center organized and operated for charitable purposes 62.24 within the meaning of section 501(c)(3) of the Internal Revenue 62.25 Code of 1986, as amended, and licensed under chapter 144 or by 62.26 any other jurisdiction. For the purposes of this subdivision, 62.27 "outpatient surgical services" means: (1) services authorized 62.28 or required to be performed by an outpatient surgical center 62.29 under chapter 144 and rules thereunder or under the applicable 62.30 licensure law of any other jurisdiction; and (2) urgent care. 62.31 For purposes of this subdivision, "urgent care" means health 62.32 services furnished to a person whose medical condition is 62.33 sufficiently acute to require treatment unavailable through, or 62.34 inappropriate to be provided by, a clinic or physician's office, 62.35 but not so acute as to require treatment in a hospital emergency 62.36 room. 63.1 (c) These exemptions do not apply to purchases made by a 63.2 clinic, physician's office, or any other medical facility not 63.3 operating as a hospital or outpatient surgical center, even 63.4 though the clinic, office, or facility may be owned and operated 63.5 by a hospital or outpatient surgical center. Sales exempted by 63.6 this subdivision do not include sales under section 297A.01, 63.7 subdivision 3, paragraphs (c) and (e).This exemption63.8doesThese exemptions do not apply to building, construction, or 63.9 reconstruction materials purchased by a contractor or a 63.10 subcontractor as a part of a lump-sum contract or similar type 63.11 of contract with a guaranteed maximum price covering both labor 63.12 and materials for use in the construction, alteration, or repair 63.13 of a hospital or outpatient surgical center.This exemption63.14doesThese exemptions do not apply to construction materials to 63.15 be used in constructing buildings or facilities which will not 63.16 be used principally by a hospital or outpatient surgical 63.17 center.This exemption doesThese exemptions do not apply to 63.18 the leasing of a motor vehicle as defined in section 297B.01, 63.19 subdivision 5. 63.20 Sec. 6. Minnesota Statutes 1998, section 297A.25, 63.21 subdivision 73, is amended to read: 63.22 Subd. 73. [BIOSOLIDS PROCESSING EQUIPMENT.] (a) The gross 63.23 receipts from the sale of and the storage, use, or consumption 63.24 of equipment designed to process, dewater, and recycle biosolids 63.25 for wastewater treatment facilities of political subdivisions, 63.26 and materials incidental to installation of that equipment, are 63.27 exempt. 63.28 (b) The gross receipts from the sale of and the storage, 63.29 use, or consumption of materials used to construct buildings to 63.30 house the equipment in paragraph (a) are exempt if purchased 63.31 after June 30, 1998, and before July 1, 2001. 63.32 Sec. 7. Minnesota Statutes 1998, section 297A.25, is 63.33 amended by adding a subdivision to read: 63.34 Subd. 79. [PRIZES.] The gross receipts from the sales of 63.35 tangible personal property which will be given as prizes to 63.36 players in games of skill or chance conducted at events such as 64.1 community festivals, fairs, and carnivals lasting less than six 64.2 days are exempt. This exemption shall not apply to property 64.3 awarded as prizes in connection with lawful gambling as defined 64.4 in section 349.12 or the state lottery. 64.5 Sec. 8. Minnesota Statutes 1998, section 297A.25, is 64.6 amended by adding a subdivision to read: 64.7 Subd. 80. [CONSTRUCTION MATERIALS AND SUPPLIES; 64.8 AGRICULTURAL PROCESSING FACILITY.] Purchases of construction 64.9 materials, supplies, and equipment are exempt from the sales and 64.10 use taxes imposed under this chapter, regardless of whether 64.11 purchased by the owner or a contractor, subcontractor, or 64.12 builder, if: 64.13 (1) the materials and supplies are used or consumed in, and 64.14 the equipment is incorporated into, the expansion, remodeling, 64.15 or improvement of a facility used for cattle slaughtering; 64.16 (2) the cost of the project is expected to exceed 64.17 $15,000,000; 64.18 (3) the expansion, remodeling, or improvement of the 64.19 facility will be used to fabricate beef; 64.20 (4) the number of jobs at the facility are expected to 64.21 increase by at least 150 when the project is completed; and 64.22 (5) the project is expected to be completed by December 31, 64.23 2001. 64.24 Sec. 9. Minnesota Statutes 1998, section 297A.25, is 64.25 amended by adding a subdivision to read: 64.26 Subd. 82. [TELEVISION COMMERCIALS.] The gross receipts 64.27 from the sale of and storage, use, or consumption of tangible 64.28 personal property which is primarily used or consumed in the 64.29 preproduction, production, or postproduction of any television 64.30 commercial and any such commercial, regardless of the medium in 64.31 which it is transferred, are exempt. "Preproduction" and 64.32 "production" include but are not limited to all activities 64.33 related to the preparation for shooting and the shooting of 64.34 television commercials, including film processing. Equipment 64.35 rented for the preproduction and production activities is 64.36 exempt. "Postproduction" includes but is not limited to all 65.1 activities related to the finishing and duplication of 65.2 television commercials. This exemption does not apply to 65.3 tangible personal property used primarily in administration, 65.4 general management, or marketing. Machinery and equipment 65.5 purchased for use in producing such commercials and fuel, 65.6 electricity, gas, or steam used for space heating or lighting 65.7 are not exempt under this subdivision. 65.8 Sec. 10. Minnesota Statutes 1998, section 297A.25, is 65.9 amended by adding a subdivision to read: 65.10 Subd. 83. [CONSTRUCTION MATERIALS AND EQUIPMENT; BIOMASS 65.11 ELECTRICAL GENERATING FACILITY.] The gross receipts from the 65.12 purchases of materials and supplies used or consumed in, and 65.13 equipment incorporated into, the construction, improvement, or 65.14 expansion of a facility using biomass to generate electricity 65.15 are exempt from the sales and use taxes imposed under this 65.16 chapter, regardless of whether purchased by the owner or a 65.17 contractor, subcontractor, or builder, if: 65.18 (1) the facility exclusively utilizes residue wood, 65.19 sawdust, bark, chipped wood, or brush to generate electricity; 65.20 (2) the facility utilizes a reciprocated grate combination 65.21 system; and 65.22 (3) the total gross capacity of the facility is 15 to 21 65.23 megawatts. 65.24 Sec. 11. Minnesota Statutes 1998, section 297A.25, is 65.25 amended by adding a subdivision to read: 65.26 Subd. 84. [WASTE MANAGEMENT CONTAINERS AND 65.27 COMPACTORS.] The gross receipts from the sale of and storage, 65.28 use, or consumption of compactors and waste collection 65.29 containers are exempt from the sales and use taxes imposed under 65.30 this chapter provided that they are purchased by a waste 65.31 management service provider, and are used in providing waste 65.32 management services as defined in section 297H.01, subdivision 65.33 12. A waste management service provider that does not remit tax 65.34 on customer charges or lease or rental payments for compactors 65.35 and waste collection containers under chapter 297H is ineligible 65.36 for this exemption. 66.1 Sec. 12. Minnesota Statutes 1998, section 297A.48, is 66.2 amended by adding a subdivision to read: 66.3 Subd. 1a. [RULES FOR ADOPTION, USE, TERMINATION.] (a) 66.4 Imposition of a local sales tax is subject to approval by voters 66.5 of the political subdivision at a general election. 66.6 (b) The proceeds of the tax must be dedicated exclusively 66.7 to payment of the cost of a specific capital improvement which 66.8 is designated at least 90 days before the referendum on 66.9 imposition of the tax is conducted. 66.10 (c) The tax must terminate after the improvement designated 66.11 under paragraph (b) has been completed. 66.12 (d) After a sales tax imposed by a political subdivision 66.13 has expired or been terminated, the political subdivision is 66.14 prohibited from imposing a local sales tax for a period of one 66.15 year. Notwithstanding subdivision 10, this paragraph applies to 66.16 all local sales taxes in effect at the time of or imposed after 66.17 the date of enactment of this section. 66.18 Sec. 13. Minnesota Statutes 1998, section 297A.48, is 66.19 amended by adding a subdivision to read: 66.20 Subd. 7a. [USE OF ZIP CODE IN DETERMINING LOCATION OF 66.21 SALE.] To determine whether to impose the local tax, the 66.22 retailer may use zip codes if the zip code area is entirely 66.23 within the political subdivision. When a zip code area is not 66.24 entirely within a political subdivision, the retailer shall not 66.25 collect the local tax if the purchaser notified the retailer 66.26 that their delivery address is outside of the political 66.27 subdivision, unless the retailer verifies that the delivery 66.28 address is in the political subdivision using a means other than 66.29 the zip code. Notwithstanding subdivision 10, this subdivision 66.30 applies to all local sales taxes without regard to the date of 66.31 authorization. 66.32 Sec. 14. Laws 1998, chapter 389, article 8, section 44, 66.33 subdivision 5, is amended to read: 66.34 Subd. 5. [USE OF REVENUES.] (a) Revenues received from the 66.35 taxes authorized by subdivisions 1 to 4 must be used to pay for 66.36 the cost of collecting the taxes; to pay all or part of the 67.1 capital or administrative cost of the acquisition, construction, 67.2 and improvement of the Central Minnesota Events Center and 67.3 related on-site and off-site improvements; and to pay for the 67.4 operating deficit, if any, in the first five years of operation 67.5 of the facility. Authorized expenses related to acquisition, 67.6 construction, and improvement of the center include, but are not 67.7 limited to, acquiring property, paying construction and 67.8 operating expenses related to the development of the facility, 67.9 and securing and paying debt service on bonds or other 67.10 obligations issued to finance construction or improvement of the 67.11 authorized facility. 67.12 (b) In addition, if the revenues collected from a tax 67.13 imposed in subdivisions 1 to 4 are greater than the amount 67.14 needed to meet obligations under paragraph (a) in any year, the 67.15 surplus may be returned to the cities in a manner agreed upon by 67.16 the participating cities under this section, to be used by the 67.17 cities for projects of regional significance, limited to the 67.18 acquisition and improvement of park land and open space; the 67.19 purchase, renovation, and construction of public buildings and 67.20 land primarily used for the arts, libraries, and community 67.21 centers; and for debt service on bonds issued for these 67.22 purposes. The amount of surplus revenues raised by a tax will 67.23 be determined either as provided for by an applicable joint 67.24 powers agreement or by a governing entity in charge of 67.25 administering the project in paragraph (a). 67.26 (c) If start of the Central Minnesota Events Center under 67.27 paragraph (a) is delayed, the cities may still impose the tax, 67.28 and use a portion of the revenue to fund the projects under 67.29 paragraph (b), provided that revenues are reserved to pay future 67.30 costs of the construction of the events center in paragraph (a) 67.31 as provided by a joint powers agreement or by a governing entity 67.32 in charge of administering the project. If a decision is made 67.33 not to proceed with the event center under paragraph (a) or 67.34 construction of the event center has not begun by December 31, 67.35 2007, the funds in the reserve account shall be distributed to 67.36 the cities based on the joint powers agreement to pay for other 68.1 projects permitted under paragraph (b). All revenues raised 68.2 from these taxes after December 31, 2008, must be used 68.3 exclusively to pay off bonds for the event center project under 68.4 paragraph (a) and to pay off bonds issued under subdivision 6. 68.5 Sec. 15. Laws 1998, chapter 389, article 8, section 44, 68.6 subdivision 6, is amended to read: 68.7 Subd. 6. [BONDING AUTHORITY.] (a) The cities named in 68.8 subdivision 1 may issue bonds under Minnesota Statutes, chapter 68.9 475, to finance the acquisition, construction, and improvement 68.10 of the Central Minnesota Events Center. An election to approve 68.11 the bonds under Minnesota Statutes, section 475.58, may be held 68.12 in combination with the election to authorize imposition of the 68.13 tax under subdivision 1. Whether to permit imposition of the 68.14 tax and issuance of bonds may be posed to the voters as a single 68.15 question. The question must state that the sales tax revenues 68.16 are pledged to pay the bonds, but that the bonds are general 68.17 obligations and will be guaranteed by the city's property taxes. 68.18 (b) The issuance of bonds under this subdivision is not 68.19 subject to Minnesota Statutes, section 275.60. 68.20 (c) The bonds are not included in computing any debt 68.21 limitation applicable to the city, and the levy of taxes under 68.22 Minnesota Statutes, section 475.61, to pay principal of and 68.23 interest on the bonds is not subject to any levy limitation. 68.24 The aggregate principal amount of bonds issued by all cities 68.25 named in subdivision 1, plus the aggregate of the taxes used 68.26 directly to pay eligible capital expenditures and improvements 68.27 for the Central Minnesota Events Center, may not exceed 68.28 $50,000,000, plus an amount equal to the costs related to 68.29 issuance of the bonds, less any amount made available to the 68.30 cities for the project described in subdivision 5 under the 68.31 capital expenditure legislation adopted during the 1998 session 68.32 of the legislature. 68.33 (d) The taxes may be pledged to and used for the payment of 68.34 the bonds and any bonds issued to refund them, only if the bonds 68.35 and any refunding bonds are general obligations of the city. 68.36 (e) The cities named in subdivision 1 may issue bonds for 69.1 the projects listed in subdivision 5, paragraph (b), under 69.2 regular bonding authority. Bonds for these projects, to be paid 69.3 from tax revenues under this section, may not be issued after 69.4 December 31, 2008. 69.5 Sec. 16. Laws 1998, chapter 389, article 8, section 44, 69.6 subdivision 7, as amended by Laws 1998, chapter 408, section 20, 69.7 is amended to read: 69.8 Subd. 7. [TERMINATION OF TAXES.] The taxes imposed by each 69.9 city under subdivisions 1 to 4 expire at the earlier of 30 years 69.10 or when sufficient funds have been received from the taxes to 69.11 finance the obligations under subdivisions 5, paragraph (a), and 69.12 6, and to prepay or retire at maturity the principal, interest, 69.13 and premium due on the original bonds issued for the initial 69.14 acquisition, construction, and improvement of the Central 69.15 Minnesota Events Center as determined under an applicable joint 69.16 powers agreement or by a governing entity in charge of 69.17 administering the project. Any funds remaining after completion 69.18 of the project and retirement or redemption of the bonds may be 69.19 placed in the general funds of the cities imposing the taxes. 69.20 The taxes imposed by a city under this section may expire at an 69.21 earlier time by city ordinance, if authorized under the 69.22 applicable joint powers agreement or by the governing entity in 69.23 charge of administering the project. 69.24 If the cities that pass a referendum required under 69.25 subdivision61 determine that the revenues raised from the sum 69.26 of all the taxes authorized by referendum under thissubdivision69.27 section will not be sufficient to fund the project in 69.28 subdivision 5, paragraph (a), none of the authorized taxes may 69.29 be imposed. 69.30 If the taxes are imposed, as allowed under subdivision 5, 69.31 paragraph (c), and the cities determine at a later date that 69.32 there are not sufficient funds to fund the Central Minnesota 69.33 Events Center under subdivision 5, paragraph (a), or the funding 69.34 for the event center has not been determined by December 31, 69.35 2008, the taxes will be terminated as soon as sufficient 69.36 revenues are raised to prepay or retire at maturity the 70.1 principal, interest, and premium due on bonds issued under 70.2 subdivision 6, paragraph (e). 70.3 Sec. 17. [CITY OF NEW ULM; TAXES AUTHORIZED.] 70.4 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 70.5 Minnesota Statutes, section 477A.016, or any other provision of 70.6 law, ordinance, or city charter, if approved by the city voters 70.7 at the first municipal general election held after the date of 70.8 final enactment of this act, the city of New Ulm may impose by 70.9 ordinance a sales and use tax of up to one-half of one percent 70.10 for the purposes specified in subdivision 3. The provisions of 70.11 Minnesota Statutes, section 297A.48, govern the imposition, 70.12 administration, collection, and enforcement of the tax 70.13 authorized under this subdivision. 70.14 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 70.15 Minnesota Statutes, section 477A.016, or any other provision of 70.16 law, ordinance, or city charter, the city of New Ulm may impose 70.17 by ordinance, for the purposes specified in subdivision 3, an 70.18 excise tax of up to $20 per motor vehicle, as defined by 70.19 ordinance, purchased or acquired from any person engaged within 70.20 the city in the business of selling motor vehicles at retail. 70.21 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 70.22 authorized by subdivisions 1 and 2 must be used by the city to 70.23 pay the cost of collecting the taxes and to pay for construction 70.24 and improvement of a civic and community center and recreational 70.25 facilities to serve all ages, including seniors and youth. 70.26 Authorized expenses include, but are not limited to, acquiring 70.27 property, paying construction and operating expenses related to 70.28 the development of an authorized facility, funding facilities 70.29 replacement reserves, and paying debt service on bonds or other 70.30 obligations issued to finance the construction or expansion of 70.31 an authorized facility. The capital expenses for all projects 70.32 authorized under this subdivision that may be paid with these 70.33 taxes are limited to $9,000,000, plus an amount equal to the 70.34 costs related to issuance of the bonds and funding facilities 70.35 replacement reserves. 70.36 Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds 71.1 under Minnesota Statutes, chapter 475, to finance the capital 71.2 expenditure and improvement projects. An election to approve 71.3 the bonds under Minnesota Statutes, section 475.58, may be held 71.4 in combination with the election to authorize imposition of the 71.5 tax under subdivision 1. Whether to permit imposition of the 71.6 tax and issuance of bonds may be posed to the voters as a single 71.7 question. The question must state that the sales tax revenues 71.8 are pledged to pay the bonds, but that the bonds are general 71.9 obligations and will be guaranteed by the city's property taxes. 71.10 (b) The issuance of bonds under this subdivision is not 71.11 subject to Minnesota Statutes, sections 275.60 and 275.61. 71.12 (c) The bonds are not included in computing any debt 71.13 limitation applicable to the city, and the levy of taxes under 71.14 Minnesota Statutes, section 475.61, to pay principal of and 71.15 interest on the bonds is not subject to any levy limitation. 71.16 The aggregate principal amount of bonds, plus the aggregate of 71.17 the taxes used directly to pay eligible capital expenditures and 71.18 improvements may not exceed $9,000,000, plus an amount equal to 71.19 the costs related to issuance of the bonds. 71.20 (d) The taxes may be pledged to and used for the payment of 71.21 the bonds and any bonds issued to refund them, only if the bonds 71.22 and any refunding bonds are general obligations of the city. 71.23 Subd. 5. [TERMINATION OF TAXES.] The taxes imposed under 71.24 subdivisions 1 and 2 expire when the city council determines 71.25 that sufficient funds have been received from the taxes to 71.26 finance the capital and administrative costs for the 71.27 acquisition, construction, and improvement of facilities 71.28 described in subdivision 3, and to prepay or retire at maturity 71.29 the principal, interest, and premium due on any bonds issued for 71.30 the facilities under subdivision 4. Any funds remaining after 71.31 completion of the project and retirement or redemption of the 71.32 bonds may be placed in the general fund of the city. The taxes 71.33 imposed under subdivisions 1 and 2 may expire at an earlier time 71.34 if the city so determines by ordinance. 71.35 Subd. 6. [EFFECTIVE DATE.] This section is effective the 71.36 day after compliance by the governing body of the city of New 72.1 Ulm with Minnesota Statutes, section 645.021, subdivision 3. 72.2 Sec. 18. [CITY OF PROCTOR; TAXES AUTHORIZED.] 72.3 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 72.4 Minnesota Statutes, section 297A.48, subdivision 1a, 477A.016, 72.5 or any other provision of law, ordinance, or city charter, if 72.6 approved by the city voters at the first municipal general 72.7 election held after the date of final enactment of this act or 72.8 at a special election held November 2, 1999, the city of Proctor 72.9 may impose by ordinance a sales and use tax of up to one-half of 72.10 one percent for the purposes specified in subdivision 3. The 72.11 provisions of Minnesota Statutes, section 297A.48, govern the 72.12 imposition, administration, collection, and enforcement of the 72.13 tax authorized under this subdivision. 72.14 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 72.15 Minnesota Statutes, section 477A.016, or any other provision of 72.16 law, ordinance, or city charter, the city of Proctor may impose 72.17 by ordinance, for the purposes specified in subdivision 3, an 72.18 excise tax of up to $20 per motor vehicle, as defined by 72.19 ordinance, purchased or acquired from any person engaged within 72.20 the city in the business of selling motor vehicles at retail. 72.21 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 72.22 authorized by subdivisions 1 and 2 must be used by the city to 72.23 pay the cost of collecting the taxes and to pay for construction 72.24 and improvement of the following city facilities: 72.25 (1) streets; and 72.26 (2) constructing and equipping the Proctor community 72.27 activity center. 72.28 Authorized expenses include, but are not limited to, 72.29 acquiring property, paying construction and operating expenses 72.30 related to the development of an authorized facility, and paying 72.31 debt service on bonds or other obligations, including lease 72.32 obligations, issued to finance the construction, expansion, or 72.33 improvement of an authorized facility. The capital expenses for 72.34 all projects authorized under this paragraph that may be paid 72.35 with these taxes is limited to $3,600,000, plus an amount equal 72.36 to the costs related to issuance of the bonds. 73.1 Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds 73.2 under Minnesota Statutes, chapter 475, to finance the capital 73.3 expenditure and improvement projects described in subdivision 73.4 3. An election to approve the bonds under Minnesota Statutes, 73.5 section 475.58, is not required. 73.6 (b) The issuance of bonds under this subdivision is not 73.7 subject to Minnesota Statutes, sections 275.60 and 279.61. 73.8 (c) The bonds are not included in computing any debt 73.9 limitation applicable to the city, and the levy of taxes under 73.10 Minnesota Statutes, section 475.61, to pay principal of and 73.11 interest on the bonds is not subject to any levy limitation. 73.12 (d) The aggregate principal amount of bonds, plus the 73.13 aggregate of the taxes used directly to pay eligible capital 73.14 expenditures and improvements, may not exceed $3,600,000, plus 73.15 an amount equal to the costs related to issuance of the bonds, 73.16 including interest on the bonds. 73.17 (e) The sales and use and excise taxes authorized in this 73.18 section may be pledged to and used for the payment of the bonds 73.19 and any bonds issued to refund them only if the bonds and any 73.20 refunding bonds are general obligations of the city. 73.21 Subd. 5. [TERMINATION OF TAXES.] The taxes imposed under 73.22 subdivisions 1 and 2 expire when the city council determines 73.23 that the amount described in subdivision 4, paragraph (d), has 73.24 been received from the taxes to finance the capital and 73.25 administrative costs for the acquisition, construction, 73.26 expansion, and improvement of facilities described in 73.27 subdivision 3, plus the additional amount needed to pay the 73.28 costs related to issuance of bonds under subdivision 4. Any 73.29 funds remaining after completion of the project and retirement 73.30 or redemption of the bonds may be placed in the general fund of 73.31 the city. The taxes imposed under subdivisions 1 and 2 may 73.32 expire at an earlier time if the city so determines by ordinance. 73.33 Subd. 6. [EFFECTIVE DATE.] This section is effective the 73.34 day after compliance by the governing body of the city of 73.35 Proctor with Minnesota Statutes, section 645.021, subdivision 3. 73.36 Sec. 19. [EFFECTIVE DATES.] 74.1 Sections 1, 2, 5, 7, 9, and 11 are effective for sales and 74.2 purchases made after June 30, 1999. 74.3 Section 3 is effective for amended returns and refund 74.4 claims filed on or after July 1, 1999. 74.5 Section 4 is effective the day following final enactment 74.6 and applies retroactively to all open tax years and to 74.7 assessments and appeals under Minnesota Statutes, sections 74.8 289A.38 and 289A.65, for which the time limits have not expired 74.9 on the date of final enactment of this act. The provisions of 74.10 Minnesota Statutes, section 289A.50, apply to refunds claimed 74.11 under section 4. Refunds claimed under section 4 must be filed 74.12 by the later of December 31, 1999, or the time limit under 74.13 Minnesota Statutes, section 289A.40, subdivision 1. 74.14 Section 6 is effective retroactively for sales and 74.15 purchases made after June 30, 1998. 74.16 Section 8 is effective for purchases and sales made after 74.17 the date of final enactment. 74.18 Section 10 is effective for purchases made after the date 74.19 of final enactment and before July 1, 2001. 74.20 Section 12 is effective the day after final enactment. 74.21 Section 12, paragraphs (a) to (c), apply to all local sales 74.22 taxes enacted after July 1, 1999. Section 12, paragraph (d), 74.23 applies to all local sales taxes in effect at the time of, or 74.24 imposed after the day of, the enactment of this section. 74.25 Section 13 is effective the day following final enactment. 74.26 ARTICLE 5 74.27 PROPERTY TAXES 74.28 Section 1. Minnesota Statutes 1998, section 271.01, 74.29 subdivision 5, is amended to read: 74.30 Subd. 5. [JURISDICTION.] The tax court shall have 74.31 statewide jurisdiction. Except for an appeal to the supreme 74.32 court or any other appeal allowed under this subdivision, the 74.33 tax court shall be the sole, exclusive, and final authority for 74.34 the hearing and determination of all questions of law and fact 74.35 arising under the tax laws of the state, as defined in this 74.36 subdivision, in those cases that have been appealed to the tax 75.1 court and in any case that has been transferred by the district 75.2 court to the tax court. The tax court shall have no 75.3 jurisdiction in any case that does not arise under the tax laws 75.4 of the state or in any criminal case or in any case determining 75.5 or granting title to real property or in any case that is under 75.6 the probate jurisdiction of the district court. The small 75.7 claims division of the tax court shall have no jurisdiction in 75.8 any case dealing with property valuation or assessment for 75.9 property tax purposes until the taxpayer has appealed the 75.10 valuation or assessment to the county board of equalization, and 75.11 in those towns and cities which have not transferred their 75.12 duties to the county, the town or city board of equalization, 75.13 except for: (i) those taxpayers whose original assessments are 75.14 determined by the commissioner of revenue; and (ii) those 75.15 taxpayers appealing a denial of a current year application for 75.16 the homestead classification for their property and the denial 75.17 was not reflected on a valuation notice issued in the year. The 75.18 tax court shall have no jurisdiction in any case involving an 75.19 order of the state board of equalization unless a taxpayer 75.20 contests the valuation of property. Laws governing taxes, aids, 75.21 and related matters administered by the commissioner of revenue, 75.22 laws dealing with property valuation, assessment or taxation of 75.23 property for property tax purposes, and any other laws that 75.24 contain provisions authorizing review of taxes, aids, and 75.25 related matters by the tax court shall be considered tax laws of 75.26 this state subject to the jurisdiction of the tax court. This 75.27 subdivision shall not be construed to prevent an appeal, as 75.28 provided by law, to an administrative agency, board of 75.29 equalization, review under section 274.13, subdivision 1c, or to 75.30 the commissioner of revenue. Wherever used in this chapter, the 75.31 term commissioner shall mean the commissioner of revenue, unless 75.32 otherwise specified. 75.33 Sec. 2. Minnesota Statutes 1998, section 271.21, 75.34 subdivision 2, is amended to read: 75.35 Subd. 2. [JURISDICTION.] At the election of the taxpayer, 75.36 the small claims division shall have jurisdiction only in the 76.1 following matters: 76.2 (a)incases involving valuation, assessment, or taxation 76.3 of real or personal property, if the taxpayer has satisfied the 76.4 requirements of section 271.01, subdivision 5, and: (i) the 76.5 issue is a denial of a current year application for the 76.6 homestead classification for the taxpayer's property and the 76.7 denial was not reflected on a valuation notice issued in the 76.8 year; or (ii) in the case of nonhomestead property, the 76.9 assessor's estimated market value is less than $100,000; or 76.10 (b) any other case concerning the tax laws as defined in 76.11 section 271.01, subdivision 5, in which the amount in 76.12 controversy does not exceed $5,000, including penalty and 76.13 interest. 76.14 Sec. 3. Minnesota Statutes 1998, section 272.02, 76.15 subdivision 1, is amended to read: 76.16 Subdivision 1. [EXEMPT PROPERTY DESCRIBED.] All property 76.17 described in this section to the extent herein limited shall be 76.18 exempt from taxation: 76.19 (1) All public burying grounds. 76.20 (2) All public schoolhouses. 76.21 (3) All public hospitals. 76.22 (4) All academies, colleges, and universities, and all 76.23 seminaries of learning. 76.24 (5) All churches, church property, and houses of worship. 76.25 (6) Institutions of purely public charity except parcels of 76.26 property containing structures and the structures described in 76.27 section 273.13, subdivision 25, paragraph (e), other than those 76.28 that qualify for exemption under clause (25). 76.29 (7) All public property exclusively used for any public 76.30 purpose. 76.31 (8) Except for the taxable personal property enumerated 76.32 below, all personal property and the property described in 76.33 section 272.03, subdivision 1, paragraphs (c) and (d), shall be 76.34 exempt. 76.35 The following personal property shall be taxable: 76.36 (a) personal property which is part of an electric 77.1 generating, transmission, or distribution system or a pipeline 77.2 system transporting or distributing water, gas, crude oil, or 77.3 petroleum products or mains and pipes used in the distribution 77.4 of steam or hot or chilled water for heating or cooling 77.5 buildings and structures; 77.6 (b) railroad docks and wharves which are part of the 77.7 operating property of a railroad company as defined in section 77.8 270.80; 77.9 (c) personal property defined in section 272.03, 77.10 subdivision 2, clause (3); 77.11 (d) leasehold or other personal property interests which 77.12 are taxed pursuant to section 272.01, subdivision 2; 273.124, 77.13 subdivision 7; or 273.19, subdivision 1; or any other law 77.14 providing the property is taxable as if the lessee or user were 77.15 the fee owner; 77.16 (e) manufactured homes and sectional structures, including 77.17 storage sheds, decks, and similar removable improvements 77.18 constructed on the site of a manufactured home, sectional 77.19 structure, park trailer or travel trailer as provided in section 77.20 273.125, subdivision 8, paragraph (f); and 77.21 (f) flight property as defined in section 270.071. 77.22 (9) Personal property used primarily for the abatement and 77.23 control of air, water, or land pollution to the extent that it 77.24 is so used, and real property which is used primarily for 77.25 abatement and control of air, water, or land pollution as part 77.26 of an agricultural operation, as a part of a centralized 77.27 treatment and recovery facility operating under a permit issued 77.28 by the Minnesota pollution control agency pursuant to chapters 77.29 115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 77.30 and 7045.0020 to 7045.1260, as a wastewater treatment facility 77.31 and for the treatment, recovery, and stabilization of metals, 77.32 oils, chemicals, water, sludges, or inorganic materials from 77.33 hazardous industrial wastes, or as part of an electric 77.34 generation system. For purposes of this clause, personal 77.35 property includes ponderous machinery and equipment used in a 77.36 business or production activity that at common law is considered 78.1 real property. 78.2 Any taxpayer requesting exemption of all or a portion of 78.3 any real property or any equipment or device, or part thereof, 78.4 operated primarily for the control or abatement of air or water 78.5 pollution shall file an application with the commissioner of 78.6 revenue. The equipment or device shall meet standards, rules, 78.7 or criteria prescribed by the Minnesota pollution control 78.8 agency, and must be installed or operated in accordance with a 78.9 permit or order issued by that agency. The Minnesota pollution 78.10 control agency shall upon request of the commissioner furnish 78.11 information or advice to the commissioner. On determining that 78.12 property qualifies for exemption, the commissioner shall issue 78.13 an order exempting the property from taxation. The equipment or 78.14 device shall continue to be exempt from taxation as long as the 78.15 permit issued by the Minnesota pollution control agency remains 78.16 in effect. 78.17 (10) Wetlands. For purposes of this subdivision, 78.18 "wetlands" means: (i) land described in section 103G.005, 78.19 subdivision 15a; (ii) land which is mostly under water, produces 78.20 little if any income, and has no use except for wildlife or 78.21 water conservation purposes, provided it is preserved in its 78.22 natural condition and drainage of it would be legal, feasible, 78.23 and economically practical for the production of livestock, 78.24 dairy animals, poultry, fruit, vegetables, forage and grains, 78.25 except wild rice; or (iii) land in a wetland preservation area 78.26 under sections 103F.612 to 103F.616. "Wetlands" under items (i) 78.27 and (ii) include adjacent land which is not suitable for 78.28 agricultural purposes due to the presence of the wetlands, but 78.29 do not include woody swamps containing shrubs or trees, wet 78.30 meadows, meandered water, streams, rivers, and floodplains or 78.31 river bottoms. Exemption of wetlands from taxation pursuant to 78.32 this section shall not grant the public any additional or 78.33 greater right of access to the wetlands or diminish any right of 78.34 ownership to the wetlands. 78.35 (11) Native prairie. The commissioner of the department of 78.36 natural resources shall determine lands in the state which are 79.1 native prairie and shall notify the county assessor of each 79.2 county in which the lands are located. Pasture land used for 79.3 livestock grazing purposes shall not be considered native 79.4 prairie for the purposes of this clause. Upon receipt of an 79.5 application for the exemption provided in this clause for lands 79.6 for which the assessor has no determination from the 79.7 commissioner of natural resources, the assessor shall refer the 79.8 application to the commissioner of natural resources who shall 79.9 determine within 30 days whether the land is native prairie and 79.10 notify the county assessor of the decision. Exemption of native 79.11 prairie pursuant to this clause shall not grant the public any 79.12 additional or greater right of access to the native prairie or 79.13 diminish any right of ownership to it. 79.14 (12) Property used in a continuous program to provide 79.15 emergency shelter for victims of domestic abuse, provided the 79.16 organization that owns and sponsors the shelter is exempt from 79.17 federal income taxation pursuant to section 501(c)(3) of the 79.18 Internal Revenue Code of 1986, as amended through December 31, 79.19 1992, notwithstanding the fact that the sponsoring organization 79.20 receives funding under section 8 of the United States Housing 79.21 Act of 1937, as amended. 79.22 (13) If approved by the governing body of the municipality 79.23 in which the property is located, property not exceeding one 79.24 acre which is owned and operated by any senior citizen group or 79.25 association of groups that in general limits membership to 79.26 persons age 55 or older and is organized and operated 79.27 exclusively for pleasure, recreation, and other nonprofit 79.28 purposes, no part of the net earnings of which inures to the 79.29 benefit of any private shareholders; provided the property is 79.30 used primarily as a clubhouse, meeting facility, or recreational 79.31 facility by the group or association and the property is not 79.32 used for residential purposes on either a temporary or permanent 79.33 basis. 79.34 (14) To the extent provided by section 295.44, real and 79.35 personal property used or to be used primarily for the 79.36 production of hydroelectric or hydromechanical power on a site 80.1 owned by the federal government, the state, or a local 80.2 governmental unit which is developed and operated pursuant to 80.3 the provisions of section 103G.535. 80.4 (15) If approved by the governing body of the municipality 80.5 in which the property is located, and if construction is 80.6 commenced after June 30, 1983: 80.7 (a) a "direct satellite broadcasting facility" operated by 80.8 a corporation licensed by the federal communications commission 80.9 to provide direct satellite broadcasting services using direct 80.10 broadcast satellites operating in the 12-ghz. band; and 80.11 (b) a "fixed satellite regional or national program service 80.12 facility" operated by a corporation licensed by the federal 80.13 communications commission to provide fixed satellite-transmitted 80.14 regularly scheduled broadcasting services using satellites 80.15 operating in the 6-ghz. band. 80.16 An exemption provided by clause (15) shall apply for a period 80.17 not to exceed five years. When the facility no longer qualifies 80.18 for exemption, it shall be placed on the assessment rolls as 80.19 provided in subdivision 4. Before approving a tax exemption 80.20 pursuant to this paragraph, the governing body of the 80.21 municipality shall provide an opportunity to the members of the 80.22 county board of commissioners of the county in which the 80.23 facility is proposed to be located and the members of the school 80.24 board of the school district in which the facility is proposed 80.25 to be located to meet with the governing body. The governing 80.26 body shall present to the members of those boards its estimate 80.27 of the fiscal impact of the proposed property tax exemption. 80.28 The tax exemption shall not be approved by the governing body 80.29 until the county board of commissioners has presented its 80.30 written comment on the proposal to the governing body or 30 days 80.31 have passed from the date of the transmittal by the governing 80.32 body to the board of the information on the fiscal impact, 80.33 whichever occurs first. 80.34 (16) Real and personal property owned and operated by a 80.35 private, nonprofit corporation exempt from federal income 80.36 taxation pursuant to United States Code, title 26, section 81.1 501(c)(3), primarily used in the generation and distribution of 81.2 hot water for heating buildings and structures. 81.3 (17) Notwithstanding section 273.19, state lands that are 81.4 leased from the department of natural resources under section 81.5 92.46. 81.6 (18) Electric power distribution lines and their 81.7 attachments and appurtenances, that are used primarily for 81.8 supplying electricity to farmers at retail. 81.9 (19) Transitional housing facilities. "Transitional 81.10 housing facility" means a facility that meets the following 81.11 requirements. (i) It provides temporary housing to individuals, 81.12 couples, or families. (ii) It has the purpose of reuniting 81.13 families and enabling parents or individuals to obtain 81.14 self-sufficiency, advance their education, get job training, or 81.15 become employed in jobs that provide a living wage. (iii) It 81.16 provides support services such as child care, work readiness 81.17 training, and career development counseling; and a 81.18 self-sufficiency program with periodic monitoring of each 81.19 resident's progress in completing the program's goals. (iv) It 81.20 provides services to a resident of the facility for at least 81.21 three months but no longer than three years, except residents 81.22 enrolled in an educational or vocational institution or job 81.23 training program. These residents may receive services during 81.24 the time they are enrolled but in no event longer than four 81.25 years. (v) It is owned and operated or under lease from a unit 81.26 of government or governmental agency under a property 81.27 disposition program and operated by one or more organizations 81.28 exempt from federal income tax under section 501(c)(3) of the 81.29 Internal Revenue Code of 1986, as amended through December 31, 81.30 1992. This exemption applies notwithstanding the fact that the 81.31 sponsoring organization receives financing by a direct federal 81.32 loan or federally insured loan or a loan made by the Minnesota 81.33 housing finance agency under the provisions of either Title II 81.34 of the National Housing Act or the Minnesota Housing Finance 81.35 Agency Law of 1971 or rules promulgated by the agency pursuant 81.36 to it, and notwithstanding the fact that the sponsoring 82.1 organization receives funding under Section 8 of the United 82.2 States Housing Act of 1937, as amended. 82.3 (20) Real and personal property, including leasehold or 82.4 other personal property interests, owned and operated by a 82.5 corporation if more than 50 percent of the total voting power of 82.6 the stock of the corporation is owned collectively by: (i) the 82.7 board of regents of the University of Minnesota, (ii) the 82.8 University of Minnesota Foundation, an organization exempt from 82.9 federal income taxation under section 501(c)(3) of the Internal 82.10 Revenue Code of 1986, as amended through December 31, 1992, and 82.11 (iii) a corporation organized under chapter 317A, which by its 82.12 articles of incorporation is prohibited from providing pecuniary 82.13 gain to any person or entity other than the regents of the 82.14 University of Minnesota; which property is used primarily to 82.15 manage or provide goods, services, or facilities utilizing or 82.16 relating to large-scale advanced scientific computing resources 82.17 to the regents of the University of Minnesota and others. 82.18 (21)(a) Small scale wind energy conversion systems 82.19 installed after January 1, 1991, and used as an electric power 82.20 source are exempt. 82.21 "Small scale wind energy conversion systems" are wind 82.22 energy conversion systems, as defined in section 216C.06, 82.23 subdivision 12, including the foundation or support pad, which 82.24 are (i) used as an electric power source; (ii) located within 82.25 one county and owned by the same owner; and (iii) produce two 82.26 megawatts or less of electricity as measured by nameplate 82.27 ratings. 82.28 (b) Medium scale wind energy conversion systems installed 82.29 after January 1, 1991, are treated as follows: (i) the 82.30 foundation and support pad are taxable; (ii) the associated 82.31 supporting and protective structures are exempt for the first 82.32 five assessment years after they have been constructed, and 82.33 thereafter, 30 percent of the market value of the associated 82.34 supporting and protective structures are taxable; and (iii) the 82.35 turbines, blades, transformers, and its related equipment, are 82.36 exempt. "Medium scale wind energy conversion systems" are wind 83.1 energy conversion systems as defined in section 216C.06, 83.2 subdivision 12, including the foundation or support pad, which 83.3 are: (i) used as an electric power source; (ii) located within 83.4 one county and owned by the same owner; and (iii) produce more 83.5 than two but equal to or less than 12 megawatts of energy as 83.6 measured by nameplate ratings. 83.7 (c) Large scale wind energy conversion systems installed 83.8 after January 1, 1991, are treated as follows: 25 percent of 83.9 the market value of all property is taxable, including (i) the 83.10 foundation and support pad; (ii) the associated supporting and 83.11 protective structures; and (iii) the turbines, blades, 83.12 transformers, and its related equipment. "Large scale wind 83.13 energy conversion systems" are wind energy conversion systems as 83.14 defined in section 216C.06, subdivision 12, including the 83.15 foundation or support pad, which are: (i) used as an electric 83.16 power source; and (ii) produce more than 12 megawatts of energy 83.17 as measured by nameplate ratings. 83.18 (22) Containment tanks, cache basins, and that portion of 83.19 the structure needed for the containment facility used to 83.20 confine agricultural chemicals as defined in section 18D.01, 83.21 subdivision 3, as required by the commissioner of agriculture 83.22 under chapter 18B or 18C. 83.23 (23) Photovoltaic devices, as defined in section 216C.06, 83.24 subdivision 13, installed after January 1, 1992, and used to 83.25 produce or store electric power. 83.26 (24) Real and personal property owned and operated by a 83.27 private, nonprofit corporation exempt from federal income 83.28 taxation pursuant to United States Code, title 26, section 83.29 501(c)(3), primarily used for an ice arena or ice rink, and used 83.30 primarily for youth and high school programs. 83.31 (25) A structure that is situated on real property that is 83.32 used for: 83.33 (i) housing for the elderly or for low- and moderate-income 83.34 families as defined in Title II of the National Housing Act, as 83.35 amended through December 31, 1990, and funded by a direct 83.36 federal loan or federally insured loan made pursuant to Title II 84.1 of the act; or 84.2 (ii) housing lower income families or elderly or 84.3 handicapped persons, as defined in Section 8 of the United 84.4 States Housing Act of 1937, as amended. 84.5 In order for a structure to be exempt under item (i) or 84.6 (ii), it must also meet each of the following criteria: 84.7 (A) is owned by an entity which is operated as a nonprofit 84.8 corporation organized under chapter 317A; 84.9 (B) is owned by an entity which has not entered into a 84.10 housing assistance payments contract under Section 8 of the 84.11 United States Housing Act of 1937, or, if the entity which owns 84.12 the structure has entered into a housing assistance payments 84.13 contract under Section 8 of the United States Housing Act of 84.14 1937, the contract provides assistance for less than 90 percent 84.15 of the dwelling units in the structure, excluding dwelling units 84.16 intended for management or maintenance personnel; 84.17 (C) operates an on-site congregate dining program in which 84.18 participation by residents is mandatory, and provides assisted 84.19 living or similar social and physical support services for 84.20 residents; and 84.21 (D) was not assessed and did not pay tax under chapter 273 84.22 prior to the 1991 levy, while meeting the other conditions of 84.23 this clause. 84.24 An exemption under this clause remains in effect for taxes 84.25 levied in each year or partial year of the term of its permanent 84.26 financing. 84.27 (26) Real and personal property that is located in the 84.28 Superior National Forest, and owned or leased and operated by a 84.29 nonprofit organization that is exempt from federal income 84.30 taxation under section 501(c)(3) of the Internal Revenue Code of 84.31 1986, as amended through December 31, 1992, and primarily used 84.32 to provide recreational opportunities for disabled veterans and 84.33 their families. 84.34 (27) Manure pits and appurtenances, which may include 84.35 slatted floors and pipes, installed or operated in accordance 84.36 with a permit, order, or certificate of compliance issued by the 85.1 Minnesota pollution control agency. The exemption shall 85.2 continue for as long as the permit, order, or certificate issued 85.3 by the Minnesota pollution control agency remains in effect. 85.4 (28) Notwithstanding clause (8), item (a), attached 85.5 machinery and other personal property which is part of a 85.6 facility containing a cogeneration system as described in 85.7 section 216B.166, subdivision 2, paragraph (a), if the 85.8 cogeneration system has met the following criteria: (i) the 85.9 system utilizes natural gas as a primary fuel and the 85.10 cogenerated steam initially replaces steam generated from 85.11 existing thermal boilers utilizing coal; (ii) the facility 85.12 developer is selected as a result of a procurement process 85.13 ordered by the public utilities commission; and (iii) 85.14 construction of the facility is commenced after July 1, 1994, 85.15 and before July 1, 1997. 85.16 (29) Real property acquired by a home rule charter city, 85.17 statutory city, county, town, or school district under a lease 85.18 purchase agreement or an installment purchase contract during 85.19 the term of the lease purchase agreement as long as and to the 85.20 extent that the property is used by the city, county, town, or 85.21 school district and devoted to a public use and to the extent it 85.22 is not subleased to any private individual, entity, association, 85.23 or corporation in connection with a business or enterprise 85.24 operated for profit. 85.25 (30) Property owned by a nonprofit charitable organization 85.26 that qualifies for tax exemption under section 501(c)(3) of the 85.27 Internal Revenue Code of 1986, as amended through December 31, 85.28 1997, that is intended to be used as a business incubator in a 85.29 high-unemployment countybut is not occupied on the assessment85.30date. As used in this clause, a "business incubator" is a 85.31 facility used for the development of nonretail businesses, 85.32 offering access to equipment, space, services, and advice to the 85.33 tenant businesses, for the purpose of encouraging economic 85.34 development, diversification, and job creation in the area 85.35 served by the organization, and "high-unemployment county" is a 85.36 county that had an average annual unemployment rate of 7.9 86.1 percent or greater in 1997. Property that qualifies for the 86.2 exemption under this clause is limited to no more than two 86.3 contiguous parcels and structures that do not exceed in the 86.4 aggregate 40,000 square feet. This exemption expires after 86.5 taxes payable in 2005. 86.6 (31) Notwithstanding any other law to the contrary, real 86.7 property that meets the following criteria is exempt: 86.8 (i) constitutes a wastewater treatment system (a) 86.9 constructed by a municipality using public funds, (b) operates 86.10 under a State Disposal System Permit issued by the Minnesota 86.11 pollution control agency pursuant to chapters 115 and 116 and 86.12 Minnesota Rules, chapter 700l, and (c) applies its effluent to 86.13 land used as part of an agricultural operation; 86.14 (ii) is located within a municipality of a population of 86.15 less than 10,000; 86.16 (iii) is used for treatment of effluent from a private 86.17 potato processing facility; and 86.18 (iv) is owned by a municipality and operated by a private 86.19 entity under agreement with that municipality. 86.20 (32) Notwithstanding clause (8), item (a), attached 86.21 machinery and other personal property which is part of a 86.22 simple-cycle combustion-turbine electric generation facility 86.23 that exceeds 250 megawatts of installed capacity and that meets 86.24 the requirements of this clause. At the time of construction, 86.25 the facility must: 86.26 (i) not be owned by a public utility as defined in section 86.27 216B.02, subdivision 4; 86.28 (ii) utilize natural gas as a primary fuel; 86.29 (iii) be located within 20 miles of the intersection of an 86.30 existing 42-inch (outside diameter) natural gas pipeline and a 86.31 345-kilovolt high-voltage electric transmission line; and 86.32 (iv) be designed to provide peaking, emergency backup, or 86.33 contingency services, and have received a certificate of need 86.34 pursuant to section 216B.243 demonstrating demand for its 86.35 capacity. 86.36 Construction of the facility must be commenced after July 1, 87.1 1999, and before July 1, 2003. Property eligible for this 87.2 exemption does not include electric transmission lines and 87.3 interconnections or gas pipelines and interconnections 87.4 appurtenant to the property or the facility. 87.5 Sec. 4. Minnesota Statutes 1998, section 272.027, is 87.6 amended to read: 87.7 272.027 [PERSONAL PROPERTY USED TO GENERATE ELECTRICITY FOR 87.8 PRODUCTION AND RESALE.] 87.9 Subdivision 1. [ELECTRICITY GENERATED TO PRODUCE GOODS AND 87.10 SERVICES.] Personal property used to generate electric power is 87.11 exempt from property taxation if the electric power is used to 87.12 manufacture or produce goods, products, or services, other than 87.13 electric power, by the owner of the electric generation 87.14 plant. Except as provided in subdivisions 2 and 3, the 87.15 exemption does not apply to property used to produce electric 87.16 power for sale to others and does not apply to real property. 87.17 In determining the value subject to tax, a proportionate share 87.18 of the value of the generating facilities, equal to the 87.19 proportion that the power sold to others bears to the total 87.20 generation of the plant, is subject to the general property tax 87.21 in the same manner as other property. Power generated in such a 87.22 plant and exchanged for an equivalent amount of power that is 87.23 used for the manufacture or production of goods, products, or 87.24 services other than electric power by the owner of the 87.25 generating plant is considered to be used by the owner of the 87.26 plant. 87.27 Subd. 2. [EXEMPTION FOR CUSTOMER OWNED PROPERTY 87.28 TRANSFERRED TO A UTILITY.] (a) Tools, implements, and machinery 87.29 of an electric generating facility are exempt if all the 87.30 following requirements are met: 87.31 (1) the electric generating facilities were operational and 87.32 met the requirements for exemption of personal property under 87.33 subdivision 1 on January 2, 1999; and 87.34 (2) the generating facility is sold to a Minnesota electric 87.35 utility. 87.36 (b) Any tools, implements, and machinery installed to 88.1 increase generation capacity are also exempt under this section 88.2 provided that the existing tools, implements, and machinery are 88.3 exempt under paragraph (a). 88.4 Subd. 3. [EXEMPTION ELECTRIC POWER PLANT PERSONAL 88.5 PROPERTY; TACONITE AND STEEL MILL.] 88.6 Tools, implements, and machinery of an electric generating 88.7 facility are exempt if all the following requirements are met: 88.8 (1) the electric generating facility, when completed, will 88.9 have a capacity of at least 450 megawatts; 88.10 (2) the electric generating facility is adjacent to a 88.11 taconite mine direct-reduction steel mill; and 88.12 (3) the electric generating facility supplied over 60 88.13 percent of its electricity generated in the prior year to the 88.14 adjacent direct-reduction plant and steel mill. 88.15 Sec. 5. Minnesota Statutes 1998, section 272.03, 88.16 subdivision 6, is amended to read: 88.17 Subd. 6. [TRACT, LOT, PARCEL, AND PIECE OR PARCEL.] 88.18 (a) "Tract," "lot," "parcel," and "piece or parcel" of land 88.19 means any contiguous quantity of land in the possession of, 88.20 owned by, or recorded as the property of, the same claimant or 88.21 person. 88.22 (b) Notwithstanding paragraph (a), property that is owned 88.23 by a utility, leased for residential or recreational uses for 88.24 terms of 20 years or longer, and separately valued by the 88.25 assessor, will be treated for property tax purposes as separate 88.26 parcels. 88.27 Sec. 6. Minnesota Statutes 1998, section 273.11, 88.28 subdivision 1a, is amended to read: 88.29 Subd. 1a. [LIMITED MARKET VALUE.] In the case of all 88.30 property classified as agricultural homestead or nonhomestead, 88.31 residential homestead or nonhomestead, or noncommercial seasonal 88.32 recreational residential, the assessor shall compare the value 88.33 with that determined in the preceding assessment. The amount of 88.34 the increase entered in the current assessment shall not exceed 88.35 the greater of (1)ten8.5 percent of the value in the preceding 88.36 assessment, or (2)one-fourth15 percent of the difference 89.1 between the current assessment and the preceding assessment. 89.2 This limitation shall not apply to increases in value due to 89.3 improvements. For purposes of this subdivision, the term 89.4 "assessment" means the value prior to any exclusion under 89.5 subdivision 16. 89.6 The provisions of this subdivision shall be in effect only 89.7for assessment years 1993through assessment year 2001. 89.8 For purposes of the assessment/sales ratio study conducted 89.9 under section 127A.48, and the computation of state aids paid 89.10 under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 89.11 477A, market values and net tax capacities determined under this 89.12 subdivision and subdivision 16, shall be used. 89.13 Sec. 7. Minnesota Statutes 1998, section 273.11, 89.14 subdivision 16, is amended to read: 89.15 Subd. 16. [VALUATION EXCLUSION FOR CERTAIN IMPROVEMENTS.] 89.16 Improvements to homestead property made before January 2, 2003, 89.17 shall be fully or partially excluded from the value of the 89.18 property for assessment purposes provided that (1) the house is 89.19 at least3545 years old at the time of the improvement and (2) 89.20either89.21(a)the assessor's estimated market value of the house on 89.22 January 2 of the current year is equal to or less than$150,000,89.23or$400,000. 89.24(b) if the estimated market value of the house is over89.25$150,000 market value but is less than $300,000 on January 2 of89.26the current year, the property qualifies if89.27(i) it is located in a city or town in which 50 percent or89.28more of the owner-occupied housing units were constructed before89.291960 based upon the 1990 federal census, and89.30(ii) the city or town's median family income based upon the89.311990 federal census is less than the statewide median family89.32income based upon the 1990 federal census, or89.33(c) if the estimated market value of the house is $300,00089.34or more on January 2 of the current year, the property qualifies89.35if89.36(i) it is located in a city or town in which 45 percent or90.1more of the homes were constructed before 1940 based upon the90.21990 federal census, and90.3(ii) it is located in a city or town in which 45 percent or90.4more of the housing units were rental based upon the 199090.5federal census, and90.6(iii) the city or town's median value of owner-occupied90.7housing units based upon the 1990 federal census is less than90.8the statewide median value of owner-occupied housing units based90.9upon the 1990 federal census.90.10 For purposes of determining this eligibility, "house" means 90.11 land and buildings. 90.12 The age of a residence is the number of years since the 90.13 original year of its construction. In the case of a residence 90.14 that is relocated, the relocation must be from a location within 90.15 the state and the only improvements eligible for exclusion under 90.16 this subdivision are (1) those for which building permits were 90.17 issued to the homeowner after the residence was relocated to its 90.18 present site, and (2) those undertaken during or after the year 90.19 the residence is initially occupied by the homeowner, excluding 90.20 any market value increase relating to basic improvements that 90.21 are necessary to install the residence on its foundation and 90.22 connect it to utilities at its present site. In the case of an 90.23 owner-occupied duplex or triplex, the improvement is eligible 90.24 regardless of which portion of the property was improved. 90.25 If the property lies in a jurisdiction which is subject to 90.26 a building permit process, a building permit must have been 90.27 issued prior to commencement of the improvement.Any90.28improvementThe improvements for a single project or in any one 90.29 year must add at least$1,000$5,000 to the value of the 90.30 property to be eligible for exclusion under this subdivision. 90.31 Only improvements to the structure which is the residence of the 90.32 qualifying homesteader or construction of or improvements to no 90.33 more than one two-car garage per residence qualify for the 90.34 provisions of this subdivision. If an improvement was begun 90.35 between January 2, 1992, and January 2, 1993, any value added 90.36 from that improvement for the January 1994 and subsequent 91.1 assessments shall qualify for exclusion under this subdivision 91.2 provided that a building permit was obtained for the improvement 91.3 between January 2, 1992, and January 2, 1993. Whenever a 91.4 building permit is issued for property currently classified as 91.5 homestead, the issuing jurisdiction shall notify the property 91.6 owner of the possibility of valuation exclusion under this 91.7 subdivision. The assessor shall require an application, 91.8 including documentation of the age of the house from the owner, 91.9 if unknown by the assessor. The application may be filed 91.10 subsequent to the date of the building permit provided that the 91.11 application must be filed within three years of the date the 91.12 building permit was issued for the improvement. If the property 91.13 lies in a jurisdiction which is not subject to a building permit 91.14 process, the application must be filed within three years of the 91.15 date the improvement was made. The assessor may require proof 91.16 from the taxpayer of the date the improvement was made. 91.17 Applications must be received prior to July 1 of any year in 91.18 order to be effective for taxes payable in the following year. 91.19 No exclusion for an improvement may be grantedfor an91.20improvementby a local board of review or county board of 91.21 equalization, and no abatement of the taxes for qualifying 91.22 improvements may be granted by the county board unless (1) a 91.23 building permit was issued prior to the commencement of the 91.24 improvement if the jurisdiction requires a building permit, and 91.25 (2) an application was completed. 91.26 The assessor shall note the qualifying value of each 91.27 improvement on the property's record, and the sum of those 91.28 amounts shall be subtracted from the value of the property in 91.29 each year for ten years after the improvement has been made, at91.30which time an amount equal to 20 percent of the qualifying value91.31shall be added back in each of the five subsequent assessment91.32years. After ten years the amount of the qualifying value shall 91.33 be added back as follows: 91.34 (1) 50 percent in the two subsequent assessment years if 91.35 the qualifying value is equal to or less than $10,000 market 91.36 value; or 92.1 (2) 20 percent in the five subsequent assessment years if 92.2 the qualifying value is greater than $10,000 market value. 92.3 If an application is filed after the first assessment date at 92.4 which an improvement could have been subject to the valuation 92.5 exclusion under this subdivision, the ten-year period during 92.6 which the value is subject to exclusion is reduced by the number 92.7 of years that have elapsed since the property would have 92.8 qualified initially. The valuation exclusion shall terminate 92.9 whenever (1) the property is sold, or (2) the property is 92.10 reclassified to a class which does not qualify for treatment 92.11 under this subdivision. Improvements made by an occupant who is 92.12 the purchaser of the property under a conditional purchase 92.13 contract do not qualify under this subdivision unless the seller 92.14 of the property is a governmental entity. The qualifying value 92.15 of the property shall be computed based upon the increase from 92.16 that structure's market value as of January 2 preceding the 92.17 acquisition of the property by the governmental entity. 92.18 The total qualifying value for a homestead may not exceed 92.19 $50,000. The total qualifying value for a homestead with a 92.20 house that is less than 70 years old may not exceed $25,000. 92.21 The term "qualifying value" means the increase in estimated 92.22 market value resulting from the improvement if the improvement 92.23 occurs when the house is at least 70 years old, or one-half of 92.24 the increase in estimated market value resulting from the 92.25 improvement otherwise. The $25,000 and $50,000 maximum 92.26 qualifying value under this subdivision may result fromup to92.27three separatemultiple improvements to the homestead.The92.28application shall state, in clear language, that If more than92.29three improvements are made to the qualifying property, a92.30taxpayer may choose which three improvements are eligible,92.31provided that after the taxpayer has made the choice and any92.32valuation attributable to those improvements has been excluded92.33from taxation, no further changes can be made by the taxpayer.92.34 If 50 percent or more of the square footage of a structure 92.35 is voluntarily razed or removed, the valuation increase 92.36 attributable to any subsequent improvements to the remaining 93.1 structure does not qualify for the exclusion under this 93.2 subdivision. If a structure is unintentionally or accidentally 93.3 destroyed by a natural disaster, the property is eligible for an 93.4 exclusion under this subdivision provided that the structure was 93.5 not completely destroyed. The qualifying value on property 93.6 destroyed by a natural disaster shall be computed based upon the 93.7 increase from that structure's market value as determined on 93.8 January 2 of the year in which the disaster occurred. A 93.9 property receiving benefits under the homestead disaster 93.10 provisions under section 273.123 is not disqualified from 93.11 receiving an exclusion under this subdivision. If any 93.12 combination of improvements made to a structure after January 1, 93.13 1993, increases the size of the structure by 100 percent or 93.14 more, the valuation increase attributable to the portion of the 93.15 improvement that causes the structure's size to exceed 100 93.16 percent does not qualify for exclusion under this subdivision. 93.17 Sec. 8. Minnesota Statutes 1998, section 273.111, is 93.18 amended by adding a subdivision to read: 93.19 Subd. 15. [DISSECTED PARCELS; CONTINUED DEFERMENT.] Real 93.20 estate consisting of more than ten, but less than 15, acres 93.21 which has: 93.22 (1) been owned by the applicant or the applicant's parents 93.23 for at least 70 years; 93.24 (2) been dissected by two or more major parkways or 93.25 interstate highways; and 93.26 (3) qualified for the agricultural valuation and tax 93.27 deferment under this section through assessment year 1996, taxes 93.28 payable in 1997, 93.29 shall continue to qualify for treatment under this section until 93.30 the applicant's death or transfer or sale by the applicant of 93.31 the applicant's interest in the real estate. When the property 93.32 ceases to qualify for treatment under this section, the 93.33 recapture provisions of subdivision 9 will apply with respect to 93.34 the last ten years that the property has been valued and 93.35 assessed under this section. 93.36 Sec. 9. Minnesota Statutes 1998, section 273.124, 94.1 subdivision 1, is amended to read: 94.2 Subdivision 1. [GENERAL RULE.] (a) Residential real estate 94.3 that is occupied and used for the purposes of a homestead by its 94.4 owner, who must be a Minnesota resident, is a residential 94.5 homestead. 94.6 Agricultural land, as defined in section 273.13, 94.7 subdivision 23, that is occupied and used as a homestead by its 94.8 owner, who must be a Minnesota resident, is an agricultural 94.9 homestead. 94.10 Dates for establishment of a homestead and homestead 94.11 treatment provided to particular types of property are as 94.12 provided in this section. 94.13 Property of a trustee, beneficiary, or grantor of a trust 94.14 is not disqualified from receiving homestead benefits if the 94.15 homestead requirements under this chapter are satisfied. 94.16 The assessor shall require proof, as provided in 94.17 subdivision 13, of the facts upon which classification as a 94.18 homestead may be determined. Notwithstanding any other law, the 94.19 assessor may at any time require a homestead application to be 94.20 filed in order to verify that any property classified as a 94.21 homestead continues to be eligible for homestead status. 94.22 Notwithstanding any other law to the contrary, the department of 94.23 revenue may, upon request from an assessor, verify whether an 94.24 individual who is requesting or receiving homestead 94.25 classification has filed a Minnesota income tax return as a 94.26 resident for the most recent taxable year for which the 94.27 information is available. 94.28 When there is a name change or a transfer of homestead 94.29 property, the assessor may reclassify the property in the next 94.30 assessment unless a homestead application is filed to verify 94.31 that the property continues to qualify for homestead 94.32 classification. 94.33 (b) For purposes of this section, homestead property shall 94.34 include property which is used for purposes of the homestead but 94.35 is separated from the homestead by a road, street, lot, 94.36 waterway, or other similar intervening property. The term "used 95.1 for purposes of the homestead" shall include but not be limited 95.2 to uses for gardens, garages, or other outbuildings commonly 95.3 associated with a homestead, but shall not include vacant land 95.4 held primarily for future development. In order to receive 95.5 homestead treatment for the noncontiguous property, the owner 95.6 must use the property for the purposes of the homestead, and 95.7 must apply to the assessor, both by the deadlines given in 95.8 subdivision 9. After initial qualification for the homestead 95.9 treatment, additional applications for subsequent years are not 95.10 required. 95.11 (c) Residential real estate that is occupied and used for 95.12 purposes of a homestead by a relative of the owner is a 95.13 homestead but only to the extent of the homestead treatment that 95.14 would be provided if the related owner occupied the property. 95.15 For purposes of this paragraph and paragraph (g), "relative" 95.16 means a parent, stepparent, child, stepchild, grandparent, 95.17 grandchild, brother, sister, uncle,oraunt, nephew, or niece. 95.18 This relationship may be by blood or marriage. Property that 95.19 has been classified as seasonal recreational residential 95.20 property at any time during which it has been owned by the 95.21 current owner or spouse of the current owner will not be 95.22 reclassified as a homestead unless it is occupied as a homestead 95.23 by the owner; this prohibition also applies to property that, in 95.24 the absence of this paragraph, would have been classified as 95.25 seasonal recreational residential property at the time when the 95.26 residence was constructed. Neither the related occupant nor the 95.27 owner of the property may claim a property tax refund under 95.28 chapter 290A for a homestead occupied by a relative. In the 95.29 case of a residence located on agricultural land, only the 95.30 house, garage, and immediately surrounding one acre of land 95.31 shall be classified as a homestead under this paragraph, except 95.32 as provided in paragraph (d). 95.33 (d) Agricultural property that is occupied and used for 95.34 purposes of a homestead by a relative of the owner, is a 95.35 homestead, only to the extent of the homestead treatment that 95.36 would be provided if the related owner occupied the property, 96.1 and only if all of the following criteria are met: 96.2 (1) the relative who is occupying the agricultural property 96.3 is a son, daughter, father, or mother of the owner of the 96.4 agricultural property or a son or daughter of the spouse of the 96.5 owner of the agricultural property, 96.6 (2) the owner of the agricultural property must be a 96.7 Minnesota resident, 96.8 (3) the owner of the agricultural property must not receive 96.9 homestead treatment on any other agricultural property in 96.10 Minnesota, and 96.11 (4) the owner of the agricultural property is limited to 96.12 only one agricultural homestead per family under this paragraph. 96.13 Neither the related occupant nor the owner of the property 96.14 may claim a property tax refund under chapter 290A for a 96.15 homestead occupied by a relative qualifying under this 96.16 paragraph. For purposes of this paragraph, "agricultural 96.17 property" means the house, garage, other farm buildings and 96.18 structures, and agricultural land. 96.19 Application must be made to the assessor by the owner of 96.20 the agricultural property to receive homestead benefits under 96.21 this paragraph. The assessor may require the necessary proof 96.22 that the requirements under this paragraph have been met. 96.23 (e) In the case of property owned by a property owner who 96.24 is married, the assessor must not deny homestead treatment in 96.25 whole or in part if only one of the spouses occupies the 96.26 property and the other spouse is absent due to: (1) marriage 96.27 dissolution proceedings, (2) legal separation, (3) employment or 96.28 self-employment in another location, or (4) other personal 96.29 circumstances causing the spouses to live separately, not 96.30 including an intent to obtain two homestead classifications for 96.31 property tax purposes. To qualify under clause (3), the 96.32 spouse's place of employment or self-employment must be at least 96.33 50 miles distant from the other spouse's place of employment, 96.34 and the homesteads must be at least 50 miles distant from each 96.35 other. Homestead treatment, in whole or in part, shall not be 96.36 denied to the owner's spouse who previously occupied the 97.1 residence with the owner if the absence of the owner is due to 97.2 one of the exceptions provided in this paragraph. 97.3 (f) The assessor must not deny homestead treatment in whole 97.4 or in part if: 97.5 (1) in the case of a property owner who is not married, the 97.6 owner is absent due to residence in a nursing home or boarding 97.7 care facility and the property is not otherwise occupied; or 97.8 (2) in the case of a property owner who is married, the 97.9 owner or the owner's spouse or both are absent due to residence 97.10 in a nursing home or boarding care facility and the property is 97.11 not occupied or is occupied only by the owner's spouse. 97.12 (g) If an individual is purchasing property with the intent 97.13 of claiming it as a homestead and is required by the terms of 97.14 the financing agreement to have a relative shown on the deed as 97.15 a coowner, the assessor shall allow a full homestead 97.16 classification. This provision only applies to first-time 97.17 purchasers, whether married or single, or to a person who had 97.18 previously been married and is purchasing as a single individual 97.19 for the first time. The application for homestead benefits must 97.20 be on a form prescribed by the commissioner and must contain the 97.21 data necessary for the assessor to determine if full homestead 97.22 benefits are warranted. 97.23 (h) If residential or agricultural real estate is occupied 97.24 and used for purposes of a homestead by a child of a deceased 97.25 owner and the property is subject to jurisdiction of probate 97.26 court, the child shall receive relative homestead classification 97.27 under paragraph (c) or (d) to the same extent they would be 97.28 entitled to it if the owner was still living, until the probate 97.29 is completed. For purposes of this paragraph, "child" includes 97.30 a relationship by blood or by marriage. 97.31 Sec. 10. Minnesota Statutes 1998, section 273.124, 97.32 subdivision 7, is amended to read: 97.33 Subd. 7. [LEASED BUILDINGS OR LAND.] For purposes of class 97.34 1 determinations, homesteads include: 97.35 (a) buildings and appurtenances owned and used by the 97.36 occupant as a permanent residence which are located upon land 98.1 the title to which is vested in a person or entity other than 98.2 the occupant; 98.3 (b) all buildings and appurtenances located upon land owned 98.4 by the occupant and used for the purposes of a homestead 98.5 together with the land upon which they are located, if all of 98.6 the following criteria are met: 98.7 (1) the occupant is using the property as a permanent 98.8 residence; 98.9 (2) the occupant is paying the property taxes and any 98.10 special assessments levied against the property; 98.11 (3) the occupant has signed a lease which has an option to 98.12 purchase the buildings and appurtenances; 98.13 (4) the term of the lease is at least five years; and 98.14 (5) the occupant has made a down payment of at least $5,000 98.15 in cash if the property was purchased by means of a contract for 98.16 deed or subject to a mortgage. 98.17 (c) all buildings and appurtenances and the land upon which 98.18 they are located that are used for purposes of a homestead, if 98.19 all of the following criteria are met: 98.20 (1) the land is owned by a utility, which maintains 98.21 ownership of the land in order to facilitate compliance with the 98.22 terms of its hydroelectric project license from the federal 98.23 energy regulatory commission; 98.24 (2) the land is leased for a term of 20 years or more; 98.25 (3) the occupant is using the property as a permanent 98.26 residence; and 98.27 (4) the occupant is paying the property taxes and any 98.28 special assessments levied against the property. 98.29 Any taxpayer meeting all the requirements of this paragraph 98.30 must notify the county assessor, or the assessor who has the 98.31 powers of the county assessor pursuant to section 273.063, in 98.32 writing, as soon as possible after signing the lease agreement 98.33 and occupying the buildings as a homestead. 98.34 Sec. 11. Minnesota Statutes 1998, section 273.124, 98.35 subdivision 8, is amended to read: 98.36 Subd. 8. [HOMESTEAD OWNED BY FAMILY FARM CORPORATION OR 99.1 PARTNERSHIP OR LEASED TO FAMILY FARM CORPORATION OR 99.2 PARTNERSHIP.] (a) Each family farm corporation and each 99.3 partnership operating a family farm is entitled to class 1b 99.4 under section 273.13, subdivision 22, paragraph (b), or class 2a 99.5 assessment for one homestead occupied by a shareholder or 99.6 partner thereof who is residing on the land and actively engaged 99.7 in farming of the land owned by the corporation or partnership. 99.8 Homestead treatment applies even if legal title to the property 99.9 is in the name of the corporation or partnership and not in the 99.10 name of the person residing on it. "Family farm corporation" 99.11 and "family farm" have the meanings given in section 500.24, 99.12 except that the number of allowable shareholders or partners 99.13 under this subdivision shall not exceed 12. 99.14 (b) In addition to property specified in paragraph (a), any 99.15 other residences owned by corporations or partnerships described 99.16 in paragraph (a) which are located on agricultural land and 99.17 occupied as homesteads by shareholders or partners who are 99.18 actively engaged in farming on behalf of the corporation or 99.19 partnership must also be assessed as class 2a property or as 99.20 class 1b property under section 273.13, subdivision 22, 99.21 paragraph (b), but the property eligible is limited to the99.22residence itself and as much of the land surrounding the99.23homestead, not exceeding one acre, as is reasonably necessary99.24for the use of the dwelling as a home, and does not include any99.25other structures that may be located on it. 99.26 (c) Agricultural property owned by a shareholder of a 99.27 family farm corporation, as defined in paragraph (a), or by a 99.28 partner in a partnership operating a family farm and leased to 99.29 the family farm corporation by the shareholder or to the 99.30 partnership by the partner, is eligible for classification as 99.31 class 1b under section 273.13, subdivision 22, paragraph (b), or 99.32 class 2a under section 273.13, subdivision 23, paragraph (a), if 99.33 the owner is actually residing on the property and is actually 99.34 engaged in farming the land on behalf of the corporation or 99.35 partnership. This paragraph applies without regard to any legal 99.36 possession rights of the family farm corporation or partnership 100.1 operating a family farm under the lease. 100.2 Sec. 12. Minnesota Statutes 1998, section 273.124, 100.3 subdivision 13, is amended to read: 100.4 Subd. 13. [HOMESTEAD APPLICATION.] (a) A person who meets 100.5 the homestead requirements under subdivision 1 must file a 100.6 homestead application with the county assessor to initially 100.7 obtain homestead classification. 100.8 (b) On or before January 2, 1993, each county assessor 100.9 shall mail a homestead application to the owner of each parcel 100.10 of property within the county which was classified as homestead 100.11 for the 1992 assessment year. The format and contents of a 100.12 uniform homestead application shall be prescribed by the 100.13 commissioner of revenue. The commissioner shall consult with 100.14 the chairs of the house and senate tax committees on the 100.15 contents of the homestead application form. The application 100.16 must clearly inform the taxpayer that this application must be 100.17 signed by all owners who occupy the property or by the 100.18 qualifying relative and returned to the county assessor in order 100.19 for the property to continue receiving homestead treatment. The 100.20 envelope containing the homestead application shall clearly 100.21 identify its contents and alert the taxpayer of its necessary 100.22 immediate response. 100.23 (c) Every property owner applying for homestead 100.24 classification must furnish to the county assessor the social 100.25 security number of each occupant who is listed as an owner of 100.26 the property on the deed of record, the name and address of each 100.27 owner who does not occupy the property, and the name and social 100.28 security number of each owner's spouse who occupies the 100.29 property. The application must be signed by each owner who 100.30 occupies the property and by each owner's spouse who occupies 100.31 the property, or, in the case of property that qualifies as a 100.32 homestead under subdivision 1, paragraph (c), by the qualifying 100.33 relative. 100.34 If a property owner occupies a homestead, the property 100.35 owner's spouse may not claim another property as a homestead 100.36 unless the property owner and the property owner's spouse file 101.1 with the assessor an affidavit or other proof required by the 101.2 assessor stating that the property qualifies as a homestead 101.3 under subdivision 1, paragraph (e). 101.4 Owners or spouses occupying residences owned by their 101.5 spouses and previously occupied with the other spouse, either of 101.6 whom fail to include the other spouse's name and social security 101.7 number on the homestead application or provide the affidavits or 101.8 other proof requested, will be deemed to have elected to receive 101.9 only partial homestead treatment of their residence. The 101.10 remainder of the residence will be classified as nonhomestead 101.11 residential. When an owner or spouse's name and social security 101.12 number appear on homestead applications for two separate 101.13 residences and only one application is signed, the owner or 101.14 spouse will be deemed to have elected to homestead the residence 101.15 for which the application was signed. 101.16 The social security numbers or affidavits or other proofs 101.17 of the property owners and spouses are private data on 101.18 individuals as defined by section 13.02, subdivision 12, but, 101.19 notwithstanding that section, the private data may be disclosed 101.20 to the commissioner of revenue, or, for purposes of proceeding 101.21 under the Revenue Recapture Act to recover personal property 101.22 taxes owing, to the county treasurer. 101.23 (d) If residential real estate is occupied and used for 101.24 purposes of a homestead by a relative of the owner and qualifies 101.25 for a homestead under subdivision 1, paragraph (c), in order for 101.26 the property to receive homestead status, a homestead 101.27 application must be filed with the assessor. The social 101.28 security number of each relative occupying the property and the 101.29 social security number of each owner who is related to an 101.30 occupant of the property shall be required on the homestead 101.31 application filed under this subdivision. If a different 101.32 relative of the owner subsequently occupies the property, the 101.33 owner of the property must notify the assessor within 30 days of 101.34 the change in occupancy. The social security number of a 101.35 relative occupying the property is private data on individuals 101.36 as defined by section 13.02, subdivision 12, but may be 102.1 disclosed to the commissioner of revenue. 102.2 (e) The homestead application shall also notify the 102.3 property owners that the application filed under this section 102.4 will not be mailed annually and that if the property is granted 102.5 homestead status for the 1993 assessment, or any assessment year 102.6 thereafter, that same property shall remain classified as 102.7 homestead until the property is sold or transferred to another 102.8 person, or the owners, the spouse of the owner, or the relatives 102.9 no longer use the property as their homestead. Upon the sale or 102.10 transfer of the homestead property, a certificate of value must 102.11 be timely filed with the county auditor as provided under 102.12 section 272.115. Failure to notify the assessor within 30 days 102.13 that the property has been sold, transferred, or that the owner, 102.14 the spouse of the owner, or the relative is no longer occupying 102.15 the property as a homestead, shall result in the penalty 102.16 provided under this subdivision and the property will lose its 102.17 current homestead status. 102.18 (f) If the homestead application is not returned within 30 102.19 days, the county will send a second application to the present 102.20 owners of record. The notice of proposed property taxes 102.21 prepared under section 275.065, subdivision 3, shall reflect the 102.22 property's classification. Beginning with assessment year 1993 102.23 for all properties, if a homestead application has not been 102.24 filed with the county by December 15, the assessor shall 102.25 classify the property as nonhomestead for the current assessment 102.26 year for taxes payable in the following year, provided that the 102.27 owner may be entitled to receive the homestead classification by 102.28 proper application under section 375.192. 102.29 (g) At the request of the commissioner, each county must 102.30 give the commissioner a list that includes the name and social 102.31 security number of each property owner and the property owner's 102.32 spouse occupying the property, or relative of a property owner, 102.33 applying for homestead classification under this subdivision. 102.34 The commissioner shall use the information provided on the lists 102.35 as appropriate under the law, including for the detection of 102.36 improper claims by owners, or relatives of owners, under chapter 103.1 290A. 103.2 (h) If the commissioner finds that a property owner may be 103.3 claiming a fraudulent homestead, the commissioner shall notify 103.4 the appropriate counties. Within 90 days of the notification, 103.5 the county assessor shall investigate to determine if the 103.6 homestead classification was properly claimed. If the property 103.7 owner does not qualify, the county assessor shall notify the 103.8 county auditor who will determine the amount of homestead 103.9 benefits that had been improperly allowed. For the purpose of 103.10 this section, "homestead benefits" means the tax reduction 103.11 resulting from the classification as a homestead under section 103.12 273.13, the taconite homestead credit under section 273.135, and 103.13 the supplemental homestead credit under section 273.1391. 103.14 The county auditor shall send a notice to the person who 103.15 owned the affected property at the time the homestead 103.16 application related to the improper homestead was filed, 103.17 demanding reimbursement of the homestead benefits plus a penalty 103.18 equal to 100 percent of the homestead benefits. The person 103.19 notified may appeal the county's determination by serving copies 103.20 of a petition for review with county officials as provided in 103.21 section 278.01 and filing proof of service as provided in 103.22 section 278.01 with the Minnesota tax court within 60 days of 103.23 the date of the notice from the county. Procedurally, the 103.24 appeal is governed by the provisions in chapter 271 which apply 103.25 to the appeal of a property tax assessment or levy, but without 103.26 requiring any prepayment of the amount in controversy. If the 103.27 amount of homestead benefits and penalty is not paid within 60 103.28 days, and if no appeal has been filed, the county auditor shall 103.29 certify the amount of taxes and penalty to the county 103.30 treasurer. The county treasurer will add interest to the unpaid 103.31 homestead benefits and penalty amounts at the rate provided in 103.32 section 279.03 for real property taxes becoming delinquent in 103.33 the calendar year during which the amount remains unpaid. 103.34 Interest may be assessed for the period beginning 60 days after 103.35 demand for payment was made. 103.36 If the person notified is the current owner of the 104.1 property, the treasurer may add the total amount of benefits, 104.2 penalty, interest, and costs to the ad valorem taxes otherwise 104.3 payable on the property by including the amounts on the property 104.4 tax statements under section 276.04, subdivision 3. The amounts 104.5 added under this paragraph to the ad valorem taxes shall include 104.6 interest accrued through December 31 of the year preceding the 104.7 taxes payable year for which the amounts are first added. These 104.8 amounts, when added to the property tax statement, become 104.9 subject to all the laws for the enforcement of real or personal 104.10 property taxes for that year, and for any subsequent year. 104.11 If the person notified is not the current owner of the 104.12 property, the treasurer may collect the amounts due under the 104.13 Revenue Recapture Act in chapter 270A, or use any of the powers 104.14 granted in sections 277.20 and 277.21 without exclusion, to 104.15 enforce payment of the benefits, penalty, interest, and costs, 104.16 as if those amounts were delinquent tax obligations of the 104.17 person who owned the property at the time the application 104.18 related to the improperly allowed homestead was filed. The 104.19 treasurer may relieve a prior owner of personal liability for 104.20 the benefits, penalty, interest, and costs, and instead extend 104.21 those amounts on the tax lists against the property as provided 104.22 in this paragraph to the extent that the current owner agrees in 104.23 writing. On all demands, billings, property tax statements, and 104.24 related correspondence, the county must list and state 104.25 separately the amounts of homestead benefits, penalty, interest 104.26 and costs being demanded, billed or assessed. 104.27 (i) Any amount of homestead benefits recovered by the 104.28 county from the property owner shall be distributed to the 104.29 county, city or town, and school district where the property is 104.30 located in the same proportion that each taxing district's levy 104.31 was to the total of the three taxing districts' levy for the 104.32 current year. Any amount recovered attributable to taconite 104.33 homestead credit shall be transmitted to the St. Louis county 104.34 auditor to be deposited in the taconite property tax relief 104.35 account. Any amount recovered that is attributable to 104.36 supplemental homestead credit is to be transmitted to the 105.1 commissioner of revenue for deposit in the general fund of the 105.2 state treasury. The total amount of penalty collected must be 105.3 deposited in the county general fund. 105.4 (j) If a property owner has applied for more than one 105.5 homestead and the county assessors cannot determine which 105.6 property should be classified as homestead, the county assessors 105.7 will refer the information to the commissioner. The 105.8 commissioner shall make the determination and notify the 105.9 counties within 60 days. 105.10 (k) In addition to lists of homestead properties, the 105.11 commissioner may ask the counties to furnish lists of all 105.12 properties and the record owners. The social security numbers 105.13 and federal identification numbers that are maintained by a 105.14 county or city assessor for property tax administration 105.15 purposes, and that may appear on the lists retain their 105.16 classification as private or nonpublic data; but may be viewed, 105.17 accessed, and used by the county auditor or treasurer of the 105.18 same county for the limited purpose of assisting the 105.19 commissioner in the preparation of microdata samples under 105.20 section 270.0681. 105.21 Sec. 13. Minnesota Statutes 1998, section 273.124, 105.22 subdivision 14, is amended to read: 105.23 Subd. 14. [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 105.24 (a) Real estate of less than ten acres that is the homestead of 105.25 its owner must be classified as class 2a under section 273.13, 105.26 subdivision 23, paragraph (a), if: 105.27 (1) the parcel on which the house is located is contiguous 105.28 on at least two sides to (i) agricultural land, (ii) land owned 105.29 or administered by the United States Fish and Wildlife Service, 105.30 or (iii) land administered by the department of natural 105.31 resources on which in lieu taxes are paid under sections 477A.11 105.32 to 477A.14; 105.33 (2) its owner also owns a noncontiguous parcel of 105.34 agricultural land that is at least 20 acres; 105.35 (3) the noncontiguous land is located not farther than four 105.36 townships or cities, or a combination of townships or cities 106.1 from the homestead; and 106.2 (4) the agricultural use value of the noncontiguous land 106.3 and farm buildings is equal to at least 50 percent of the market 106.4 value of the house, garage, and one acre of land. 106.5 Homesteads initially classified as class 2a under the 106.6 provisions of this paragraph shall remain classified as class 106.7 2a, irrespective of subsequent changes in the use of adjoining 106.8 properties, as long as the homestead remains under the same 106.9 ownership, the owner owns a noncontiguous parcel of agricultural 106.10 land that is at least 20 acres, and the agricultural use value 106.11 qualifies under clause (4). Homestead classification under this 106.12 paragraph is limited to property that qualified under this 106.13 paragraph for the 1998 assessment. 106.14 (b) Agricultural property consisting of at least 40 acres 106.15 shall be classified homestead, to the same extent as other 106.16 agricultural homestead property, if all of the following 106.17 criteria are met: 106.18 (1) the owner is actively farming the agricultural 106.19 property; 106.20 (2) the owner of the agricultural property is a Minnesota 106.21 resident; 106.22 (3) neither the owner nor the spouse of the agricultural 106.23 property claims another agricultural homestead in Minnesota; and 106.24 (4) the owner does not live farther than four townships or 106.25 cities, or a combination of four townships or cities, from the 106.26 agricultural property. 106.27(b)(c) Except as provided in paragraph(d)(e), 106.28 noncontiguous land shall be included as part of a homestead 106.29 under section 273.13, subdivision 23, paragraph (a), only if the 106.30 homestead is classified as class 2a and the detached land is 106.31 located in the same township or city, or not farther than four 106.32 townships or cities or combination thereof from the homestead. 106.33 Any taxpayer of these noncontiguous lands must notify the county 106.34 assessor that the noncontiguous land is part of the taxpayer's 106.35 homestead, and, if the homestead is located in another county, 106.36 the taxpayer must also notify the assessor of the other county. 107.1(c)(d) Agricultural land used for purposes of a homestead 107.2 and actively farmed by a person holding a vested remainder 107.3 interest in it must be classified as a homestead under section 107.4 273.13, subdivision 23, paragraph (a). If agricultural land is 107.5 classified class 2a, any other dwellings on the land used for 107.6 purposes of a homestead by persons holding vested remainder 107.7 interests who are actively engaged in farming the property, and 107.8 up to one acre of the land surrounding each homestead and 107.9 reasonably necessary for the use of the dwelling as a home, must 107.10 also be assessed class 2a. 107.11(d)(e) Agricultural land and buildings that were class 2a 107.12 homestead property under section 273.13, subdivision 23, 107.13 paragraph (a), for the 1997 assessment shall remain classified 107.14 as agricultural homesteads for subsequent assessments if: 107.15 (1) the property owner abandoned the homestead dwelling 107.16 located on the agricultural homestead as a result of the April 107.17 1997 floods; 107.18 (2) the property is located in the county of Polk, Clay, 107.19 Kittson, Marshall, Norman, or Wilkin; 107.20 (3) the agricultural land and buildings remain under the 107.21 same ownership for the current assessment year as existed for 107.22 the 1997 assessment year and continue to be used for 107.23 agricultural purposes; 107.24 (4) the dwelling occupied by the owner is located in 107.25 Minnesota and is within 30 miles of one of the parcels of 107.26 agricultural land that is owned by the taxpayer; and 107.27 (5) the owner notifies the county assessor that the 107.28 relocation was due to the 1997 floods, and the owner furnishes 107.29 the assessor any information deemed necessary by the assessor in 107.30 verifying the change in dwelling. Further notifications to the 107.31 assessor are not required if the property continues to meet all 107.32 the requirements in this paragraph and any dwellings on the 107.33 agricultural land remain uninhabited. 107.34(e)(f) Agricultural land and buildings that were class 2a 107.35 homestead property under section 273.13, subdivision 23, 107.36 paragraph (a), for the 1998 assessment shall remain classified 108.1 agricultural homesteads for subsequent assessments if: 108.2 (1) the property owner abandoned the homestead dwelling 108.3 located on the agricultural homestead as a result of damage 108.4 caused by a March 29, 1998, tornado; 108.5 (2) the property is located in the county of Blue Earth, 108.6 Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice; 108.7 (3) the agricultural land and buildings remain under the 108.8 same ownership for the current assessment year as existed for 108.9 the 1998 assessment year; 108.10 (4) the dwelling occupied by the owner is located in this 108.11 state and is within 50 miles of one of the parcels of 108.12 agricultural land that is owned by the taxpayer; and 108.13 (5) the owner notifies the county assessor that the 108.14 relocation was due to a March 29, 1998, tornado, and the owner 108.15 furnishes the assessor any information deemed necessary by the 108.16 assessor in verifying the change in homestead dwelling. For 108.17 taxes payable in 1999, the owner must notify the assessor by 108.18 December 1, 1998. Further notifications to the assessor are not 108.19 required if the property continues to meet all the requirements 108.20 in this paragraph and any dwellings on the agricultural land 108.21 remain uninhabited. 108.22 Sec. 14. Minnesota Statutes 1998, section 273.124, is 108.23 amended by adding a subdivision to read: 108.24 Subd. 20. [ADDITIONAL REQUIREMENTS PROHIBITED.] No 108.25 political subdivision may impose any requirements not contained 108.26 in this chapter or chapter 272 to disqualify property from being 108.27 classified as a homestead if the property otherwise meets the 108.28 requirements for homestead treatment under this chapter and 108.29 chapter 272. 108.30 Sec. 15. Minnesota Statutes 1998, section 273.13, 108.31 subdivision 22, is amended to read: 108.32 Subd. 22. [CLASS 1.] (a) Except as provided in subdivision 108.33 23, real estate which is residential and used for homestead 108.34 purposes is class 1. The market value of class 1a property must 108.35 be determined based upon the value of the house, garage, and 108.36 land. 109.1 The first$75,000$76,000 of market value of class 1a 109.2 property has a net class rate of one percent of its market 109.3 value; and the market value of class 1a property that 109.4 exceeds$75,000$76,000 has a class rate of1.71.65 percent of 109.5 its market value. 109.6 (b) Class 1b property includes homestead real estate or 109.7 homestead manufactured homes used for the purposes of a 109.8 homestead by 109.9 (1) any blind person, or the blind person and the blind 109.10 person's spouse; or 109.11 (2) any person, hereinafter referred to as "veteran," who: 109.12 (i) served in the active military or naval service of the 109.13 United States; and 109.14 (ii) is entitled to compensation under the laws and 109.15 regulations of the United States for permanent and total 109.16 service-connected disability due to the loss, or loss of use, by 109.17 reason of amputation, ankylosis, progressive muscular 109.18 dystrophies, or paralysis, of both lower extremities, such as to 109.19 preclude motion without the aid of braces, crutches, canes, or a 109.20 wheelchair; and 109.21 (iii) has acquired a special housing unit with special 109.22 fixtures or movable facilities made necessary by the nature of 109.23 the veteran's disability, or the surviving spouse of the 109.24 deceased veteran for as long as the surviving spouse retains the 109.25 special housing unit as a homestead; or 109.26 (3) any person who: 109.27 (i) is permanently and totally disabled and 109.28 (ii) receives 90 percent or more of total household income, 109.29 as defined in section 290A.03, subdivision 5, from 109.30 (A) aid from any state as a result of that disability; or 109.31 (B) supplemental security income for the disabled; or 109.32 (C) workers' compensation based on a finding of total and 109.33 permanent disability; or 109.34 (D) social security disability, including the amount of a 109.35 disability insurance benefit which is converted to an old age 109.36 insurance benefit and any subsequent cost of living increases; 110.1 or 110.2 (E) aid under the federal Railroad Retirement Act of 1937, 110.3 United States Code Annotated, title 45, section 228b(a)5; or 110.4 (F) a pension from any local government retirement fund 110.5 located in the state of Minnesota as a result of that 110.6 disability; or 110.7 (G) pension, annuity, or other income paid as a result of 110.8 that disability from a private pension or disability plan, 110.9 including employer, employee, union, and insurance plans and 110.10 (iii) has household income as defined in section 290A.03, 110.11 subdivision 5, of $50,000 or less; or 110.12 (4) any person who is permanently and totally disabled and 110.13 whose household income as defined in section 290A.03, 110.14 subdivision 5, is 275 percent or less of the federal poverty 110.15 level. 110.16 Property is classified and assessed under clause (4) only 110.17 if the government agency or income-providing source certifies, 110.18 upon the request of the homestead occupant, that the homestead 110.19 occupant satisfies the disability requirements of this paragraph. 110.20 Property is classified and assessed pursuant to clause (1) 110.21 only if the commissioner of economic security certifies to the 110.22 assessor that the homestead occupant satisfies the requirements 110.23 of this paragraph. 110.24 Permanently and totally disabled for the purpose of this 110.25 subdivision means a condition which is permanent in nature and 110.26 totally incapacitates the person from working at an occupation 110.27 which brings the person an income. The first $32,000 market 110.28 value of class 1b property has a net class rate of .45 percent 110.29 of its market value. The remaining market value of class 1b 110.30 property has a net class rate using the rates for class 1 or 110.31 class 2a property, whichever is appropriate, of similar market 110.32 value. 110.33 (c) Class 1c property is commercial use real property that 110.34 abuts a lakeshore line and is devoted to temporary and seasonal 110.35 residential occupancy for recreational purposes but not devoted 110.36 to commercial purposes for more than 250 days in the year 111.1 preceding the year of assessment, and that includes a portion 111.2 used as a homestead by the owner, which includes a dwelling 111.3 occupied as a homestead by a shareholder of a corporation that 111.4 owns the resort or a partner in a partnership that owns the 111.5 resort, even if the title to the homestead is held by the 111.6 corporation or partnership. For purposes of this clause, 111.7 property is devoted to a commercial purpose on a specific day if 111.8 any portion of the property, excluding the portion used 111.9 exclusively as a homestead, is used for residential occupancy 111.10 and a fee is charged for residential occupancy. Class 1c 111.11 property has a class rate of one percent of total market value 111.12 with the following limitation: the area of the property must 111.13 not exceed 100 feet of lakeshore footage for each cabin or 111.14 campsite located on the property up to a total of 800 feet and 111.15 500 feet in depth, measured away from the lakeshore. If any 111.16 portion of the class 1c resort property is classified as class 111.17 4c under subdivision 25, the entire property must meet the 111.18 requirements of subdivision 25, paragraph (d), clause (1), to 111.19 qualify for class 1c treatment under this paragraph. 111.20 (d) Class 1d property includes structures that meet all of 111.21 the following criteria: 111.22 (1) the structure is located on property that is classified 111.23 as agricultural property under section 273.13, subdivision 23; 111.24 (2) the structure is occupied exclusively by seasonal farm 111.25 workers during the time when they work on that farm, and the 111.26 occupants are not charged rent for the privilege of occupying 111.27 the property, provided that use of the structure for storage of 111.28 farm equipment and produce does not disqualify the property from 111.29 classification under this paragraph; 111.30 (3) the structure meets all applicable health and safety 111.31 requirements for the appropriate season; and 111.32 (4) the structure is not salable as residential property 111.33 because it does not comply with local ordinances relating to 111.34 location in relation to streets or roads. 111.35 The market value of class 1d property has the same class 111.36 rates as class 1a property under paragraph (a). 112.1 Sec. 16. Minnesota Statutes 1998, section 273.13, 112.2 subdivision 23, is amended to read: 112.3 Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural 112.4 land including any improvements that is homesteaded. The market 112.5 value of the house and garage and immediately surrounding one 112.6 acre of land has the same class rates as class 1a property under 112.7 subdivision 22. The value of the remaining land including 112.8 improvements up to $115,000 has a net class rate of 0.35 percent 112.9 of market value. Theremainingvalue of class 2a property over 112.10 $115,000 of market valuethat does not exceed 320 acresup to 112.11 and including $600,000 market value has a net class rate of 0.8 112.12 percent of market value. The remaining property 112.13 over$115,000$600,000 market valuein excess of 320 acreshas a 112.14 class rate of1.251.20 percent of market value. 112.15 (b) Class 2b property is (1) real estate, rural in 112.16 character and used exclusively for growing trees for timber, 112.17 lumber, and wood and wood products; (2) real estate that is not 112.18 improved with a structure and is used exclusively for growing 112.19 trees for timber, lumber, and wood and wood products, if the 112.20 owner has participated or is participating in a cost-sharing 112.21 program for afforestation, reforestation, or timber stand 112.22 improvement on that particular property, administered or 112.23 coordinated by the commissioner of natural resources; (3) real 112.24 estate that is nonhomestead agricultural land; or (4) a landing 112.25 area or public access area of a privately owned public use 112.26 airport. Class 2b property has a net class rate of1.251.20 112.27 percent of market value. 112.28 (c) Agricultural land as used in this section means 112.29 contiguous acreage of ten acres or more, used during the 112.30 preceding year for agricultural purposes. "Agricultural 112.31 purposes" as used in this section means the raising or 112.32 cultivation of agricultural products or enrollment in the 112.33 Reinvest in Minnesota program under sections 103F.501 to 112.34 103F.535 or the federal Conservation Reserve Program as 112.35 contained in Public Law Number 99-198. Contiguous acreage on 112.36 the same parcel, or contiguous acreage on an immediately 113.1 adjacent parcel under the same ownership, may also qualify as 113.2 agricultural land, but only if it is pasture, timber, waste, 113.3 unusable wild land, or land included in state or federal farm 113.4 programs. Agricultural classification for property shall be 113.5 determined excluding the house, garage, and immediately 113.6 surrounding one acre of land, and shall not be based upon the 113.7 market value of any residential structures on the parcel or 113.8 contiguous parcels under the same ownership. 113.9 (d) Real estate, excluding the house, garage, and 113.10 immediately surrounding one acre of land, of less than ten acres 113.11 which is exclusively and intensively used for raising or 113.12 cultivating agricultural products, shall be considered as 113.13 agricultural land. 113.14 Land shall be classified as agricultural even if all or a 113.15 portion of the agricultural use of that property is the leasing 113.16 to, or use by another person for agricultural purposes. 113.17 Classification under this subdivision is not determinative 113.18 for qualifying under section 273.111. 113.19 The property classification under this section supersedes, 113.20 for property tax purposes only, any locally administered 113.21 agricultural policies or land use restrictions that define 113.22 minimum or maximum farm acreage. 113.23 (e) The term "agricultural products" as used in this 113.24 subdivision includes production for sale of: 113.25 (1) livestock, dairy animals, dairy products, poultry and 113.26 poultry products, fur-bearing animals, horticultural and nursery 113.27 stock described in sections 18.44 to 18.61, fruit of all kinds, 113.28 vegetables, forage, grains, bees, and apiary products by the 113.29 owner; 113.30 (2) fish bred for sale and consumption if the fish breeding 113.31 occurs on land zoned for agricultural use; 113.32 (3) the commercial boarding of horses if the boarding is 113.33 done in conjunction with raising or cultivating agricultural 113.34 products as defined in clause (1); 113.35 (4) property which is owned and operated by nonprofit 113.36 organizations used for equestrian activities, excluding racing; 114.1and114.2 (5) game birds and waterfowl bred and raised for use on a 114.3 shooting preserve licensed under section 97A.115; 114.4 (6) insects primarily bred to be used as food for animals; 114.5 and 114.6 (7) trees, grown for sale as a crop, and not sold for 114.7 timber, lumber, wood, or wood products. 114.8 (f) If a parcel used for agricultural purposes is also used 114.9 for commercial or industrial purposes, including but not limited 114.10 to: 114.11 (1) wholesale and retail sales; 114.12 (2) processing of raw agricultural products or other goods; 114.13 (3) warehousing or storage of processed goods; and 114.14 (4) office facilities for the support of the activities 114.15 enumerated in clauses (1), (2), and (3), 114.16 the assessor shall classify the part of the parcel used for 114.17 agricultural purposes as class 1b, 2a, or 2b, whichever is 114.18 appropriate, and the remainder in the class appropriate to its 114.19 use. The grading, sorting, and packaging of raw agricultural 114.20 products for first sale is considered an agricultural purpose. 114.21 A greenhouse or other building where horticultural or nursery 114.22 products are grown that is also used for the conduct of retail 114.23 sales must be classified as agricultural if it is primarily used 114.24 for the growing of horticultural or nursery products from seed, 114.25 cuttings, or roots and occasionally as a showroom for the retail 114.26 sale of those products. Use of a greenhouse or building only 114.27 for the display of already grown horticultural or nursery 114.28 products does not qualify as an agricultural purpose. 114.29 The assessor shall determine and list separately on the 114.30 records the market value of the homestead dwelling and the one 114.31 acre of land on which that dwelling is located. If any farm 114.32 buildings or structures are located on this homesteaded acre of 114.33 land, their market value shall not be included in this separate 114.34 determination. 114.35 (g) To qualify for classification under paragraph (b), 114.36 clause (4), a privately owned public use airport must be 115.1 licensed as a public airport under section 360.018. For 115.2 purposes of paragraph (b), clause (4), "landing area" means that 115.3 part of a privately owned public use airport properly cleared, 115.4 regularly maintained, and made available to the public for use 115.5 by aircraft and includes runways, taxiways, aprons, and sites 115.6 upon which are situated landing or navigational aids. A landing 115.7 area also includes land underlying both the primary surface and 115.8 the approach surfaces that comply with all of the following: 115.9 (i) the land is properly cleared and regularly maintained 115.10 for the primary purposes of the landing, taking off, and taxiing 115.11 of aircraft; but that portion of the land that contains 115.12 facilities for servicing, repair, or maintenance of aircraft is 115.13 not included as a landing area; 115.14 (ii) the land is part of the airport property; and 115.15 (iii) the land is not used for commercial or residential 115.16 purposes. 115.17 The land contained in a landing area under paragraph (b), clause 115.18 (4), must be described and certified by the commissioner of 115.19 transportation. The certification is effective until it is 115.20 modified, or until the airport or landing area no longer meets 115.21 the requirements of paragraph (b), clause (4). For purposes of 115.22 paragraph (b), clause (4), "public access area" means property 115.23 used as an aircraft parking ramp, apron, or storage hangar, or 115.24 an arrival and departure building in connection with the airport. 115.25 Sec. 17. Minnesota Statutes 1998, section 273.13, 115.26 subdivision 24, is amended to read: 115.27 Subd. 24. [CLASS 3.] (a) Commercial and industrial 115.28 property and utility real and personal property, except class 5115.29property as identified in subdivision 31, clause (1),is class 115.30 3a. Each parcel of real property has a class rate of2.452.4 115.31 percent of the first tier of market value, and3.53.4 percent 115.32 of the remaining market value, except that in the case of 115.33 contiguous parcels ofcommercial and industrialproperty owned 115.34 by the same person or entity, only the value equal to the 115.35 first-tier value of the contiguous parcels qualifies for the 115.36 reduced class rate. For the purposes of this subdivision, the 116.1 first tier means the first $150,000 of market value.In the116.2case of utility property owned by one person or entity, only one116.3parcel in each county has a reduced class rate on the first tier116.4of market value.Real property owned in fee by a utility for 116.5 transmission line right-of-way shall be classified at the class 116.6 rate for the higher tier. All personal property shall be 116.7 classified at the class rate for the higher tier. For purposes 116.8 of this subdivision "personal property" means tools, implements, 116.9 and machinery of an electric generating, transmission, or 116.10 distribution system, or a pipeline system transporting or 116.11 distributing water, gas, crude oil, or petroleum products or 116.12 mains and pipes used in the distribution of steam or hot or 116.13 chilled water for heating or cooling buildings, which are 116.14 fixtures. 116.15 For purposes of this paragraph, parcels are considered to 116.16 be contiguous even if they are separated from each other by a 116.17 road, street, vacant lot, waterway, or other similar intervening 116.18 type of property. 116.19 (b) Employment property defined in section 469.166, during 116.20 the period provided in section 469.170, shall constitute class 116.21 3band has a class rate of 2.3 percent of the first $50,000 of116.22market value and 3.5 percent of the remainder, except that for116.23employment property located in a border city enterprise zone116.24designated pursuant to section 469.168, subdivision 4, paragraph116.25(c),. The classrate of the first tier of market value and the116.26class rate of the remainder isrates for class 3b property are 116.27 determined under paragraph (a), unless the governing body of the116.28city designated as an enterprise zone determines that a specific116.29parcel shall be assessed pursuant to the first clause of this116.30sentence. The governing body may provide for assessment under116.31the first clause of the preceding sentence only for property116.32which is located in an area which has been designated by the116.33governing body for the receipt of tax reductions authorized by116.34section 469.171, subdivision 1. 116.35 (c)(1) Subject to the limitations of clause (2), structures 116.36 which are (i) located on property classified as class 3a, (ii) 117.1 constructed under an initial building permit issued after 117.2 January 2, 1996, (iii) located in a transit zone as defined 117.3 under section 473.3915, subdivision 3, (iv) located within the 117.4 boundaries of a school district, and (v) not primarily used for 117.5 retail or transient lodging purposes, shall have a class rate 117.6 equalto 85 percent ofto the lesser of 2.975 percent or the 117.7 class rate of the second tier of the commercial property rate 117.8 under paragraph (a) on any portion of the market value that does 117.9 not qualify for the first tier class rate under paragraph (a). 117.10 As used in item (v), a structure is primarily used for retail or 117.11 transient lodging purposes if over 50 percent of its square 117.12 footage is used for those purposes. A class rate equal to85117.13percent ofthe lesser of 2.975 percent or the class rate of the 117.14 second tier of the commercial property class rate under 117.15 paragraph (a) shall also apply to improvements to existing 117.16 structures that meet the requirements of items (i) to (v) if the 117.17 improvements are constructed under an initial building permit 117.18 issued after January 2, 1996, even if the remainder of the 117.19 structure was constructed prior to January 2, 1996. For the 117.20 purposes of this paragraph, a structure shall be considered to 117.21 be located in a transit zone if any portion of the structure 117.22 lies within the zone. If any property once eligible for 117.23 treatment under this paragraph ceases to remain eligible due to 117.24 revisions in transit zone boundaries, the property shall 117.25 continue to receive treatment under this paragraph for a period 117.26 of three years. 117.27 (2) This clause applies to any structure qualifying for the 117.28 transit zone reduced class rate under clause (1) on January 2, 117.29 1999, or any structure meeting any of the qualification criteria 117.30 in item (i) and otherwise qualifying for the transit zone 117.31 reduced class rate under clause (1). Such a structure continues 117.32 to receive the transit zone reduced class rate until the 117.33 occurrence of one of the events in item (ii). Property 117.34 qualifying under item (i)(D), that is located outside of a city 117.35 of the first class, qualifies for the transit zone reduced class 117.36 rate as provided in that item. Property qualifying under item 118.1 (i)(E) qualifies for the transit zone reduced class rate as 118.2 provided in that item. 118.3 (i) A structure qualifies for the rate in this clause if it 118.4 is: 118.5 (A) property for which a building permit was issued before 118.6 December 31, 1998; or 118.7 (B) property for which a building permit was issued before 118.8 June 30, 2001, if: 118.9 (I) at least 50 percent of the land on which the structure 118.10 is to be built has been acquired or is the subject of signed 118.11 purchase agreements or signed options as of March 15, 1998, by 118.12 the entity that proposes construction of the project or an 118.13 affiliate of the entity; 118.14 (II) signed agreements have been entered into with one 118.15 entity or with affiliated entities to lease for the account of 118.16 the entity or affiliated entities at least 50 percent of the 118.17 square footage of the structure or the owner of the structure 118.18 will occupy at least 50 percent of the square footage of the 118.19 structure; and 118.20 (III) one of the following requirements is met: 118.21 the project proposer has submitted the completed data 118.22 portions of an environmental assessment worksheet by December 118.23 31, 1998; or 118.24 a notice of determination of adequacy of an environmental 118.25 impact statement has been published by April 1, 1999; or 118.26 an alternative urban areawide review has been completed by 118.27 April 1, 1999; or 118.28 (C) property for which a building permit is issued before 118.29 July 30, 1999, if: 118.30 (I) at least 50 percent of the land on which the structure 118.31 is to be built has been acquired or is the subject of signed 118.32 purchase agreements as of March 31, 1998, by the entity that 118.33 proposes construction of the project or an affiliate of the 118.34 entity; 118.35 (II) a signed agreement has been entered into between the 118.36 building developer and a tenant to lease for its own account at 119.1 least 200,000 square feet of space in the building; 119.2 (III) a signed letter of intent is entered into by July 1, 119.3 1998, between the building developer and the tenant to lease the 119.4 space for its own account; and 119.5 (IV) the environmental review process required by state law 119.6 was commenced by December 31, 1998; 119.7 (D) property for which an irrevocable letter of credit with 119.8 a housing and redevelopment authority was signed before December 119.9 31, 1998. The structure shall receive the transit zone reduced 119.10 class rate during construction and for the duration of time that 119.11 the original tenants remain in the building. Any unoccupied net 119.12 leasable square footage that is not leased within 36 months 119.13 after the certificate of occupancy has been issued for the 119.14 building shall not be eligible to receive the reduced class 119.15 rate. This reduced class rate applies only if the entity that 119.16 constructed the structure continues to own the property; 119.17 (E) property, located in a city of the first class, and for 119.18 which the building permits for the excavation, the parking ramp, 119.19 and the office tower were issued prior to April 1, 1999, shall 119.20 receive the reduced class rate during construction and for the 119.21 first five assessment years immediately following its initial 119.22 occupancy provided that, when completed, at least 25 percent of 119.23 the net leasable square footage must be occupied by the entity 119.24 or the parent entity constructing the structure each year during 119.25 this time period. In order to receive the reduced class rate on 119.26 the structure in any subsequent assessment years, at least 50 119.27 percent of the rentable square footage must be occupied by the 119.28 entity or the parent entity that constructed the structure. 119.29 This reduced class rate applies only if the entity or the parent 119.30 entity that constructed the structure continues to own the 119.31 property. 119.32 (ii) A structure specified by this clause, other than a 119.33 structure qualifying under clause (i)(D) or (E), shall continue 119.34 to receive the transit zone reduced class rate until the 119.35 occurrence of one of the following events: 119.36 (A) if the structure upon initial occupancy will be owner 120.1 occupied by the entity initially constructing the structure or 120.2 an affiliated entity, the structure receives the reduced class 120.3 rate until the structure ceases to be at least 50 percent 120.4 occupied by the entity or an affiliated entity, provided, if the 120.5 portion of the structure occupied by that entity or an affiliate 120.6 of the entity is less than 85 percent, the transit zone class 120.7 rate reduction for the portion of structure not so occupied 120.8 terminates upon the leasing of such space to any nonaffiliated 120.9 entity; or 120.10 (B) if the structure is leased by a single entity or 120.11 affiliated entity at the time of initial occupancy, the 120.12 structure shall receive the reduced class rate until the 120.13 structure ceases to be at least 50 percent occupied by the 120.14 entity or an affiliated entity, provided, if the portion of the 120.15 structure occupied by that entity or an affiliate of the entity 120.16 is less than 85 percent, the transit zone class rate reduction 120.17 for the portion of structure not so occupied shall terminate 120.18 upon the leasing of such space to any nonaffiliated entity; or 120.19 (C) if the structure meets the criteria in item (i)(C), the 120.20 structure shall receive the reduced class rate until the 120.21 expiration of the initial lease term of the applicable tenants. 120.22 Percentages occupied or leased shall be determined based 120.23 upon net leasable square footage in the structure. The assessor 120.24 shall allocate the value of the structure in the same fashion as 120.25 provided in the general law for portions of any structure 120.26 receiving and not receiving the transit tax class reduction as a 120.27 result of this clause. 120.28 Sec. 18. Minnesota Statutes 1998, section 273.13, is 120.29 amended by adding a subdivision to read: 120.30 Subd. 24a. [TRANSIT ZONE PROPERTIES; PERSONAL PROPERTY 120.31 TAX.] (a) Notwithstanding the provisions of section 272.02 or 120.32 any other law to the contrary, a personal property tax is 120.33 imposed on the leasehold of a tenant of a structure described in 120.34 subdivision 24, paragraph (c), clause (2), item (i)(C). 120.35 (b) The tax equals the amount obtained by multiplying the 120.36 sum of the local tax rates by: 121.1 (1) the estimated market value of the structure multiplied 121.2 by 121.3 (2) the square footage of the structure under lease that 121.4 qualifies under subdivision 24, clause (c)(1), divided by 121.5 (3) the total square footage of the structure that 121.6 qualifies under subdivision 24, clause (c)(1), multiplied by 121.7 (4) the difference between the class rate under subdivision 121.8 24, paragraph (a), for the second tier and the class rate under 121.9 subdivision 24, paragraph (c), for the second tier for the 121.10 qualifying parts of a structure. 121.11 (c) The tax under this subdivision does not apply to a 121.12 lease that: 121.13 (1) was executed before May 1, 1999; 121.14 (2) was entered according to a binding written agreement 121.15 executed before May 1, 1999; or 121.16 (3) is a lease entered under an expansion option contained 121.17 in a lease or binding written agreement qualifying under clause 121.18 (1) or (2). 121.19 (d) The tax imposed under this subdivision is a personal 121.20 property tax and is imposed on the lessee or tenant and not on 121.21 the structure or the real property. The tax is an obligation of 121.22 the lessee or tenant and must be collected in the manner 121.23 provided for personal property taxes. 121.24 (e) The personal property tax applies only to a year in 121.25 which the leased structure qualifies for the transit zone class 121.26 rate. 121.27 Sec. 19. Minnesota Statutes 1998, section 273.13, 121.28 subdivision 25, is amended to read: 121.29 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 121.30 estate containing four or more units and used or held for use by 121.31 the owner or by the tenants or lessees of the owner as a 121.32 residence for rental periods of 30 days or more. Class 4a also 121.33 includes hospitals licensed under sections 144.50 to 144.56, 121.34 other than hospitals exempt under section 272.02, and contiguous 121.35 property used for hospital purposes, without regard to whether 121.36 the property has been platted or subdivided. Class 4a property 122.1 in a city with a population of 5,000 or less, that is (1) 122.2 located outside of the metropolitan area, as defined in section 122.3 473.121, subdivision 2, or outside any county contiguous to the 122.4 metropolitan area, and (2) whose city boundary is at least 15 122.5 miles from the boundary of any city with a population greater 122.6 than 5,000 has a class rate of 2.15 percent of market value. 122.7 All other class 4a property has a class rate of2.52.4 percent 122.8 of market value. For purposes of this paragraph, population has 122.9 the same meaning given in section 477A.011, subdivision 3. 122.10 (b) Class 4b includes: 122.11 (1) residential real estate containing less than four units 122.12 that does not qualify as class 4bb, other than seasonal 122.13 residential, and recreational; 122.14 (2) manufactured homes not classified under any other 122.15 provision; 122.16 (3) a dwelling, garage, and surrounding one acre of 122.17 property on a nonhomestead farm classified under subdivision 23, 122.18 paragraph (b) containing two or three units; 122.19 (4) unimproved property that is classified residential as 122.20 determined under subdivision 33. 122.21 Class 4b property has a class rate of1.71.65 percent of 122.22 market value. 122.23 (c) Class 4bb includes: 122.24 (1) nonhomestead residential real estate containing one 122.25 unit, other than seasonal residential, and recreational; and 122.26 (2) a single family dwelling, garage, and surrounding one 122.27 acre of property on a nonhomestead farm classified under 122.28 subdivision 23, paragraph (b). 122.29 Class 4bb has a class rate of1.251.2 percent on the 122.30 first$75,000$76,000 of market value and a class rate of1.7122.31 1.65 percent of its market value that exceeds$75,000$76,000. 122.32 Property that has been classified as seasonal recreational 122.33 residential property at any time during which it has been owned 122.34 by the current owner or spouse of the current owner does not 122.35 qualify for class 4bb. 122.36 (d) Class 4c property includes: 123.1 (1) except as provided in subdivision 22, paragraph (c), 123.2 real property devoted to temporary and seasonal residential 123.3 occupancy for recreation purposes, including real property 123.4 devoted to temporary and seasonal residential occupancy for 123.5 recreation purposes and not devoted to commercial purposes for 123.6 more than 250 days in the year preceding the year of 123.7 assessment. For purposes of this clause, property is devoted to 123.8 a commercial purpose on a specific day if any portion of the 123.9 property is used for residential occupancy, and a fee is charged 123.10 for residential occupancy. In order for a property to be 123.11 classified as class 4c, seasonal recreational residential for 123.12 commercial purposes, at least 40 percent of the annual gross 123.13 lodging receipts related to the property must be from business 123.14 conducted during 90 consecutive days and either (i) at least 60 123.15 percent of all paid bookings by lodging guests during the year 123.16 must be for periods of at least two consecutive nights; or (ii) 123.17 at least 20 percent of the annual gross receipts must be from 123.18 charges for rental of fish houses, boats and motors, 123.19 snowmobiles, downhill or cross-country ski equipment, or charges 123.20 for marina services, launch services, and guide services, or the 123.21 sale of bait and fishing tackle. For purposes of this 123.22 determination, a paid booking of five or more nights shall be 123.23 counted as two bookings. Class 4c also includes commercial use 123.24 real property used exclusively for recreational purposes in 123.25 conjunction with class 4c property devoted to temporary and 123.26 seasonal residential occupancy for recreational purposes, up to 123.27 a total of two acres, provided the property is not devoted to 123.28 commercial recreational use for more than 250 days in the year 123.29 preceding the year of assessment and is located within two miles 123.30 of the class 4c property with which it is used. Class 4c 123.31 property classified in this clause also includes the remainder 123.32 of class 1c resorts provided that the entire property including 123.33 that portion of the property classified as class 1c also meets 123.34 the requirements for class 4c under this clause; otherwise the 123.35 entire property is classified as class 3. Owners of real 123.36 property devoted to temporary and seasonal residential occupancy 124.1 for recreation purposes and all or a portion of which was 124.2 devoted to commercial purposes for not more than 250 days in the 124.3 year preceding the year of assessment desiring classification as 124.4 class 1c or 4c, must submit a declaration to the assessor 124.5 designating the cabins or units occupied for 250 days or less in 124.6 the year preceding the year of assessment by January 15 of the 124.7 assessment year. Those cabins or units and a proportionate 124.8 share of the land on which they are located will be designated 124.9 class 1c or 4c as otherwise provided. The remainder of the 124.10 cabins or units and a proportionate share of the land on which 124.11 they are located will be designated as class 3a. The owner of 124.12 property desiring designation as class 1c or 4c property must 124.13 provide guest registers or other records demonstrating that the 124.14 units for which class 1c or 4c designation is sought were not 124.15 occupied for more than 250 days in the year preceding the 124.16 assessment if so requested. The portion of a property operated 124.17 as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 124.18 nonresidential facility operated on a commercial basis not 124.19 directly related to temporary and seasonal residential occupancy 124.20 for recreation purposes shall not qualify for class 1c or 4c; 124.21 (2) qualified property used as a golf course if: 124.22 (i) it is open to the public on a daily fee basis. It may 124.23 charge membership fees or dues, but a membership fee may not be 124.24 required in order to use the property for golfing, and its green 124.25 fees for golfing must be comparable to green fees typically 124.26 charged by municipal courses; and 124.27 (ii) it meets the requirements of section 273.112, 124.28 subdivision 3, paragraph (d). 124.29 A structure used as a clubhouse, restaurant, or place of 124.30 refreshment in conjunction with the golf course is classified as 124.31 class 3a property. 124.32 (3) real property up to a maximum of one acre of land owned 124.33 by a nonprofit community service oriented organization; provided 124.34 that the property is not used for a revenue-producing activity 124.35 for more than six days in the calendar year preceding the year 124.36 of assessment and the property is not used for residential 125.1 purposes on either a temporary or permanent basis. For purposes 125.2 of this clause, a "nonprofit community service oriented 125.3 organization" means any corporation, society, association, 125.4 foundation, or institution organized and operated exclusively 125.5 for charitable, religious, fraternal, civic, or educational 125.6 purposes, and which is exempt from federal income taxation 125.7 pursuant to section 501(c)(3), (10), or (19) of the Internal 125.8 Revenue Code of 1986, as amended through December 31, 1990. For 125.9 purposes of this clause, "revenue-producing activities" shall 125.10 include but not be limited to property or that portion of the 125.11 property that is used as an on-sale intoxicating liquor or 3.2 125.12 percent malt liquor establishment licensed under chapter 340A, a 125.13 restaurant open to the public, bowling alley, a retail store, 125.14 gambling conducted by organizations licensed under chapter 349, 125.15 an insurance business, or office or other space leased or rented 125.16 to a lessee who conducts a for-profit enterprise on the 125.17 premises. Any portion of the property which is used for 125.18 revenue-producing activities for more than six days in the 125.19 calendar year preceding the year of assessment shall be assessed 125.20 as class 3a. The use of the property for social events open 125.21 exclusively to members and their guests for periods of less than 125.22 24 hours, when an admission is not charged nor any revenues are 125.23 received by the organization shall not be considered a 125.24 revenue-producing activity; 125.25 (4) post-secondary student housing of not more than one 125.26 acre of land that is owned by a nonprofit corporation organized 125.27 under chapter 317A and is used exclusively by a student 125.28 cooperative, sorority, or fraternity for on-campus housing or 125.29 housing located within two miles of the border of a college 125.30 campus; 125.31 (5) manufactured home parks as defined in section 327.14, 125.32 subdivision 3; and 125.33 (6) real property that is actively and exclusively devoted 125.34 to indoor fitness, health, social, recreational, and related 125.35 uses, is owned and operated by a not-for-profit corporation, and 125.36 is located within the metropolitan area as defined in section 126.1 473.121, subdivision 2. 126.2 Class 4c property has a class rate of1.81.65 percent of 126.3 market value, except that (i)foreach parcel of seasonal 126.4 residential recreational property not used for commercial 126.5 purposesthe first $75,000 of market value has a class rate of126.61.25 percent, and the market value that exceeds $75,000 has a126.7class rate of 2.2 percenthas the same class rates as class 4bb 126.8 property, (ii) manufactured home parks assessed under clause (5) 126.9 haveathe same class rateof two percentas class 4b property, 126.10 and (iii) property described in paragraph (d), clause (4), has 126.11 the same class rate as the rate applicable to the first tier of 126.12 class 4bb nonhomestead residential real estate under paragraph 126.13 (c). 126.14 (e) Class 4d property is qualifying low-income rental 126.15 housing certified to the assessor by the housing finance agency 126.16 under sections 273.126 and 462A.071. Class 4d includes land in 126.17 proportion to the total market value of the building that is 126.18 qualifying low-income rental housing. For all properties 126.19 qualifying as class 4d, the market value determined by the 126.20 assessor must be based on the normal approach to value using 126.21 normal unrestricted rents. 126.22 Class 4d property has a class rate of one percent of market 126.23 value. 126.24(f) Class 4e property consists of the residential portion126.25of any structure located within a city that was converted from126.26nonresidential use to residential use, provided that:126.27(1) the structure had formerly been used as a warehouse;126.28(2) the structure was originally constructed prior to 1940;126.29(3) the conversion was done after December 31, 1995, but126.30before January 1, 2003; and126.31(4) the conversion involved an investment of at least126.32$25,000 per residential unit.126.33Class 4e property has a class rate of 2.3 percent, provided126.34that a structure is eligible for class 4e classification only in126.35the 12 assessment years immediately following the conversion.126.36 Sec. 20. Minnesota Statutes 1998, section 273.13, 127.1 subdivision 31, is amended to read: 127.2 Subd. 31. [CLASS 5.] Class 5 property includes: 127.3 (1)tools, implements, and machinery of an electric127.4generating, transmission, or distribution system or a pipeline127.5system transporting or distributing water, gas, crude oil, or127.6petroleum products or mains and pipes used in the distribution127.7of steam or hot or chilled water for heating or cooling127.8buildings, which are fixtures;127.9(2)unmined iron ore and low-grade iron-bearing formations 127.10 as defined in section 273.14; and 127.11(3)(2) all other property not otherwise classified. 127.12 Class 5 property has a class rate of3.53.4 percent of 127.13 market value. 127.14 Sec. 21. Minnesota Statutes 1998, section 273.1382, is 127.15 amended to read: 127.16 273.1382 [EDUCATION HOMESTEAD CREDIT; EDUCATION 127.17 AGRICULTURAL CREDIT.] 127.18 Subdivision 1. [EDUCATIONHOMESTEADCREDIT TAX RATE.] Each 127.19 year, the respective county auditors shall determine the initial 127.20 tax rate for each school district for the general education levy 127.21 certified under section 126C.13, subdivision 2 or 3. That rate 127.22 plus the school district's education homestead credit tax rate 127.23 adjustment under section 275.08, subdivision 1e, shall be the 127.24 general educationhomesteadcreditlocaltax rate for the 127.25 district.The127.26 Subd. 1a. [EDUCATION HOMESTEAD CREDIT.] Each county 127.27 auditor shallthendetermine a general education homestead 127.28 credit for each homestead within the county equal to6866.2 127.29 percent for taxes payable in 1999 and6983 percent for taxes 127.30 payable in 2000 and thereafter of thegeneraleducation 127.31homesteadcreditlocaltax rate times the net tax capacity of 127.32 the homestead for the taxes payable year. The amount of general 127.33 education homestead credit for a homestead may not exceed $320 127.34 for taxes payable in 1999 and$335$390 for taxes payable in 127.35 2000 and thereafter. In the case of an agricultural homestead, 127.36 only the net tax capacity of the house, garage, and surrounding 128.1 one acre of land shall be used in determining the property's 128.2 education homestead credit. 128.3Subd. 1a. [CREDIT PERCENTAGE REDUCTION.] If the general128.4education levy target for fiscal year 2000 or 2001 is increased128.5by another law enacted prior to the 1999 legislative session,128.6the commissioner of revenue shall adjust the percentage rates of128.7the education homestead credit for the corresponding taxes128.8payable year by multiplying the percentage rate by the ratio of128.9the prior general education levy target to the current general128.10education levy target. If an adjustment is made under this128.11section for fiscal year 2001, the adjusted rate shall remain in128.12effect for future years until amended by subsequent legislation.128.13 Subd. 1b. [EDUCATION AGRICULTURAL CREDIT.] Property 128.14 classified as class 2a agricultural homestead or class 2b 128.15 agricultural nonhomestead or timberland is eligible for 128.16 education agricultural credit. The credit is equal to 54 128.17 percent, in the case of agricultural homestead property, or 50 128.18 percent, in the case of agricultural nonhomestead property or 128.19 timberland, of the property's net tax capacity times the 128.20 education credit tax rate determined in subdivision 1. The net 128.21 tax capacity of class 2a property attributable to the house, 128.22 garage, and surrounding one acre of land is not eligible for the 128.23 credit under this subdivision. 128.24 Subd. 2. [CREDIT REIMBURSEMENTS.] (a) The commissioner of 128.25 revenue shall determine the tax reductions allowed under this 128.26 section for each taxes payable year, and for each school 128.27 district based upon a review of the abstracts of tax lists 128.28 submitted by the county auditors under section 275.29, and from 128.29 any other information which the commissioner deems relevant. 128.30 The commissioner of revenue shall generally compute the tax 128.31 reductions at the unique taxing jurisdiction level, however the 128.32 commissioner may compute the tax reductions at a higher 128.33 geographic level if that would have a negligible impact, or if 128.34 changes in the composition of unique taxing jurisdictions do not 128.35 permit computation at the unique taxing jurisdiction level. The 128.36 commissioner's determinations under this paragraph are not rules. 129.1 (b) The commissioner of revenue shall certify the total of 129.2 the tax reductions granted under this section for each taxes 129.3 payable year within each school district to the commissioner of 129.4 children, families, and learning after July 1 and on or before 129.5 August 1 of the taxes payable year. The commissioner of 129.6 children, families, and learning shall reimburse each affected 129.7 school district for the amount of the property tax reductions 129.8 allowed under this section as provided in section 273.1392. The 129.9 commissioner of children, families, and learning shall treat the 129.10 reimbursement payments as entitlements for the same state fiscal 129.11 year as certified, including with each district's initial 129.12 payment all amounts that would have been paid up to that date, 129.13 computed as if 90 percent of the annual reimbursement amount for 129.14 the district were being paid one-twelfth in each month of the 129.15 fiscal year. 129.16 Subd. 3. [APPROPRIATION.] An amount sufficient to make the 129.17 payments required by this section is annually appropriated from 129.18 the general fund to the commissioner of children, families, and 129.19 learning. 129.20 Sec. 22. Minnesota Statutes 1998, section 273.1398, 129.21 subdivision 1a, is amended to read: 129.22 Subd. 1a. [TAX BASE DIFFERENTIAL.] (a) For aids payable in 129.23 2000, the tax base differential is: 129.24 (1) 0.45 percent of the assessment year 1998 taxable market 129.25 value of class 2a agricultural homestead property, excluding the 129.26 house, garage, and surrounding one acre of land, between 129.27 $115,000 and $600,000 and over 320 acres, minus the value over 129.28 $600,000 that is less than 320 acres; plus 129.29 (2) 0.5 percent of the assessment year 1998 taxable market 129.30 value of noncommercial seasonal recreational residential 129.31 property over $75,000 in value; plus 129.32 (3) for purposes of computing the fiscal disparity 129.33 adjustment only,the tax base differential is0.2 percent of the 129.34 assessment year 1998 taxable market value of class 3 129.35 commercial-industrial property over $150,000. 129.36 (b) For the purposes of the distribution of homestead and 130.1 agricultural credit aid for aids payable in 2000, the 130.2 commissioner of revenue shall use the best information available 130.3 as of June 30, 1999, to make an estimate of the value described 130.4 in paragraph (a), clause (1). The commissioner shall adjust the 130.5 distribution of homestead and agricultural credit aid for aids 130.6 payable in 2001 and subsequent years if new information 130.7 regarding the value described in paragraph (a), clause (1), 130.8 becomes available after June 30, 1999. 130.9 Sec. 23. Minnesota Statutes 1998, section 273.1398, 130.10 subdivision 8, is amended to read: 130.11 Subd. 8. [APPROPRIATION.] (a) An amount sufficient to pay 130.12 the aids and credits provided under this section for school 130.13 districts, intermediate school districts, or any group of school 130.14 districts levying as a single taxing entity, is annually 130.15 appropriated from the general fund to the commissioner of 130.16 children, families, and learning. An amount sufficient to pay 130.17 the aids and credits provided under this section for counties, 130.18 cities, towns, and special taxing districts is annually 130.19 appropriated from the general fund to the commissioner of 130.20 revenue. A jurisdiction's aid amount may be increased or 130.21 decreased based on any prior year adjustments for homestead 130.22 credit or other property tax credit or aid programs. 130.23 (b) The commissioner of finance shall bill the commissioner 130.24 of revenue for the cost of preparation of local impact notes as 130.25 required by section 3.987 only to the extent to which those 130.26 costs exceed those costs incurred in fiscal year 1997 and for 130.27 any other new costs attributable to the local impact note 130.28 function required by section 3.987, not to exceed $100,000 in 130.29 fiscalyearyears 1998 and 1999 and $200,000 in fiscal year1999130.30 2000 and thereafter. 130.31 The commissioner of revenue shall deduct the amount billed 130.32 under this paragraph from aid payments to be made to cities and 130.33 counties under subdivision 2 on a pro rata basis. The amount 130.34 deducted under this paragraph is appropriated to the 130.35 commissioner of finance for the preparation of local impact 130.36 notes. 131.1 Sec. 24. Minnesota Statutes 1998, section 273.20, is 131.2 amended to read: 131.3 273.20 [ASSESSOR MAY ENTER DWELLINGS, BUILDINGS, OR 131.4 STRUCTURES.] 131.5 Any officer authorized by law to assess property for 131.6 taxation may, when necessary to the proper performance of 131.7 duties, enter any dwelling-house, building, or structure, and 131.8 view the same and the property therein. 131.9 Any officer authorized by law to assess property for ad 131.10 valorem tax purposes shall have reasonable access to land and 131.11 structures as necessary for the proper performance of their 131.12 duties. A property owner may refuse to allow an assessor to 131.13 inspect their property. This refusal by the property owner must 131.14 be either verbal or expressly stated in a letter to the county 131.15 assessor. If the assessor is denied access to view a property, 131.16 the assessor is authorized to estimate the property's estimated 131.17 market value by making assumptions believed appropriate 131.18 concerning the property's finish and condition. 131.19 Sec. 25. Minnesota Statutes 1998, section 274.01, 131.20 subdivision 1, is amended to read: 131.21 Subdivision 1. [ORDINARY BOARD; MEETINGS, DEADLINES, 131.22 GRIEVANCES.] (a) The town board of a town, or the council or 131.23 other governing body of a city, is the board of review except 131.24 (1) in cities whose charters provide for a board of equalization 131.25 or (2) in any city or town that has transferred its local board 131.26 of review power and duties to the county board as provided in 131.27 subdivision 3. The county assessor shall fix a day and time 131.28 when the board or the board of equalization shall meet in the 131.29 assessment districts of the county. On or before February 15 of 131.30 each year the assessor shall give written notice of the time to 131.31 the city or town clerk. Notwithstanding the provisions of any 131.32 charter to the contrary, the meetings must be held between April 131.33 1 and May 31 each year. The clerk shall give published and 131.34 posted notice of the meeting at least ten days before the date 131.35 of the meeting. 131.36 If in any county, at least 25 percent of the total net tax 132.1 capacity of a city or town is noncommercial seasonal residential 132.2 recreational property classified under section 273.13, 132.3 subdivision 25, the county must hold two countywide 132.4 informational meetings on Saturdays. The meetings will allow 132.5 noncommercial seasonal residential recreational taxpayers to 132.6 discuss their property valuation with the appropriate assessment 132.7 staff. These Saturday informational meetings must be scheduled 132.8 to allow the owner of the noncommercial seasonal residential 132.9 recreational property the opportunity to attend one of the 132.10 meetings prior to the scheduled board of review for their city 132.11 or town. The Saturday meeting dates must be contained on the 132.12 notice of valuation of real property under section 273.121. 132.13 The board shall meet at the office of the clerk to review 132.14 the assessment and classification of property in the town or 132.15 city. No changes in valuation or classification which are 132.16 intended to correct errors in judgment by the county assessor 132.17 may be made by the county assessor after the board of review has 132.18 adjourned in those cities or towns that hold a local board of 132.19 review; however, corrections of errors that are merely clerical 132.20 in nature or changes that extend homestead treatment to property 132.21 are permitted after adjournment until the tax extension date for 132.22 that assessment year. The changes must be fully documented and 132.23 maintained in the assessor's office and must be available for 132.24 review by any person. A copy of the changes made during this 132.25 period in those cities or towns that hold a local board of 132.26 review must be sent to the county board no later than December 132.27 31 of the assessment year. 132.28 (b) The board shall determine whether the taxable property 132.29 in the town or city has been properly placed on the list and 132.30 properly valued by the assessor. If real or personal property 132.31 has been omitted, the board shall place it on the list with its 132.32 market value, and correct the assessment so that each tract or 132.33 lot of real property, and each article, parcel, or class of 132.34 personal property, is entered on the assessment list at its 132.35 market value. No assessment of the property of any person may 132.36 be raised unless the person has been duly notified of the intent 133.1 of the board to do so. On application of any person feeling 133.2 aggrieved, the board shall review the assessment or 133.3 classification, or both, and correct it as appears just. The 133.4 board may not make an individual market value adjustment or 133.5 classification change that would benefit the property in cases 133.6 where the owner or other person having control over the property 133.7 will not permit the assessor to inspect the property and the 133.8 interior of any buildings or structures. 133.9 (c) A local board of review may reduce assessments upon 133.10 petition of the taxpayer but the total reductions must not 133.11 reduce the aggregate assessment made by the county assessor by 133.12 more than one percent. If the total reductions would lower the 133.13 aggregate assessments made by the county assessor by more than 133.14 one percent, none of the adjustments may be made. The assessor 133.15 shall correct any clerical errors or double assessments 133.16 discovered by the board of review without regard to the one 133.17 percent limitation. 133.18 (d) A majority of the members may act at the meeting, and 133.19 adjourn from day to day until they finish hearing the cases 133.20 presented. The assessor shall attend, with the assessment books 133.21 and papers, and take part in the proceedings, but must not 133.22 vote. The county assessor, or an assistant delegated by the 133.23 county assessor shall attend the meetings. The board shall list 133.24 separately, on a form appended to the assessment book, all 133.25 omitted property added to the list by the board and all items of 133.26 property increased or decreased, with the market value of each 133.27 item of property, added or changed by the board, placed opposite 133.28 the item. The county assessor shall enter all changes made by 133.29 the board in the assessment book. 133.30 (e) Except as provided in subdivision 3, if a person fails 133.31 to appear in person, by counsel, or by written communication 133.32 before the board after being duly notified of the board's intent 133.33 to raise the assessment of the property, or if a person feeling 133.34 aggrieved by an assessment or classification fails to apply for 133.35 a review of the assessment or classification, the person may not 133.36 appear before the county board of equalization for a review of 134.1 the assessment or classification. This paragraph does not apply 134.2 if an assessment was made after the board meeting, as provided 134.3 in section 273.01, or if the person can establish not having 134.4 received notice of market value at least five days before the 134.5 local board of review meeting. 134.6 (f) The board of review or the board of equalization must 134.7 complete its work and adjourn within 20 days from the time of 134.8 convening stated in the notice of the clerk, unless a longer 134.9 period is approved by the commissioner of revenue. No action 134.10 taken after that date is valid. All complaints about an 134.11 assessment or classification made after the meeting of the board 134.12 must be heard and determined by the county board of 134.13 equalization. A nonresident may, at any time, before the 134.14 meeting of the board of review file written objections to an 134.15 assessment or classification with the county assessor. The 134.16 objections must be presented to the board of review at its 134.17 meeting by the county assessor for its consideration. 134.18 Sec. 26. Minnesota Statutes 1998, section 276.131, is 134.19 amended to read: 134.20 276.131 [DISTRIBUTION OF PENALTIES, INTEREST, AND COSTS.] 134.21 The penalties, interest, and costs collected on special 134.22 assessments and real and personal property taxes must be 134.23 distributed as follows: 134.24 (1) all penalties and interest collected on special 134.25 assessments against real or personal property must be 134.26 distributed to the taxing jurisdiction that levied the 134.27 assessment; 134.28 (2) 50 percent of all penaltiesand interestcollected on 134.29 real and personal property taxes must be distributed to the 134.30county in which the property is locatedschool districts within 134.31 the county, and theotherremaining 50 percent must be 134.32 distributed tothe school districts withinthe county. The134.33distribution to the school district must be in accordance with134.34the provisions of section 127A.34;and134.35 (3) in the case of interest on taxes that have been 134.36 delinquent for a period of one year or less, (a) 50 percent of 135.1 the interest must be distributed to the school districts within 135.2 the county and (b) the remaining 50 percent shall be distributed 135.3 to the county; 135.4 (4) in the case of interest on taxes that have been 135.5 delinquent for a period of more than one year, (a) 50 percent of 135.6 the interest must be distributed to the school districts within 135.7 the county and (b) the remaining 50 percent must be distributed 135.8 as follows: (i) the city or town where the property is located 135.9 shall receive a share of the amount of interest equal to the 135.10 proportion that the city's or town's local tax rate for the year 135.11 that the interest was collected, is to the sum of the city's or 135.12 town's local tax rate and the county's local tax rate for the 135.13 year that the interest was collected and (ii) the balance must 135.14 be distributed to the county; and 135.15 (5) all costs collected by the county on special 135.16 assessments and on delinquent real and personal property taxes 135.17 must be distributed to the county in which the property is 135.18 located. 135.19 The distribution of all penalties and interest to the 135.20 school district must be in accordance with the provisions of 135.21 section 127A.34. 135.22 Sec. 27. Minnesota Statutes 1998, section 290A.03, 135.23 subdivision 6, is amended to read: 135.24 Subd. 6. [HOMESTEAD.] "Homestead" means the dwelling 135.25 occupied as the claimant's principal residence and so much of 135.26 the land surrounding it, not exceeding ten acres, as is 135.27 reasonably necessary for use of the dwelling as a home and any 135.28 other property used for purposes of a homestead as defined in 135.29 section 273.13, subdivision 22, except for agricultural land 135.30 assessed as part of a homestead pursuant to section 273.13, 135.31 subdivision 23, "homestead" is limited to320 acresthe first 135.32 $600,000 of market value or, where the farm homestead is rented, 135.33 one acre. The homestead may be owned or rented and may be a 135.34 part of a multidwelling or multipurpose building and the land on 135.35 which it is built. A manufactured home, as defined in section 135.36 273.125, subdivision 8, or a park trailer taxed as a 136.1 manufactured home under section 168.012, subdivision 9, assessed 136.2 as personal property may be a dwelling for purposes of this 136.3 subdivision. 136.4 Sec. 28. Minnesota Statutes 1998, section 290B.03, 136.5 subdivision 1, is amended to read: 136.6 Subdivision 1. [PROGRAM QUALIFICATIONS.] The 136.7 qualifications for the senior citizens' property tax deferral 136.8 program are as follows: 136.9 (1) the property must be owned and occupied as a homestead 136.10 by a person 65 years of age or older. In the case of a married 136.11 couple, both of the spouses must be at least 65 years old at the 136.12 time the first property tax deferral is granted, regardless of 136.13 whether the property is titled in the name of one spouse or both 136.14 spouses, or titled in another way that permits the property to 136.15 have homestead status; 136.16 (2) the total household income of the qualifying 136.17 homeowners, as defined in section 290A.03, subdivision 5, for 136.18 the calendar year preceding the year of the initial application 136.19 may not exceed$30,000$60,000; 136.20 (3) the homestead must have been owned and occupied as the 136.21 homestead of at least one of the qualifying homeowners for at 136.22 least 15 years prior to the year the initial application is 136.23 filed; 136.24 (4) there are no delinquent property taxes, penalties, or 136.25 interest on the homesteaded property; 136.26 (5) there are no delinquent special assessments on the 136.27 homesteaded property; 136.28 (6) there are no state or federal tax liens or judgment 136.29 liens on the homesteaded property; 136.30 (7) there are no mortgages or other liens on the property 136.31 that secure future advances, except for those subject to credit 136.32 limits that result in compliance with clause (8); and 136.33 (8) the total unpaid balances of debts secured by mortgages 136.34 and other liens on the property, including unpaid special 136.35 assessments, but not including property taxes payable during the 136.36 year, does not exceed 30 percent of the assessor's estimated 137.1 market value for the year. 137.2 Sec. 29. Minnesota Statutes 1998, section 290B.04, 137.3 subdivision 2, is amended to read: 137.4 Subd. 2. [APPROVAL; RECORDING.] The commissioner shall 137.5 approve all initial applications that qualify under this chapter 137.6 and shall notify qualifying homeowners on or before December 1. 137.7 The commissioner may investigate the facts or require 137.8 confirmation in regard to an application. The commissioner 137.9 shall record or file a notice of qualification for deferral, 137.10 including the names of the qualifying homeowners and a legal 137.11 description of the property, in the office of the county 137.12 recorder, or registrar of titles, whichever is applicable, in 137.13 the county where the qualifying property is located. The notice 137.14 must state that it serves as a notice of lien and that it 137.15 includes deferrals under this section for future years. The 137.16 homeowner shall pay the recording or filing fees for the notice, 137.17 which, notwithstanding section 357.18, shall be paid by the 137.18 homeowner at the time of satisfaction of the lien. 137.19 Sec. 30. Minnesota Statutes 1998, section 290B.04, 137.20 subdivision 3, is amended to read: 137.21 Subd. 3. [EXCESS-INCOME CERTIFICATION BY TAXPAYER.] A 137.22 taxpayer whose initial application has been approved under 137.23 subdivision 2 shall notify the commissioner of revenue in 137.24 writing by July 1 if the taxpayer's household income for the 137.25 preceding calendar year exceeded$30,000$60,000. The 137.26 certification must state the homeowner's total household income 137.27 for the previous calendar year. No property taxes may be 137.28 deferred under this chapter in any year following the year in 137.29 which a program participant filed or should have filed an 137.30 excess-income certification under this subdivision, unless the 137.31 participant has filed a resumption of eligibility certification 137.32 as described in subdivision 4. 137.33 Sec. 31. Minnesota Statutes 1998, section 290B.04, 137.34 subdivision 4, is amended to read: 137.35 Subd. 4. [RESUMPTION OF ELIGIBILITY CERTIFICATION BY 137.36 TAXPAYER.] A taxpayer who has previously filed an excess-income 138.1 certification under subdivision 3 may resume program 138.2 participation if the taxpayer's household income for a 138.3 subsequent year is$30,000$60,000 or less. If the taxpayer 138.4 chooses to resume program participation, the taxpayer must 138.5 notify the commissioner of revenue in writing by July 1 of the 138.6 year following a calendar year in which the taxpayer's household 138.7 income is$30,000$60,000 or less. The certification must state 138.8 the taxpayer's total household income for the previous calendar 138.9 year. Once a taxpayer resumes participation in the program 138.10 under this subdivision, participation will continue until the 138.11 taxpayer files a subsequent excess-income certification under 138.12 subdivision 3 or until participation is terminated under section 138.13 290B.08, subdivision 1. 138.14 Sec. 32. Minnesota Statutes 1998, section 290B.05, 138.15 subdivision 1, is amended to read: 138.16 Subdivision 1. [DETERMINATION BY COMMISSIONER.] The 138.17 commissioner shall determine each qualifying homeowner's "annual 138.18 maximum property tax amount" following approval of the 138.19 homeowner's initial application and following the receipt of a 138.20 resumption of eligibility certification. The "annual maximum 138.21 property tax amount" equalsfivethree percent of the 138.22 homeowner's total household income for the year preceding either 138.23 the initial application or the resumption of eligibility 138.24 certification, whichever is applicable. Following approval of 138.25 the initial application, the commissioner shall determine the 138.26 qualifying homeowner's "maximum allowable deferral." No tax may 138.27 be deferred relative to the appropriate assessment year for any 138.28 homeowner whose total household income for the previous year 138.29 exceeds$30,000$60,000. No tax shall be deferred in any year 138.30 in which the homeowner does not meet the program qualifications 138.31 in section 290B.03. The maximum allowable total deferral is 138.32 equal to 75 percent of the assessor's estimated market value for 138.33 the year, less the balance of any mortgage loans and other 138.34 amounts secured by liens against the property at the time of 138.35 application, including any unpaid special assessments but not 138.36 including property taxes payable during the year. 139.1 Sec. 33. Minnesota Statutes 1998, section 298.22, 139.2 subdivision 7, is amended to read: 139.3 Subd. 7. [GIANTS RIDGE RECREATION AREA.] (a) In addition 139.4 to the other powers granted in this section and other law, the 139.5 commissioner, for purposes of fostering economic development and 139.6 tourism within the Giants Ridge recreation area, may spend any 139.7 money made available to the agency under section 298.28 to 139.8 acquire real or personal property or interests therein by gift, 139.9 purchase, or lease and may convey by lease, sale, or other means 139.10 of conveyance or commitment any or all of those property 139.11 interests acquired. 139.12 (b)Notwithstanding any other law to the contrary, property139.13conveyed under this subdivision and used for residential139.14purposes is not eligible for property tax homestead139.15classification under section 273.124 or for a property tax139.16refund under chapter 290A.139.17(c)In furtherance of development of the Giants Ridge 139.18 recreation area, the commissioner may establish and participate 139.19 in charitable foundations and nonprofit corporations, including 139.20 a corporation within the meaning of section 317A.011, 139.21 subdivision 6. 139.22(d)(c) The term "Giants Ridge recreation area" refers to 139.23 an economic development project area established by the 139.24 commissioner in furtherance of the powers delegated in this 139.25 section within St. Louis county in the western portions of the 139.26 town of White and in the eastern portion of the westerly, 139.27 adjacent, unorganized township. 139.28 Sec. 34. Minnesota Statutes 1998, section 373.40, 139.29 subdivision 1, is amended to read: 139.30 Subdivision 1. [DEFINITIONS.] For purposes of this 139.31 section, the following terms have the meanings given. 139.32 (a) "Bonds" means an obligation as defined under section 139.33 475.51. 139.34 (b) "Capital improvement" means acquisition or betterment 139.35 of public lands, development rights in the form of conservation 139.36 easements under chapter 84C, buildings, or other improvements 140.1 within the county for the purpose of a county courthouse, 140.2 administrative building, health or social service facility, 140.3 correctional facility, jail, law enforcement center, hospital, 140.4 morgue, library, park, qualified indoor ice arena, and roads and 140.5 bridges. An improvement must have an expected useful life of 140.6 five years or more to qualify. "Capital improvement" does not 140.7 include light rail transit or any activity related to it or a 140.8 recreation or sports facility building (such as, but not limited 140.9 to, a gymnasium, ice arena, racquet sports facility, swimming 140.10 pool, exercise room or health spa), unless the building is part 140.11 of an outdoor park facility and is incidental to the primary 140.12 purpose of outdoor recreation. 140.13 (c) "Commissioner" means the commissioner of trade and 140.14 economic development. 140.15 (d) "Metropolitan county" means a county located in the 140.16 seven-county metropolitan area as defined in section 473.121 or 140.17 a county with a population of 90,000 or more. 140.18 (e) "Population" means the population established by the 140.19 most recent of the following (determined as of the date the 140.20 resolution authorizing the bonds was adopted): 140.21 (1) the federal decennial census, 140.22 (2) a special census conducted under contract by the United 140.23 States Bureau of the Census, or 140.24 (3) a population estimate made either by the metropolitan 140.25 council or by the state demographer under section 4A.02. 140.26 (f) "Qualified indoor ice arena" means a facility that 140.27 meets the requirements of section 373.43. 140.28 (g) "Tax capacity" means total taxable market value, but 140.29 does not include captured market value. 140.30 Sec. 35. Minnesota Statutes 1998, section 375.18, 140.31 subdivision 12, is amended to read: 140.32 Subd. 12. [LAND FOR PUBLIC USE.] Each county board may 140.33 acquire by gift or purchase and improve land within the county, 140.34 for use as a park, site for a building, or other public purpose, 140.35 and, when required by the public interest, sell and convey it. 140.36 The land may be paid for out of moneys in the county treasury 141.1 not otherwise appropriated, or by issuing bonds of the 141.2 county. The county board may acquire development rights in the 141.3 form of a conservation easement under chapter 84C. The holder 141.4 of the conservation easement may be determined by a governmental 141.5 body. 141.6 Sec. 36. Minnesota Statutes 1998, section 462A.071, 141.7 subdivision 2, is amended to read: 141.8 Subd. 2. [APPLICATION.] (a) In order to qualify for 141.9 certification under subdivision 1, the owner or manager of the 141.10 property must annually apply to the agency. The application 141.11 must be in the form prescribed by the agency, contain the 141.12 information required by the agency, and be submitted by the date 141.13 and time specified by the agency.Beginning in calendar year141.142000, the agency shall adopt procedures and deadlines for making141.15application to permit certification of the units qualifying to141.16the assessor by no later than April 1 of the assessment year.141.17 (b) Each application must include: 141.18 (1) the property tax identification number; 141.19 (2) the number, type, and size of units the applicant seeks 141.20 to qualify as low-income housing under class 4d; 141.21 (3) the number, type, and size of units in the property for 141.22 which the applicant is not seeking qualification, if any; 141.23 (4) a certification that the property has been inspected by 141.24 a qualified inspector within the past three years and meets the 141.25 minimum housing quality standards or is exempt from the 141.26 inspection requirement under subdivision 4; 141.27 (5) a statement indicating the qualifying units in 141.28 compliance with the income limits; 141.29 (6) an executed agreement to restrict rents meeting the 141.30 requirements specified by the agency or executed leases for the 141.31 units for which qualification as low-income housing as class 4d 141.32 under section 273.13 is sought and the rent schedule; and 141.33 (7) any additional information the agency deems appropriate 141.34 to require. 141.35 (c) The applicant must pay a per-unit application fee to be 141.36 set by the agency. The application fee charged by the agency 142.1 must approximately equal the costs of processing and reviewing 142.2 the applications. The fee must be deposited in the housing 142.3 development fund. 142.4 Sec. 37. Minnesota Statutes 1998, section 469.002, 142.5 subdivision 10, is amended to read: 142.6 Subd. 10. [FEDERAL LEGISLATION.] "Federal legislation" 142.7 includes the United States Housing Act of 1937, United States 142.8 Code, title 42, sections 1401 to 1440, as amended through 142.9 December 31,19891998; the National Housing Act, United States 142.10 Code, title 12, sections 1701 to 1750g, as amended through 142.11 December 31, 1989; and any other legislation of the Congress of 142.12 the United States relating to federal assistance for clearance 142.13 or rehabilitation of substandard or blighted areas, land 142.14 assembly, redevelopment projects, or housing. 142.15 Sec. 38. Minnesota Statutes 1998, section 469.012, 142.16 subdivision 1, is amended to read: 142.17 Subdivision 1. [SCHEDULE OF POWERS.] An authority shall be 142.18 a public body corporate and politic and shall have all the 142.19 powers necessary or convenient to carry out the purposes of 142.20 sections 469.001 to 469.047, except that the power to levy and 142.21 collect taxes or special assessments is limited to the power 142.22 provided in sections 469.027 to 469.033. Its powers include the 142.23 following powers in addition to others granted in sections 142.24 469.001 to 469.047: 142.25 (1) to sue and be sued; to have a seal, which shall be 142.26 judicially noticed, and to alter it; to have perpetual 142.27 succession; and to make, amend, and repeal rules consistent with 142.28 sections 469.001 to 469.047; 142.29 (2) to employ an executive director, technical experts, and 142.30 officers, agents, and employees, permanent and temporary, that 142.31 it requires, and determine their qualifications, duties, and 142.32 compensation; for legal services it requires, to call upon the 142.33 chief law officer of the city or to employ its own counsel and 142.34 legal staff; so far as practicable, to use the services of local 142.35 public bodies in its area of operation, provided that those 142.36 local public bodies, if requested, shall make the services 143.1 available; 143.2 (3) to delegate to one or more of its agents or employees 143.3 the powers or duties it deems proper; 143.4 (4) within its area of operation, to undertake, prepare, 143.5 carry out, and operate projects and to provide for the 143.6 construction, reconstruction, improvement, extension, 143.7 alteration, or repair of any project or part thereof; 143.8 (5) subject to the provisions of section 469.026, to give, 143.9 sell, transfer, convey, or otherwise dispose of real or personal 143.10 property or any interest therein and to execute leases, deeds, 143.11 conveyances, negotiable instruments, purchase agreements, and 143.12 other contracts or instruments, and take action that is 143.13 necessary or convenient to carry out the purposes of these 143.14 sections; 143.15 (6) within its area of operation, to acquire real or 143.16 personal property or any interest therein by gifts, grant, 143.17 purchase, exchange, lease, transfer, bequest, devise, or 143.18 otherwise, and by the exercise of the power of eminent domain, 143.19 in the manner provided by chapter 117, to acquire real property 143.20 which it may deem necessary for its purposes, after the adoption 143.21 by it of a resolution declaring that the acquisition of the real 143.22 property is necessary to eliminate one or more of the conditions 143.23 found to exist in the resolution adopted pursuant to section 143.24 469.003 or to provide decent, safe, and sanitary housing for 143.25 persons of low and moderate income, or is necessary to carry out 143.26 a redevelopment project. Real property needed or convenient for 143.27 a project may be acquired by the authority for the project by 143.28 condemnation pursuant to this section. This includes any 143.29 property devoted to a public use, whether or not held in trust, 143.30 notwithstanding that the property may have been previously 143.31 acquired by condemnation or is owned by a public utility 143.32 corporation, because the public use in conformity with the 143.33 provisions of sections 469.001 to 469.047 shall be deemed a 143.34 superior public use. Property devoted to a public use may be so 143.35 acquired only if the governing body of the municipality has 143.36 approved its acquisition by the authority. An award of 144.1 compensation shall not be increased by reason of any increase in 144.2 the value of the real property caused by the assembly, clearance 144.3 or reconstruction, or proposed assembly, clearance or 144.4 reconstruction for the purposes of sections 469.001 to 469.047 144.5 of the real property in an area; 144.6 (7) within its area of operation, and without the adoption 144.7 of an urban renewal plan, to acquire, by all means as set forth 144.8 in clause (6) but without the adoption of a resolution provided 144.9 for in clause (6), real property, and to demolish, remove, 144.10 rehabilitate, or reconstruct the buildings and improvements or 144.11 construct new buildings and improvements thereon, or to so 144.12 provide through other means as set forth in Laws 1974, chapter 144.13 228, or to grade, fill, and construct foundations or otherwise 144.14 prepare the site for improvements. The authority may dispose of 144.15 the property pursuant to section 469.029, provided that the 144.16 provisions of section 469.029 requiring conformance to an urban 144.17 renewal plan shall not apply. The authority may finance these 144.18 activities by means of the redevelopment project fund or by 144.19 means of tax increments or tax increment bonds or by the methods 144.20 of financing provided for in section 469.033 or by means of 144.21 contributions from the municipality provided for in section 144.22 469.041, clause (9), or by any combination of those means. Real 144.23 property with buildings or improvements thereon shall only be 144.24 acquired under this clause when the buildings or improvements 144.25 are substandard. The exercise of the power of eminent domain 144.26 under this clause shall be limited to real property which 144.27 contains, or has contained within the three years immediately 144.28 preceding the exercise of the power of eminent domain and is 144.29 currently vacant, buildings and improvements which are vacated 144.30 and substandard. Notwithstanding the prior sentence, in cities 144.31 of the first class the exercise of the power of eminent domain 144.32 under this clause shall be limited to real property which 144.33 contains, or has contained within the three years immediately 144.34 preceding the exercise of the power of eminent domain, buildings 144.35 and improvements which are substandard. For the purpose of this 144.36 clause, substandard buildings or improvements mean hazardous 145.1 buildings as defined in section 463.15, subdivision 3, or 145.2 buildings or improvements that are dilapidated or obsolescent, 145.3 faultily designed, lack adequate ventilation, light, or sanitary 145.4 facilities, or any combination of these or other factors that 145.5 are detrimental to the safety or health of the community; 145.6 (8) within its area of operation, to determine the level of 145.7 income constituting low or moderate family income. The 145.8 authority may establish various income levels for various family 145.9 sizes. In making its determination, the authority may consider 145.10 income levels that may be established by the Department of 145.11 Housing and Urban Development or a similar or successor federal 145.12 agency for the purpose of federal loan guarantees or subsidies 145.13 for persons of low or moderate income. The authority may use 145.14 that determination as a basis for the maximum amount of income 145.15 for admissions to housing development projects or housing 145.16 projects owned or operated by it; 145.17 (9) to provide in federally assisted projects any 145.18 relocation payments and assistance necessary to comply with the 145.19 requirements of the Federal Uniform Relocation Assistance and 145.20 Real Property Acquisition Policies Act of 1970, and any 145.21 amendments or supplements thereto; 145.22 (10) to make an agreement with the governing body or bodies 145.23 creating the authority which provides exemption from all ad 145.24 valorem real and personal property taxes levied or imposed by 145.25 the body or bodies creating the authority. In the case of 145.26 low-rent public housing that received financial assistance under 145.27 the United States Housing Act of 1937, or successor federal 145.28 legislation, an authority may make an agreement with the 145.29 governing body or bodies creating the authority to provide 145.30 exemption from all real and personal property taxes levied or 145.31 imposed by the state, city, county, or other political 145.32 subdivision, for which the authority shall make payments in lieu 145.33 of taxes to the state, city, county, or other political 145.34 subdivisions as provided in section 469.040. The governing body 145.35 shall agree on behalf of all the applicable governing bodies 145.36 affected that local cooperation as required by the federal 146.1 government shall be provided by the local governing body or 146.2 bodies in whose jurisdiction the project is to be located, at no 146.3 cost or at no greater cost than the same public services and 146.4 facilities furnished to other residents; 146.5 (11) to cooperate with or act as agent for the federal 146.6 government, the state or any state public body, or any agency or 146.7 instrumentality of the foregoing, in carrying out any of the 146.8 provisions of sections 469.001 to 469.047 or of any other 146.9 related federal, state, or local legislation; and upon the 146.10 consent of the governing body of the city to purchase, lease, 146.11 manage, or otherwise take over any housing project already owned 146.12 and operated by the federal government; 146.13 (12) to make plans for carrying out a program of voluntary 146.14 repair and rehabilitation of buildings and improvements, and 146.15 plans for the enforcement of laws, codes, and regulations 146.16 relating to the use of land and the use and occupancy of 146.17 buildings and improvements, and to the compulsory repair, 146.18 rehabilitation, demolition, or removal of buildings and 146.19 improvements. The authority may develop, test, and report 146.20 methods and techniques, and carry out demonstrations and other 146.21 activities for the prevention and elimination of slums and 146.22 blight; 146.23 (13) to borrow money or other property and accept 146.24 contributions, grants, gifts, services, or other assistance from 146.25 the federal government, the state government, state public 146.26 bodies, or from any other public or private sources; 146.27 (14) to include in any contract for financial assistance 146.28 with the federal government any conditions that the federal 146.29 government may attach to its financial aid of a project, not 146.30 inconsistent with purposes of sections 469.001 to 469.047, 146.31 including obligating itself (which obligation shall be 146.32 specifically enforceable and not constitute a mortgage, 146.33 notwithstanding any other laws) to convey to the federal 146.34 government the project to which the contract relates upon the 146.35 occurrence of a substantial default with respect to the 146.36 covenants or conditions to which the authority is subject; to 147.1 provide in the contract that, in case of such conveyance, the 147.2 federal government may complete, operate, manage, lease, convey, 147.3 or otherwise deal with the project until the defaults are cured 147.4 if the federal government agrees in the contract to reconvey to 147.5 the authority the project as then constituted when the defaults 147.6 have been cured; 147.7 (15) to issue bonds for any of its corporate purposes and 147.8 to secure the bonds by mortgages upon property held or to be 147.9 held by it or by pledge of its revenues, including grants or 147.10 contributions; 147.11 (16) to invest any funds held in reserves or sinking funds, 147.12 or any funds not required for immediate disbursement, in 147.13 property or securities in which savings banks may legally invest 147.14 funds subject to their control or in the manner and subject to 147.15 the conditions provided in section 118A.04 for the deposit and 147.16 investment of public funds; 147.17 (17) within its area of operation, to determine where 147.18 blight exists or where there is unsafe, unsanitary, or 147.19 overcrowded housing; 147.20 (18) to carry out studies of the housing and redevelopment 147.21 needs within its area of operation and of the meeting of those 147.22 needs. This includes study of data on population and family 147.23 groups and their distribution according to income groups, the 147.24 amount and quality of available housing and its distribution 147.25 according to rentals and sales prices, employment, wages, 147.26 desirable patterns for land use and community growth, and other 147.27 factors affecting the local housing and redevelopment needs and 147.28 the meeting of those needs; to make the results of those studies 147.29 and analyses available to the public and to building, housing, 147.30 and supply industries; 147.31 (19) if a local public body does not have a planning agency 147.32 or the planning agency has not produced a comprehensive or 147.33 general community development plan, to make or cause to be made 147.34 a plan to be used as a guide in the more detailed planning of 147.35 housing and redevelopment areas; 147.36 (20) to lease or rent any dwellings, accommodations, lands, 148.1 buildings, structures, or facilities included in any project 148.2 and, subject to the limitations contained in sections 469.001 to 148.3 469.047 with respect to the rental of dwellings in housing 148.4 projects, to establish and revise the rents or charges therefor; 148.5 (21) to own, hold, and improve real or personal property 148.6 and to sell, lease, exchange, transfer, assign, pledge, or 148.7 dispose of any real or personal property or any interest 148.8 therein; 148.9 (22) to insure or provide for the insurance of any real or 148.10 personal property or operations of the authority against any 148.11 risks or hazards; 148.12 (23) to procure or agree to the procurement of government 148.13 insurance or guarantees of the payment of any bonds or parts 148.14 thereof issued by an authority and to pay premiums on the 148.15 insurance; 148.16 (24) to make expenditures necessary to carry out the 148.17 purposes of sections 469.001 to 469.047; 148.18 (25) to enter into an agreement or agreements with any 148.19 state public body to provide informational service and 148.20 relocation assistance to families, individuals, business 148.21 concerns, and nonprofit organizations displaced or to be 148.22 displaced by the activities of any state public body; 148.23 (26) to compile and maintain a catalog of all vacant, open 148.24 and undeveloped land, or land which contains substandard 148.25 buildings and improvements as that term is defined in clause 148.26 (7), that is owned or controlled by the authority or by the 148.27 governing body within its area of operation and to compile and 148.28 maintain a catalog of all authority owned real property that is 148.29 in excess of the foreseeable needs of the authority, in order to 148.30 determine and recommend if the real property compiled in either 148.31 catalog is appropriate for disposal pursuant to the provisions 148.32 of section 469.029, subdivisions 9 and 10; 148.33 (27) to recommend to the city concerning the enforcement of 148.34 the applicable health, housing, building, fire prevention, and 148.35 housing maintenance code requirements as they relate to 148.36 residential dwelling structures that are being rehabilitated by 149.1 low- or moderate-income persons pursuant to section 469.029, 149.2 subdivision 9, for the period of time necessary to complete the 149.3 rehabilitation, as determined by the authority; 149.4 (28) to recommend to the city the initiation of municipal 149.5 powers, against certain real properties, relating to repair, 149.6 closing, condemnation, or demolition of unsafe, unsanitary, 149.7 hazardous, and unfit buildings, as provided in section 469.041, 149.8 clause (5); 149.9 (29) to sell, at private or public sale, at the price or 149.10 prices determined by the authority, any note, mortgage, lease, 149.11 sublease, lease purchase, or other instrument or obligation 149.12 evidencing or securing a loan made for the purpose of economic 149.13 development, job creation, redevelopment, or community 149.14 revitalization by a public agency to a business, for-profit or 149.15 nonprofit organization, or an individual; 149.16 (30) within its area of operation, to acquire and sell real 149.17 property that is benefited by federal housing assistance 149.18 payments, other rental subsidies, interest reduction payments, 149.19 or interest reduction contracts for the purpose of preserving 149.20 the affordability of low- and moderate-income multifamily 149.21 housing; 149.22 (31) to apply for, enter into contracts with the federal 149.23 government, administer, and carry out a section 8 program. 149.24 Authorization by the governing body creating the authority to 149.25 administer the program at the authority's initial application is 149.26 sufficient to authorize operation of the program in its area of 149.27 operation for which it was created without additional local 149.28 governing body approval. Approval by the governing body or 149.29 bodies creating the authority constitutes approval of a housing 149.30 program for purposes of any special or general law requiring 149.31 local approval of section 8 programs undertaken by city, county, 149.32 or multicounty authorities; and 149.33 (32) to secure a mortgage or loan for a rental housing 149.34 project by obtaining the appointment of receivers or assignments 149.35 of rents and profits under sections 559.17 and 576.01, except 149.36 that the limitation relating to the minimum amounts of the 150.1 original principal balances of mortgages specified in sections 150.2 559.17, subdivision 2, clause (2); and 576.01, subdivision 2, 150.3 does not apply. 150.4 Sec. 39. Minnesota Statutes 1998, section 475.52, 150.5 subdivision 1, is amended to read: 150.6 Subdivision 1. [STATUTORY CITIES.] Any statutory city may 150.7 issue bonds or other obligations for the acquisition or 150.8 betterment of public buildings, means of garbage disposal, 150.9 hospitals, nursing homes, homes for the aged, schools, 150.10 libraries, museums, art galleries, parks, playgrounds, stadia, 150.11 sewers, sewage disposal plants, subways, streets, sidewalks, 150.12 warning systems; for any utility or other public convenience 150.13 from which a revenue is or may be derived; for a permanent 150.14 improvement revolving fund; for changing, controlling or 150.15 bridging streams and other waterways; for the acquisition and 150.16 betterment of bridges and roads within two miles of the 150.17 corporate limits for the acquisition of development rights in 150.18 the form of conservation easements under chapter 84C; and for 150.19 acquisition of equipment for snow removal, street construction 150.20 and maintenance, or fire fighting. Without limitation by the 150.21 foregoing the city may issue bonds to provide money for any 150.22 authorized corporate purpose except current expenses. 150.23 Sec. 40. Minnesota Statutes 1998, section 475.52, 150.24 subdivision 3, is amended to read: 150.25 Subd. 3. [COUNTIES.] Any county may issue bonds for the 150.26 acquisition or betterment of courthouses, county administrative 150.27 buildings, health or social service facilities, correctional 150.28 facilities, law enforcement centers, jails, morgues, libraries, 150.29 parks, and hospitals, for roads and bridges within the county or 150.30 bordering thereon and for road equipment and machinery and for 150.31 ambulances and related equipment for the acquisition of 150.32 development rights in the form of conservation easements under 150.33 chapter 84C, and for capital equipment for the administration 150.34 and conduct of elections providing the equipment is uniform 150.35 countywide, except that the power of counties to issue bonds in 150.36 connection with a library shall not exist in Hennepin county. 151.1 Sec. 41. Minnesota Statutes 1998, section 475.52, 151.2 subdivision 4, is amended to read: 151.3 Subd. 4. [TOWNS.] Any town may issue bonds for the 151.4 acquisition and betterment of town halls, town roads and 151.5 bridges, nursing homes and homes for the aged, and for 151.6 acquisition of equipment for snow removal, road construction or 151.7 maintenance, and fire fighting for the acquisition of 151.8 development rights in the form of conservation easements under 151.9 chapter 84C and for the acquisition and betterment of any 151.10 buildings to house and maintain town equipment. 151.11 Sec. 42. Minnesota Statutes 1998, section 477A.011, 151.12 subdivision 36, is amended to read: 151.13 Subd. 36. [CITY AID BASE.] (a) Except as provided in 151.14 paragraphs (b), (c), and (d)to (k), "city aid base" means, for 151.15 each city, the sum of the local government aid and equalization 151.16 aid it was originally certified to receive in calendar year 1993 151.17 under Minnesota Statutes 1992, section 477A.013, subdivisions 3 151.18 and 5, and the amount of disparity reduction aid it received in 151.19 calendar year 1993 under Minnesota Statutes 1992, section 151.20 273.1398, subdivision 3. 151.21 (b) For aids payable in 1996 and thereafter, a city that in 151.22 1992 or 1993 transferred an amount from governmental funds to 151.23 its sewer and water fund, which amount exceeded its net levy for 151.24 taxes payable in the year in which the transfer occurred, has a 151.25 "city aid base" equal to the sum of (i) its city aid base, as 151.26 calculated under paragraph (a), and (ii) one-half of the 151.27 difference between its city aid distribution under section 151.28 477A.013, subdivision 9, for aids payable in 1995 and its city 151.29 aid base for aids payable in 1995. 151.30 (c) The city aid base for any city with a population less 151.31 than 500 is increased by $40,000 for aids payable in calendar 151.32 year 1995 and thereafter, and the maximum amount of total aid it 151.33 may receive under section 477A.013, subdivision 9, paragraph 151.34 (c), is also increased by $40,000 for aids payable in calendar 151.35 year 1995 only, provided that: 151.36 (i) the average total tax capacity rate for taxes payable 152.1 in 1995 exceeds 200 percent; 152.2 (ii) the city portion of the tax capacity rate exceeds 100 152.3 percent; and 152.4 (iii) its city aid base is less than $60 per capita. 152.5 (d) The city aid base for a city is increased by $20,000 in 152.6 1998 and thereafter and the maximum amount of total aid it may 152.7 receive under section 477A.013, subdivision 9, paragraph (c), is 152.8 also increased by $20,000 in calendar year 1998 only, provided 152.9 that: 152.10 (i) the city has a population in 1994 of 2,500 or more; 152.11 (ii) the city is located in a county, outside of the 152.12 metropolitan area, which contains a city of the first class; 152.13 (iii) the city's net tax capacity used in calculating its 152.14 1996 aid under section 477A.013 is less than $400 per capita; 152.15 and 152.16 (iv) at least four percent of the total net tax capacity, 152.17 for taxes payable in 1996, of property located in the city is 152.18 classified as railroad property. 152.19 (e) The city aid base for a city is increased by $200,000 152.20 in 1999 and thereafter and the maximum amount of total aid it 152.21 may receive under section 477A.013, subdivision 9, paragraph 152.22 (c), is also increased by $200,000 in calendar year 1999 only, 152.23 provided that: 152.24 (i) the city was incorporated as a statutory city after 152.25 December 1, 1993; 152.26 (ii) its city aid base does not exceed $5,600; and 152.27 (iii) the city had a population in 1996 of 5,000 or more. 152.28 (f) The city aid base for a city is increased by $450,000 152.29 in 1999 to 2008 and the maximum amount of total aid it may 152.30 receive under section 477A.013, subdivision 9, paragraph (c), is 152.31 also increased by $450,000 in calendar year 1999 only, provided 152.32 that: 152.33 (i) the city had a population in 1996 of at least 50,000; 152.34 (ii) its population had increased by at least 40 percent in 152.35 the ten-year period ending in 1996; and 152.36 (iii) its city's net tax capacity for aids payable in 1998 153.1 is less than $700 per capita. 153.2 (g) Beginning in 2002, the city aid base for a city is 153.3 equal to the sum of its city aid base in 2001 and the amount of 153.4 additional aid it was certified to receive under section 477A.06 153.5 in 2001. For 2002 only, the maximum amount of total aid a city 153.6 may receive under section 477A.013, subdivision 9, paragraph 153.7 (c), is also increased by the amount it was certified to receive 153.8 under section 477A.06 in 2001. 153.9 (h) The city aid base for a city is increased by $150,000 153.10 for aids payable in 2000 and thereafter, and the maximum amount 153.11 of total aid it may receive under section 477A.013, subdivision 153.12 9, paragraph (c), is also increased by $150,000 in calendar year 153.13 2000 only, provided that: 153.14 (1) the city has a population that is greater than 1,000 153.15 and less than 2,500; 153.16 (2) its commercial and industrial percentage for aids 153.17 payable in 1999 is greater than 45 percent; and 153.18 (3) the total market value of all commercial and industrial 153.19 property in the city for assessment year 1999 is at least 15 153.20 percent less than the total market value of all commercial and 153.21 industrial property in the city for assessment year 1998. 153.22 (i) The city aid base for a city is increased by $200,000 153.23 in 2000 and thereafter, and the maximum amount of total aid it 153.24 may receive under section 477A.013, subdivision 9, paragraph 153.25 (c), is also increased by $200,000 in calendar year 2000 only, 153.26 provided that: 153.27 (1) the city had a population in 1997 of 2,500 or more; 153.28 (2) the net tax capacity of the city used in calculating 153.29 its 1999 aid under section 477A.013 is less than $650 per 153.30 capita; 153.31 (3) the pre-1940 housing percentage of the city used in 153.32 calculating 1999 aid under section 477A.013 is greater than 12 153.33 percent; 153.34 (4) the 1999 local government aid of the city under section 153.35 477A.013 is less than 20 percent of the amount that the formula 153.36 aid of the city would have been if the need increase percentage 154.1 was 100 percent; and 154.2 (5) the city aid base of the city used in calculating aid 154.3 under section 477A.013 is less than $7 per capita. 154.4 (j) The city aid base for a city is increased by $225,000 154.5 in calendar years 2000 to 2002 and the maximum amount of total 154.6 aid it may receive under section 477A.013, subdivision 9, 154.7 paragraph (c), is also increased by $225,000 in calendar year 154.8 2000 only, provided that: 154.9 (1) the city had a population of at least 5,000; 154.10 (2) its population had increased by at least 50 percent in 154.11 the ten-year period ending in 1997; 154.12 (3) the city is located outside of the Minneapolis-St. Paul 154.13 metropolitan statistical area as defined by the United States 154.14 Bureau of the Census; and 154.15 (4) the city received less than $30 per capita in aid under 154.16 section 477A.013, subdivision 9, for aids payable in 1999. 154.17 (k) The city aid base for a city is increased by $102,000 154.18 in 2000 and thereafter, and the maximum amount of total aid it 154.19 may receive under section 477A.013, subdivision 9, paragraph 154.20 (c), is also increased by $102,000 in calendar year 2000 only, 154.21 provided that: 154.22 (1) the city has a population in 1997 of 2,000 or more; 154.23 (2) the net tax capacity of the city used in calculating 154.24 its 1999 aid under section 477A.013 is less than $455 per 154.25 capita; 154.26 (3) the net levy of the city used in calculating 1999 aid 154.27 under section 477A.013 is greater than $195 per capita; and 154.28 (4) the 1999 local government aid of the city under section 154.29 477A.013 is less than 38 percent of the amount that the formula 154.30 aid of the city would have been if the need increase percentage 154.31 was 100 percent. 154.32 Sec. 43. Minnesota Statutes 1998, section 477A.06, 154.33 subdivision 1, is amended to read: 154.34 Subdivision 1. [ELIGIBILITY.] (a) For assessment years 154.35 1998, 1999, and 2000, for all class 4d property on which 154.36 construction was begun before January 1, 1999, the assessor 155.1 shall determine the difference between the actual net tax 155.2 capacity and the net tax capacity that would be determined for 155.3 the property if the class rates for assessment year 1997 were in 155.4 effect. 155.5 (b) In calendar years 1999, 2000, and 2001, each city shall 155.6 be eligible for aid equal to (i) the amount by which the sum of 155.7 the differences determined in clause (a) for the corresponding 155.8 assessment year exceeds2.5two percent of the city's total 155.9 taxable net tax capacity for taxes payable in 1998, multiplied 155.10 by (ii) the city government's average local tax rate for taxes 155.11 payable in 1998. 155.12 Sec. 44. Laws 1997, chapter 231, article 2, section 68, 155.13 subdivision 3, as amended by Laws 1998, chapter 389, article 3, 155.14 section 36, is amended to read: 155.15 Subd. 3. [MORATORIUM ON CHANGES INELDERLY ASSISTED LIVING 155.16 FACILITIES; ASSESSMENTPRACTICES.] (a) An assessor may not 155.17 change the current practices or policies used generally in 155.18 assessing elderly assisted living facilities. 155.19 (b) An assessor may not change the 1999 assessment of an 155.20 existing elderly assisted living facility, unless the change is 155.21 made as a result of a change in ownership, occupancy, or use of 155.22 the facility. This paragraph does not apply to: 155.23 (1) a facility that was constructed during calendar year 155.24 1997, 1998, or 1999; 155.25 (2) a facility that was converted to an elderly assisted 155.26 living facility during calendar year 1997, 1998, or 1999; or 155.27 (3) a change in market value. 155.28 (c) This subdivision expiresand no longer applies on the155.29earlier of:155.30(1) the enactment of legislation establishing criteria for155.31the property taxation of elderly assisted living facilities; or155.32(2) final adjournment of the 1999 regular legislative155.33sessionDecember 31, 1999. 155.34 Sec. 45. Laws 1997, First Special Session chapter 3, 155.35 section 27, is amended to read: 155.36 Sec. 27. [TAXPAYER'S PERSONAL INFORMATION; DISCLOSURE.] 156.1 (a) An owner of property in Washington or Ramsey county 156.2 that is subject to property taxation must be informed in a clear 156.3 and conspicuous manner in writing on a form sent to property 156.4 taxpayers that the property owner's name, address, and other 156.5 information may be used, rented, or sold for business purposes, 156.6 including surveys, marketing, and solicitation. 156.7 (b) If the property owner so requests on the form provided, 156.8 then any such list generated by the county and sold for business 156.9 purposes must exclude the owner's name and address if the 156.10 business purpose is conducting surveys, marketing, or 156.11 solicitation. 156.12 (c) This section expires August 1,19992001. 156.13 Sec. 46. [ABATEMENT OF TAXES.] 156.14 Subdivision 1. [PROPERTY DEFINED.] As used in this section 156.15 and section 47, "property" means property located in Lake county 156.16 that meets the following description: 156.17 All that part of Government Lot Two (2) of Section One (1) 156.18 in Township Fifty-two (52) North, Range Eleven (11) West of the 156.19 Fourth Principal Meridian, lying within the following described 156.20 lines: 156.21 Commencing at a point on the North-South quarter line of 156.22 said Section 1 which is 20 feet south of the center of said 156.23 Section 1 measured along said North-South quarter line; 156.24 thence easterly at a right angle to said North-South 156.25 quarter line a distance of 5 feet to the point of Beginning; 156.26 thence continuing in an easterly direction at a right angle 156.27 to said North-South quarter line a distance of 335 feet; 156.28 thence southerly at a right angle to the last described 156.29 line a distance of 80 feet; 156.30 thence easterly at a right angle to the last described line 156.31 a distance of 210 feet; 156.32 thence southerly at a right angle to the last described 156.33 line a distance of 255 feet; 156.34 thence southeasterly at an angle of 102 degrees to the last 156.35 described line to the ordinary low-water mark of Agate Bay; 156.36 thence easterly along said ordinary low-water mark to the 157.1 East boundary line of said Government Lot 2; 157.2 thence in a northerly direction along said East boundary 157.3 line to a point on said East boundary line which is 75 feet 157.4 distant in a northerly direction from the East-West quarter line 157.5 of said Section 1, extended, as measured along said East 157.6 boundary line; 157.7 thence in a northwesterly direction to a point which is 190 157.8 feet easterly measured at a right angle to the North-South 157.9 quarter line of said Section 1 from a point on the North-South 157.10 quarter line, which point is 725 feet northerly of the center of 157.11 said Section 1 when measured along said North-South quarter 157.12 line; 157.13 thence in a westerly direction at a right angle to said 157.14 North-South quarter line a distance of 185 feet; 157.15 thence southerly along a line parallel to and 5 feet 157.16 distant easterly from said North-South quarter line a distance 157.17 of 230 feet; 157.18 thence easterly at a right angle to the last described line 157.19 a distance of 130 feet; 157.20 thence southerly at a right angle to the last described 157.21 line a distance of 119.27 feet; 157.22 thence westerly at a right angle to the last described line 157.23 a distance of 130 feet; 157.24 thence southerly along a line parallel to and 5 feet 157.25 distant easterly from said North-South quarter line a distance 157.26 of 395.73 feet to the point of beginning. 157.27 Subd. 2. [AUTHORIZATION.] Upon a majority vote of its 157.28 members, the governing bodies of each of Lake county, the city 157.29 of Two Harbors, and Lake Superior independent school district 157.30 No. 381, may abate the taxes levied on the property described in 157.31 subdivision 1 in 1979 to 1990, payable in 1980 to 1991, as well 157.32 as any interest and penalties due on those taxes. 157.33 Sec. 47. [RECORDING OF CONVEYANCE AUTHORIZED.] 157.34 Notwithstanding Minnesota Statutes, section 272.12, or any 157.35 other law to the contrary, if the governing bodies of Lake 157.36 county, the city of Two Harbors, and Lake Superior independent 158.1 school district No. 381 have all abated the taxes, interest, and 158.2 penalties as provided in section 46, subdivision 2, the county 158.3 auditor may record the conveyance of the property described in 158.4 section 46, subdivision 1. 158.5 Sec. 48. [LOCAL PERFORMANCE AID RECIPIENTS; OTHER AID 158.6 INCREASES.] 158.7 (a) If a county received local performance aid under 158.8 Minnesota Statutes, section 477A.05, in calendar year 1999, the 158.9 amount of homestead and agricultural credit aid determined and 158.10 payable to the county under Minnesota Statutes, section 158.11 273.1398, in 2000 and subsequent years is increased by the 158.12 amount of performance aid it received in 1999. 158.13 (b) If a city received local performance aid under 158.14 Minnesota Statutes, section 477A.05, in calendar year 1999, the 158.15 city aid base of the city under Minnesota Statutes, section 158.16 477A.011, subdivision 36, is increased for aid payable in 2000 158.17 and subsequent years by the amount of performance aid it 158.18 received in 1999, and the maximum amount of total aid it may 158.19 receive under Minnesota Statutes, section 477A.013, subdivision 158.20 9, paragraph (c), is also increased by that amount in calendar 158.21 year 2000 only. 158.22 (c) For purposes of determining the limitation on aid 158.23 increases under Minnesota Statutes, section 477A.013, 158.24 subdivision 9, paragraph (b), for aid payable in 2000, the sum 158.25 of the aid to all cities in 2000 does not include the aid 158.26 increase under paragraph (a) of this section. 158.27 Sec. 49. [RECOMMENDATIONS ON UTILITY TAX POLICY.] 158.28 The commissioner of revenue, upon consultation with the 158.29 commissioner of public service and other appropriate state 158.30 agencies, shall convene meetings of representatives from 158.31 utilities which pay personal property taxes on generation 158.32 facilities and local governments in which those facilities are 158.33 sited. These meetings shall assess policy issues related to the 158.34 taxation of Minnesota utility generation facilities in a 158.35 changing energy market, including: 158.36 (1) the effects of future restructuring of the electric 159.1 industry; 159.2 (2) impacts on revenue to local governments and debt 159.3 issuance; 159.4 (3) evolution of utility tax policy in Minnesota and other 159.5 states; 159.6 (4) sufficiency of Minnesota's future electric power 159.7 supply; and 159.8 (5) any other relevant issues, including environmental, 159.9 labor, and consumer issues. 159.10 The meetings shall be open to any interested parties. The 159.11 commissioner shall examine utility tax policy issues and make 159.12 recommendations, as warranted, on the future of the personal 159.13 property tax on generation facilities and the replacement of 159.14 revenues that would be lost to local units of government as a 159.15 result of a partial or full exemption of these personal property 159.16 taxes. 159.17 The commissioner shall report on the progress of these 159.18 meetings, including options being considered and a plan for 159.19 completing the report, to the chairs of the senate committees on 159.20 taxes and jobs, energy and community development, the house 159.21 committees on taxes and commerce, and the governor, by January 159.22 15, 2000, with a final report to those same officials by 159.23 December 1, 2000. 159.24 Sec. 50. [383D.74] [DAKOTA COUNTY; ADMINISTRATIVE 159.25 PENALTIES.] 159.26 Subdivision 1. [PENALTIES.] The Dakota county board may 159.27 impose an administrative penalty for violation of an ordinance 159.28 enacted under chapter 103F. No penalty may be imposed unless 159.29 the owner has received notice, served personally or by mail, of 159.30 the alleged violation and an opportunity for a hearing before a 159.31 person authorized by the county board to conduct the hearing. A 159.32 decision that a violation occurred must be in writing. The 159.33 amount of the penalty with interest may not exceed the amount 159.34 allowed for a single misdemeanor violation. A person aggrieved 159.35 by a decision under this section may have the decision reviewed 159.36 in the district court. If a penalty imposed under this section 160.1 is unpaid for more than 60 days after the date when payment is 160.2 due, the county board may certify the penalty to the county 160.3 auditor for collection to the same extent and in the same manner 160.4 provided by law for the assessment and collection of real estate 160.5 taxes. 160.6 Subd. 2. [EXPIRATION.] The authority to impose a penalty 160.7 under this section expires on December 31, 2000. 160.8 Sec. 51. [LEGISLATIVE INTENT.] 160.9 It is the intent of the legislature that one-half of the 160.10 actual property tax savings to the taxpayer as a result of the 160.11 class rate reduction under section 19, for manufactured home 160.12 parks, for taxes payable in 2000 to 2004, be reinvested by the 160.13 taxpayer in capital improvements of the manufactured home park 160.14 or used for direct assistance to homeowners for home 160.15 improvements. 160.16 Sec. 52. [2000 CHARITY CARE AID.] 160.17 Subdivision 1. [PURPOSE.] The purpose of charity care aid 160.18 is to prevent or reduce the reliance on county property taxes to 160.19 meet the cost of providing medical care to individuals who are 160.20 indigent and who do not reside in the county. 160.21 Subd. 2. [QUALIFICATION.] A county qualifies for payment 160.22 under this section in 2000 only if it contains a hospital that 160.23 has a medical assistance disproportionate population adjustment 160.24 as determined under section 256.969, subdivision 9, greater than 160.25 16 percent. 160.26 Subd. 3. [REPORTS BY HOSPITALS AND COUNTIES.] (a) By June 160.27 1, 1999, a hospital described in subdivision 2 must file a 160.28 report with the county in which it is located setting forth its 160.29 audited financial statements and a schedule setting forth the 160.30 aggregate amount of charity care for calendar year 1998 that 160.31 meets the following criteria: 160.32 (1) the patient is from a county other than the county in 160.33 which the hospital is located; and 160.34 (2) the hospital has made a preliminary determination that: 160.35 (i) the patient is not eligible for any public health care 160.36 program or it cannot be determined whether the person is 161.1 eligible for any public health care program; and 161.2 (ii) the person is uninsured or it cannot be determined if 161.3 the person is uninsured or the person has insufficient resources 161.4 to pay the cost of services delivered by the hospital. 161.5 (b) By July 1, 1999, each county must report to the 161.6 commissioner of revenue the total amount of charity care 161.7 reported to it by hospitals under this subdivision. 161.8 Subd. 4. [AMOUNT OF AID.] (a) Subject to the limitation in 161.9 paragraph (b), payment to a county under this section is equal 161.10 to the aggregate amount of charity care, as reported under 161.11 subdivision 3, for calendar year 1998. 161.12 (b) The total of all payments under this section may not 161.13 exceed $10,000,000. If the amounts reported under subdivision 3 161.14 for all counties exceeds $10,000,000, the distributions to each 161.15 county must be allocated in proportion to the total amount of 161.16 uncompensated care reported to the commissioner by the county so 161.17 that the total of the payments does not exceed $10,000,000. 161.18 Subd. 5. [PAYMENT DATES.] The aid amounts must be paid as 161.19 provided in section 477A.015. 161.20 Subd. 6. [USE OF FUNDS.] Each county that receives a 161.21 payment under this section must remit all charity care aid funds 161.22 to hospitals described in subdivision 2 that apply to the county 161.23 for reimbursement. If the aid a county receives is less than 161.24 the total amount of uncompensated care reported by eligible 161.25 hospitals in the county, the aid amounts remitted to the 161.26 hospitals must be proportional to the amounts reported. 161.27 Subd. 7. [REPORT TO THE COMMISSIONER.] By March 15, 2001, 161.28 each county that receives the aid must file a report with the 161.29 commissioner of revenue describing how charity care aids were 161.30 spent, and verifying that they were paid to hospitals described 161.31 in subdivision 2 for charity care purposes for individuals who 161.32 do not reside in the county. 161.33 Subd. 8. [NOTICE TO COUNTIES.] The commissioner of revenue 161.34 shall annually notify the governing body of each county, 161.35 providing information, to the extent available to the 161.36 commissioner, regarding the amount of reimbursements paid under 162.1 this section attributable to care provided to residents of that 162.2 county. 162.3 Subd. 9. [HENNEPIN COUNTY LEVY LIMIT ADJUSTMENT.] For 162.4 taxes levied in 1999 only, the levy limit for Hennepin county 162.5 under Minnesota Statutes, section 275.71, subdivision 4, is 162.6 reduced by an amount equal to the amount of charity aid 162.7 allocated to the Hennepin county medical center. 162.8 Subd. 10. [APPROPRIATION.] The amount sufficient to make 162.9 the payments under this section is appropriated from the general 162.10 fund to the commissioner of revenue. 162.11 Sec. 53. [PROPERTY TAX ABATEMENT; PROPERTY DAMAGED BY 162.12 TORNADO.] 162.13 Subdivision 1. [ABATEMENT AMOUNT.] The county auditor 162.14 shall grant an abatement for taxes payable in 1999 to any 162.15 property in a qualifying county, as defined in Laws 1998, 162.16 chapter 383, section 20, that contains a structure that has been 162.17 determined by the assessor to have lost over 50 percent of its 162.18 estimated market value due to wind damage sustained on March 29, 162.19 1998, excluding residential homestead property and the portion 162.20 of agricultural homestead property consisting of the house, 162.21 garage, and surrounding one acre of land. The abatement is 162.22 equal to 75 percent of the amount by which the net tax capacity 162.23 of the structure was reduced by the wind damage, multiplied by 162.24 the payable 1999 total local net tax capacity tax rate, plus 75 162.25 percent of the amount by which the referendum market value of 162.26 the structure was reduced by the wind damage, multiplied by the 162.27 payable 1999 total market value tax rate. If the amount of the 162.28 abatement exceeds the remaining tax due on the property for 162.29 taxes payable in 1999, a refund shall be issued to the taxpayer 162.30 by the county treasurer by June 30, 1999. 162.31 Subd. 2. [CERTIFICATION.] The amount of abatements granted 162.32 under this section shall be reported to the commissioner of 162.33 revenue by the county auditor by June 30, 1999, in a form 162.34 prescribed by the commissioner. The commissioner may require 162.35 the county to provide other information necessary to verify the 162.36 accuracy of the abatement amounts submitted. 163.1 Subd. 3. [PAYMENT.] The commissioner shall make payments 163.2 equal to the amount of abatements granted to each county by 163.3 August 30, 1999. The county treasurer shall distribute the 163.4 payments to the affected taxing jurisdictions equal to the 163.5 amount of the tax that was abated as part of the October 1999 163.6 regular settlement as provided in Minnesota Statutes, section 163.7 276.111. 163.8 Subd. 4. [APPROPRIATION.] The amount necessary to fund the 163.9 payments required under this section is appropriated from the 163.10 general fund to the commissioner of revenue in fiscal year 2000. 163.11 Sec. 54. [REPEALER.] 163.12 (a) Minnesota Statutes 1998, section 273.11, subdivision 163.13 10, is repealed. 163.14 (b) Minnesota Statutes 1998, section 477A.05, is repealed. 163.15 (c) Laws 1998, chapter 389, article 3, section 45, is 163.16 repealed. 163.17 Sec. 55. [EFFECTIVE DATES.] 163.18 Sections 1 and 2 are effective for petitions filed on or 163.19 after the day following final enactment. 163.20 Sections 3, 4, 5, 9, paragraph (c), 10, 11, 15, 16, 17, 163.21 paragraphs (a) and (b), 19, 20, 21, 22, 25, and 33 are effective 163.22 for taxes levied in 1999, payable in 2000, and thereafter. 163.23 Section 6 is effective for assessment years 1999 through 163.24 2001. 163.25 Section 7 is effective for improvements made on or after 163.26 July 1, 1999. 163.27 Section 8 is effective retroactively for property taxes 163.28 payable in 1998 and thereafter. 163.29 Section 9, paragraph (h), is effective for taxes payable in 163.30 1999 and subsequent years. 163.31 Section 13 is effective beginning with the 1999 assessment, 163.32 taxes payable in 2000 and thereafter. For eligibility for the 163.33 1999 assessment year under section 13, paragraph (b), the owner 163.34 or the person who is actively farming the property must notify 163.35 the county assessor by July 1, 1999, and furnish to the assessor 163.36 the information required by the assessor to determine whether 164.1 the qualifying criteria has been met for the 1999 assessment on 164.2 the agricultural property. 164.3 Sections 12, 14, 24, 29, 36 to 38, 44, and 53 are effective 164.4 the day following final enactment. 164.5 Sections 17, paragraph (c), 18, and 54, paragraph (c), are 164.6 effective for taxes levied in 2000, payable in 2001 and 164.7 thereafter. 164.8 Section 20, paragraph (f), is effective for the 2000 164.9 assessment and thereafter, for taxes payable in 2001 and 164.10 thereafter, except that for taxes payable in 2001, the date for 164.11 filing an application with the county assessor under section 20, 164.12 paragraph (f), clause (3), is September 1, 1999. 164.13 Section 26 is effective for penalties and interest on 164.14 property taxes collected after June 30, 1999. 164.15 Section 27 is effective for property tax refunds for claims 164.16 for property taxes payable filed in 2000 and thereafter for 164.17 taxes payable in 2000 and thereafter. 164.18 Sections 22, 48, and 54, paragraph (b), are effective for 164.19 aids payable in 2000 and thereafter. 164.20 Sections 28 and 30 to 32 are effective for deferrals of 164.21 property taxes payable in 2000 and thereafter. The changes in 164.22 the annual tax amount percentage and the maximum annual 164.23 household income in sections 28 and 30 to 32 apply to all 164.24 homeowners and all property taxes deferred beginning in payable 164.25 2000, including those homeowners who initially qualified under 164.26 this program for taxes payable in 1999. 164.27 Section 45 applies to Washington county only and is 164.28 effective the day after the chief clerical officer of Washington 164.29 county files a certificate of approval that complies with 164.30 Minnesota Statutes, section 645.021, subdivision 3. 164.31 Sections 46 and 47 are effective the day following final 164.32 enactment, upon approval by and compliance with Minnesota 164.33 Statutes, section 645.021, subdivision 3, by the governing 164.34 bodies of Lake county, the city of Two Harbors, and Lake 164.35 Superior independent school district No. 381. 164.36 ARTICLE 6 165.1 LEVY AUTHORIZATION AND LEVY LIMITS 165.2 Section 1. Minnesota Statutes 1998, section 204B.135, is 165.3 amended by adding a subdivision to read: 165.4 Subd. 5. [REDISTRICTING EXPENSES.] The county board may 165.5 levy a tax not to exceed $1 per capita in the year ending in "0" 165.6 to pay costs incurred in the year ending in "1" or "2" that are 165.7 reasonably related to the redistricting of election districts, 165.8 establishment of precinct boundaries, designation of polling 165.9 places, and the updating of voter records in the statewide 165.10 registration system. The county auditor shall distribute to 165.11 each municipality in the county on a per capita basis 25 percent 165.12 of the amount levied as provided in this subdivision, based on 165.13 the population of the municipality in the most recent census. 165.14 This levy is not subject to statutory levy limits. 165.15 Sec. 2. [275.078] [AUTHORIZATION; TAX RATE INCREASE.] 165.16 On or before October 1, 1999, and each subsequent year, the 165.17 county auditor shall certify to the governing body of each home 165.18 rule charter or statutory city in the county and to the county 165.19 board, the following information for the taxing jurisdiction: 165.20 (1) the taxing jurisdiction's certified levy under section 165.21 275.08 for the previous year, taxes payable in the current year, 165.22 excluding any amount levied to pay general obligation bonds, 165.23 less (i) the areawide portion of the levy under section 276A.06, 165.24 subdivision 3, or 473F.08, subdivision 3, if any, for taxes 165.25 payable in the following year; and (ii) the sum of the net tax 165.26 capacity adjustment amount and the fiscal disparities adjustment 165.27 amount under section 273.1398, subdivision 2, if any, for aids 165.28 payable in the following year; 165.29 (2) the taxing jurisdiction's taxable net tax capacity for 165.30 the current assessment year, for taxes payable in the following 165.31 year; and 165.32 (3) the tax rate obtained by dividing the amount in clause 165.33 (1) by the amount in clause (2), rounded to the nearest 165.34 hundredth percent. 165.35 In order to impose a tax rate for purposes other than to 165.36 pay general obligation bonds for taxes payable in the following 166.1 year that is higher than the tax rate certified by the county 166.2 auditor under clause (3), the governing body of the city or the 166.3 county board must adopt a resolution, after holding a public 166.4 hearing, authorizing a higher tax rate and file a copy of the 166.5 resolution with the county auditor on or before October 20, 166.6 1999, and each year thereafter. A county auditor is prohibited 166.7 from fixing a tax rate for purposes other than to pay general 166.8 obligation bonds for taxes payable in the following year that is 166.9 higher than the rate certified under clause (3) if a resolution 166.10 has not been filed, unless the higher rate is due solely to a 166.11 reduction in the taxing jurisdiction's net tax capacity 166.12 certified under clause (2) resulting from classification 166.13 changes, exemptions, tax court judgments, or clerical or 166.14 administrative errors made by the county. For purposes of this 166.15 section, "public hearing" includes, but is not limited to, 166.16 regularly scheduled city council hearings and county board 166.17 meetings. 166.18 Sec. 3. Minnesota Statutes 1998, section 275.70, 166.19 subdivision 5, is amended to read: 166.20 Subd. 5. [SPECIAL LEVIES.] "Special levies" means those 166.21 portions of ad valorem taxes levied by a local governmental unit 166.22 for the following purposes or in the following manner: 166.23 (1) to pay the costs of the principal and interest on 166.24 bonded indebtedness or to reimburse for the amount of liquor 166.25 store revenues used to pay the principal and interest due on 166.26 municipal liquor store bonds in the year preceding the year for 166.27 which the levy limit is calculated; 166.28 (2) to pay the costs of principal and interest on 166.29 certificates of indebtedness issued for any corporate purpose 166.30 except for the following: 166.31 (i) tax anticipation or aid anticipation certificates of 166.32 indebtedness; 166.33 (ii) certificates of indebtedness issued under sections 166.34 298.28 and 298.282; 166.35 (iii) certificates of indebtedness used to fund current 166.36 expenses or to pay the costs of extraordinary expenditures that 167.1 result from a public emergency; or 167.2 (iv) certificates of indebtedness used to fund an 167.3 insufficiency in tax receipts or an insufficiency in other 167.4 revenue sources; 167.5 (3) to provide for the bonded indebtedness portion of 167.6 payments made to another political subdivision of the state of 167.7 Minnesota; 167.8 (4) to fund payments made to the Minnesota state armory 167.9 building commission under section 193.145, subdivision 2, to 167.10 retire the principal and interest on armory construction bonds; 167.11 (5) for unreimbursed expenses related to flooding that 167.12 occurred during the first half of calendar year 1997, as allowed 167.13 by the commissioner of revenue under section 275.74, paragraph 167.14 (b); 167.15 (6) for local units of government located in an area 167.16 designated by the Federal Emergency Management Agency pursuant 167.17 to a major disaster declaration issued for Minnesota by 167.18 President Clinton after April 1, 1997, and before June 11, 1997, 167.19 for the amount of tax dollars lost due to abatements authorized 167.20 under section 273.123, subdivision 7, and Laws 1997, chapter 167.21 231, article 2, section 64, to the extent that they are related 167.22 to the major disaster and to the extent that neither the state 167.23 or federal government reimburses the local government for the 167.24 amount lost; 167.25 (7) property taxes approved by voters which are levied 167.26 against the referendum market value as provided under section 167.27 275.61; 167.28 (8) to fund matching requirements needed to qualify for 167.29 federal or state grants or programs to the extent that either 167.30 (i) the matching requirement exceeds the matching requirement in 167.31 calendar year 1997, or (ii) it is a new matching requirement 167.32 that didn't exist prior to 1998; 167.33 (9) to pay the expenses reasonably and necessarily incurred 167.34 in preparing for or repairing the effects of natural disaster 167.35 including the occurrence or threat of widespread or severe 167.36 damage, injury, or loss of life or property resulting from 168.1 natural causes, in accordance with standards formulated by the 168.2 emergency services division of the state department of public 168.3 safety, as allowed by the commissioner of revenue under section 168.4 275.74, paragraph (b); 168.5 (10) for the amount of tax revenue lost due to abatements 168.6 authorized under section 273.123, subdivision 7, for damage 168.7 related to the tornadoes of March 29, 1998, to the extent that 168.8 neither the state or federal government provides reimbursement 168.9 for the amount lost; 168.10 (11) pay amounts required to correct an error in the levy 168.11 certified to the county auditor by a city or county in a levy 168.12 year, but only to the extent that when added to the preceding 168.13 year's levy it is not in excess of an applicable statutory, 168.14 special law or charter limitation, or the limitation imposed on 168.15 the governmental subdivision by sections 275.70 to 275.74 in the 168.16 preceding levy year;and168.17 (12) to pay an abatement under section 469.1815.; and 168.18 (13) to pay the operating or maintenance costs of a county 168.19 jail as authorized in section 641.01 or 641.262, or of a 168.20 correctional facility as defined in section 241.021, subdivision 168.21 1, paragraph (5), to the extent that the county can demonstrate 168.22 to the commissioner of revenue that the amount has been included 168.23 in the county budget as a direct result of a rule, minimum 168.24 requirement, minimum standard, or directive of the department of 168.25 corrections. If the county utilizes this special levy, any 168.26 amount levied by the county in the previous levy year for the 168.27 purposes specified under this clause and included in the 168.28 county's previous year's levy limitation computed under section 168.29 275.71, shall be deducted from the levy limit base under section 168.30 275.71, subdivision 2, when determining the county's current 168.31 year levy limitation. The county shall provide the necessary 168.32 information to the commissioner of revenue for making this 168.33 determination. 168.34 Sec. 4. Minnesota Statutes 1998, section 275.71, 168.35 subdivision 2, is amended to read: 168.36 Subd. 2. [LEVY LIMIT BASE.] (a) The levy limit base for a 169.1 local governmental unit for taxes levied in 1997 shall be equal 169.2 to the sum of: 169.3 (1) the amount the local governmental unit levied in 1996, 169.4 less any amount levied for debt, as reported to the department 169.5 of revenue under section 275.62, subdivision 1, clause (1), and 169.6 less any tax levied in 1996 against market value as provided for 169.7 in section 275.61; 169.8 (2) the amount of aids the local governmental unit was 169.9 certified to receive in calendar year 1997 under sections 169.10 477A.011 to 477A.03 before any reductions for state tax 169.11 increment financing aid under section 273.1399, subdivision 5; 169.12 (3) the amount of homestead and agricultural credit aid the 169.13 local governmental unit was certified to receive under section 169.14 273.1398 in calendar year 1997 before any reductions for tax 169.15 increment financing aid under section 273.1399, subdivision 5; 169.16 (4) the amount of local performance aid the local 169.17 governmental unit was certified to receive in calendar year 1997 169.18 under section 477A.05; and 169.19 (5) the amount of any payments certified to the local 169.20 government unit in 1997 under sections 298.28 and 298.282. 169.21 If a governmental unit was not required to report under 169.22 section 275.62 for taxes levied in 1997, the commissioner shall 169.23 request information on levies used for debt from the local 169.24 governmental unit and adjust its levy limit base accordingly. 169.25 (b) The levy limit base for a local governmental unit for 169.26 taxes levied in 1998 is equal to its adjusted levy limit base in 169.27 the previous year, subject to any adjustments under section 169.28 275.72 and multiplied by the increase that would have occurred 169.29 under subdivision 3, clause (3), if that clause had been in 169.30 effect for taxes levied in 1997. 169.31 (c) The levy limit base for a city with a population 169.32 greater than 2,500 for taxes levied in 1999 is limited to its 169.33 adjusted levy limit base in the previous year, subject to 169.34 adjustments under section 275.72. 169.35 (d) The levy limit base for a county for taxes levied in 169.36 1999 is limited to the difference between (1) its adjusted levy 170.1 limit base in the previous year subject to adjustments under 170.2 section 275.72, and (2) one-half of the county's share of the 170.3 net cost to the state for assumption of district court costs, as 170.4 reported by the supreme court to the commissioner of revenue 170.5 under section 273.1398, subdivision 4a, paragraph (a). 170.6 Sec. 5. Minnesota Statutes 1998, section 275.71, 170.7 subdivision 3, is amended to read: 170.8 Subd. 3. [ADJUSTED LEVY LIMIT BASE.] For taxes levied in 170.9 1998 and 1999, the adjusted levy limit is equal to the levy 170.10 limit base computed under subdivision 2 or section 275.72, 170.11 multiplied by: 170.12 (1) one plus a percentage equal to the percentage growth in 170.13 the implicit price deflator; and 170.14 (2) for all cities and for counties outside of the 170.15 seven-county metropolitan area, one plus a percentage equal to 170.16 the percentage increase in number of households, if any, for the 170.17 most recent 12-month period for which data is available; and for 170.18 counties located in the seven-county metropolitan area, one plus 170.19 a percentage equal to the greater of the percentage increase in 170.20 the number of households in the county or the percentage 170.21 increase in the number of households in the entire seven-county 170.22 metropolitan area for the most recent 12-month period for which 170.23 data is available; and 170.24 (3) one plus a percentage equal to the percentage increase 170.25 in the taxable market value of the jurisdiction due to new 170.26 construction of class 3 and class 5 property, as defined in 170.27 section 273.13, subdivisions 24 and 31, for the most recent year 170.28 for which data are available. 170.29 Sec. 6. Minnesota Statutes 1998, section 275.71, 170.30 subdivision 4, is amended to read: 170.31 Subd. 4. [PROPERTY TAX LEVY LIMIT.] For taxes levied in 170.32 1998 and 1999, the property tax levy limit for a local 170.33 governmental unit is equal to its adjusted levy limit base 170.34 determined under subdivision 3 plus any additional levy 170.35 authorized under section 275.73, which is levied against net tax 170.36 capacity, reduced by the sum of (1) the total amount of aids 171.1 that the local governmental unit is certified to receive under 171.2 sections 477A.011 to 477A.014, (2) homestead and agricultural 171.3 aids it is certified to receive under section 273.1398, (3) 171.4 local performance aid it is certified to receive under section 171.5 477A.05, (4) taconite aids under sections 298.28 and 298.282 171.6 including any aid which was required to be placed in a special 171.7 fund for expenditure in the next succeeding year, (5) flood loss 171.8 aid under section 273.1383, and (6) low-income housing aid under 171.9 sections 477A.06 and 477A.065. 171.10 Sec. 7. Minnesota Statutes 1998, section 465.82, is 171.11 amended by adding a subdivision to read: 171.12 Subd. 4. [DIFFERENTIAL TAXATION.] The plan for cooperation 171.13 and combination adopted in accordance with subdivision 1 may 171.14 establish that the tax rate of the local government unit with 171.15 the lesser tax rate prior to the effective date of combination 171.16 shall be increased in substantially equal proportions over not 171.17 more than six years to equality with the tax rate on the 171.18 property already within the borders of the local unit of 171.19 government with the higher tax rate. The appropriate period of 171.20 time, if any, for transition to the higher tax rate shall be 171.21 based on the time reasonably required to effectively provide 171.22 equal municipal services to the residents of the local unit of 171.23 government with the lower tax rate. 171.24 Sec. 8. Minnesota Statutes 1998, section 473.252, 171.25 subdivision 2, is amended to read: 171.26 Subd. 2. [SOURCES OF FUNDS.] The council shall credit to 171.27 the tax base revitalization account within the fundthe amount,171.28if any, provided for under subdivision 4, andthe amount, if 171.29 any, distributed to the council under section 473F.08, 171.30 subdivision 3b. 171.31 Sec. 9. Laws 1988, chapter 645, section 3, is amended to 171.32 read: 171.33 Sec. 3. [TAX; PAYMENT OF EXPENSES.] 171.34 (a) The tax levied by the hospital district under Minnesota 171.35 Statutes, section 447.34, must not be levied at a rate that 171.36 exceeds2 mills.0063 percent of taxable market value.The172.1proceeds172.2 (b) .0048 percent of taxable market value ofthattax in 172.3 paragraph (a) may be used only for acquisition, betterment, and 172.4 maintenance of the district's hospital and nursing home 172.5 facilities and equipment, and not for administrative or salary 172.6 expenses. 172.7 (c) .0015 percent of taxable market value of the tax in 172.8 paragraph (a) may be used solely for the purpose of capital 172.9 expenditures as it relates to ambulance acquisitions for the 172.10 Cook ambulance service and the Orr ambulance service and not for 172.11 administrative or salary expenses. 172.12 The part of the levy referred to in paragraph (c) must be 172.13 administered by the Cook Hospital and passed on directly to the 172.14 Cook area ambulance service board and the city of Orr to be held 172.15 in trust until funding for a new ambulance is needed by either 172.16 the Cook ambulance service or the Orr ambulance service. 172.17 Sec. 10. Laws 1997, chapter 231, article 3, section 9, is 172.18 amended to read: 172.19 Sec. 9. [EFFECTIVE DATE.] 172.20 Sections 1 and 3 to 7, as amended by Laws 1998, chapter 172.21 389, article 4, sections 1 to 6, are effective for taxes levied 172.22 in 1997and 1998through 1999, payable in 1998and 1999through 172.23 2000. 172.24 Upon compliance with Minnesota Statutes, section 645.021, 172.25 subdivision 3, by the governing body of Faribault county or the 172.26 city of Blue Earth, section 8 is effective for taxes levied in 172.27 1997and 1998through 1999 in the county or city that approves 172.28 it. 172.29 Sec. 11. [CEMETERY LEVY FOR SAWYER BY CARLTON COUNTY.] 172.30 Subdivision 1. [LEVY AUTHORIZED.] Notwithstanding other 172.31 law to the contrary, the Carlton county board of commissioners 172.32 may levy in and for the unorganized township of Sawyer an amount 172.33 up to $1,000 annually for cemetery purposes, beginning with 172.34 taxes payable in 2000 and ending with taxes payable in 2009. 172.35 Subd. 2. [EFFECTIVE DATE.] This section is effective June 172.36 1, 1999, without local approval. 173.1 Sec. 12. [COUNTY OF GOODHUE; LEVY LIMITS AND AID 173.2 ADJUSTMENTS.] 173.3 Subdivision 1. [LEVY LIMIT BASE.] The levy limit base of 173.4 the county of Goodhue for taxes levied in 1999 under Minnesota 173.5 Statutes, section 275.71, subdivision 2, is increased by 173.6 $422,324. 173.7 Subd. 2. [TEMPORARY COUNTY AGRICULTURAL AND HOMESTEAD 173.8 CREDIT AID ADJUSTMENTS.] For aids paid in calendar year 1999 173.9 only, the county of Goodhue shall receive an additional aid 173.10 payment of $422,324 under the provisions of Minnesota Statutes, 173.11 section 273.1398. For aids paid in calendar years 2000 and 173.12 2001, the aid paid to the county of Goodhue under section 173.13 273.1398, subdivision 2, shall be reduced by $211,162. The 173.14 additional aid paid in 1999 shall not be included in calculating 173.15 any limitation on levies or expenditures in calendar year 1999 173.16 but the reductions in calendar years 2000 and 2001 shall be 173.17 included in calculating any limitation on levies or expenditures. 173.18 Subd. 3. [APPROPRIATION.] $422,324 is appropriated in 173.19 fiscal year 2000 to the commissioner of revenue from the general 173.20 fund to make the payment under subdivision 2. 173.21 Subd. 4. [EFFECTIVE DATE.] Subdivision 1 is effective for 173.22 taxes levied in 1999 upon compliance with the governing body of 173.23 the county of Goodhue with Minnesota Statutes, section 645.021, 173.24 subdivision 3. Subdivision 2 is effective for aids payable in 173.25 calendar years 1999 to 2001. 173.26 Sec. 13. [CITY OF GRANT; LEVY LIMITS.] 173.27 Subdivision 1. [LEVY LIMIT BASE INCREASE.] The levy limit 173.28 base for the city of Grant for taxes levied in 1999 under 173.29 Minnesota Statutes, section 275.71, subdivision 2, is increased 173.30 by an amount equal to the difference between (1) the amount the 173.31 city would have raised if it had imposed a tax rate equal to 173.32 one-third of the statewide average city tax effort rate for 173.33 taxes payable in 1999, as defined in Minnesota Statutes, section 173.34 477A.011, subdivision 35, on its net tax capacity for taxes 173.35 payable in 1999, as defined in Minnesota Statutes, section 173.36 477A.011, subdivision 20; and (2) the amount it levied for taxes 174.1 payable in 1999. 174.2 Subd. 2. [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 174.3 effective upon compliance by the governing body of the city of 174.4 Grant with Minnesota Statutes, section 645.021, subdivision 3, 174.5 for taxes levied in 1999, payable in 2000. 174.6 Sec. 14. [NORTH FORK CROW RIVER WATERSHED DISTRICT.] 174.7 Subdivision 1. [LEVY AUTHORIZED.] Notwithstanding 174.8 Minnesota Statutes, section 103D.905, subdivision 3, the North 174.9 Fork Crow River watershed district may annually levy up to 174.10 .04836 percent of taxable market value, or $140,000, whichever 174.11 is less, for its administrative fund. 174.12 Subd. 2. [EFFECTIVE DATE.] This section is effective 174.13 without local approval beginning with taxes levied in 1999, 174.14 payable in 2000. 174.15 Sec. 15. [SAUK RIVER WATERSHED DISTRICT.] 174.16 Subdivision 1. [LEVY AUTHORIZED.] Notwithstanding 174.17 Minnesota Statutes, section 103D.905, subdivision 3, the Sauk 174.18 river watershed district may annually levy up to $200,000 for 174.19 its administrative fund for taxes payable in 2000, 2001, 2002, 174.20 2003, and 2004. 174.21 Subd. 2. [EFFECTIVE DATE.] This section is effective the 174.22 day following final enactment. 174.23 Sec. 16. [CITY OF STILLWATER; DIVISION INTO URBAN AND 174.24 RURAL SERVICE DISTRICTS.] 174.25 Notwithstanding the provisions of Minnesota Statutes, 174.26 section 272.67, subdivisions 1 and 6, in order to carry out an 174.27 orderly annexation agreement entered into for the annexation of 174.28 a part or all of Stillwater township, the city of Stillwater may 174.29 divide its area into urban service districts and rural service 174.30 districts constituting separate taxing districts for the purpose 174.31 of all municipal property taxes including those levied for the 174.32 payment of bonds and judgments and interest on them. 174.33 Sec. 17. [REPEALER.] 174.34 Minnesota Statutes 1998, section 473.252, subdivisions 4 174.35 and 5, are repealed. 174.36 Sec. 18. [EFFECTIVE DATE.] 175.1 Sections 3 to 6 and 10 are effective for taxes levied in 175.2 1999, and payable in 2000. Section 7 is effective the day 175.3 following final enactment for taxes levied in 1999 and 175.4 thereafter. Sections 8 and 17 are effective for taxes levied in 175.5 1999, payable in 2000, and thereafter. 175.6 The .0015 percent of taxable market value levy described in 175.7 section 9, paragraph (c), is effective for the cities of Cook 175.8 and Orr and the counties of St. Louis and Koochiching for 175.9 affected parts of those counties on January 1, 2000, to be 175.10 requested in the year 2000, with the first payment to be 175.11 received in 2001. 175.12 ARTICLE 7 175.13 SPECIAL TAXES 175.14 Section 1. Minnesota Statutes 1998, section 60A.19, 175.15 subdivision 6, is amended to read: 175.16 Subd. 6. [RETALIATORY PROVISIONS.] (1) When by the laws of 175.17 any other state or country any taxes, fines, deposits, 175.18 penalties, licenses, or fees,other than assessments made by an175.19insurance guaranty association or similar organization,in 175.20 addition to or in excess of those imposed by the laws of this 175.21 state upon foreign insurance companies and their agents doing 175.22 business in this state,other than assessments by an insurance175.23guaranty association or similar organization organized under the175.24laws of this state,are imposed on insurance companies of this 175.25 state and their agents doing business in that state or country, 175.26 or when any conditions precedent to the right to do business in 175.27 that state are imposed by the laws thereof, beyond those imposed 175.28 upon these foreign companies by the laws of this state, the same 175.29 taxes, fines, deposits, penalties, licenses, fees, and 175.30 conditions precedent shall be imposed upon every similar 175.31 insurance company of that state or country and their agents 175.32 doing or applying to do business in this state so long as these 175.33 foreign laws remain in force. Special purpose obligations or 175.34 assessments, including assessments by an insurance guaranty 175.35 association, joint underwriting association or similar 175.36 organization, or assessments imposed in connection with 176.1 particular kinds of insurance, are not taxes, licenses, or fees 176.2 as these terms are used in this section. 176.3 (2) In the event that a domestic insurance company, after 176.4 complying with all reasonable laws and rulings of any other 176.5 state or country, is refused permission by that state or country 176.6 to transact business therein after the commissioner of commerce 176.7 of Minnesota has determined that that company is solvent and 176.8 properly managed and after the commissioner has so certified to 176.9 the proper authority of that other state or country, then, and 176.10 in every such case, the commissioner may forthwith suspend or 176.11 cancel the certificate of authority of every insurance company 176.12 organized under the laws of that other state or country to the 176.13 extent that it insures, or seeks to insure, in this state 176.14 against any of the risks or hazards which that domestic company 176.15 seeks to insure against in that other state or country. Without 176.16 limiting the application of the foregoing provision, it is 176.17 hereby determined that any law or ruling of any other state or 176.18 country which prescribes to a Minnesota domestic insurance 176.19 company the premium rate or rates for life insurance issued or 176.20 to be issued outside that other state or country shall not be 176.21 reasonable. 176.22 (3) This section does not apply to insurance companies 176.23 organized or domiciled in a state or country, the laws of which 176.24 do not impose retaliatory taxes, fines, deposits, penalties, 176.25 licenses, or fees or which grant, on a reciprocal basis, 176.26 exemptions from retaliatory taxes, fines, deposits, penalties, 176.27 licenses, or fees to insurance companies domiciled in this state. 176.28 Sec. 2. Minnesota Statutes 1998, section 296A.16, is 176.29 amended by adding a subdivision to read: 176.30 Subd. 4a. [UNDYED KEROSENE; REFUNDS.] Notwithstanding 176.31 subdivision 1, the commissioner shall allow a refund of the tax 176.32 paid on undyed kerosene used exclusively for a purpose other 176.33 than as fuel for a motor vehicle using the streets and 176.34 highways. To obtain a refund, the person making the sale to an 176.35 end user must meet the Internal Revenue Service requirements for 176.36 sales from a blocked pump. A claim for a refund may be filed as 177.1 provided in this section. 177.2 Sec. 3. Minnesota Statutes 1998, section 296A.16, is 177.3 amended by adding a subdivision to read: 177.4 Subd. 4b. [RACING GASOLINE; REFUNDS.] Notwithstanding 177.5 subdivision 1, the commissioner shall allow a licensed 177.6 distributor a refund of the tax paid on leaded gasoline of 110 177.7 octane or more that does not meet ASTM specification D4814 for 177.8 gasoline and that is sold in bulk for use in nonregistered motor 177.9 vehicles. A claim for a refund may be filed as provided for in 177.10 this section. 177.11 Sec. 4. Minnesota Statutes 1998, section 297E.01, is 177.12 amended by adding a subdivision to read: 177.13 Subd. 17a. [BUSINESS DAY.] "Business day" means Monday 177.14 through Friday, excluding any holidays as defined in section 177.15 645.44. 177.16 Sec. 5. Minnesota Statutes 1998, section 297E.02, 177.17 subdivision 1, is amended to read: 177.18 Subdivision 1. [IMPOSITION.] A tax is imposed on all 177.19 lawful gambling other than (1)pull-tabs purchased and placed177.20into inventory after January 1, 1987,pull-tab deals or games; 177.21and(2)tipboards purchased and placed into inventory after June177.2230, 1988tipboard deals or games; and (3) items listed in 177.23 section 297E.01, subdivision 8, clauses (4) and (5), at the rate 177.24 of9.59 percent on the gross receipts as defined in section 177.25 297E.01, subdivision 8, less prizes actually paid. The tax 177.26 imposed by this subdivision is in lieu of the tax imposed by 177.27 section 297A.02 and all local taxes and license fees except a 177.28 fee authorized under section 349.16, subdivision 8, or a tax 177.29 authorized under subdivision 5. 177.30 The tax imposed under this subdivision is payable by the 177.31 organization or party conducting, directly or indirectly, the 177.32 gambling. 177.33 Sec. 6. Minnesota Statutes 1998, section 297E.02, 177.34 subdivision 3, is amended to read: 177.35 Subd. 3. [COLLECTION; DISPOSITION.] Taxes imposed by this 177.36 section other than in subdivision 4 are due and payable to the 178.1 commissioner when the gambling tax return is required to be 178.2 filed. Taxes imposed by subdivision 4 are due and payable to 178.3 the commissioner on or before the last business day of the month 178.4 following the month in which the taxable sale was made. Returns 178.5 covering the taxes imposed under this section must be filed with 178.6 the commissioner on or before the 20th day of the month 178.7 following the close of the previous calendar month. The 178.8 commissioner may require that the returns be filed via magnetic 178.9 media or electronic data transfer. The proceeds, along with the 178.10 revenue received from all license fees and other fees under 178.11 sections 349.11 to 349.191, 349.211, and 349.213, must be paid 178.12 to the state treasurer for deposit in the general fund. 178.13 Sec. 7. Minnesota Statutes 1998, section 297E.02, 178.14 subdivision 4, is amended to read: 178.15 Subd. 4. [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed 178.16 on the sale of each deal of pull-tabs and tipboards sold by a 178.17 distributor. The rate of the tax is1.91.8 percent of the 178.18 ideal gross of the pull-tab or tipboard deal. The sales tax 178.19 imposed by chapter 297A on the sale of the pull-tabs and 178.20 tipboards by the distributor is imposed on the retail sales 178.21 price less the tax imposed by this subdivision. The retail sale 178.22 of pull-tabs or tipboards by the organization is exempt from 178.23 taxes imposed by chapter 297A and is exempt from all local taxes 178.24 and license fees except a fee authorized under section 349.16, 178.25 subdivision 8. 178.26 (b) The liability for the tax imposed by this section is 178.27 incurred when the pull-tabs and tipboards are delivered by the 178.28 distributor to the customer or to a common or contract carrier 178.29 for delivery to the customer, or when received by the customer's 178.30 authorized representative at the distributor's place of 178.31 business, regardless of the distributor's method of accounting 178.32 or the terms of the sale. 178.33 The tax imposed by this subdivision is imposed on all sales 178.34 of pull-tabs and tipboards, except the following: 178.35 (1) sales to the governing body of an Indian tribal 178.36 organization for use on an Indian reservation; 179.1 (2) sales to distributors licensed under the laws of 179.2 another state or of a province of Canada, as long as all 179.3 statutory and regulatory requirements are met in the other state 179.4 or province; 179.5 (3) sales of promotional tickets as defined in section 179.6 349.12; and 179.7 (4) pull-tabs and tipboards sold to an organization that 179.8 sells pull-tabs and tipboards under the exemption from licensing 179.9 in section 349.166, subdivision 2. A distributor shall require 179.10 an organization conducting exempt gambling to show proof of its 179.11 exempt status before making a tax-exempt sale of pull-tabs or 179.12 tipboards to the organization. A distributor shall identify, on 179.13 all reports submitted to the commissioner, all sales of 179.14 pull-tabs and tipboards that are exempt from tax under this 179.15 subdivision. 179.16 (c) A distributor having a liability of $120,000 or more 179.17 during a fiscal year ending June 30 must remit all liabilities 179.18 in the subsequent calendar year by a funds transfer as defined 179.19 in section 336.4A-104, paragraph (a). The funds transfer 179.20 payment date, as defined in section 336.4A-401, must be on or 179.21 before the date the tax is due. If the date the tax is due is 179.22 not a funds transfer business day, as defined in section 179.23 336.4A-105, paragraph (a), clause (4), the payment date must be 179.24 on or before the funds transfer business day next following the 179.25 date the tax is due. 179.26 (d) Any customer who purchases deals of pull-tabs or 179.27 tipboards from a distributor may file an annual claim for a 179.28 refund or credit of taxes paid pursuant to this subdivision for 179.29 unsold pull-tab and tipboard tickets. The claim must be filed 179.30 with the commissioner on a form prescribed by the commissioner 179.31 by March 20 of the year following the calendar year for which 179.32 the refund is claimed. The refund must be filed as part of the 179.33 customer's February monthly return. The refund or credit is 179.34 equal to1.91.8 percent of the face value of the unsold 179.35 pull-tab or tipboard tickets, provided that the refund or credit 179.36 will be1.951.85 percent of the face value of the unsold 180.1 pull-tab or tipboard tickets for claims for a refund or credit 180.2 of taxes filed on the February19992000 monthly return. The 180.3 refund claimed will be applied as a credit against tax owing 180.4 under this chapter on the February monthly return. If the 180.5 refund claimed exceeds the tax owing on the February monthly 180.6 return, that amount will be refunded. The amount refunded will 180.7 bear interest pursuant to section 270.76 from 90 days after the 180.8 claim is filed. 180.9 Sec. 8. Minnesota Statutes 1998, section 297E.02, 180.10 subdivision 6, is amended to read: 180.11 Subd. 6. [COMBINED RECEIPTS TAX.] In addition to the taxes 180.12 imposed under subdivisions 1 and 4, a tax is imposed on the 180.13 combined receipts of the organization. As used in this section, 180.14 "combined receipts" is the sum of the organization's gross 180.15 receipts from lawful gambling less gross receipts directly 180.16 derived from the conduct of bingo, raffles, and paddlewheels, as 180.17 defined in section 297E.01, subdivision 8, for the fiscal year. 180.18 The combined receipts of an organization are subject to a tax 180.19 computed according to the following schedule: 180.20 If the combined receipts for the The tax is: 180.21 fiscal year are: 180.22 Not over $500,000 zero 180.23 Over $500,000, but not over 180.24 $700,0001.91.8 percent of the 180.25 amount over $500,000, but 180.26 not over $700,000 180.27 Over $700,000, but not over 180.28 $900,000$3,800$3,600 plus3.8180.29 3.6 percent of the amount 180.30 over $700,000, but 180.31 not over $900,000 180.32 Over $900,000$11,400$10,800 plus5.7180.33 5.4 percent of the 180.34 amount over $900,000 180.35 Sec. 9. Minnesota Statutes 1998, section 297F.01, 180.36 subdivision 23, is amended to read: 181.1 Subd. 23. [WHOLESALE PRICE.] "Wholesale price" means the 181.2 established price for which a manufacturer or person sells a 181.3 tobacco product to a distributor, exclusive of any discount or 181.4 other reduction. 181.5 Sec. 10. Minnesota Statutes 1998, section 297F.17, 181.6 subdivision 6, is amended to read: 181.7 Subd. 6. [TIME LIMIT FOR BAD DEBTDEDUCTIONREFUND.] 181.8 Claims for refund must be filed with the commissionerwithin one181.9year ofduring the one-year period beginning with the timely 181.10 filingdateof the taxpayer's federal income tax return 181.11 containing the bad debt deduction that is being claimed. 181.12 Claimants under this subdivision are subject to the notice 181.13 requirements of section 289A.38, subdivision 7. 181.14 Sec. 11. Minnesota Statutes 1998, section 297H.05, is 181.15 amended to read: 181.16 297H.05 [SELF-HAULERS.] 181.17 (a) A self-hauler of mixed municipal solid waste shall pay 181.18 the tax to the operator of the waste management facility to 181.19 which the waste is delivered at the rate imposed under section 181.20 297H.03, based on the sales price of the waste management 181.21 services. 181.22 (b) A self-hauler of non-mixed-municipal solid waste shall 181.23 pay the tax to the operator of the waste management facility to 181.24 which the waste is delivered at the rate imposed under section 181.25 297H.04. 181.26 (c) The tax imposed on the self-hauler of 181.27 non-mixed-municipal solid waste may be based either on the 181.28 capacity of the container, the actual volume, or the 181.29 weight-to-volume conversion schedule in paragraph (d). However, 181.30 the tax must be calculated by the operator using the same method 181.31 for calculating the tipping fee so that both are calculated 181.32 according to container capacity, actual volume, or weight. 181.33 (d) The weight-to-volume conversion schedule for: 181.34 (1) construction debris as defined in section 115A.03, 181.35 subdivision 7, is one ton equals 3.33 cubic yards, or $2 per 181.36 ton; 182.1 (2) industrial waste as defined in section 115A.03, 182.2 subdivision 13a, is equal to 60 cents per cubic yard. The 182.3 commissioner of revenue, after consultation with the 182.4 commissioner of the pollution control agency, shall determine, 182.5 and may publish by notice, a conversion schedule for various 182.6 industrial wastes; and 182.7 (3) infectious waste as defined in section 116.76, 182.8 subdivision 12, and pathological waste as defined in section 182.9 116.76, subdivision 14, is 150 pounds equals one cubic yard, or 182.10 60 cents per 150 pounds. 182.11 (e) For mixed municipal solid waste the tax is imposed upon 182.12 the difference between the market price and the tip fee at a 182.13 processing or disposal facility if the tip fee is less than the 182.14 market price and the political subdivision subsidizes the cost 182.15 of service at the facility. The political subdivision is liable 182.16 for the tax. 182.17 Sec. 12. Minnesota Statutes 1998, section 297H.06, 182.18 subdivision 2, is amended to read: 182.19 Subd. 2. [MATERIALS.] The tax is not imposed upon charges 182.20 to generators of mixed municipal solid waste or upon the volume 182.21 of non-mixed-municipal solid waste for waste management services 182.22 to manage the following materials: 182.23 (1) mixed municipal solid waste and non-mixed-municipal 182.24 solid waste generated outside of Minnesota; 182.25 (2) recyclable materials that are separated for recycling 182.26 by the generator, collected separately from other waste, and 182.27 recycled, to the extent the price of the service for handling 182.28 recyclable material is separately itemized; 182.29 (3) recyclable non-mixed-municipal solid waste that is 182.30 separated for recycling by the generator, collected separately 182.31 from other waste, delivered to a waste facility for the purpose 182.32 of recycling, and recycled; 182.33 (4) industrial waste, when it is transported to a facility 182.34 owned and operated by the same person that generated it; 182.35 (5) mixed municipal solid waste from a recycling facility 182.36 that separates or processes recyclable materials and reduces the 183.1 volume of the waste by at least 85 percent, provided that the 183.2 exempted waste is managed separately from other waste; 183.3 (6) recyclable materials that are separated from mixed 183.4 municipal solid waste by the generator, collected and delivered 183.5 to a waste facility that recycles at least 85 percent of its 183.6 waste, and are collected with mixed municipal solid waste that 183.7 is segregated in leakproof bags, provided that the mixed 183.8 municipal solid waste does not exceed five percent of the total 183.9 weight of the materials delivered to the facility and is 183.10 ultimately delivered to a waste facility identified as a 183.11 preferred waste management facility in county solid waste plans 183.12 under section 115A.46; 183.13 (7) through December 31, 2002, source-separated compostable 183.14 waste, if the waste is delivered to a facility exempted as 183.15 described in this clause. To initially qualify for an 183.16 exemption, a facility must apply for an exemption in its 183.17 application for a new or amended solid waste permit to the 183.18 pollution control agency. The first time a facility applies to 183.19 the agency it must certify in its application that it will 183.20 comply with the criteria in items (i) to (v) and the 183.21 commissioner of the agency shall so certify to the commissioner 183.22 of revenue who must grant the exemption. For each subsequent 183.23 calendar year, by October 1 of the preceding year, the facility 183.24 must apply to the agency for certification to renew its 183.25 exemption for the following year. The application must be filed 183.26 according to the procedures of, and contain the information 183.27 required by, the agency. The commissioner of revenue shall 183.28 grant the exemption if the commissioner of the pollution control 183.29 agency finds and certifies to the commissioner of revenue that 183.30 based on an evaluation of the composition of incoming waste and 183.31 residuals and the quality and use of the product: 183.32 (i) generators separate materials at the source; 183.33 (ii) the separation is performed in a manner appropriate to 183.34 the technology specific to the facility that: 183.35 (A) maximizes the quality of the product; 183.36 (B) minimizes the toxicity and quantity of residuals; and 184.1 (C) provides an opportunity for significant improvement in 184.2 the environmental efficiency of the operation; 184.3 (iii) the operator of the facility educates generators, in 184.4 coordination with each county using the facility, about 184.5 separating the waste to maximize the quality of the waste stream 184.6 for technology specific to the facility; 184.7 (iv) process residuals do not exceed 15 percent of the 184.8 weight of the total material delivered to the facility; and 184.9 (v) the final product is accepted for use;and184.10 (8) waste and waste by-products for which the tax has been 184.11 paid; and 184.12 (9) daily cover for landfills that has been approved in 184.13 writing by the Minnesota pollution control agency. 184.14 Sec. 13. [EFFECTIVE DATES.] 184.15 Section 1 is effective for taxable years beginning after 184.16 December 31, 1999. Section 2 is effective retroactively for 184.17 sales made after June 30, 1998. Section 3 is effective 184.18 retroactively for sales made after January 31, 1999. Section 4 184.19 is effective August 1, 1999. Sections 5, 7, and 8 are effective 184.20 July 1, 1999. Section 6 is effective for taxes first becoming 184.21 due on or after August 1, 1999. Sections 9 and 12 are effective 184.22 the day following final enactment. Section 10 is effective for 184.23 refund claims filed on or after July 1, 1999. Section 11 is 184.24 effective for services provided on or after July 1, 1999. 184.25 ARTICLE 8 184.26 MINNESOTACARE TAXES 184.27 Section 1. Minnesota Statutes 1998, section 295.50, 184.28 subdivision 4, is amended to read: 184.29 Subd. 4. [HEALTH CARE PROVIDER.] (a) "Health care 184.30 provider" means: 184.31 (1) a person whose health care occupation is regulated or 184.32 required to be regulated by the state of Minnesota furnishing 184.33 any or all of the following goods or services directly to a 184.34 patient or consumer: medical, surgical, optical, visual, 184.35 dental, hearing, nursing services, drugs, laboratory, diagnostic 184.36 or therapeutic services; 185.1 (2) a person who provides goods and services not listed in 185.2 clause (1) that qualify for reimbursement under the medical 185.3 assistance program provided under chapter 256B; 185.4 (3) a staff model health plan company; 185.5 (4) an ambulance service required to be licensed; or 185.6 (5) a person who sells or repairs hearing aids and related 185.7 equipment or prescription eyewear. 185.8 (b) Health care provider does not include: (1) hospitals; 185.9 medical supplies distributors, except as specified under 185.10 paragraph (a), clause (5); nursing homes licensed under chapter 185.11 144A or licensed in any other jurisdiction; pharmacies; surgical 185.12 centers; bus and taxicab transportation, or any other providers 185.13 of transportation services other than ambulance services 185.14 required to be licensed; supervised living facilities for 185.15 persons with mental retardation or related conditions, licensed 185.16 under Minnesota Rules, parts 4665.0100 to 4665.9900; residential 185.17 care homes licensed under chapter 144B; board and lodging 185.18 establishments providing only custodial services that are 185.19 licensed under chapter 157 and registered under section 157.17 185.20 to provide supportive services or health supervision services; 185.21 adult foster homes as defined in Minnesota Rules, part 185.22 9555.5105; day training and habilitation services for adults 185.23 with mental retardation and related conditions as defined in 185.24 section 252.41, subdivision 3; and boarding care homes, as 185.25 defined in Minnesota Rules, part 4655.0100.; 185.26(c) For purposes of this subdivision, "directly to a185.27patient or consumer" includes goods and services provided in185.28connection with independent medical examinations under section185.2965B.56 or other examinations for purposes of litigation or185.30insurance claims.185.31 (2) home health agencies as defined in Minnesota Rules, 185.32 part 9505.0175, subpart 15; a person providing personal care 185.33 services and supervision of personal care services as defined in 185.34 Minnesota Rules, part 9505.0335; a person providing private duty 185.35 nursing services as defined in Minnesota Rules, part 9505.0360; 185.36 and home care providers required to be licensed under chapter 186.1 144A; 186.2 (3) a person who employs health care providers solely for 186.3 the purpose of providing patient services to its employees; and 186.4 (4) an educational institution that employs health care 186.5 providers solely for the purpose of providing patient services 186.6 to its students if the institution does not receive fee for 186.7 service payments or payments for extended coverage. 186.8 Sec. 2. Minnesota Statutes 1998, section 295.52, 186.9 subdivision 7, is amended to read: 186.10 Subd. 7. [TAX REDUCTION.] (a) Notwithstanding subdivisions 186.11 1, 1a, 2, 3, and 4, the tax imposed under this section equals 186.12 for calendar years 1998and, 1999shall be equal to, 2000, and 186.13 2001, 1.5 percent of the gross revenues received on or after 186.14 January 1, 1998, and before January 1,2000. The commissioner186.15shall extend the reduced tax rate of 1.5 percent for gross186.16revenues received on or after January 1, 2000, and before186.17January 1, 2002, if the commissioner of finance determines that186.18the health care access fund structural balance projected for186.19fiscal year 2001 will remain positive, prior to any increase of186.20the one percent premium tax under section 60A.15, subdivision 1,186.21paragraph (h), and prior to any tax expenditures related to the186.22increase in the maximum tax credit for research expenses under186.23section 295.53, subdivision 4a, as amended by Laws 1997, chapter186.242252002. 186.25 Sec. 3. Minnesota Statutes 1998, section 295.53, 186.26 subdivision 1, is amended to read: 186.27 Subdivision 1. [EXEMPTIONS.] (a) The following payments 186.28 are excluded from the gross revenues subject to the hospital, 186.29 surgical center, or health care provider taxes under sections 186.30 295.50 to 295.57: 186.31 (1) payments received for services provided under the 186.32 Medicare program, including payments received from the 186.33 government, and organizations governed by sections 1833 and 1876 186.34 of title XVIII of the federal Social Security Act, United States 186.35 Code, title 42, section 1395, and enrollee deductibles, 186.36 coinsurance, and copayments, whether paid by the Medicare 187.1 enrollee or by a Medicare supplemental coverage as defined in 187.2 section 62A.011, subdivision 3, clause (10). Payments for 187.3 services not covered by Medicare are taxable; 187.4 (2) medical assistance payments including payments received 187.5 directly from the government or from a prepaid plan; 187.6 (3) payments received for home health care services; 187.7 (4) payments received from hospitals or surgical centers 187.8 for goods and services on which liability for tax is imposed 187.9 under section 295.52 or the source of funds for the payment is 187.10 exempt under clause (1), (2), (7), (8),or(10), or (13); 187.11 (5) payments received from health care providers for goods 187.12 and services on which liability for tax is imposed under this 187.13 chapter or the source of funds for the payment is exempt under 187.14 clause (1), (2), (7), (8),or(10), or (13); 187.15 (6) amounts paid for legend drugs, other than nutritional 187.16 products, to a wholesale drug distributor who is subject to tax 187.17 under section 295.52, subdivision 3, reduced by reimbursements 187.18 received for legend drugs under clauses (1), (2), (7), and (8); 187.19 (7) payments received under the general assistance medical 187.20 care program including payments received directly from the 187.21 government or from a prepaid plan; 187.22 (8) payments received for providing services under the 187.23 MinnesotaCare program including payments received directly from 187.24 the government or from a prepaid plan and enrollee deductibles, 187.25 coinsurance, and copayments. For purposes of this clause, 187.26 coinsurance means the portion of payment that the enrollee is 187.27 required to pay for the covered service; 187.28 (9) payments received by a health care provider or the 187.29 wholly owned subsidiary of a health care provider for care 187.30 provided outside Minnesotato a patient who is not domiciled in187.31Minnesota; 187.32 (10) payments received from the chemical dependency fund 187.33 under chapter 254B; 187.34 (11) payments received in the nature of charitable 187.35 donations that are not designated for providing patient services 187.36 to a specific individual or group; 188.1 (12) payments received for providing patient services 188.2 incurred through a formal program of health care research 188.3 conducted in conformity with federal regulations governing 188.4 research on human subjects. Payments received from patients or 188.5 from other persons paying on behalf of the patients are subject 188.6 to tax; 188.7 (13) payments received from any governmental agency for 188.8 services benefiting the public, not including payments made by 188.9 the government in its capacity as an employer or insurer; 188.10 (14) payments received for services provided by community 188.11 residential mental health facilities licensed under Minnesota 188.12 Rules, parts 9520.0500 to 9520.0690, community support programs 188.13 and family community support programs approved under Minnesota 188.14 Rules, parts 9535.1700 to 9535.1760, and community mental health 188.15 centers as defined in section 245.62, subdivision 2; 188.16 (15) government payments received by a regional treatment 188.17 center; 188.18 (16) payments received for hospice care services; 188.19 (17) payments received by a health care provider for 188.20 hearing aids and related equipment or prescription eyewear 188.21 delivered outside of Minnesota; 188.22 (18) payments received bya post-secondaryan educational 188.23 institution from student tuition, student activity fees, health 188.24 care service fees, government appropriations, donations, or 188.25 grants. Fee for service payments and payments for extended 188.26 coverage are taxable;and188.27 (19) payments received for services provided by: assisted 188.28 living programs and congregate housing programs; 188.29 (20) payments received from nursing homes licensed under 188.30 chapter 144A for services provided to a nursing home; and 188.31 (21) payments received for examinations for purposes of 188.32 utilization reviews, insurance claims or eligibility, 188.33 litigation, and employment, including reviews of medical records 188.34 for those purposes. 188.35 (b) Payments received by wholesale drug distributors for 188.36 legend drugs sold directly to veterinarians or veterinary bulk 189.1 purchasing organizations are excluded from the gross revenues 189.2 subject to the wholesale drug distributor tax under sections 189.3 295.50 to 295.59. 189.4 Sec. 4. Minnesota Statutes 1998, section 295.55, 189.5 subdivision 2, is amended to read: 189.6 Subd. 2. [ESTIMATED TAX; HOSPITALS; SURGICAL CENTERS.] (a) 189.7 Each hospital or surgical center must make estimated payments of 189.8 the taxes for the calendar year in monthly installments to the 189.9 commissioner within 15 days after the end of the month. 189.10 (b) Estimated tax payments are not required of hospitals or 189.11 surgical centers if: (1) the tax for the current calendar year 189.12 is less than $500; or (2) the tax for the previous calendar year 189.13 is less than $500, if the taxpayer had a tax liability and was 189.14 doing business the entire year; or (3) if a hospital has been 189.15 allowed a grant under section 144.1484, subdivision 2, for the 189.16 year. 189.17 (c) Underpayment of estimated installments bear interest at 189.18 the rate specified in section 270.75, from the due date of the 189.19 payment until paid or until the due date of the annual returnat189.20the rate specified in section 270.75whichever comes first. An 189.21 underpayment of an estimated installment is the difference 189.22 between the amount paid and the lesser of (1) 90 percent of 189.23 one-twelfth of the tax for the calendar year or (2) one-twelfth 189.24 of the total tax for theactual gross revenues received during189.25the monthprevious calendar year if the taxpayer had a tax 189.26 liability and was doing business the entire year. 189.27 Sec. 5. Minnesota Statutes 1998, section 295.55, 189.28 subdivision 3, is amended to read: 189.29 Subd. 3. [ESTIMATED TAX; OTHER TAXPAYERS.] (a) Each 189.30 taxpayer, other than a hospital or surgical center, must make 189.31 estimated payments of the taxes for the calendar year in 189.32 quarterly installments to the commissioner by April 15, July 15, 189.33 October 15, and January 15 of the following calendar year. 189.34 (b) Estimated tax payments are not required if: (1) the 189.35 tax for the current calendar year is less than $500; or (2) the 189.36 tax for the previous calendar year is less than $500, if the 190.1 taxpayer had a tax liability and was doing business the entire 190.2 year. 190.3 (c) Underpayment of estimated installments bear interest at 190.4 the rate specified in section 270.75, from the due date of the 190.5 payment until paid or until the due date of the annual returnat190.6the rate specified in section 270.75whichever comes first. An 190.7 underpayment of an estimated installment is the difference 190.8 between the amount paid and the lesser of (1) 90 percent of 190.9 one-quarter of the tax for the calendar year or (2) one-quarter 190.10 of the total tax for theactual gross revenues received during190.11the quarterprevious calendar year if the taxpayer had a tax 190.12 liability and was doing business the entire year. 190.13 Sec. 6. Minnesota Statutes 1998, section 295.57, is 190.14 amended by adding a subdivision to read: 190.15 Subd. 4. [SAMPLING TECHNIQUES.] The commissioner may use 190.16 statistical or other sampling techniques consistent with 190.17 generally accepted auditing standards in examining returns or 190.18 records and making assessments. 190.19 Sec. 7. [HEALTH CARE ACCESS FUND TRANSFER.] 190.20 $27,000,000 is appropriated for fiscal year 2000; 190.21 $27,000,000 is appropriated for fiscal year 2001; and 190.22 $30,900,000 is appropriated for fiscal year 2002 from the 190.23 general fund to the commissioner of finance for deposit in the 190.24 health care access fund under Minnesota Statutes, section 190.25 16A.724. 190.26 Sec. 8. [EFFECTIVE DATE.] 190.27 The provisions of section 1, striking paragraph (c), and 190.28 section 3, clause (21), are effective for services provided 190.29 after December 31, 1998. The rest of section 1, the rest of 190.30 section 3 and sections 4 and 5 are effective for payments 190.31 received on or after January 1, 2000. Section 6 is effective 190.32 the day following final enactment. 190.33 ARTICLE 9 190.34 TACONITE TAXATION 190.35 Section 1. Minnesota Statutes 1998, section 298.24, 190.36 subdivision 1, is amended to read: 191.1 Subdivision 1. (a) For concentrate produced in1997 and191.219981999, there is imposed upon taconite and iron sulphides, 191.3 and upon the mining and quarrying thereof, and upon the 191.4 production of iron ore concentrate therefrom, and upon the 191.5 concentrate so produced, a tax of $2.141 per gross ton of 191.6 merchantable iron ore concentrate produced therefrom. 191.7 (b) For concentrates produced in19992000 and subsequent 191.8 years, the tax rate shall be equal to the preceding year's tax 191.9 rate plus an amount equal to the preceding year's tax rate 191.10 multiplied by the percentage increase in the implicit price 191.11 deflator from the fourth quarter of the second preceding year to 191.12 the fourth quarter of the preceding year. "Implicit price 191.13 deflator" for the gross national product means the implicit 191.14 price deflator prepared by the bureau of economic analysis of 191.15 the United States Department of Commerce. 191.16 (c) On concentrates produced in 1997 and thereafter, an 191.17 additional tax is imposed equal to three cents per gross ton of 191.18 merchantable iron ore concentrate for each one percent that the 191.19 iron content of the product exceeds 72 percent, when dried at 191.20 212 degrees Fahrenheit. 191.21 (d) The tax shall be imposed on the average of the 191.22 production for the current year and the previous two years. The 191.23 rate of the tax imposed will be the current year's tax rate. 191.24 This clause shall not apply in the case of the closing of a 191.25 taconite facility if the property taxes on the facility would be 191.26 higher if this clause and section 298.25 were not applicable. 191.27 (e) If the tax or any part of the tax imposed by this 191.28 subdivision is held to be unconstitutional, a tax of $2.141 per 191.29 gross ton of merchantable iron ore concentrate produced shall be 191.30 imposed. 191.31 (f) Consistent with the intent of this subdivision to 191.32 impose a tax based upon the weight of merchantable iron ore 191.33 concentrate, the commissioner of revenue may indirectly 191.34 determine the weight of merchantable iron ore concentrate 191.35 included in fluxed pellets by subtracting the weight of the 191.36 limestone, dolomite, or olivine derivatives or other basic flux 192.1 additives included in the pellets from the weight of the 192.2 pellets. For purposes of this paragraph, "fluxed pellets" are 192.3 pellets produced in a process in which limestone, dolomite, 192.4 olivine, or other basic flux additives are combined with 192.5 merchantable iron ore concentrate. No subtraction from the 192.6 weight of the pellets shall be allowed for binders, mineral and 192.7 chemical additives other than basic flux additives, or moisture. 192.8 (g)(1) Notwithstanding any other provision of this 192.9 subdivision, for the first two years of a plant's production of 192.10 direct reduced ore, no tax is imposed under this section. As 192.11 used in this paragraph, "direct reduced ore" is ore that results 192.12 in a product that has an iron content of at least 75 percent. 192.13 For the third year of a plant's production of direct reduced 192.14 ore, the rate to be applied to direct reduced ore is 25 percent 192.15 of the rate otherwise determined under this subdivision. For 192.16 the fourth such production year, the rate is 50 percent of the 192.17 rate otherwise determined under this subdivision; for the fifth 192.18 such production year, the rate is 75 percent of the rate 192.19 otherwise determined under this subdivision; and for all 192.20 subsequent production years, the full rate is imposed. 192.21 (2) Subject to clause (1), production of direct reduced ore 192.22 in this state is subject to the tax imposed by this section, but 192.23 if that production is not produced by a producer of taconite or 192.24 iron sulfides, the production of taconite or iron sulfides 192.25 consumed in the production of direct reduced iron in this state 192.26 is not subject to the tax imposed by this section on taconite or 192.27 iron sulfides. 192.28 Sec. 2. Minnesota Statutes 1998, section 298.28, 192.29 subdivision 9a, is amended to read: 192.30 Subd. 9a. [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 15.4 192.31 cents per ton for distributions in1996, 1998,1999,and2000 192.32and 20.4 cents per ton for distributions in 1997 shall, 2001, 192.33 and 2002 must be paid to the taconite economic development 192.34 fund. No distribution shall be made under this paragraph in any 192.35 year in which total industry production falls below 30 million 192.36 tons. 193.1 (b) An amount equal to 50 percent of the tax under section 193.2 298.24 for concentrate sold in the form of pellet chips and 193.3 fines not exceeding 5/16 inch in size and not including crushed 193.4 pellets shall be paid to the taconite economic development 193.5 fund. The amount paid shall not exceed $700,000 annually for 193.6 all companies. If the initial amount to be paid to the fund 193.7 exceeds this amount, each company's payment shall be prorated so 193.8 the total does not exceed $700,000. 193.9 Sec. 3. Minnesota Statutes 1998, section 298.28, 193.10 subdivision 9b, is amended to read: 193.11 Subd. 9b. [TACONITE ENVIRONMENTAL FUND.] Five cents per 193.12 ton for distributions in1998,1999,and2000shall, 2001, and 193.13 2002 must be paid to the taconite environmental fund for use 193.14 under section 298.2961. No distribution may be made under this 193.15 paragraph in any year in which total industry production falls 193.16 below 30,000,000 tons. 193.17 Sec. 4. Minnesota Statutes 1998, section 298.296, 193.18 subdivision 4, is amended to read: 193.19 Subd. 4. [TEMPORARY LOAN AUTHORITY.] (a) The board may 193.20 recommend that up to $7,500,000 from the corpus of the trust may 193.21 be used for loans, grants, or equity investments as provided in 193.22 this subdivision. The money would be available for loans for 193.23 construction and equipping of facilities constituting (1) a 193.24 value added iron products plant, which may be either a new plant 193.25 or a facility incorporated into an existing plant that produces 193.26 iron upgraded to a minimum of 75 percent iron content or any 193.27 iron alloy with a total minimum metallic content of 90 percent; 193.28 or (2) a new mine or minerals processing plant for any mineral 193.29 subject to the net proceeds tax imposed under section 298.015. 193.30 A loan under this paragraph may not exceed $5,000,000 for any 193.31 facility. 193.32 (b) Additionally, the board must reserve the first 193.33 $2,000,000 of the net interest, dividends, and earnings arising 193.34 from the investment of the trust after June 30, 1996, to be used 193.35 for additional grants for the purposes set forth in paragraph 193.36 (a). This amount must be reserved until it is used for the 194.1 grantsor until June 30, 1999, whichever is earlier. 194.2 (c) Additionally, the board may recommend that up to 194.3 $5,500,000 from the corpus of the trust may be used for 194.4 additional grants for the purposes set forth in paragraph (a). 194.5 (d) The board may require that it receive an equity 194.6 percentage in any project to which it contributes under this 194.7 section. 194.8(e) The authority to make loans and grants under this194.9subdivision terminates June 30, 1999.194.10 Sec. 5. [MINNESOTA MINERALS 21ST CENTURY FUND 194.11 APPROPRIATION.] 194.12 Subdivision 1. [APPROPRIATION.] $20,000,000 is 194.13 appropriated in fiscal year 2000 from the general fund to the 194.14 Minnesota minerals 21st century fund, if a bill styled as H.F. 194.15 No. 2390 is enacted in 1999 and creates such a fund. 194.16 Notwithstanding any other law enacted during the 1999 regular 194.17 legislative session, the maximum total appropriation authorized 194.18 for the purposes of the Minnesota minerals 21st century fund 194.19 under all laws enacted during the 1999 regular legislative 194.20 session is $20,000,000. Any amounts appropriated in any other 194.21 law enacted during the 1999 legislative session that would cause 194.22 the appropriation to exceed $20,000,000 are canceled. This 194.23 limitation does not apply to the appropriation transfer 194.24 contained in 1999 H.F. No. 2390, article 2, section 71. 194.25 Subd. 2. [MATCHING REQUIREMENT.] If a bill styled as H.F. 194.26 No. 2390 is enacted in 1999 and it provides for creation of the 194.27 Minnesota minerals 21st century fund, the commissioner of the 194.28 iron range resources and rehabilitation board shall, upon the 194.29 recommendation of the board, match the funds allocated under 194.30 subdivision 1 to the extent they are used for a loan or equity 194.31 investment meeting the requirements of the provision creating 194.32 the Minnesota minerals 21st century fund within H.F. No. 2390. 194.33 Notwithstanding Minnesota Statutes, section 645.33, this 194.34 subdivision supersedes any contrary provisions of H.F. No. 2390 194.35 that is enacted in 1999. 194.36 ARTICLE 10 195.1 TAX INCREMENT FINANCING 195.2 Section 1. Minnesota Statutes 1998, section 273.1399, 195.3 subdivision 6, is amended to read: 195.4 Subd. 6. [EXEMPT DISTRICTS.] (a) The provisions of this 195.5 section do not apply to exempt tax increment financing districts 195.6 as specified by this subdivision. 195.7 (b) A tax increment financing district for an ethanol 195.8 production facility that satisfies all of the following 195.9 requirements is exempt: 195.10 (1) The district is an economic development district, that 195.11 qualifies under section 469.176, subdivision 4c, paragraph (a), 195.12 clause (1). 195.13 (2) The facility is certified by the commissioner of 195.14 agriculture to qualify for state payments for ethanol 195.15 development under section 41A.09 to the extent funds are 195.16 available. 195.17 (3) Increments from the district are used only to finance 195.18 the qualifying ethanol development project located in the 195.19 district or to pay for administrative costs of the district. 195.20 (4) The district is located outside of the seven-county 195.21 metropolitan area, as defined in section 473.121. 195.22 (5) The tax increment financing plan was approved by a 195.23 resolution of the county board. 195.24 (6) The exemption provided by this paragraph applies until 195.25 the first year after the total amount of increment for the 195.26 district exceeds $1,500,000. The county auditor shall notify 195.27 the commissioner of revenue of the expiration of the exemption 195.28 by June 1 of the year in which the auditor projects the revenues 195.29 from increments will exceed $1,500,000. On or before the 195.30 expiration of the exemption, the municipality may elect to make 195.31 a qualifying local contribution under paragraph (d) in lieu of 195.32 the state aid reduction. 195.33 (c) A qualified housing district is exempt. 195.34 (d)(1) A district is exempt if the municipality elects at 195.35 the time of approving the tax increment financing plan for the 195.36 district to make a qualifying local contribution. To qualify 196.1 for the exemption in each year, the authority or the 196.2 municipality must make a qualifying local contribution equal to 196.3 the listed percentages of increment from the district or 196.4 subdistrict: 196.5 (A) for an economic development district, a housing196.6district,or a renewal and renovation district, ten percent; 196.7 (B) for a redevelopment district, a housing district, a 196.8 mined underground space district, a hazardous substance 196.9 subdistrict, or a soils condition district, five percent. 196.10 (2) If the municipality elects to make a qualifying 196.11 contribution and fails to make the required contribution for a 196.12 year, the state aid reduction applies for the year. The state 196.13 aid reduction equals the greater of (A) the required local 196.14 contribution or (B) the amount of the aid reduction that applies 196.15 under subdivision 3. For a district exempt under paragraph (b), 196.16 no qualifying local contribution is required for years in which 196.17 the district is exempt. 196.18 (3)(A) If the sum of required local contributions for all 196.19 districts in the municipality exceeds two percent of city net 196.20 tax capacity as defined in section 477A.011, subdivision 20, for 196.21 a year, the municipality's total required local contribution for 196.22 that year is limited to two percent of net tax capacity to 196.23 qualify for the exemption under this subdivision. The 196.24 municipality may allocate the contribution among the districts 196.25 on which it has made elections as it determines appropriate. 196.26 (B) If a municipality makes an election under this 196.27 subdivision for a district in a year in which item (A) applies, 196.28 a minimum annual qualifying contribution must be made for the 196.29 district equal to the lesser of 0.25 percent of city net tax 196.30 capacity or three percent of increment revenues. This minimum 196.31 contribution applies for the life of the district for each year 196.32 that the restriction in item (A) applies and is in addition to 196.33 the contribution required by item (A). 196.34 (4) The amount of the local contribution must be made out 196.35 of unrestricted money of the authority or municipality, such as 196.36 the general fund, a property tax levy, or a federal or a state 197.1 grant-in-aid which may be spent for general government 197.2 purposes. The local contribution may not be made, directly or 197.3 indirectly, with tax increments or developer payments as defined 197.4 under section 469.1766. The local contribution must be used to 197.5 pay project costs and cannot be used for general government 197.6 purposes or for improvements or costs that the authority or 197.7 municipality planned to incur absent the project. The authority 197.8 or municipality may request contributions from other local 197.9 government entities that will benefit from the district's 197.10 activities. These contributions reduce the local contribution 197.11 required of the municipality or authority by this paragraph. 197.12 Cities, counties, towns, and schools may contribute to paying 197.13 these costs, notwithstanding any other law to the contrary. 197.14 (5) The municipality may make a local contribution in 197.15 excess of the required contribution for a year. If it does so, 197.16 the municipality may credit the excess to a local contribution 197.17 account for the district. The balance in the account may be 197.18 used to meet the requirements for qualifying local contributions 197.19 for later years. No interest or investment earnings may be 197.20 credited or imputed to the account, except those (A) actually 197.21 paid by the municipality out of its unrestricted funds or by 197.22 another person or entity, other than a developer as used in 197.23 section 469.1766, and (B) used as required for a qualifying 197.24 local contribution. 197.25 (6) If the state contributes to the project costs through a 197.26 direct grant or similar incentive, the required local 197.27 contribution is reduced by one-half of the dollar amount of the 197.28 state grant or other similar incentive. 197.29 Sec. 2. Minnesota Statutes 1998, section 469.176, 197.30 subdivision 4g, is amended to read: 197.31 Subd. 4g. [GENERAL GOVERNMENT USE PROHIBITED.] (a) These 197.32 revenues shall not be used to circumvent existing levy limit 197.33 law. No revenues derived from tax increment from any district, 197.34 whether certified before or after August 1, 1979, shall be used 197.35 for the acquisition, construction, renovation, operation, or 197.36 maintenance of a building to be used primarily and regularly for 198.1 conducting the business of a municipality, county, school 198.2 district, or any other local unit of government or the state or 198.3 federal government or for a commons area used as a public park, 198.4 or a facility used for social, recreational, or conference 198.5 purposes. This provision shall not prohibit the use of revenues 198.6 derived from tax increments for the construction or renovation 198.7 of a parking structure, a commons area used as a public park, or198.8a facility used for social, recreational, or conference purposes198.9and not primarily for conducting the business of the198.10municipalityor of a privately owned facility for conference 198.11 purposes. 198.12 (b) If any publicly owned facility used for social, 198.13 recreational, or conference purposes and financed in whole or in 198.14 part from revenues derived from a district is operated or 198.15 managed by an entity other than the authority, the operating and 198.16 management policies of the facility must be approved by the 198.17 governing body of the authority. 198.18 (c)(1) Tax increments may not be used to pay for the cost 198.19 of public improvements, equipment, or other items, if: 198.20 (i) the improvements, equipment, or other items are located 198.21 outside of the area of the tax increment financing district from 198.22 which the increments were collected; and 198.23 (ii) the improvements, equipment, or items that (i) 198.24 primarily serve a decorative or aesthetic purpose, or (ii) serve 198.25 a functional purpose, but their cost is increased by more than 198.26 100 percent as a result of the selection of materials, design, 198.27 or type as compared with more commonly used materials, designs, 198.28 or types for similar improvements, equipment, or items. 198.29 (2) The provisions of this paragraph do not apply to 198.30 expenditures related to the rehabilitation of historic 198.31 structures that are: 198.32 (i) individually listed on the National Register of 198.33 Historic Places; or 198.34 (ii) a contributing element to a historic district listed 198.35 on the National Register of Historic Places. 198.36 Sec. 3. Minnesota Statutes 1998, section 469.1763, is 199.1 amended by adding a subdivision to read: 199.2 Subd. 6. [POOLING PERMITTED FOR DEFICITS.] (a) This 199.3 subdivision applies only to districts for which the request for 199.4 certification was made before June 2, 1997. 199.5 (b) The municipality for the district may transfer 199.6 available increments from another tax increment financing 199.7 district located in the municipality, if the transfer is 199.8 necessary to eliminate a deficit in the district to which the 199.9 increments are transferred. A deficit in the district for 199.10 purposes of this subdivision means the lesser of the following 199.11 two amounts: 199.12 (1)(i) the amount due during the calendar year to pay 199.13 preexisting obligations of the district; minus 199.14 (ii) the total increments to be collected from properties 199.15 located within the district that are available for the calendar 199.16 year, plus 199.17 (iii) total increments from properties located in other 199.18 districts in the municipality that are available to be used to 199.19 meet the district's obligations under this section, excluding 199.20 this subdivision, or other provisions of law (but excluding a 199.21 special tax under section 469.1791 and the grant program under 199.22 Laws 1997, chapter 231, article 1, section 19); or 199.23 (2) the reduction in increments collected from properties 199.24 located in the district for the calendar year as a result of the 199.25 changes in class rates in Laws 1997, chapter 231, article 1; 199.26 Laws 1998, chapter 389, article 2; and this act. 199.27 (c) A preexisting obligation means bonds issued and sold 199.28 before June 2, 1997, and bonds issued to refund such bonds or to 199.29 reimburse expenditures made in conjunction with a signed 199.30 contractual agreement entered into before June 2, 1997, to the 199.31 extent that the bonds are secured by a pledge of increments from 199.32 the tax increment financing district. For purposes of this 199.33 subdivision, bonds exclude an obligation to reimburse or pay a 199.34 developer or owner of property located in the district for 199.35 amounts incurred or paid by the developer or owner. 199.36 (d) The municipality may require a development authority, 200.1 other than a seaway port authority, to transfer available 200.2 increments for any of its tax increment financing districts in 200.3 the municipality to make up an insufficiency in another district 200.4 in the municipality, regardless of whether the district was 200.5 established by the development authority or another development 200.6 authority. This authority applies notwithstanding any law to 200.7 the contrary, but applies only to a development authority that: 200.8 (1) was established by the municipality; or 200.9 (2) the governing body of which is appointed, in whole or 200.10 part, by the municipality or an officer of the municipality or 200.11 which consists, in whole or part, of members of the governing 200.12 body of the municipality. 200.13 (e) The authority under this subdivision to spend tax 200.14 increments outside of the area of the district from which the 200.15 tax increments were collected: 200.16 (1) may only be exercised after obtaining approval of the 200.17 use of the increments, in writing, by the commissioner of 200.18 revenue; 200.19 (2) is an exception to the restrictions under section 200.20 469.176, subdivision 4i, and the other provisions of this 200.21 section, and the percentage restrictions under subdivision 2 200.22 must be calculated after deducting increments spent under this 200.23 subdivision from the total increments for the district; and 200.24 (3) applies notwithstanding the provisions of the tax 200.25 increment financing act in effect for districts for which the 200.26 request for certification was made before June 30, 1982, or any 200.27 other law to the contrary. 200.28 Sec. 4. [469.1764] [PRE-1982 DISTRICTS; POOLING RULES.] 200.29 Subdivision 1. [SCOPE; APPLICATION.] (a) This section 200.30 applies to a tax increment financing district or area added to a 200.31 district, if the request for certification of the district or 200.32 the area added to the district was made after July 31, 1979, and 200.33 before July 1, 1982. 200.34 (b) This section, section 469.1763, subdivision 6, and any 200.35 special law applying to the district are the exclusive authority 200.36 to spend tax increments on activities located outside of the 201.1 geographic area of a tax increment financing district that is 201.2 subject to this section. 201.3 (c) This section does not apply to increments from a 201.4 district that is subject to the provisions of this section, if: 201.5 (1) the district was decertified before the enactment of 201.6 this section and all increments spent on activities located 201.7 outside of the geographic area of the district were repaid and 201.8 distributed as excess increments under section 469.176, 201.9 subdivision 2; or 201.10 (2) the use of increments on activities located outside of 201.11 the geographic area of the district consists solely of payment 201.12 of debt service on bonds under section 469.129, subdivision 2, 201.13 and any bonds issued to refund bonds issued under that 201.14 subdivision. 201.15 Subd. 2. [STATE AUDITOR NOTIFICATION.] By August 1, 1999, 201.16 the state auditor shall notify in writing each authority for 201.17 which the auditor has records that the authority has a district 201.18 subject to this section. 201.19 Subd. 3. [RATIFICATION OF PAST SPENDING.] (a) The 201.20 following expenditures of increments on activities located 201.21 outside of the geographic area of a district subject to this 201.22 section are permitted: 201.23 (1) expenditures made before the earlier of (i) 201.24 notification by the state auditor or (ii) December 31, 1999; and 201.25 (2) expenditures to pay preexisting outside district 201.26 obligations. 201.27 Subd. 4. [DECERTIFICATION REQUIRED.] (a) The provisions of 201.28 this subdivision apply to any tax increment financing district 201.29 subject to this section, if increments from the district were 201.30 used on activities located outside of the geographic area of the 201.31 district. 201.32 (b) After December 31, 1999, any tax increments received by 201.33 the authority from a district subject to this subdivision may be 201.34 expended only to pay: 201.35 (1) preexisting in-district obligations; 201.36 (2) preexisting outside district obligations; and 202.1 (3) administrative expenses. 202.2 After all preexisting obligations have been paid or 202.3 defeased, the district must be decertified and any remaining 202.4 increments distributed as excess increments under section 202.5 469.176, subdivision 2. 202.6 Subd. 5. [DEFINITIONS.] (a) "Notification by the state 202.7 auditor" means the receipt by the authority or the municipality 202.8 of the final written notification from the state auditor that 202.9 its expenditures of increments from the district on activities 202.10 located outside of the geographic area of the district were not 202.11 in compliance with state law. 202.12 (b) "Preexisting outside district obligations" means: 202.13 (1) bonds secured by increments from a district subject to 202.14 this section and used to finance activities outside the 202.15 geographic area of the district, if the bonds were issued and 202.16 the pledge of increment was made before the earlier of (i) 202.17 notification by the state auditor, or (ii) April 1, 1999; 202.18 (2) bonds issued to refund bonds qualifying under clause 202.19 (1), if the refunding bonds do not increase the total amount of 202.20 tax increments required to pay the refunded bonds; and 202.21 (3) binding written agreements secured by the increments 202.22 from the district subject to this section and used to finance 202.23 activities outside the geographic area of the district, if the 202.24 agreement was entered before the earlier of (i) notification by 202.25 the state auditor or (ii) May 1, 1999. 202.26 (c) "Preexisting in-district obligations" means: 202.27 (1) bonds secured by increments from a district subject to 202.28 this section and not used to finance activities outside of the 202.29 geographic area of the district, if the bonds were issued and 202.30 the pledge of increments was made before April 1, 1999; 202.31 (2) bonds issued to refund bonds qualifying under clause 202.32 (1), if the refunding bonds do not increase the total amount of 202.33 tax increments required to pay the refunded bonds; and 202.34 (3) binding written agreements secured by increments from a 202.35 district subject to this section and not used to finance 202.36 activities outside of the geographic area of the district, if 203.1 the agreements were entered into and the pledge of increments 203.2 was made before June 30, 1999. 203.3 Sec. 5. Minnesota Statutes 1998, section 469.1771, 203.4 subdivision 1, is amended to read: 203.5 Subdivision 1. [ENFORCEMENT.] (a) The owner of taxable 203.6 property located in the city, town, school district, or county 203.7 in which the tax increment financing district is located may 203.8 bring suit for equitable relief or for damages, as provided in 203.9 subdivisions 3 and 4, arising out of a failure of a municipality 203.10 or authority to comply with the provisions of sections 469.174 203.11 to 469.179, or related provisions of this chapter. The 203.12 prevailing party in a suit filed under the preceding sentence is 203.13 entitled to costs, including reasonable attorney fees. 203.14 (b) The state auditor may examine and audit political 203.15 subdivisions' use of tax increment financing. Without previous 203.16 notice, the state auditor may examine or audit accounts and 203.17 records on a random basis as the auditor deems to be in the 203.18 public interest. If the state auditor finds evidence that an 203.19 authority or municipality has violated a provision of the law 203.20 for which a remedy is provided under this section, the state 203.21 auditor shall forward the relevant information to the county 203.22 attorney. The county attorney may bring an action to enforce 203.23 the provisions of sections 469.174 to 469.179 or related 203.24 provisions of this chapter, for matters referred by the state 203.25 auditor or on behalf of the county. If the county attorney 203.26 determines not to bring an action or if the county attorney has 203.27 not brought an action within 12 months after receipt of the 203.28 initial notification by the state auditor of the violation, the 203.29 county attorney shall notify the state auditor in writing. 203.30 (c) If the state auditor finds an authority is not in 203.31 compliance with sections 469.174 to 469.179 or related 203.32 provisions of law, the auditor shall notify the governing body 203.33 of the municipality that approved the tax increment financing 203.34 district of its findings. The governing body of the 203.35 municipality must respond in writing to the state auditor within 203.36 60 days after receiving the notification. Its written response 204.1 must state whether the municipality accepts, in whole or part, 204.2 the auditor's findings. If the municipality does not accept the 204.3 findings, the statement must indicate the basis for its 204.4 disagreement. The state auditor shall annually summarize the 204.5 responses it receives under this section and send the summary 204.6 and copies of the responses to the chairs of the committees of 204.7 the legislature with jurisdiction over tax increment financing. 204.8 (d) The state auditor shall notify the attorney general in 204.9 writing and provide supporting materials for a violation found 204.10 by the auditor, if the: 204.11 (1) auditor receives notification from the county attorney 204.12 under paragraph (b) or receives no notification for a 12-month 204.13 period after initially notifying the county attorney and the 204.14 state auditor confirms with the county attorney or the 204.15 municipality that no action has been brought regarding the 204.16 matter; and 204.17 (2) municipality or development authority have not 204.18 eliminated or resolved the violation to the satisfaction of the 204.19 state auditor. 204.20 The auditor shall provide the municipality and development 204.21 authority a copy of the notification sent to the attorney 204.22 general. 204.23 Sec. 6. Minnesota Statutes 1998, section 469.1771, is 204.24 amended by adding a subdivision to read: 204.25 Subd. 2b. [ACTION TO SUSPEND TIF AUTHORITY.] (a) Upon 204.26 receipt of a notification from the state auditor under 204.27 subdivision 1, paragraph (d), the attorney general shall review 204.28 the materials submitted by the auditor and any materials 204.29 submitted by the municipality and development authority. If the 204.30 attorney general finds that the municipality or development 204.31 authority violated a provision of the law enumerated in 204.32 subdivision 1 and that the violation was substantial, the 204.33 attorney general shall file a petition in the tax court to 204.34 suspend the authority of the municipality and development 204.35 authority to exercise tax increment financing powers. 204.36 (b) Before filing a petition under this subdivision, the 205.1 attorney shall attempt to resolve the matter using appropriate 205.2 alternative dispute resolution procedures, such as those under 205.3 sections 572.31 to 572.40. 205.4 (c) If the tax court finds that the municipality or 205.5 development authority failed to comply with the law and that the 205.6 noncompliance was substantial, the court shall suspend the 205.7 authority of the municipality or development to exercise tax 205.8 increment financing powers. The court shall set the period of 205.9 the suspension for a period not to exceed five years. In 205.10 determining the length of the suspension, the court may consider: 205.11 (1) the substantiality of the violation or violations; 205.12 (2) the dollar amount of the violation or violations; 205.13 (3) the sophistication of the municipality or development 205.14 authority; 205.15 (4) the extent to which the municipality or development 205.16 authority violated a clear and unambiguous requirement of the 205.17 law; 205.18 (5) whether the municipality or development authority 205.19 continued to violate the law after receiving notification from 205.20 the state auditor that it was not in compliance with the law; 205.21 (6) the extent to which the municipality or development 205.22 authority engaged in a pattern of violations; and 205.23 (7) any other factors the court determines are relevant to 205.24 whether the municipality or development authority's authority to 205.25 exercise tax increment financing powers should be suspended. 205.26 (d) For purposes of this subdivision, the exercise of tax 205.27 increment financing powers means: 205.28 (1) the authority to request certification of a new tax 205.29 increment financing district or the addition of area to an 205.30 existing tax increment financing district; 205.31 (2) the authority to issue bonds under section 469.178; 205.32 (3) the authority to amend a tax increment financing plan 205.33 to authorize new activities or expenditures. 205.34 Sec. 7. Minnesota Statutes 1998, section 469.1791, 205.35 subdivision 3, is amended to read: 205.36 Subd. 3. [PRECONDITIONS TO ESTABLISH DISTRICT.] (a) A city 206.1 may establish a special taxing district within a tax increment 206.2 financing district under this section only if the conditions 206.3 under paragraphs (b) and (c) are met or if the city elects to 206.4 exercise the authority under paragraph (d). 206.5 (b) The city has determined that: 206.6 (1) total tax increments from the district, including 206.7 unspent increments from previous years and increments 206.8 transferred under paragraph (c), will be insufficient to pay the 206.9 amounts due in a year on preexisting obligations; and 206.10 (2) this insufficiency of increments resulted from the 206.11 reduction in property tax class rates enacted in the 1997 and 206.12 1998 legislative sessions. 206.13 (c) The city has agreed to transfer any available 206.14 increments from other tax increment financing districts in the 206.15 city to pay the preexisting obligations of the district under 206.16 section 469.1763, subdivision 6. This requirement does not 206.17 apply to any available increments of a qualified housing 206.18 district, as defined in section 273.1399, subdivision 206.19 1.Notwithstanding any law to the contrary, the city may206.20require a development authority to transfer available increments206.21for any of its tax increment financing districts in the city to206.22make up an insufficiency in another district in the city,206.23regardless of whether the district was established by the206.24development authority or another development authority.206.25Notwithstanding any law to the contrary, increments transferred206.26under this authority must be spent to pay preexisting206.27obligations. "Development authority" for this purpose means any206.28authority as defined in section 469.174, subdivision 2.206.29 (d) If a tax increment financing district does not qualify 206.30 under paragraphs (b) and (c), the governing body may elect to 206.31 establish a special taxing district under this section. If the 206.32 city elects to exercise this authority, increments from the tax 206.33 increment financing district and the proceeds of the tax imposed 206.34 under this section may only be used to pay preexisting 206.35 obligations and reasonable administrative expenses of the 206.36 authority for the tax increment financing district. The tax 207.1 increment financing district must be decertified when all 207.2 preexisting obligations have been paid. 207.3 Sec. 8. Minnesota Statutes 1998, section 469.1813, 207.4 subdivision 1, is amended to read: 207.5 Subdivision 1. [AUTHORITY.] The governing body of a 207.6 political subdivision may grant an abatement of the taxes 207.7 imposed by the political subdivision on a parcel of property, or 207.8 defer the payments of the taxes and abate the interest and 207.9 penalty that otherwise would apply, if: 207.10 (a) it expects the benefits to the political subdivision of 207.11 the proposed abatement agreement to at least equal the costs to 207.12 the political subdivision of the proposed agreement; and 207.13 (b) it finds that doing so is in the public interest 207.14 because it will: 207.15 (1) increase or preserve tax base; 207.16 (2) provide employment opportunities in the political 207.17 subdivision; 207.18 (3) provide or help acquire or construct public facilities; 207.19 (4) help redevelop or renew blighted areas;or207.20 (5) help provide access to services for residents of the 207.21 political subdivision; or 207.22 (6) finance or provide public infrastructure. 207.23 Sec. 9. Minnesota Statutes 1998, section 469.1813, is 207.24 amended by adding a subdivision to read: 207.25 Subd. 1a. [USE OF TERM.] As used in this section and 207.26 sections 469.1814 and 469.1815, "abatement" includes a deferral 207.27 of taxes with abatement of interest and penalties unless the 207.28 context indicates otherwise. 207.29 Sec. 10. Minnesota Statutes 1998, section 469.1813, 207.30 subdivision 2, is amended to read: 207.31 Subd. 2. [ABATEMENT RESOLUTION.] (a) The governing body of 207.32 a political subdivision may grant an abatement only by adopting 207.33 an abatement resolution, specifying the terms of the abatement. 207.34 In the case of a town, the board of supervisors may approve the 207.35 abatement resolution. The resolution must also include a 207.36 specific statement as to the nature and extent of the public 208.1 benefits which the governing body expects to result from the 208.2 agreement. The resolution may provide that the political 208.3 subdivision will retain or transfer to another political 208.4 subdivision the abatement to pay for all or part of the cost of 208.5 acquisition or improvement of public infrastructure, whether or 208.6 not located on or adjacent to the parcel for which the tax is 208.7 abated. The abatement may reduce all or part of the property 208.8 taxlevied byamount for the political subdivision on the 208.9 parcel. A political subdivision's maximum annual amount for a 208.10 parcel equals its total local tax rate multiplied by the total 208.11 net tax capacity of the parcel. 208.12 (b) The political subdivision may limit the abatement: 208.13 (1) to a specific dollar amount per year or in total; 208.14 (2) to the increase in property taxes resulting from 208.15 improvement of the property; 208.16 (3) to the increases in property taxes resulting from 208.17 increases in the market value or tax capacity of the 208.18 property;or208.19 (4) in any other manner the governing body of the 208.20 subdivision determines is appropriate; or 208.21 (5) to the interest and penalty that would otherwise be due 208.22 on taxes that are deferred. 208.23 (c) The political subdivision may not abate tax 208.24 attributable tothe value of the land orthe areawide tax under 208.25 chapter 276A or 473F, except as provided in this subdivision. 208.26 Sec. 11. Minnesota Statutes 1998, section 469.1813, is 208.27 amended by adding a subdivision to read: 208.28 Subd. 6a. [DEFERMENT PAYMENT SCHEDULE.] When the tax is 208.29 deferred and the interest and penalty abated, the political 208.30 subdivision must set a schedule for repayments. The deferred 208.31 payment must be included with the current taxes due and payable 208.32 in the years the deferred payments are due and payable and must 208.33 be levied accordingly. 208.34 Sec. 12. Minnesota Statutes 1998, section 469.1813, 208.35 subdivision 3, is amended to read: 208.36 Subd. 3. [SCHOOL DISTRICTABATEMENT PROCEDUREABATEMENTS.] 209.1Notwithstanding the amounts in subdivision 2, a school district209.2that grants an abatement under this section must limit the209.3abatement for any property to not more than an amount equal to209.4the product of: (1) the property's net tax capacity, and (2)209.5the difference between the district's total tax rate for that209.6year and one-half of the general education tax rate for that209.7year.An abatement granted under this section is not an 209.8 abatement for purposes of state aid or local levy under sections 209.9 127A.40 to 127A.51. 209.10 Sec. 13. Minnesota Statutes 1998, section 469.1813, 209.11 subdivision 6, is amended to read: 209.12 Subd. 6. [DURATION LIMIT.](a)A political subdivision 209.13other than a school districtmay grant an abatement for a period 209.14 no longer than ten years. The subdivision may specify in the 209.15 abatement resolution a shorter duration. If the resolution does 209.16 not specify a period of time, the abatement is for eight years. 209.17 If an abatement has been granted to a parcel of property and the 209.18 period of the abatement has expired, the political subdivision 209.19 that granted the abatement may not grant another abatement for 209.20 eight years after the expiration of the first abatement. This 209.21 prohibition does not apply to improvements added after and not 209.22 subject to the first abatement. 209.23(b) A school district may grant an abatement for only one209.24year at a time. Once a school district has authorized an209.25abatement for a property, it may reauthorize the abatement in209.26any subsequent year for the next seven years, or nine years if209.27provided in the original abatement agreement. This prohibition209.28does not apply to improvements added after and not subject to209.29the original abatement agreement.209.30 Sec. 14. Minnesota Statutes 1998, section 469.1813, is 209.31 amended by adding a subdivision to read: 209.32 Subd. 9. [CONSENT OF PROPERTY OWNER NOT REQUIRED.] A 209.33 political subdivision may abate the taxes on a parcel under 209.34 sections 469.1812 to 469.1815 without obtaining the consent of 209.35 the property owner. 209.36 Sec. 15. Minnesota Statutes 1998, section 469.1815, 210.1 subdivision 2, is amended to read: 210.2 Subd. 2. [PROPERTY TAXES; ABATEMENT PAYMENT.] The total 210.3 property taxes shall be levied on the property and shall be due 210.4 and payable to the county at the times provided under section 210.5 279.01. The political subdivision will pay the abatement to the 210.6 property owner, lessee, or a representative of the 210.7 bondholders or will retain the abatement to pay public 210.8 infrastructure costs, as provided by the abatement resolution. 210.9 Sec. 16. Laws 1997, chapter 231, article 1, section 19, 210.10 subdivision 1, is amended to read: 210.11 Subdivision 1. [TIF GRANTS.] (a) The commissioner of 210.12 revenue shall pay grants to municipalities for deficits in tax 210.13 increment financing districts caused by the changes in class 210.14 rates under this act. Municipalities must submit applications 210.15 for the grants in a form prescribed by the commissioner by no 210.16 later thanMarchAugust 1 for grants payable during the calendar 210.17 year. The maximum grant equals the lesser of: 210.18 (1) for taxes payable in the year before the grant is paid, 210.19 the reduction in the tax increment financing district's revenues 210.20 derived from increment resulting from the class rate changes in 210.21 this article, Laws 1998, chapter 389, article 2, and those 210.22 enacted in the 1999 regular legislative session; or 210.23 (2) the municipality's total tax increments, including 210.24 unspent increments from previous years, less the amount due 210.25 during the calendar year to pay (i) bonds issued and sold before 210.26 the day following final enactment of this act and (ii) binding 210.27 contracts entered into before the day following final enactment 210.28 of this act. 210.29 (b) The commissioner of revenue may require applicants for 210.30 grantsor pooling authorityunder this section to provide any 210.31 information the commissioner deems appropriate. The 210.32 commissioner shall calculate the amount under paragraph (a), 210.33 clause (2), based on the reports for the tax increment financing 210.34 district or districts filed with the state auditor on or before 210.35JulyAugust 1 of the year before the year in which the grant is 210.36 to be paid. 211.1 (c) This subdivision applies only to deficits in tax 211.2 increment financing districts for which: 211.3 (1) the request for certification was made before the 211.4 enactment date of this act; and 211.5 (2) all timely reports have been filed with the state 211.6 auditor, as required by Minnesota Statutes, section 469.175. 211.7 (d) The commissioner shall pay the grants under this 211.8 subdivision by December 26 of the year. 211.9 (e) $2,000,000 is appropriated to the commissioner of 211.10 revenue to make grants under this section. This appropriation 211.11 is available until expended or this section expires under 211.12 subdivision 3, whichever is earlier. If the amount of grant 211.13 entitlements for a year exceed the appropriation, the 211.14 commissioner shall reduce each grant proportionately so the 211.15 total equals the amount available. 211.16 Sec. 17. Laws 1997, chapter 231, article 1, section 19, 211.17 subdivision 3, is amended to read: 211.18 Subd. 3. [EXPIRATION.] This section expires on January 1, 211.1920012002. 211.20 Sec. 18. [CITY OF ONAMIA; USE OF TAX INCREMENT FINANCING.] 211.21 Subdivision 1. [APPLICATION OF TIME LIMIT.] For tax 211.22 increment financing district No. 1-1, established April 14, 211.23 1993, by the city of Onamia, Minnesota Statutes, section 211.24 469.1763, subdivision 3, applies to the qualified portion of the 211.25 district by permitting a period of ten years for commencement of 211.26 activities within the district. As used in this section, 211.27 "qualified portion of the district" means only that portion of 211.28 the district consisting of three parcels fronting on U.S. 169. 211.29 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 211.30 approval by the governing body of the city of Onamia and 211.31 compliance with Minnesota Statutes, section 645.021, subdivision 211.32 3. 211.33 Sec. 19. [ST. CLOUD HOUSING AND REDEVELOPMENT AUTHORITY.] 211.34 Subdivision 1. [TAX INCREMENT POOLING.] Notwithstanding 211.35 the provisions of Minnesota Statutes, section 469.1763, 211.36 subdivision 2, and the provisions of the tax increment financing 212.1 act in effect for districts established by the St. Cloud housing 212.2 and redevelopment authority for which the request for 212.3 certification was made after August 1, 1979, and before June 30, 212.4 1982, revenue derived from tax increments paid by properties in 212.5 the districts may be expended through a development fund or 212.6 otherwise within other tax increment districts established by 212.7 the authority to finance the redevelopment of commercial 212.8 properties outside of tax increment financing districts which 212.9 were destroyed or impacted in a natural gas explosion on 212.10 December 11, 1998. 212.11 Subd. 2. [EFFECTIVE DATE.] This section is effective the 212.12 day after compliance with Minnesota Statutes, section 645.021, 212.13 subdivision 3. 212.14 Sec. 20. [CITY OF ST. PAUL.] 212.15 Subdivision 1. [DELAY OF DEEMED COMMENCEMENT OF TAX 212.16 INCREMENT FINANCING DISTRICT.] Notwithstanding Minnesota 212.17 Statutes, section 469.176, or any other law to the contrary, the 212.18 duration limit of the Williams Hill tax increment district in 212.19 the city of St. Paul is determined as if the date of receipt of 212.20 the first tax increment by the authority occurs when the 212.21 aggregate of all tax increments received from the district 212.22 reaches $2,000. In no case may the duration limit of the 212.23 district be extended by more than two years. 212.24 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 212.25 approval by and compliance with Minnesota Statutes, sections 212.26 469.1782, subdivision 2, and 645.021, subdivision 3, by the 212.27 governing body of the city of St. Paul. 212.28 Sec. 21. [CITY OF JACKSON; TAX INCREMENT FINANCING 212.29 DISTRICT.] 212.30 Subdivision 1. [DISTRICT EXTENSION.] (a) Notwithstanding 212.31 the provisions of Minnesota Statutes, section 469.176, 212.32 subdivision 1c, full tax increments from U.S. 71/I-90 tax 212.33 increment financing district in the city of Jackson must be paid 212.34 to and may be retained by the city of Jackson through taxes 212.35 payable in 2002. The amount to be retained by the city is 212.36 limited to $170,000. Any increments received during the 213.1 extension in excess of $170,000 must be returned as excess 213.2 increments under Minnesota Statutes, section 469.176, 213.3 subdivision 2. 213.4 Subd. 2. [EFFECTIVE DATE.] This section is effective the 213.5 day after compliance with Minnesota Statutes, sections 469.1782, 213.6 subdivision 2, and 645.021, subdivision 3. 213.7 Sec. 22. [CITY OF MINNEOTA; TAX INCREMENT FINANCING.] 213.8 Subdivision 1. [ACTIONS RATIFIED.] The expenditure of tax 213.9 increments on administrative expenses and public utility or 213.10 other improvements by the city of Minneota for its tax increment 213.11 financing district, adopted by city resolution 4-15-85A, are 213.12 ratified and deemed to be authorized by the tax increment 213.13 financing plan for the district. 213.14 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 213.15 compliance by the governing body of the city of Minneota with 213.16 Minnesota Statutes, section 645.021, subdivision 3. 213.17 Sec. 23. [CITY OF FRIDLEY, TAX INCREMENT FINANCING 213.18 DISTRICT.] 213.19 Subdivision 1. [EXTENSION OF TIME.] (a) Notwithstanding 213.20 the provisions of Minnesota Statutes, section 469.176, 213.21 subdivision 1b, upon approval of the governing body of the city 213.22 of Fridley, the Fridley housing and redevelopment authority may, 213.23 by resolution, extend the duration of tax increment financing 213.24 district No. 6 located in the city of Fridley. The housing and 213.25 redevelopment authority may not extend the duration beyond 213.26 December 31, 2025. 213.27 (b) The provisions of Minnesota Statutes, sections 213.28 273.1399, subdivision 8, and 469.1782, subdivision 1, apply to 213.29 this district if extended, except that the maximum state aid 213.30 reduction for a year may not exceed the least of the following 213.31 amounts: 213.32 (1) the amount under Minnesota Statutes, section 469.1782, 213.33 subdivision 1; 213.34 (2) $200,000, plus one-half of (the amount under Minnesota 213.35 Statutes, section 469.1782, subdivision 1, minus $200,000); 213.36 (3) 2.5 percent of the net tax capacity of the city; or 214.1 (4) five percent of the prior year's tax increment from the 214.2 district. 214.3 (c) Notwithstanding any law to the contrary, effective upon 214.4 approval of this section, no increments may be spent on 214.5 activities located outside of the area of the district, other 214.6 than for administrative expenses, sanitary sewer, and the costs 214.7 of trunk highway No. 65 and other road improvements that are a 214.8 direct result of development occurring within the area of the 214.9 district. 214.10 (d) In the taxes payable year that the district would be 214.11 terminated under general law, the original net tax capacity of 214.12 tax increment financing district No. 6 must be increased by the 214.13 net tax capacity of 200,000 square feet of building 214.14 improvements, exclusive of parking structures. 214.15 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 214.16 compliance with the requirements of Minnesota Statutes, sections 214.17 469.1782, subdivision 2, and 645.021. 214.18 Sec. 24. [CITY OF BROOKLYN CENTER; TAX INCREMENT FINANCING 214.19 DISTRICT.] 214.20 Subdivision 1. [CHANGE OF FISCAL DISPARITIES 214.21 ELECTION.] Notwithstanding Minnesota Statutes, section 469.177, 214.22 subdivision 3, paragraph (c), the governing body of the city of 214.23 Brooklyn Center may change its election of the computation of 214.24 tax increment for tax increment district No. 4 under Minnesota 214.25 Statutes, section 469.177, subdivision 3, from the method of 214.26 computation in paragraph (b) to the method in paragraph (a) of 214.27 that provision. 214.28 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 214.29 approval by the governing body of the city of Brooklyn Center 214.30 and compliance with Minnesota Statutes, section 645.021, 214.31 subdivision 3. 214.32 Sec. 25. [CITY OF DAWSON; TAX INCREMENT DISTRICT.] 214.33 Subdivision 1. [DISTRICT EXTENDED.] Notwithstanding 214.34 Minnesota Statutes, section 469.176, subdivision 1b, the Dawson 214.35 economic development authority may collect tax increments from 214.36 tax increment financing district No. 7 for a period of 18 years 215.1 after receipt by the authority of the first increment. 215.2 Subd. 2. [EFFECTIVE DATE; APPLICABILITY.] Subdivision 1 is 215.3 effective upon compliance with Minnesota Statutes, sections 215.4 469.1782, subdivision 2, and 645.021, subdivision 3. 215.5 Sec. 26. [MINNEAPOLIS; TAX INCREMENT FINANCING.] 215.6 Subdivision 1. [SOCIAL AND RECREATIONAL FACILITIES.] The 215.7 provisions of section 2 do not apply to the Mill Ruins Park and 215.8 Milwaukee Road Depot tax increment financing districts and to a 215.9 district designated in the future that contains the former 215.10 federal reserve bank building in the city of Minneapolis. 215.11 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 215.12 compliance by the city of Minneapolis with the requirements of 215.13 Minnesota Statutes 1998, section 645.021, subdivision 3. 215.14 Sec. 27. [APPROPRIATION; TIF GRANTS.] 215.15 $4,000,000 is appropriated to the commissioner of revenue 215.16 for purposes of grants under Laws 1997, chapter 231, article 1, 215.17 section 19, to municipalities to offset deficits in tax 215.18 increment financing districts. 215.19 Sec. 28. [REPEALER.] 215.20 Laws 1997, chapter 231, article 1, section 19, subdivision 215.21 2, is repealed. 215.22 Sec. 29. [EFFECTIVE DATE.] 215.23 Section 1 is effective for requests for certification of a 215.24 new district or for the addition of geographic area to a 215.25 district made after June 30, 1999. 215.26 Section 2 is effective for all tax increment financing 215.27 districts, regardless of when the request for certification was 215.28 made, but does not apply to (1) expenditures made before January 215.29 1, 2000; (2) expenditures made under a binding contract entered 215.30 before January 1, 2000; or (3) expenditures made under a binding 215.31 contract entered pursuant to a letter of intent with the 215.32 developer or contractor if the letter of intent was entered 215.33 before January 1, 2000. 215.34 Section 3 is effective for all districts for which the 215.35 request for certification was made before June 2, 1997. 215.36 Section 4 is effective the day following final enactment 216.1 and applies to districts for which the request for certification 216.2 was made after July 31, 1979, and before July 1, 1982. 216.3 Sections 5 and 6 apply to all districts for which the 216.4 request for certification was made after August 1, 1979, but is 216.5 limited to final letters of noncompliance issued by the state 216.6 auditor after December 31, 1999. 216.7 Sections 8 to 17, and 28 are effective the day following 216.8 final enactment. 216.9 ARTICLE 11 216.10 STATE FUNDING OF DISTRICT COURTS 216.11 TRANSFER OF FINES, FEES, AND OTHER MONEY TO STATE 216.12 Section 1. Minnesota Statutes 1998, section 97A.065, 216.13 subdivision 2, is amended to read: 216.14 Subd. 2. [FINES AND FORFEITED BAIL.] (a) Fines and 216.15 forfeited bail collected from prosecutions of violations of: 216.16 the game and fish laws; sections 84.091 to 84.15; sections 84.81 216.17 to 84.91; section 169.121, when the violation involved an 216.18 off-road recreational vehicle as defined in section 169.01, 216.19 subdivision 86; chapter 348; and any other law relating to wild 216.20 animals or aquatic vegetation, must be paid to the treasurer of 216.21 the county where the violation is prosecuted. The county 216.22 treasurer shall submit one-half of the receipts to the 216.23 commissioner and credit the balance to the county general 216.24 revenue fund except as provided in paragraphs (b), (c), and 216.25 (d). In a county in a judicial district under section 480.181, 216.26 subdivision 1, paragraph (b), as added in 1999 S.F. No. 2221, 216.27 article 7, section 26, the share that would otherwise go to the 216.28 county under this paragraph must be submitted to the state 216.29 treasurer for deposit in the state treasury and credited to the 216.30 general fund. 216.31 (b) The commissioner must reimburse a county, from the game 216.32 and fish fund, for the cost of keeping prisoners prosecuted for 216.33 violations under this section if the county board, by 216.34 resolution, directs: (1) the county treasurer to submit all 216.35 fines and forfeited bail to the commissioner; and (2) the county 216.36 auditor to certify and submit monthly itemized statements to the 217.1 commissioner. 217.2 (c) The county treasurer shall submit one-half of the 217.3 receipts collected under paragraph (a) from prosecutions of 217.4 violations of sections 84.81 to 84.91, and 169.121, except 217.5 receipts that are surcharges imposed under section 357.021, 217.6 subdivision 6, to the state treasurer and credit the balance to 217.7 the county general fund. The state treasurer shall credit these 217.8 receipts to the snowmobile trails and enforcement account in the 217.9 natural resources fund. 217.10 (d) The county treasurer shall indicate the amount of the 217.11 receipts that are surcharges imposed under section 357.021, 217.12 subdivision 6, and shall submit all of those receipts to the 217.13 state treasurer. 217.14 Sec. 2. Minnesota Statutes 1998, section 273.1398, 217.15 subdivision 2, is amended to read: 217.16 Subd. 2. [HOMESTEAD AND AGRICULTURAL CREDIT AID.] 217.17 Homestead and agricultural credit aid for each unique taxing 217.18 jurisdiction equals the product of (1) the homestead and 217.19 agricultural credit aid base, and (2) the growth adjustment 217.20 factor, plus the net tax capacity adjustment and the fiscal 217.21 disparity adjustment.For aid payable in 2000, each county217.22shall have its homestead and agricultural credit aid permanently217.23reduced by an amount equal to one-third of the additional amount217.24received by the county under section 477A.03, subdivision 2,217.25paragraph (c), clause (ii).217.26 Sec. 3. Minnesota Statutes 1998, section 273.1398, is 217.27 amended by adding a subdivision to read: 217.28 Subd. 4a. [AID OFFSET FOR COURT COSTS.] (a) By July 15, 217.29 1999, the supreme court shall determine and certify to the 217.30 commissioner of revenue for each county, other than counties 217.31 located in the eighth judicial district, the county's share of 217.32 the costs assumed under 1999 S.F. No. 2221, article 7, during 217.33 the fiscal year beginning July 1, 2000, less an amount equal to 217.34 the county's share of transferred fines collected by the 217.35 district courts in the county during calendar year 1998. 217.36 (b) Payments to a county under subdivision 2 or section 218.1 273.166 for calendar year 2000 must be permanently reduced by an 218.2 amount equal to 75 percent of the net cost to the state for 218.3 assumption of district court costs as certified in paragraph (a). 218.4 (c) Payments to a county under subdivision 2 or section 218.5 273.166 for calendar year 2001 must be permanently reduced by an 218.6 amount equal to 25 percent of the net cost to the state for 218.7 assumption of district court costs as certified in paragraph (a). 218.8 Sec. 4. Minnesota Statutes 1998, section 299D.03, 218.9 subdivision 5, is amended to read: 218.10 Subd. 5. [FINES AND FORFEITED BAIL MONEY.] (a) All fines 218.11 and forfeited bail money, from traffic and motor vehicle law 218.12 violations, collected from persons apprehended or arrested by 218.13 officers of the state patrol, shall be paid by the person or 218.14 officer collecting the fines, forfeited bail money or 218.15 installments thereof, on or before the tenth day after the last 218.16 day of the month in which these moneys were collected, to the 218.17 county treasurer of the county where the violation occurred. 218.18 Three-eighths of these receipts shall be credited to the general 218.19 revenue fund of the county, except that in a county in a 218.20 judicial district under section 480.181, subdivision 1, 218.21 paragraph (b), as added in 1999 S.F. No. 2221, article 7, 218.22 section 26, this three-eighths share must be transmitted to the 218.23 state treasurer for deposit in the state treasury and credited 218.24 to the general fund. The other five-eighths of these receipts 218.25 shall be transmitted by that officer to the state treasurer and 218.26 shall be credited as follows: 218.27 (1) In the fiscal year ending June 30, 1991, the first 218.28 $275,000 in money received by the state treasurer after June 4, 218.29 1991, must be credited to the transportation services fund, and 218.30 the remainder in the fiscal year credited to the trunk highway 218.31 fund. 218.32 (2) In fiscal year 1992, the first $215,000 in money 218.33 received by the state treasurer in the fiscal year must be 218.34 credited to the transportation services fund, and the remainder 218.35 credited to the trunk highway fund. 218.36 (3) In fiscal years 1993 and subsequent years, the entire 219.1 amount received by the state treasurer must be credited to the 219.2 trunk highway fund. If, however, the violation occurs within a 219.3 municipality and the city attorney prosecutes the offense, and a 219.4 plea of not guilty is entered, one-third of the receipts shall 219.5 be credited to the general revenue fund of the county, one-third 219.6 of the receipts shall be paid to the municipality prosecuting 219.7 the offense, and one-third shall be transmitted to the state 219.8 treasurer as provided in this subdivision. All costs of 219.9 participation in a nationwide police communication system 219.10 chargeable to the state of Minnesota shall be paid from 219.11 appropriations for that purpose. 219.12 (b) Notwithstanding any other provisions of law, all fines 219.13 and forfeited bail money from violations of statutes governing 219.14 the maximum weight of motor vehicles, collected from persons 219.15 apprehended or arrested by employees of the state of Minnesota, 219.16 by means of stationary or portable scales operated by these 219.17 employees, shall be paid by the person or officer collecting the 219.18 fines or forfeited bail money, on or before the tenth day after 219.19 the last day of the month in which the collections were made, to 219.20 the county treasurer of the county where the violation 219.21 occurred. Five-eighths of these receipts shall be transmitted 219.22 by that officer to the state treasurer and shall be credited to 219.23 the highway user tax distribution fund. Three-eighths of these 219.24 receipts shall be credited to the general revenue fund of the 219.25 county, except that in a county in a judicial district under 219.26 section 480.181, subdivision 1, paragraph (b), as added in 1999 219.27 S.F. No. 2221, article 7, section 26, this three-eighths share 219.28 must be transmitted to the state treasurer for deposit in the 219.29 state treasury and credited to the general fund. 219.30 Sec. 5. Minnesota Statutes 1998, section 357.021, 219.31 subdivision 1a, is amended to read: 219.32 Subd. 1a. [TRANSMITTAL OF FEES TO STATE TREASURER.] (a) 219.33 Every person, including the state of Minnesota and all bodies 219.34 politic and corporate, who shall transact any business in the 219.35 district court, shall pay to the court administrator of said 219.36 court the sundry fees prescribed in subdivision 2. Except as 220.1 provided in paragraph (d), the court administrator shall 220.2 transmit the fees monthly to the state treasurer for deposit in 220.3 the state treasury and credit to the general fund. 220.4 (b) In a county which has a screener-collector position, 220.5 fees paid by a county pursuant to this subdivision shall be 220.6 transmitted monthly to the county treasurer, who shall apply the 220.7 fees first to reimburse the county for the amount of the salary 220.8 paid for the screener-collector position. The balance of the 220.9 fees collected shall then be forwarded to the state treasurer 220.10 for deposit in the state treasury and credited to the general 220.11 fund. In a county inthe eightha judicial district under 220.12 section 480.181, subdivision 1, paragraph (b), as added in 1999 220.13 S.F. No. 2221, article 7, section 26, which has a 220.14 screener-collector position, the fees paid by a county shall be 220.15 transmitted monthly to the state treasurer for deposit in the 220.16 state treasury and credited to the general fund. A 220.17 screener-collector position for purposes of this paragraph is an 220.18 employee whose function is to increase the collection of fines 220.19 and to review the incomes of potential clients of the public 220.20 defender, in order to verify eligibility for that service. 220.21 (c) No fee is required under this section from the public 220.22 authority or the party the public authority represents in an 220.23 action for: 220.24 (1) child support enforcement or modification, medical 220.25 assistance enforcement, or establishment of parentage in the 220.26 district court, or child or medical support enforcement 220.27 conducted by an administrative law judge in an administrative 220.28 hearing under section 518.5511; 220.29 (2) civil commitment under chapter 253B; 220.30 (3) the appointment of a public conservator or public 220.31 guardian or any other action under chapters 252A and 525; 220.32 (4) wrongfully obtaining public assistance under section 220.33 256.98 or 256D.07, or recovery of overpayments of public 220.34 assistance; 220.35 (5) court relief under chapter 260; 220.36 (6) forfeiture of property under sections 169.1217 and 221.1 609.531 to 609.5317; 221.2 (7) recovery of amounts issued by political subdivisions or 221.3 public institutions under sections 246.52, 252.27, 256.045, 221.4 256.25, 256.87, 256B.042, 256B.14, 256B.15, 256B.37, and 221.5 260.251, or other sections referring to other forms of public 221.6 assistance; 221.7 (8) restitution under section 611A.04; or 221.8 (9) actions seeking monetary relief in favor of the state 221.9 pursuant to section 16D.14, subdivision 5. 221.10 (d) The fees collected for child support modifications 221.11 under subdivision 2, clause (13), must be transmitted to the 221.12 county treasurer for deposit in the county general fund. The 221.13 fees must be used by the county to pay for child support 221.14 enforcement efforts by county attorneys. 221.15 Sec. 6. Minnesota Statutes 1998, section 477A.03, 221.16 subdivision 2, is amended to read: 221.17 Subd. 2. [ANNUAL APPROPRIATION.] (a) A sum sufficient to 221.18 discharge the duties imposed by sections 477A.011 to 477A.014 is 221.19 annually appropriated from the general fund to the commissioner 221.20 of revenue. 221.21 (b) Aid payments to counties under section 477A.0121 are 221.22 limited to $20,265,000 in 1996. Aid payments to counties under 221.23 section 477A.0121 are limited to $27,571,625 in 1997. For aid 221.24 payable in 1998 and thereafter, the total aids paid under 221.25 section 477A.0121 are the amounts certified to be paid in the 221.26 previous year, adjusted for inflation as provided under 221.27 subdivision 3. 221.28 (c)(i) For aids payable in 1998 and thereafter, the total 221.29 aids paid to counties under section 477A.0122 are the amounts 221.30 certified to be paid in the previous year, adjusted for 221.31 inflation as provided under subdivision 3. 221.32 (ii) Aid payments to counties under section 477A.0122 in 221.33 2000 are further increased by an 221.34 additional$30,000,000$20,000,000 in 2000. 221.35 (d) Aid payments to cities in 1999 under section 477A.013, 221.36 subdivision 9, are limited to $380,565,489. For aids payable in 222.1 2000 and 2001, the total aids paid under section 477A.013, 222.2 subdivision 9, are the amounts certified to be paid in the 222.3 previous year, adjusted for inflation as provided under 222.4 subdivision 3. For aids payable in 2002, the total aids paid 222.5 under section 477A.013, subdivision 9, are the amounts certified 222.6 to be paid in the previous year, adjusted for inflation as 222.7 provided under subdivision 3, and increased by the amount 222.8 certified to be paid in 2001 under section 477A.06. For aids 222.9 payable in 2003 and thereafter, the total aids paid under 222.10 section 477A.013, subdivision 9, are the amounts certified to be 222.11 paid in the previous year, adjusted for inflation as provided 222.12 under subdivision 3. The additional amount authorized under 222.13 subdivision 4 is not included when calculating the appropriation 222.14 limits under this paragraph. 222.15 Sec. 7. Minnesota Statutes 1998, section 485.018, 222.16 subdivision 5, is amended to read: 222.17 Subd. 5. [COLLECTION OF FEES.] The court administrator of 222.18 district court shall charge and collect all fees as prescribed 222.19 by law and all such fees collected by the court administrator as 222.20 court administrator of district court shall be paid to the 222.21 county treasurer. Except for those portions of forfeited bail 222.22 paid to victims pursuant to existing law, the county treasurer 222.23 shall forward all revenue from fees and forfeited bail collected 222.24 under chapters 357, 487, and 574 to the state treasurer for 222.25 deposit in the state treasury and credit to the general fund, 222.26 unless otherwise provided in chapter 611A or other law, in the 222.27 manner and at the times prescribed by the state treasurer, but 222.28 not less often than once each month. If the defendant or 222.29 probationer is located after forfeited bail proceeds have been 222.30 forwarded to the state treasurer, the state treasurer shall 222.31 reimburse the county, on request, for actual costs expended for 222.32 extradition, transportation, or other costs necessary to return 222.33 the defendant or probationer to the jurisdiction where the bail 222.34 was posted, in an amount not more than the amount of forfeited 222.35 bail.All other money must be deposited in the county general222.36fund unless otherwise provided by law.The court administrator 223.1 of district court shall not retain any additional compensation, 223.2 per diem or other emolument for services as court administrator 223.3 of district court, but may receive and retain mileage and 223.4 expense allowances as prescribed by law. 223.5 Sec. 8. Minnesota Statutes 1998, section 487.02, 223.6 subdivision 2, is amended to read: 223.7 Subd. 2. Except as provided in this subdivision, the 223.8 county board shall levy taxes annually against the taxable 223.9 property within the county as necessary for the establishment, 223.10 operation and maintenance of the county court or courts within 223.11 the county. Any county in a judicial district under section 223.12 480.181, subdivision 1, paragraph (b), as added by 1999 S.F. No. 223.13 2221, article 7, section 26, is prohibited from levying property 223.14 taxes for these purposes, except for any amounts necessary to 223.15 pay the costs incurred in the first six months of calendar year 223.16 2000 with respect to counties in the fifth, seventh, and ninth 223.17 judicial districts. 223.18 Sec. 9. Minnesota Statutes 1998, section 487.32, 223.19 subdivision 3, is amended to read: 223.20 Subd. 3. A judge of a county court may order any sums 223.21 forfeited to be reinstated and thecountystate treasurer shall 223.22 then refund accordingly. Thecountystate treasurer shall 223.23 reimburse the court administrator if the court administrator 223.24 refunds the deposit upon a judge's order and obtains a receipt 223.25 to be used as a voucher. 223.26 Sec. 10. Minnesota Statutes 1998, section 487.33, 223.27 subdivision 5, is amended to read: 223.28 Subd. 5. [ALLOCATION.] The court administrator shall 223.29 provide the county treasurer with the name of the municipality 223.30 or other subdivision of government where the offense was 223.31 committed which employed or provided by contract the arresting 223.32 or apprehending officer and the name of the municipality or 223.33 other subdivision of government which employed the prosecuting 223.34 attorney or otherwise provided for prosecution of the offense 223.35 for each fine or penalty and the total amount of fines or 223.36 penalties collected for each municipality or other subdivision 224.1 of government. On or before the last day of each month, the 224.2 county treasurer shall pay over to the treasurer of each 224.3 municipality or subdivision of government within the county all 224.4 fines or penalties for parking violations for which complaints 224.5 and warrants have not been issued and one-third of all fines or 224.6 penalties collected during the previous month for offenses 224.7 committed within the municipality or subdivision of government 224.8 from persons arrested or issued citations by officers employed 224.9 by the municipality or subdivision or provided by the 224.10 municipality or subdivision by contract. An additional 224.11 one-third of all fines or penalties shall be paid to the 224.12 municipality or subdivision of government providing prosecution 224.13 of offenses of the type for which the fine or penalty is 224.14 collected occurring within the municipality or subdivision, 224.15 imposed for violations of state statute or of an ordinance, 224.16 charter provision, rule or regulation of a city whether or not a 224.17 guilty plea is entered or bail is forfeited. Except as provided 224.18 in section 299D.03, subdivision 5, or as otherwise provided by 224.19 law, all other fines and forfeitures and all fees and statutory 224.20 court costs collected by the court administrator shall be paid 224.21 to the county treasurer of the county in which the funds were 224.22 collected who shall dispense them as provided by law. In a 224.23 county in a judicial district under section 480.181, subdivision 224.24 1, paragraph (b), as added in 1999 S.F. No. 2221, article 7, 224.25 section 26, all other fines, forfeitures, fees, and statutory 224.26 court costs must be paid to the state treasurer for deposit in 224.27 the state treasury and credited to the general fund. 224.28 Sec. 11. Minnesota Statutes 1998, section 574.34, 224.29 subdivision 1, is amended to read: 224.30 Subdivision 1. [GENERAL.] Fines and forfeitures not 224.31 specially granted or appropriated by law shall be paid into the 224.32 treasury of the county where they are incurred, except in a 224.33 county in a judicial district under section 480.181, subdivision 224.34 1, paragraph (b), as added in 1999 S.F. No. 2221, article 7, 224.35 section 26, the fines and forfeitures must be deposited in the 224.36 state treasury and credited to the general fund. 225.1 Sec. 12. [APPROPRIATION.] 225.2 $18,731,000 is appropriated for fiscal year 2001 from the 225.3 general fund to the district courts for purposes of funding the 225.4 district court expenses under this article. 225.5 Sec. 13. [EFFECTIVE DATES; CONTINGENCY.] 225.6 (a) Sections 2 and 6 are effective for aids payable in 225.7 2000. The other provisions of this article providing for the 225.8 transfer of fees and fines to the state are effective January 1, 225.9 2000, with respect to counties in the eighth judicial district, 225.10 and July 1, 2000, with respect to counties in the fifth, 225.11 seventh, and ninth judicial districts. 225.12 (b) Notwithstanding paragraph (a), this article does not 225.13 take effect unless the state assumes the district court costs 225.14 under 1999 S.F. No. 2221, article 7. 225.15 ARTICLE 12 225.16 BUSINESS SUBSIDIES 225.17 Section 1. [116J.993] [DEFINITIONS.] 225.18 Subdivision 1. [SCOPE.] For the purposes of sections 225.19 116J.993 to 116J.995, the terms defined in this section have the 225.20 meanings given them. 225.21 Subd. 2. [BENEFIT DATE.] "Benefit date" means the date 225.22 that the recipient receives the business subsidy. If the 225.23 business subsidy involves the purchase, lease, or donation of 225.24 physical equipment, then the benefit date begins when the 225.25 recipient puts the equipment into service. If the business 225.26 subsidy is for improvements to property, then the benefit date 225.27 refers to the earliest date of either: 225.28 (1) when the improvements are finished for the entire 225.29 project; or 225.30 (2) when a business occupies the property. If a business 225.31 occupies the property and the subsidy grantor expects that other 225.32 businesses will also occupy the same property, the grantor may 225.33 assign a separate benefit date for each business when it first 225.34 occupies the property. 225.35 Subd. 3. [BUSINESS SUBSIDY.] "Business subsidy" or 225.36 "subsidy" means a state or local government agency grant, 226.1 contribution of personal property, real property, 226.2 infrastructure, the principal amount of a loan at rates below 226.3 those commercially available to the recipient, any reduction or 226.4 deferral of any tax or any fee, any guarantee of any payment 226.5 under any loan, lease, or other obligation, or any preferential 226.6 use of government facilities given to a business. 226.7 The following forms of financial assistance are not a 226.8 business subsidy: 226.9 (1) a business subsidy of less than $25,000; 226.10 (2) assistance that is generally available to all 226.11 businesses or to a general class of similar businesses, such as 226.12 a line of business, size, location, or similar general criteria; 226.13 (3) public improvements to buildings or lands owned by the 226.14 state or local government that serve a public purpose and do not 226.15 principally benefit a single business or defined group of 226.16 businesses at the time the improvements are made; 226.17 (4) redevelopment property polluted by contaminants as 226.18 defined in section 116J.552, subdivision 3; 226.19 (5) assistance provided for the sole purpose of renovating 226.20 old or decaying building stock or bringing it up to code, 226.21 provided that the assistance is equal to or less than 50 percent 226.22 of the total cost; 226.23 (6) assistance provided to organizations whose primary 226.24 mission is to provide job readiness and training services if the 226.25 sole purpose of the assistance is to provide those services; 226.26 (7) assistance for housing; 226.27 (8) assistance for pollution control or abatement; 226.28 (9) assistance for energy conservation; 226.29 (10) tax reductions resulting from conformity with federal 226.30 tax law; 226.31 (11) workers' compensation and unemployment compensation; 226.32 (12) benefits derived from regulation; 226.33 (13) indirect benefits derived from assistance to 226.34 educational institutions; 226.35 (14) funds from bonds allocated under chapter 474A; 226.36 (15) assistance for a collaboration between a Minnesota 227.1 higher education institution and a business; 227.2 (16) assistance for a tax increment financing soils 227.3 condition district as defined under section 469.174, subdivision 227.4 19; 227.5 (17) redevelopment when the recipient's investment in the 227.6 purchase of the site and in site preparation is 70 percent or 227.7 more of the assessor's current year's estimated market value; 227.8 and 227.9 (18) general changes in tax increment financing law and 227.10 other general tax law changes of a principally technical nature. 227.11 Subd. 4. [GRANTOR.] "Grantor" means any state or local 227.12 government agency with the authority to grant a business subsidy. 227.13 Subd. 5. [LOCAL GOVERNMENT AGENCY.] "Local government 227.14 agency" includes a statutory or home rule charter city, housing 227.15 and redevelopment authority, town, county, port authority, 227.16 economic development authority, community development agency, 227.17 nonprofit entity created by a local government agency, or any 227.18 other entity created by or authorized by a local government with 227.19 authority to provide business subsidies. 227.20 Subd. 6. [RECIPIENT.] "Recipient" means any for-profit or 227.21 nonprofit business entity that receives a business subsidy. 227.22 Only nonprofit entities with at least 100 full-time equivalent 227.23 positions and with a ratio of highest to lowest paid employee, 227.24 that exceeds ten to one, determined on the basis of full-time 227.25 equivalent positions, are included in this definition. 227.26 Subd. 7. [STATE GOVERNMENT AGENCY.] "State government 227.27 agency" means any state agency that has the authority to award 227.28 business subsidies. 227.29 Sec. 2. [116J.994] [REGULATING LOCAL AND STATE BUSINESS 227.30 SUBSIDIES.] 227.31 Subdivision 1. [PUBLIC PURPOSE.] A business subsidy must 227.32 meet a public purpose other than increasing the tax base. Job 227.33 retention may only be used as a public purpose in cases where 227.34 job loss is imminent and demonstrable. 227.35 Subd. 2. [DEVELOPING A SET OF CRITERIA.] A business 227.36 subsidy may not be granted until the grantor has adopted 228.1 criteria after a public hearing for awarding business subsidies 228.2 that comply with this section. The criteria must include a 228.3 policy regarding the wages to be paid for the jobs created. The 228.4 commissioner of trade and economic development may assist local 228.5 government agencies in developing criteria. 228.6 Subd. 3. [SUBSIDY AGREEMENT.] (a) A recipient must enter 228.7 into a subsidy agreement with the grantor of the subsidy that 228.8 includes: 228.9 (1) a description of the subsidy, including the amount and 228.10 type of subsidy, and type of district if the subsidy is tax 228.11 increment financing; 228.12 (2) a statement of the public purposes for the subsidy; 228.13 (3) goals for the subsidy; 228.14 (4) a description of the financial obligation of the 228.15 recipient if the goals are not met; 228.16 (5) a statement of why the subsidy is needed; 228.17 (6) a commitment to continue operations at the site where 228.18 the subsidy is used for at least five years after the benefit 228.19 date; 228.20 (7) the name and address of the parent corporation of the 228.21 recipient, if any; and 228.22 (8) a list of all financial assistance by all grantors for 228.23 the project. 228.24 (b) Business subsidies in the form of grants must be 228.25 structured as forgivable loans. If a business subsidy is not 228.26 structured as a forgivable loan, the agreement must state the 228.27 fair market value of the subsidy to the recipient, including the 228.28 value of conveying property at less than a fair market price, or 228.29 other in-kind benefits to the recipient. 228.30 (c) If a business subsidy benefits more than one recipient, 228.31 the grantor must assign a proportion of the business subsidy to 228.32 each recipient that signs a subsidy agreement. The proportion 228.33 assessed to each recipient must reflect a reasonable estimate of 228.34 the recipient's share of the total benefits of the project. 228.35 (d) The state or local government agency and the recipient 228.36 must both sign the subsidy agreement and, if the grantor is a 229.1 local government agency, the agreement must be approved by the 229.2 local elected governing body, except for the St. Paul Port 229.3 Authority and a seaway port authority. 229.4 Subd. 4. [WAGE AND JOB GOALS.] The subsidy agreement, in 229.5 addition to any other goals, must include: (1) goals for the 229.6 number of jobs created, which may include separate goals for the 229.7 number of part-time or full-time jobs, or, in cases where job 229.8 loss is imminent and demonstrable, goals for the number of jobs 229.9 retained; and (2) wage goals for the jobs created or retained. 229.10 In addition to other specific goal time frames, the wage 229.11 and job goals must contain specific goals to be attained within 229.12 two years of the benefit date. 229.13 Subd. 5. [PUBLIC NOTICE AND HEARING.] (a) Before granting 229.14 a business subsidy that exceeds $500,000 for a state government 229.15 grantor and $100,000 for a local government grantor, the grantor 229.16 must provide public notice and a hearing on the subsidy. A 229.17 public hearing and notice under this subdivision is not required 229.18 if a hearing and notice on the subsidy is otherwise required by 229.19 law. 229.20 (b) Public notice of a proposed business subsidy under this 229.21 subdivision by a state government grantor must be published in 229.22 the State Register. Public notice of a proposed business 229.23 subsidy under this subdivision by a local government grantor 229.24 must be published in a local newspaper of general circulation. 229.25 The public notice must identify the location at which 229.26 information about the business subsidy, including a copy of the 229.27 subsidy agreement, is available. Published notice should be 229.28 sufficiently conspicuous in size and placement to distinguish 229.29 the notice from the surrounding text. The grantor must make the 229.30 information available in printed paper copies and, if possible, 229.31 on the Internet. The government agency must provide at least a 229.32 ten-day notice for the public hearing. 229.33 (c) The public notice must include the date, time, and 229.34 place of the hearing. 229.35 (d) The public hearing by a state government grantor must 229.36 be held in St. Paul. 230.1 Subd. 6. [FAILURE TO MEET GOALS.] The subsidy agreement 230.2 must specify the recipient's obligation if the recipient does 230.3 not fulfill the agreement. At a minimum, the agreement must 230.4 require a recipient failing to meet subsidy agreement goals to 230.5 pay back the assistance plus interest to the grantor provided 230.6 that repayment may be prorated to reflect partial fulfillment of 230.7 goals. The interest rate must be set at the implicit price 230.8 deflator defined under section 275.70, subdivision 2. The 230.9 grantor, after a public hearing, may extend for up to one year 230.10 the period for meeting the goals provided in a subsidy agreement. 230.11 A recipient that fails to meet the terms of a subsidy 230.12 agreement may not receive a business subsidy from any grantor 230.13 for a period of five years from the date of failure or until a 230.14 recipient satisfies its repayment obligation under this 230.15 subdivision, whichever occurs first. 230.16 Before a grantor signs a business subsidy agreement, the 230.17 grantor must check with the compilation and summary report 230.18 required by this section to determine if the recipient is 230.19 eligible to receive a business subsidy. 230.20 Subd. 7. [REPORTS BY RECIPIENTS TO GRANTORS.] (a) A 230.21 business subsidy grantor must monitor the progress by the 230.22 recipient in achieving agreement goals. 230.23 (b) A recipient must provide information regarding goals 230.24 and results for two years after the benefit date or until the 230.25 goals are met, whichever is later. If the goals are not met, 230.26 the recipient must continue to provide information on the 230.27 subsidy until the subsidy is repaid. The information must be 230.28 filed on forms developed by the commissioner in cooperation with 230.29 representatives of local government. Copies of the completed 230.30 forms must be sent to the commissioner and the local government 230.31 agency that provided the business subsidy. The report must 230.32 include: 230.33 (1) the type, public purpose, and amount of subsidies and 230.34 type of district, if the subsidy is tax increment financing; 230.35 (2) the hourly wage of each job created with separate bands 230.36 of wages; 231.1 (3) the sum of the hourly wages and cost of health 231.2 insurance provided by the employer with separate bands of wages; 231.3 (4) the date the job and wage goals will be reached; 231.4 (5) a statement of goals identified in the subsidy 231.5 agreement and an update on achievement of those goals; 231.6 (6) the location of the recipient prior to receiving the 231.7 business subsidy; 231.8 (7) why the recipient did not complete the project outlined 231.9 in the subsidy agreement at their previous location, if the 231.10 recipient was previously located at another site in Minnesota; 231.11 (8) the name and address of the parent corporation of the 231.12 recipient, if any; 231.13 (9) a list of all financial assistance by all grantors for 231.14 the project; and 231.15 (10) other information the commissioner may request. 231.16 A report must be filed no later than March 1 of each year for 231.17 the previous year and within 30 days after the deadline for 231.18 meeting the job and wage goals. 231.19 (c) Financial assistance that is excluded from the 231.20 definition of "business subsidy" by section 116J.993, 231.21 subdivision 3, clauses (4), (5), (8), and (16) is subject to the 231.22 reporting requirements of this subdivision, except that the 231.23 report of the recipient must include: 231.24 (1) the type, public purpose, and amount of the financial 231.25 assistance, and type of district if the subsidy is tax increment 231.26 financing; 231.27 (2) progress towards meeting goals stated in the subsidy 231.28 agreement and the public purpose of the assistance; 231.29 (3) the hourly wage of each job created with separate bands 231.30 of wages; 231.31 (4) the sum of the hourly wages and cost of health 231.32 insurance provided by the employer with separate bands of wages; 231.33 (5) the location of the recipient prior to receiving the 231.34 assistance; and 231.35 (6) other information the grantor requests. 231.36 (d) If the recipient does not submit its report, the local 232.1 government agency must mail the recipient a warning within one 232.2 week of the required filing date. If, after 14 days of the 232.3 postmarked date of the warning, the recipient fails to provide a 232.4 report, the recipient must pay to the grantor a penalty of $100 232.5 for each subsequent day until the report is filed. The maximum 232.6 penalty shall not exceed $1,000. 232.7 Subd. 8. [REPORTS BY GRANTORS.] (a) Local government 232.8 agencies of a local government with a population of more than 232.9 2,500 and state government agencies, regardless of whether or 232.10 not they have awarded any business subsidies, must file a report 232.11 by April 1 of each year with the commissioner. Local government 232.12 agencies of a local government with a population of 2,500 or 232.13 less are exempt from filing this report if they have not awarded 232.14 a business subsidy in the past five years. The local government 232.15 agency must include a list of recipients that did not complete 232.16 the report and of recipients that have not met their job and 232.17 wage goals within two years and the steps being taken to bring 232.18 them into compliance or to recoup the subsidy. 232.19 If the commissioner has not received the report by April 1 232.20 from an entity required to report, the commissioner shall issue 232.21 a warning to the government agency. If the commissioner has 232.22 still not received the report by June 1 of that same year from 232.23 an entity required to report, then that government agency may 232.24 not award any business subsidies until the report has been filed. 232.25 (b) The commissioner of trade and economic development must 232.26 provide information on reporting requirements to state and local 232.27 government agencies. 232.28 Subd. 9. [COMPILATION AND SUMMARY REPORT.] The department 232.29 of trade and economic development must publish a compilation and 232.30 summary of the results of the reports for the previous calendar 232.31 year by July 1 of each year. The reports of the government 232.32 agencies to the department and the compilation and summary 232.33 report of the department must be made available to the public. 232.34 The commissioner must coordinate the production of reports 232.35 so that useful comparisons across time periods and across 232.36 grantors can be made. The commissioner may add other 233.1 information to the report as the commissioner deems necessary to 233.2 evaluate business subsidies. Among the information in the 233.3 summary and compilation report, the commissioner must include: 233.4 (1) total amount of subsidies awarded in each development 233.5 region of the state; 233.6 (2) distribution of business subsidy amounts by size of the 233.7 business subsidy; 233.8 (3) distribution of business subsidy amounts by time 233.9 category, such as monthly or quarterly; 233.10 (4) distribution of subsidies by type and by public 233.11 purpose; 233.12 (5) percent of all business subsidies that reached their 233.13 goals; 233.14 (6) percent of business subsidies that did not reach their 233.15 goals by two years from the benefit date; 233.16 (7) total dollar amount of business subsidies that did not 233.17 meet their goals after two years from the benefit date; 233.18 (8) percent of subsidies that did not meet their goals and 233.19 that did not receive repayment; 233.20 (9) list of recipients that have failed to meet the terms 233.21 of a subsidy agreement in the past five years and have not 233.22 satisfied their repayment obligations; 233.23 (10) number of part-time and full-time jobs within separate 233.24 bands of wages; and 233.25 (11) benefits paid within separate bands of wages. 233.26 Sec. 3. [116J.995] [ECONOMIC GRANTS.] 233.27 An appropriation rider in an appropriation to the 233.28 department of trade and economic development that specifies that 233.29 the appropriation be granted to a particular business or class 233.30 of businesses must contain a statement of the expected benefits 233.31 associated with the grant. At a minimum, the statement must 233.32 include goals for the number of jobs created, wages paid, and 233.33 the tax revenue increases due to the grant. 233.34 Sec. 4. [REPEALER.] 233.35 Minnesota Statutes 1998, section 116J.991, is repealed. 233.36 Sec. 5. [EFFECTIVE DATE.] 234.1 Sections 1 to 4 are effective for business subsidies 234.2 entered into or state appropriations authorized on or after 234.3 August 1, 1999. 234.4 ARTICLE 13 234.5 TAX FORFEITURE AND DELINQUENCY PROCEDURES 234.6 Section 1. Minnesota Statutes 1998, section 92.51, is 234.7 amended to read: 234.8 92.51 [TAXATION; REDEMPTION; SPECIAL CERTIFICATE.] 234.9 State lands sold by the director become taxable. A 234.10 description of the tract sold, with the name of the purchaser, 234.11 must be transmitted to the proper county auditor. The auditor 234.12 must extend the land for taxation like other land. Only the 234.13 interest in the land vested by the land sale certificate in its 234.14 holder may be sold for delinquent taxes.Upon production to the234.15county treasurer of the tax certificate given upon tax sale, in234.16case the lands have not been redeemed, the tax purchaser has the234.17right to pay the principal and interest then in default upon the234.18land sale certificate as its assignee. To redeem from a tax234.19sale, the person redeeming must pay the county treasurer, for234.20the holder and owner of the tax sale certificate, in addition to234.21all sums required to be paid in other cases, all amounts paid by234.22the holder and owner for interest and principal upon the land234.23sale certificate, with interest at 12 percent per year. When234.24the director receives the tax certificate with the county234.25auditor's certificate of the expiration of the time for234.26redemption, and the county treasurer's receipt for all234.27delinquent interest and penalty on the land sale certificate,234.28the director shall issue the holder and owner of the tax234.29certificate a special certificate with the same terms and the234.30same effect as the original land sale certificate.234.31 Sec. 2. Minnesota Statutes 1998, section 279.37, 234.32 subdivision 1, is amended to read: 234.33 Subdivision 1. [COMPOSITION INTO ONE ITEM.] Delinquent 234.34 taxes upon any parcel of real estate may be composed into one 234.35 item or amount by confession of judgment at any time prior to 234.36 the forfeiture of the parcel of land to the state for taxes, for 235.1 the aggregate amount of all the taxes, costs, penalties, and 235.2 interest accrued against the parcel, ashereinafterprovided in 235.3 this section. Taxes upon property which, for the previous 235.4 year's assessment, was classified as mineral property, 235.5 employment property, or commercial or industrial propertyshall235.6 are onlybeeligible to be composed into any confession of 235.7 judgment under this section as provided in subdivision 235.8 1a. Delinquent taxes for property that has been reclassified 235.9 from 4bb to 4b under section 273.1319 may not be composed into a 235.10 confession of judgment under this subdivision. Delinquent taxes 235.11 on unimproved land are eligible to be composed into a confession 235.12 of judgment only if the land is classified as homestead, 235.13 agricultural, or timberland in the previous year or is eligible 235.14 for installment payment under subdivision 1a. The entire parcel 235.15 is eligible for the ten-year installment plan as provided in 235.16 subdivision 2 if 25 percent or more of the market value of the 235.17 parcel is eligible for confession of judgment under this 235.18 subdivision. 235.19 Sec. 3. Minnesota Statutes 1998, section 279.37, 235.20 subdivision 1a, is amended to read: 235.21 Subd. 1a. [CLASS 3A PROPERTY.] (a) The delinquent taxes 235.22 upon a parcel of property which was classified class 3a, for the 235.23 previous year's assessment and had a total market value ofless235.24than$200,000 or less for that same assessment shall be eligible 235.25 to be composed into a confession of judgment. Property 235.26 qualifying under this subdivision shall be subject to the same 235.27 provisions as provided in this section except ashereinprovided 235.28 in paragraphs (b) to (d). 235.29(a)(b) Current year taxes and penalty due at the time the 235.30 confession of judgment is entered must be paid. 235.31 (c) The down paymentshallmust include all special 235.32 assessments due in the current tax year, all delinquent special 235.33 assessments, and 20 percent of the ad valorem tax, penalties, 235.34 and interest accrued against the parcel. The balance 235.35 remainingshall beis payable in four equal annual installments; 235.36 and 236.1(b)(d) The amounts entered in judgmentshallbear interest 236.2 at the rate provided in section 279.03, subdivision 1a, 236.3 commencing with the date the judgment is entered. The interest 236.4 rate is subject to change each year on the unpaid balance in the 236.5 manner provided in section 279.03, subdivision 1a. 236.6 Sec. 4. Minnesota Statutes 1998, section 279.37, 236.7 subdivision 2, is amended to read: 236.8 Subd. 2. [INSTALLMENT PAYMENTS.] The owner of any such 236.9 parcel, or any person to whom the right to pay taxes has been 236.10 given by statute, mortgage, or other agreement, may make and 236.11 file with the county auditor of the countywhereinin which the 236.12 parcel is located a written offer to pay the current taxes each 236.13 year before they become delinquent, or to contest the taxes 236.14 under Minnesota Statutes 1941, sections 278.01 to 278.13, and 236.15 agree to confess judgment for the amounthereinbeforeprovided, 236.16 as determined by the county auditor, and shall thereby waive. 236.17 By filing the offer, the owner waives all irregularities in 236.18 connection with the tax proceedings affecting the parcel and any 236.19 defense or objection which the owner may have to the 236.20 proceedings, andshall thereby waivealso waives the 236.21 requirements of any notice of default in the payment of any 236.22 installment or interest to become due pursuant to the composite 236.23 judgment to be so entered, and shall tender therewith. With the 236.24 offer, the owner shall tender one-tenth of the amount of the 236.25 delinquent taxes, costs, penalty, and interest, and shall tender 236.26 all current year taxes and penalty due at the time the 236.27 confession of judgment is entered. In the offer, the owner 236.28 shall agreethereinto pay the balance in nine equal 236.29 installments, with interest as provided in section 279.03, 236.30 payable annually on installments remaining unpaid from time to 236.31 time, on or before December 31 of each year following the year 236.32 in which judgment was confessed, which. The offershallmust be 236.33 substantially as follows: 236.34 "To the court administrator of the district court of 236.35 ........... county, I, ....................., am the owner of 236.36 the following described parcel of real estatesituatelocated in 237.1 .................... county, Minnesota, to-wit: 237.2 .............................. Uponwhichthat real estate there 237.3 are delinquent taxes for the year ........., and prior years, as 237.4 follows: (here insert year of delinquency and the total amount 237.5 of delinquent taxes, costs, interest, and penalty)do hereby. 237.6 By signing this document I offer to confess judgment in the sum 237.7 of $...... andherebywaive all irregularities in the tax 237.8 proceedings affectingsuchthese taxes and any defense or 237.9 objection which I may havetheretoto them, and direct judgment 237.10 to be entered for theamount hereby confessedamount stated 237.11 above,lessminus the sum of $............,hereby tenderedto 237.12 be paid with this document,beingwhich is one-tenth of the 237.13 amount ofsaidthe taxes, costs, penalty, and interest;stated 237.14 above. I agree to pay the balance ofsaidthe judgment in nine 237.15 equal, annual installments, with interest as provided in section 237.16 279.03, payable annually, on the installments remaining 237.17 unpaidfrom time to time, said. I agree to pay the installments 237.18 and interestto be paidon or before December 31 of each year 237.19 following the year in which this judgment is confessed and 237.20 current taxes each year before they become delinquent, or within 237.21 30 days after the entry of final judgment in proceedings to 237.22 contestsuchthe taxes under Minnesota Statutes1941, sections 237.23 278.01 to 278.13. 237.24 Datedthis.............., ......." 237.25 Sec. 5. Minnesota Statutes 1998, section 281.23, 237.26 subdivision 2, is amended to read: 237.27 Subd. 2. [MAY COVER PARCELS BID IN AT SAME TAX SALEFORM.] 237.28All parcels of land bid in at the same tax judgment sale and237.29having the same period of redemption shall be covered by a237.30single posted notice, but a separate notice may be posted for237.31any parcel which may be omitted. SuchThe notice of expiration 237.32 of redemption must contain the tax parcel identification numbers 237.33 and legal descriptions of parcels subject to notice of 237.34 expiration of redemption provisions prescribed under subdivision 237.35 1. The notice must also indicate the names of taxpayers and fee 237.36 owners of record in the office of the county auditor at the time 238.1 the notice is prepared and names of those parties who have filed 238.2 their addresses according to section 276.041 and the amount of 238.3 payment necessary to redeem as of the date of the notice. At 238.4 the option of the county auditor, the current filed addresses of 238.5 affected persons may be included on the notice. The notice 238.6shall beis sufficient if substantially in the following form: 238.7 "NOTICE OF EXPIRATION OF REDEMPTION 238.8 Office of the County Auditor 238.9 County of ......................., State of Minnesota. 238.10 To all personsinterestedhaving an interest inthelands 238.11hereinafterdescribed in this notice: 238.12 You areherebynotified that the parcels of land 238.13hereinafterdescribed, situatedin this notice and located in 238.14 the county of ................................, state of 238.15 Minnesota,were bid in for the state on the238.16......................... day of .......................,238.17......., at the tax judgment sale of land for delinquent taxes238.18for the year .......; that the legal descriptions and tax parcel238.19identification numbers of such parcels and names of the238.20taxpayers and fee owners and in addition those parties who have238.21filed their addresses pursuant to section 276.041, and the238.22amount necessary to redeem as of the date hereof and, at the238.23election of the county auditor, the current filed addresses of238.24any such persons, are as follows:are subject to forfeiture to 238.25 the state of Minnesota because of nonpayment of delinquent 238.26 property taxes, special assessments, penalties, interest, and 238.27 costs levied on those parcels. The time for redemption from 238.28 forfeiture expires if a redemption is not made by the later of 238.29 (1) 60 days after service of this notice on all persons having 238.30 an interest in the lands of record at the office of the county 238.31 recorder or registrar of titles, or (2) by the second Monday in 238.32 May. The redemption must be made in my office. 238.33 Names (and 238.34 Current Filed 238.35 Addresses) for 238.36 the Taxpayers 239.1 and Fee Owners 239.2 andin Addition239.3 Those Parties 239.4 Who Have Filed Amount 239.5 Their Addresses Tax Necessary to 239.6 Pursuant to Legal Parcel Redeem as of 239.7 section 276.041 Description Number DateHereof239.8 of Notice 239.9 ................ ........... ...... ............ 239.10 ................ ........... ...... ............ 239.11That the time for redemption of such lands from such sale239.12will expire 60 days after service of notice and the filing of239.13proof thereof in my office, as provided by law. The redemption239.14must be made in my office.239.15 FAILURE TO REDEEMSUCHTHE LANDS PRIOR TO THE EXPIRATION 239.16 OF REDEMPTION WILL RESULT IN THE LOSS OF THE LAND AND 239.17 FORFEITUREOF SAID LANDTO THE STATE OF MINNESOTA. 239.18 Inquiries as tothethese proceedingsset forth abovecan 239.19 be made to the County Auditor forthe............... Countyof239.20..............., whose address is set forth below. 239.21 Witness my hand and official seal this 239.22 ............................ day of ................, ....... 239.23 ......................... 239.24 County Auditor 239.25 (OFFICIAL SEAL) 239.26 ......................... 239.27 (Address) 239.28 ......................... 239.29 (Telephone)." 239.30SuchThe noticeshallmust be posted by the auditor in the 239.31 auditor's office, subject to public inspection, andshallmust 239.32 remain so posted until at least one week after the date of the 239.33 last publication of notice, ashereinafterprovided in this 239.34 section. Proof ofsuchpostingshallmust be made by the 239.35 certificate of the auditor, filed in the auditor's office. 239.36 Sec. 6. Minnesota Statutes 1998, section 281.23, 240.1 subdivision 4, is amended to read: 240.2 Subd. 4. [PROOF OF PUBLICATION.] An affidavit establishing 240.3 proof of publication ofsuchthe notice affidavit, as provided 240.4 by law,shallmust be filed in the office of the county 240.5 auditor. A single published noticeshall be sufficient for all240.6 may include parcels of land bid in atthe samedifferent tax 240.7 judgmentsalesales,having the same periodbut included parcels 240.8 must have a common year for expiration of redemption, and240.9covered by a notice or notices kept posted during the time of240.10the publication, as hereinbefore provided. 240.11 Sec. 7. Minnesota Statutes 1998, section 281.23, 240.12 subdivision 6, is amended to read: 240.13 Subd. 6. [SERVICE OF NOTICE.] (a)ForthwithImmediately 240.14 after the commencement ofsuchpublication or mailing the county 240.15 auditor shall deliver to the sheriff of the county or any other 240.16 person not less than 18 years of age a sufficient number of 240.17 copies ofsuchthe notice of expiration of redemption for 240.18 serviceuponon the persons in possession of all parcels of such 240.19 landas areactually occupied, and documentation if the 240.20 certified mail notice was returned as undeliverable or the 240.21 notice was not mailed to the address associated with the 240.22 property. Within 30 days after receiptthereofof the notice, 240.23 the sheriff or other person serving the notice shallmake such240.24investigationinvestigate asmay benecessary to ascertain 240.25 whether or not the parcels covered bysuchthe notice are 240.26 actually occupied parcels, and shall serve a copy ofsuchthe 240.27 notice of expiration of redemption upon the person in possession 240.28 of each parcel found to be an occupied parcel, in the manner 240.29 prescribed for serving summons in a civil action. If the 240.30 sheriff or another person serving the notice has made at least 240.31 two attempts to serve the notice of expiration of redemption, 240.32 one between the weekday hours of 8:00 a.m. and 5:00 p.m. and the 240.33 other on a different day and different time period, the sheriff 240.34 or another person serving the notice may accomplish this service 240.35 by posting a copy of the notice of expiration of redemption on a 240.36 conspicuous location on the parcel. The sheriff or other person 241.1 serving the notice shall make prompt return to the auditor as to 241.2 all notices so served and as to all parcels found vacant and 241.3 unoccupied and parcels served by posting.SuchThe returnshall241.4 must be madeuponon a copy ofsuchthe notice andshall be241.5 is prima facie evidence of the factsthereinstated in it. 241.6 If the notice is served by the sheriff, the sheriff shall 241.7 receive from the county, in addition to other compensation 241.8 prescribed by law,suchfees and mileage for service on persons 241.9 in possession asareprescribed by law for such service in other 241.10 cases, and shall also receivesuchcompensation for making 241.11 investigation and return as to vacant and unoccupied lands as 241.12 the county board may fix, subject to appeal to the district 241.13 court as in case of other claims against the county. As to 241.14 either service upon persons in possession or return as to vacant 241.15 lands, the sheriff shall charge mileage only for one trip if the 241.16 occupants of more than two tracts are served simultaneously, and 241.17 in such case mileageshallmust be prorated and charged 241.18 equitably against all such owners. 241.19 (b) The secretary of state shall receive sheriff's service 241.20 for all out-of-state interests. 241.21 Sec. 8. Minnesota Statutes 1998, section 282.01, 241.22 subdivision 1, is amended to read: 241.23 Subdivision 1. [CLASSIFICATION AS CONSERVATION OR 241.24 NONCONSERVATION.] It is the general policy of this state to 241.25 encourage the best use of tax-forfeited lands, recognizing that 241.26 some lands in public ownership should be retained and managed 241.27 for public benefits while other lands should be returned to 241.28 private ownership. Parcels of land becoming the property of the 241.29 state in trust under law declaring the forfeiture of lands to 241.30 the state for taxesshallmust be classified by the county board 241.31 of the county in which the parcels lie as conservation or 241.32 nonconservation. In making the classification the board shall 241.33 consider the present use of adjacent lands, the productivity of 241.34 the soil, the character of forest or other growth, accessibility 241.35 of lands to established roads, schools, and other public 241.36 services, their peculiar suitability or desirability for 242.1 particular uses and the suitability of the forest resources on 242.2 the land for multiple use, sustained yield management. The 242.3 classification, furthermore, must encourage and foster a mode of 242.4 land utilization that will facilitate the economical and 242.5 adequate provision of transportation, roads, water supply, 242.6 drainage, sanitation, education, and recreation; facilitate 242.7 reduction of governmental expenditures; conserve and develop the 242.8 natural resources; and foster and develop agriculture and other 242.9 industries in the districts and places best suited to them. 242.10 In making the classification the county board may use 242.11 information made available by any office or department of the 242.12 federal, state, or local governments, or by any other person or 242.13 agency possessing pertinent information at the time the 242.14 classification is made. The lands may be reclassified from time 242.15 to time as the county boardmay considerconsiders necessary or 242.16 desirable, except for conservation lands held by the state free 242.17 from any trust in favor of any taxing district. 242.18 If the lands are located within the boundaries of an 242.19 organized town, with taxable valuation in excess of $20,000, or 242.20 incorporated municipality, the classification or 242.21 reclassification and sale must first be approved by the town 242.22 board of the town or the governing body of the municipality in 242.23 which the lands are located. The town board of the town or the 242.24 governing body of the municipality is considered to have 242.25 approved the classification or reclassification and sale if the 242.26 county board is not notified of the disapproval of the 242.27 classification or reclassification and sale within9060 days of 242.28 the date the request for approval was transmitted to the town 242.29 board of the town or governing body of the municipality. If the 242.30 town board or governing body desires to acquire any parcel lying 242.31 in the town or municipality by procedures authorized in this 242.32 section, it must file a written application with the county 242.33 board to withhold the parcel from public sale. The application 242.34 must be filed within9060 days of the request for 242.35 classification or reclassification and sale. The county board 242.36 shall then withhold the parcel from public sale forone yearsix 243.1 months. A municipality or governmental subdivision shall pay 243.2 maintenance costs incurred by the county during the six-month 243.3 period while the property is withheld from public sale, provided 243.4 the property is not offered for public sale after the six-month 243.5 period. A clerical error made by county officials does not 243.6 serve to eliminate the request of the town board or governing 243.7 body if the board or governing body has forwarded the 243.8 application to the county auditor. 243.9 Sec. 9. Minnesota Statutes 1998, section 282.01, 243.10 subdivision 4, is amended to read: 243.11 Subd. 4. [SALE: METHOD, REQUIREMENTS, EFFECTS.] The sale 243.12shallmust be conducted by the county auditor at the county seat 243.13 of the county in which the parcels lie,providedexcept that,in 243.14 St. Louis and Koochiching counties, the sale may be conducted in 243.15 any county facility within the county, and. The parcelsshall243.16 must be sold for cash only and at not less than the appraised 243.17 value, unless the county board of the countyshall havehas 243.18 adopted a resolution providing for their sale on terms, in which 243.19 event the resolutionshall controlcontrols with respectthereto243.20 to the sale. When the sale is made on terms other than for cash 243.21 only (1) a payment of at least ten percent of the purchase price 243.22 must be made at the time of purchase,thereuponand the balance 243.23shallmust be paid in no more than ten equal annual 243.24 installments, or (2) the payments must be made in accordance 243.25 with county board policy, but in no event may the board require 243.26 more than 12 installments annually, and the contract term must 243.27 not be for more than ten years.NoStanding timber or timber 243.28 productsshallmust not be removed from these lands until an 243.29 amount equal to the appraised value of all standing timber or 243.30 timber products on the lands at the time of purchase has been 243.31 paid by the purchaser; provided, that in case any. If a parcel 243.32 of land bearing standing timber or timber products is sold at 243.33 public auction for more than the appraised value, the amount bid 243.34 in excess of the appraised valueshallmust be allocated between 243.35 the land and the timber in proportion tothetheir respective 243.36 appraised valuesthereof, and no. In that case, standing timber 244.1 or timber productsshallmust not be removed from the land until 244.2 the amount of the excess bid allocated to timber or timber 244.3 products has been paid in addition to the appraised 244.4 valuethereofof the land. The purchaser is entitled to 244.5 immediate possession, subject to the provisions of any existing 244.6 valid lease made in behalf of the state. 244.7 For sales occurring on or after July 1, 1982, the unpaid 244.8 balance of the purchase price is subject to interest at the rate 244.9 determined pursuant to section 549.09. The unpaid balance of 244.10 the purchase price for sales occurring after December 31, 1990, 244.11 is subject to interest at the rate determined in section 279.03, 244.12 subdivision 1a. The interest rate is subject to change each 244.13 year on the unpaid balance in the manner provided for rate 244.14 changes in section 549.09 or 279.03, subdivision 1a, whichever, 244.15 is applicable. Interest on the unpaid contract balance on sales 244.16 occurring before July 1, 1982, is payable at the rate applicable 244.17 to the sale at the time that the sale occurred. 244.18 Sec. 10. Minnesota Statutes 1998, section 282.01, 244.19 subdivision 7, is amended to read: 244.20 Subd. 7. [COUNTY SALES; NOTICE, PURCHASE PRICE, 244.21 DISPOSITION.] The saleherein provided for shallmust commence 244.22 atsuchthe timeasdetermined by the county board of the county 244.23wherein suchin which the parcelslie, shall directare 244.24 located. The county auditor shall offer the parcels of land in 244.25 order in which they appear in the notice of sale, and shall sell 244.26 them to the highest bidder, but not for alesssum less than the 244.27 appraised value, until all of the parcels of landshallhave 244.28 been offered, and thereafter. Then the county auditor shall 244.29 sell any remaining parcels to anyone offering to pay the 244.30 appraised valuethereof, except that if the person could have 244.31 repurchased a parcel of property under section 282.012 or 244.32 282.241, that personshall not be allowed tomay not purchase 244.33 that same parcel of property at the sale under this subdivision 244.34 for a purchase price less than the sum of alldelinquenttaxes 244.35and, assessments, penalties, interest, and costs due at the time 244.36 of forfeiture computed under section 282.251,together with245.1penalties, interest, and costs that accrued or would have245.2accrued if the parcel had not forfeited to the stateand any 245.3 special assessments for improvements certified as of the date of 245.4 sale.SaidThe saleshallmust continue until allsuch245.5 the parcels are sold or until the county boardshall order245.6 orders a reappraisal orshall withdrawwithdraws any or allsuch245.7 of the parcels from sale.SuchThe list of lands may be added 245.8 to and the added lands may be sold at any time by publishing the 245.9 descriptions and appraised valuesof such. The added lands must 245.10 be: (1) parcels of landas shallthat have become forfeited and 245.11 classified as nonconservation since the commencement of any 245.12 prior saleor such; (2) parcelsas shallthat have been 245.13 reappraised, or such; (3) parcelsas shallthat have been 245.14 reclassified as nonconservation; orsuch(4) other parcelsas245.15 that are subject to sale but were omitted from the existing list 245.16 for any reason. The descriptions and appraised values must be 245.17 published in the same manner ashereinafterprovided for the 245.18 publication of the original list, provided that any. Parcels 245.19 added tosuchthe listshallmust first be offered for sale to 245.20 the highest bidder before they are sold at appraised value. All 245.21 parcels of land not offered for immediate sale, as well as 245.22 parcelsof such lands asthat are offered and not immediately 245.23 soldshall, continue to be held in trust by the state for the 245.24 taxing districts interested in each ofsaidthe parcels, under 245.25 the supervision of the county board, and such. Those parcels 245.26 may be used for public purposes until sold, as directed by the 245.27 county boardmay direct. 245.28 Sec. 11. Minnesota Statutes 1998, section 282.04, 245.29 subdivision 2, is amended to read: 245.30 Subd. 2. [RIGHTS BEFORE SALE; IMPROVEMENTS, INSURANCE, 245.31 DEMOLITION.]Until afterBefore the sale of a parcel of 245.32 forfeited land the county auditor may, with the approval of the 245.33 county board of commissioners, provide for the repair and 245.34 improvement of any building or structure located uponsuchthe 245.35 parcel, and may provide for maintenance of tax-forfeited lands, 245.36 if it is determined by the county board that such repairsor, 246.1 improvements, or maintenance are necessary for the operation, 246.2 use, preservation and safetythereof; and,of the building or 246.3 structure. If so authorized by the county board, the county 246.4 auditor may insureany suchthe building or structure against 246.5 loss or damage resulting from fire or windstorm, may purchase 246.6 workers' compensation insurance to insure the county against 246.7 claims for injury to the personsthereinemployed in the 246.8 building or structure by the county, and may insure the county, 246.9 its officers and employees against claims for injuries to 246.10 persons or property because of the management, use or operation 246.11 ofsuchthe building or structure.SuchThe county auditor may, 246.12 with the approval of the county board, provide for the 246.13 demolition ofany suchthe building or structure, which has been 246.14 determined by the county board to be within the purview of 246.15 section 299F.10, and for the sale of salvaged 246.16 materialstherefromfrom the building or structure.SuchThe 246.17 county auditor, with the approval of the county board, may 246.18 provide for the sale of abandoned personal property under either 246.19 chapter 345 or 566, as appropriate. The net proceeds from any 246.20 sale ofsuchthe personal property, salvaged materials,of246.21 timber or other products, or leases made under this lawshall246.22 must be deposited in the forfeited tax sale fund andshallmust 246.23 be distributed in the same manner as if the parcel had been sold. 246.24SuchThe county auditor, with the approval of the county 246.25 board, may provide for the demolition of any structureor246.26structureson tax-forfeited lands, if in the opinion of the 246.27 county board, the county auditor, and the land commissioner, if 246.28 therebeis one, the sale ofsuchthe land withsuchthe 246.29 structureor structures thereonon it, or the continued 246.30 existence ofsuchthe structureor structuresby reason of age, 246.31 dilapidated condition or excessive size as compared with nearby 246.32 structures, will result in a material lessening of net tax 246.33 capacities of real estate in the vicinity ofsuchthe 246.34 tax-forfeited lands, or if the demolition ofsuchthe structure 246.35 or structures will aid in disposing ofsuchthe tax-forfeited 246.36 property. 247.1 Before the sale of a parcel of forfeited land located in an 247.2 urban area, the county auditor may with the approval of the 247.3 county board provide for the gradingthereofof the land by 247.4 filling or the removal of any surplus materialtherefrom, and247.5wherefrom it. If the physical condition of forfeited lands is 247.6 such that a reasonable gradingthereofof the lands is necessary 247.7 for the protection and preservation of the property of any 247.8 adjoining owner,suchthe adjoining property owner or owners may 247.9make applicationapply to the county board to havesuchthe 247.10 grading done. If, after consideringsaidthe application, the 247.11 county board believes thatsuchthe grading will enhance the 247.12 value ofsuchthe forfeited lands commensurate with the cost 247.13 involved, it may approvethe sameit, andany suchthe work 247.14shallmust be performed under the supervision of the county or 247.15 city engineer, as the case may be, and the expensethereofpaid 247.16 from the forfeited tax sale fund. 247.17 Sec. 12. Minnesota Statutes 1998, section 282.05, is 247.18 amended to read: 247.19 282.05 [PROCEEDS APPORTIONED.] 247.20 The net proceeds received from the sale or rental of 247.21 forfeited lands shall be apportioned to the general funds of the 247.22 state or municipal subdivision thereof, in the manner 247.23hereinafterprovided, and shall be first used by the municipal247.24subdivision to retire any indebtedness then existingin section 247.25 282.08. 247.26 Sec. 13. Minnesota Statutes 1998, section 282.08, is 247.27 amended to read: 247.28 282.08 [APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.] 247.29 The net proceeds from the sale or rental of any parcel of 247.30 forfeited land, or from the sale ofanyproductstherefromfrom 247.31 the forfeited land,shallmust be apportioned by the county 247.32 auditor to the taxing districts interestedthereinin the land, 247.33 as follows: 247.34 (1)Suchthe portionas may berequired to pay any amounts 247.35 included in the appraised value under section 282.01, 247.36 subdivision 3, as representing increased value due to any public 248.1 improvement made after forfeiture ofsuchthe parcel to the 248.2 state, but not exceeding the amount certified by the clerk of 248.3 the municipality, shallmust be apportioned to the municipal 248.4 subdivision entitledtheretoto it; 248.5 (2)Suchthe portionas may berequired to pay any amount 248.6 included in the appraised value under section 282.019, 248.7 subdivision 5, representing increased value due to response 248.8 actions taken after forfeiture ofsuchthe parcel to the state, 248.9 but not exceeding the amount of expenses certified by the 248.10 pollution control agency or the commissioner of 248.11 agriculture,shallmust be apportioned to the agency or the 248.12 commissioner of agriculture and deposited in the fund from which 248.13 the expenses were paid; 248.14 (3)Suchthe portion of the remainderas may berequired to 248.15 discharge any special assessment chargeable againstsuchthe 248.16 parcel for drainage or other purpose whether due or deferred at 248.17 the time of forfeiture,shallmust be apportioned to the 248.18 municipal subdivision entitledtheretoto it; and 248.19 (4) any balanceshallmust be apportioned as follows: 248.20(a) Any(i) The county board may annually by resolution set 248.21 aside no more than 30 percent of the receipts remaining to be 248.22 used for timber development on tax-forfeited land and dedicated 248.23 memorial forests, to be expended under the supervision of the 248.24 county board. Itshallmust be expended only on projects 248.25 approved by the commissioner of natural resources. 248.26(b) Any(ii) The county board may annually by resolution 248.27 set aside no more than 20 percent of the receipts remaining to 248.28 be used for the acquisition and maintenance of county parks or 248.29 recreational areas as defined in sections 398.31 to 398.36, to 248.30 be expended under the supervision of the county board. 248.31(c) If the board does not avail itself of the authority248.32under paragraph (a) or (b)(iii) Any balance remainingshall248.33 must be apportioned as follows: county, 40 percent; town or 248.34 city, 20 percent; and school district, 40 percent,and if the248.35board avails itself of the authority under paragraph (a) or (b)248.36the balance remaining shall be apportioned among the county,249.1town or city, and school district in the proportions in this249.2paragraph above stated,provided, however, that in unorganized 249.3 territory that portion whichshouldwould have accrued to the 249.4 townshipshallmust be administered by the county board of 249.5 commissioners. 249.6 Sec. 14. Minnesota Statutes 1998, section 282.09, is 249.7 amended to read: 249.8 282.09 [FORFEITED TAX SALE FUND.] 249.9 Subdivision 1. [MONEY PLACED IN FUND; FEES AND 249.10 DISBURSEMENTS.] The county auditor and county treasurer shall 249.11 place all money received through the operation of sections 249.12 282.01 to 282.13 in a fund to be known as the forfeited tax sale 249.13 fund, and all disbursements and costsshallmust be charged 249.14 against that fund, when allowed by the county board. Members of 249.15 the county board may be paid a per diem pursuant to section 249.16 375.055, subdivision 1, and reimbursed for their necessary 249.17 expenses, and may receive mileage as fixed by law. The amount 249.18 of compensation of a land commissioner and assistants, if a land 249.19 commissioner is appointed,shallmust bein the amount249.20 determined by the county board. The county auditorshallmust 249.21 receive 50 cents for each certificate of sale, each contract for 249.22 deed and each lease executed by the auditor, and, in counties 249.23 where no land commissioner is appointed, additional annual 249.24 compensation, not exceeding $300, as fixed by the county board. 249.25 The amount of compensation of any other clerical helpthat may249.26beneeded by the county auditor or land commissionershallmust 249.27 bein the amountdetermined by the county board. All 249.28 compensation provided forherein shall bein this subdivision is 249.29 in addition to other compensation allowed by law. Fees so 249.30 charged in addition to the fee imposed in section 282.014shall249.31 must be included in the annual settlement by the county auditor 249.32 as hereinafter provided. On or before February 1 each year, the 249.33 commissioner of revenue shall certify to the commissioner of 249.34 finance, by counties, the total number of state deeds issued and 249.35 reissued during the preceding calendar year for which such fees 249.36 are charged and the total amountthereofof fees. On or before 250.1 March 1 each year, each county shall remit to the commissioner 250.2 of revenue, from the forfeited tax sale fund, the aggregate 250.3 amount of the fees imposed by section 282.014 in the preceding 250.4 calendar year. The commissioner of revenue shall deposit the 250.5 amounts received in the state treasury to the credit of the 250.6 general fund. When disbursements are made from the fund for 250.7 repairs, refunds, expenses of actions to quiet title, or any 250.8 other purpose which particularly affects specific parcels of 250.9 forfeited lands, the amount ofsuchthe disbursementsshallmust 250.10 be charged to theaccount of the taxing districts interested in250.11such parcelsforfeited tax sale fund. The county auditor shall 250.12 make an annual settlement of the net proceeds received from 250.13 sales and rentals by the operation of sections 282.01 to 282.13, 250.14 on the settlement day determined in section 276.09, for the 250.15 preceding calendar year. 250.16 Subd. 2. [EXPENDITURES.] In all counties,from said250.17"Forfeited Tax Sale Fund,"the authoritiesduly charged with the250.18execution ofresponsible for carrying out the duties imposed by 250.19 sections 282.01 to 282.13, at their discretion, may expend 250.20 moneysin repairingfrom the forfeited tax sale fund to repair 250.21 any sewer or water main either inside or outside of any curb 250.22 line situated along any property forfeited to the state for 250.23 nonpayment of taxes, to acquire and maintain equipment used 250.24 exclusively for the maintenance and improvement of tax-forfeited 250.25 lands,andto cut down, otherwise destroy or eradicate noxious 250.26 weeds on all tax-forfeited lands. In any year, the money to be250.27expended for the cutting down, destruction or eradication of250.28noxious weeds shall not exceed in amount more than ten percent250.29of the net proceeds of said "Forfeited Tax Sale Fund" during the250.30preceding calendar year, or $10,000, whichever is the lesser250.31sum, and to maintain tax-forfeited lands. 250.32 Sec. 15. Minnesota Statutes 1998, section 282.241, is 250.33 amended to read: 250.34 282.241 [REPURCHASE AFTER FORFEITURE.] 250.35 The owner at the time of forfeiture, or the owner's heirs, 250.36 devisees, or representatives, or any person to whom the right to 251.1 pay taxes was given by statute, mortgage, or other agreement, 251.2 may repurchase any parcel of land claimed by the state to be 251.3 forfeited to the state for taxes unless before the time 251.4 repurchase is made the parcel is sold under installment 251.5 payments, or otherwise, by the state as provided by law, or is 251.6 under mineral prospecting permit or lease, or proceedings have 251.7 been commenced by the state or any of its political subdivisions 251.8 or by the United States to condemnsuchthe parcel of land. The 251.9 parcel of land may be repurchased for the sum of all delinquent 251.10 taxes and assessments computed under section 282.251, together 251.11 with penalties, interest, and costs, that accrued or would have 251.12 accrued if the parcel of land had not forfeited to the state. 251.13 Except for property which was homesteaded on the date of 251.14 forfeiture,suchrepurchaseshall beis permitted during one 251.15 year only from the date of forfeiture, and in any case only 251.16 after the adoption of a resolution by the board of county 251.17 commissioners determining thattherebyby repurchase undue 251.18 hardship or injustice resulting from the forfeiture will be 251.19 corrected, or that permittingsuchthe repurchase will promote 251.20 the use ofsuchthe lands that will best serve the public 251.21 interest. If the county board has good cause to believe that a 251.22 repurchase installment payment plan for a particular parcel is 251.23 unnecessary and not in the public interest, the county board may 251.24 require as a condition of repurchase that the entire repurchase 251.25 price be paid at the time of repurchase. A repurchaseshall251.26beis subject to any easement, lease, or other encumbrance 251.27 granted by the stateprior theretobefore the repurchase, and if 251.28saidthe land is located within a restricted area established by 251.29 any county under Laws 1939, chapter 340,suchthe repurchase 251.30shallmust not be permitted unlesssaidthe resolutionwith251.31respect theretoapproving the repurchase is adopted by the 251.32 unanimous vote of the board of county commissioners. 251.33 The person seeking to repurchase under this section shall 251.34 pay all maintenance costs incurred by the county auditor during 251.35 the time the property was tax-forfeited. 251.36 Sec. 16. Minnesota Statutes 1998, section 282.261, 252.1 subdivision 4, is amended to read: 252.2 Subd. 4. [SERVICE FEE.] The county auditor may collect a 252.3 service fee to cover administrative costs as set by the county 252.4 board for each repurchasecontract approvedapplication received 252.5 after July 1, 1985. The feeshallmust be paid at the time of 252.6repurchaseapplication andshallmust be credited to the county 252.7 general revenue fund. 252.8 Sec. 17. Minnesota Statutes 1998, section 282.261, is 252.9 amended by adding a subdivision to read: 252.10 Subd. 5. [COUNTY MAY IMPOSE CONDITIONS OF REPURCHASE.] The 252.11 county auditor, after receiving county board approval, may 252.12 impose conditions on repurchase of tax-forfeited lands limiting 252.13 the use of the parcel subject to the repurchase, including, but 252.14 not limited to, environmental remediation action plan 252.15 restrictions or covenants, or easements for lines or equipment 252.16 for telephone, telegraph, electric power, or telecommunications. 252.17 Sec. 18. Minnesota Statutes 1998, section 283.10, is 252.18 amended to read: 252.19 283.10 [APPLICATION MUST BE MADE WITHIN TWO YEARS.] 252.20 Nosuch refundmentrefund shall be granted unless an 252.21 applicationtherefor shall be dulyfor refund is approved and 252.22 presented to the commissioner of revenue within two years from 252.23 the date ofsuch tax certificate orthe state assignment 252.24 certificate. 252.25 Sec. 19. Minnesota Statutes 1998, section 375.192, 252.26 subdivision 2, is amended to read: 252.27 Subd. 2. [PROCEDURE, CONDITIONS.] Upon written application 252.28 by the owner of any property, the county board may grant the 252.29 reduction or abatement of estimated market valuation or taxes 252.30 and of any costs, penalties, or interest on them as the board 252.31 deems just and equitable and order the refund in whole or part 252.32 of any taxes, costs, penalties, or interest which have been 252.33 erroneously or unjustly paid. Except as provided in sections 252.34 469.1812 to 469.1815, no reduction or abatement may be granted 252.35 on the basis of providing an incentive for economic development 252.36 or redevelopment. Except as provided in section 375.194, the 253.1 county boardis authorized tomay consider and grant reductions 253.2 or abatements on applications only as they relate to taxes 253.3 payable in the current year and the two prior years; provided 253.4 that reductions or abatements for the two prior years shall be 253.5 considered or granted only for (i) clerical errors, or (ii) when 253.6 the taxpayer fails to file for a reduction or an adjustment due 253.7 to hardship, as determined by the county board. The application 253.8 must include the social security number of the applicant. The 253.9 social security number is private data on individuals as defined 253.10 by section 13.02, subdivision 12. All applications must be 253.11 approved by the county assessor, or, if the property is located 253.12 in a city of the first or second class having a city assessor, 253.13 by the city assessor, and by the county auditor before 253.14 consideration by the county board, except that the part of the 253.15 application which is for the abatement of penalty or interest 253.16 must be approved by the county treasurer and county auditor. 253.17 Approval by the county or city assessor is not required for 253.18 abatements of penalty or interest. No reduction, abatement, or 253.19 refund of any special assessments made or levied by any 253.20 municipality for local improvements shall be made unless it is 253.21 also approved by the board of review or similar taxing authority 253.22 of the municipality.Before taking actionOn any reduction or 253.23 abatementwherewhen the reduction of taxes, costs, penalties, 253.24 and interest exceed $10,000, the county board shall give20253.25days'notice within 20 days to the school board and the 253.26 municipality in which the property is located. The notice must 253.27 describe the property involved, the actual amount of the 253.28 reduction being sought, and the reason for the reduction.If253.29the school board or the municipality object to the granting of253.30the reduction or abatement, the county board must refer the253.31abatement or reduction to the commissioner of revenue with its253.32recommendation. The commissioner shall consider the abatement253.33or reduction under section 270.07, subdivision 1.253.34 An appeal may not be taken to the tax court from any order 253.35 of the county board made in the exercise of the discretionary 253.36 authority granted in this section. 254.1 The county auditor shall notify the commissioner of revenue 254.2 of all abatements resulting from the erroneous classification of 254.3 real property, for tax purposes, as nonhomestead property. For 254.4 the abatements relating to the current year's tax processed 254.5 through June 30, the auditor shall notify the commissioner on or 254.6 before July 31 of that same year of all abatement applications 254.7 granted. For the abatements relating to the current year's tax 254.8 processed after June 30 through the balance of the year, the 254.9 auditor shall notify the commissioner on or before the following 254.10 January 31 of all applications granted. The county auditor 254.11 shall submit a form containing the social security number of the 254.12 applicant and such other information the commissioner prescribes. 254.13 Sec. 20. Minnesota Statutes 1998, section 383C.482, 254.14 subdivision 1, is amended to read: 254.15 Subdivision 1. [AUDITOR TO SEARCH RECORDS; CERTIFICATES.] 254.16 The St. Louis county auditor, upon written application of any 254.17 person, shallmakesearchofthe records of the auditor's office 254.18 and the county treasurer's office, and ascertain the amount of 254.19 current tax against any lot or parcel of land described in the 254.20 application and the existence of all tax liens and tax sales as 254.21 tosuchthe lot or parcel of land, and certify the result of 254.22suchthe search under the seal of office, giving the description 254.23 of the lot or parcel of land, the amount of the current tax, if 254.24 any, and all tax liens and tax sales shown by such records, and 254.25 the amountthereofof liens and tax sales, the year of tax 254.26 covered bysuchthe lien, and the date of tax sale, and the name254.27of the purchaser at such tax sale. For the purpose of 254.28 ascertaining the current tax againstsucha lot or parcel of 254.29 land, the county auditor has the right of access to the records 254.30 of current taxes in the office of the county treasurer. 254.31 Sec. 21. [REPEALER.] 254.32 Minnesota Statutes 1998, sections 92.22; 280.27; 281.13; 254.33 281.38; 284.01; 284.02; 284.03; 284.04; 284.05; and 284.06, are 254.34 repealed. 254.35 Sec. 22. [EFFECTIVE DATES.] 254.36 This article is effective September 1, 1999, except that 255.1 sections 11 and 13 to 15 are effective beginning January 1, 255.2 2000, and except that section 12 is effective for net proceeds 255.3 received after the date of final enactment of this act. 255.4 ARTICLE 14 255.5 WATER AND SANITARY SEWER DISTRICTS 255.6 Section 1. [CEDAR LAKE AREA WATER AND SANITARY SEWER 255.7 DISTRICT; DEFINITIONS.] 255.8 Subdivision 1. [APPLICATION.] In sections 1 to 19, the 255.9 definitions in this section apply. 255.10 Subd. 2. [DISTRICT.] "Cedar lake area water and sanitary 255.11 sewer district" and "district" mean the area over which the 255.12 Cedar lake area water and sanitary sewer board has jurisdiction, 255.13 which includes the area within the city of New Prague and Helena 255.14 and Cedar Lake townships in Scott county. The district shall 255.15 precisely describe the area over which it has jurisdiction by a 255.16 metes and bounds description in the comprehensive plan adopted 255.17 pursuant to section 5. The territory may not be larger than the 255.18 area encompassed by the Cedar Lake improvement district, but it 255.19 may be smaller and the area may include a route along public 255.20 rights-of-way from Cedar Lake to the city of New Prague along 255.21 which the sewer main is laid. 255.22 Subd. 3. [BOARD.] "Water and sanitary sewer board" or 255.23 "board" means the Cedar lake area water and sanitary sewer board 255.24 established for the district as provided in subdivision 2. 255.25 Subd. 4. [PERSON.] "Person" means an individual, 255.26 partnership, corporation, limited liability company, 255.27 cooperative, or other organization or entity, public or private. 255.28 Subd. 5. [LOCAL GOVERNMENTAL UNITS.] "Local governmental 255.29 units" or "governmental units" means Scott county, the city of 255.30 New Prague, and Helena and Cedar Lake Townships in Scott county. 255.31 Subd. 6. [ACQUISITION; BETTERMENT.] "Acquisition" and 255.32 "betterment" have the meanings given in Minnesota Statutes, 255.33 section 475.51. 255.34 Subd. 7. [AGENCY.] "Agency" means the Minnesota pollution 255.35 control agency created in Minnesota Statutes, section 116.02. 255.36 Subd. 8. [SEWAGE.] "Sewage" means all liquid or 256.1 water-carried waste products from whatever sources derived, 256.2 together with any groundwater infiltration and surface water as 256.3 may be present. 256.4 Subd. 9. [POLLUTION OF WATER; SEWER SYSTEM.] "Pollution of 256.5 water" and "sewer system" have the meanings given in Minnesota 256.6 Statutes, section 115.01. 256.7 Subd. 10. [TREATMENT WORKS; DISPOSAL SYSTEM.] "Treatment 256.8 works" and "disposal system" have the meanings given in 256.9 Minnesota Statutes, section 115.01. 256.10 Subd. 11. [INTERCEPTOR.] "Interceptor" means a sewer and 256.11 its necessary appurtenances, including but not limited to mains, 256.12 pumping stations, and sewage flow-regulating and -measuring 256.13 stations, that is: 256.14 (1) designed for or used to conduct sewage originating in 256.15 more than one local governmental unit; 256.16 (2) designed or used to conduct all or substantially all 256.17 the sewage originating in a single local governmental unit from 256.18 a point of collection in that unit to an interceptor or 256.19 treatment works outside that unit; or 256.20 (3) determined by the board to be a major collector of 256.21 sewage used or designed to serve a substantial area in the 256.22 district. 256.23 Subd. 12. [DISTRICT DISPOSAL SYSTEM.] "District disposal 256.24 system" means any and all interceptors or treatment works owned, 256.25 constructed, or operated by the board unless designated by the 256.26 board as local water and sanitary sewer facilities. 256.27 Subd. 13. [MUNICIPALITY.] "Municipality" means any town or 256.28 home rule charter or statutory city. 256.29 Subd. 14. [TOTAL COSTS.] "Total costs of acquisition and 256.30 betterment" and "costs of acquisition and betterment" mean all 256.31 acquisition and betterment expenses permitted to be financed out 256.32 of stopped bond proceeds issued in accordance with section 13, 256.33 whether or not the expenses are in fact financed out of the bond 256.34 proceeds. 256.35 Subd. 15. [CURRENT COSTS.] "Current costs of acquisition, 256.36 betterment, and debt service" means interest and principal 257.1 estimated to be due during the budget year on bonds issued to 257.2 finance said acquisition and betterment and all other costs of 257.3 acquisition and betterment estimated to be paid during the year 257.4 from funds other than bond proceeds and federal or state grants. 257.5 Subd. 16. [RESIDENT.] "Resident" means the owner of a 257.6 dwelling located in the district and receiving water or sewer 257.7 service. 257.8 Sec. 2. [WATER AND SANITARY SEWER BOARD.] 257.9 Subdivision 1. [ESTABLISHMENT.] A water and sanitary sewer 257.10 district is established in Helena and Cedar Lake townships and 257.11 the city of New Prague in Scott county, to be known as the Cedar 257.12 lake area water and sanitary sewer district. The water and 257.13 sewer district is under the control and management of the Cedar 257.14 lake area water and sanitary sewer board. The board is 257.15 established as a public corporation and political subdivision of 257.16 the state with perpetual succession and all the rights, powers, 257.17 privileges, immunities, and duties granted to or imposed upon a 257.18 municipal corporation, as provided in sections 1 to 19. 257.19 Subd. 2. [MEMBERS AND SELECTION.] The board is composed of 257.20 seven members selected as provided in this subdivision. Each of 257.21 the town boards of the townships shall meet to appoint two 257.22 residents to the water and sanitary sewer board. The township 257.23 appointees must live on Cedar lake and must be served by the 257.24 system. One member must be selected by the city of New Prague. 257.25 Two members must be selected by the Scott county board of 257.26 commissioners. Each member has one vote. The first terms are 257.27 as follows: two for one year, two for two years, and three for 257.28 three years, fixed by lot at the district's first meeting. 257.29 Thereafter, all terms are for three years. 257.30 Subd. 3. [TIME LIMITS FOR SELECTION.] The board members 257.31 must be selected as provided in subdivision 2 within 60 days 257.32 after sections 1 to 19 are effective. The successor to each 257.33 board member must be selected at any time within 60 days before 257.34 the expiration of the member's term in the same manner as the 257.35 predecessor was selected. A vacancy on the board must be filled 257.36 within 60 days after it occurs. 258.1 Subd. 4. [VACANCIES.] If the office of a board member 258.2 becomes vacant, the vacancy must be filled for the unexpired 258.3 term in the manner provided for selection of the member who 258.4 vacated the office. The office is deemed vacant under the 258.5 conditions specified in Minnesota Statutes, section 351.02. 258.6 Subd. 5. [REMOVAL.] A board member may be removed by the 258.7 unanimous vote of the governing body appointing the member, with 258.8 or without cause, or for malfeasance or nonfeasance in the 258.9 performance of official duties as provided by Minnesota 258.10 Statutes, sections 351.14 to 351.23. 258.11 Subd. 6. [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A 258.12 certificate of selection of every board member selected under 258.13 subdivision 2 stating the term for which selected, must be made 258.14 by the respective town clerks. The certificates, with the 258.15 approval appended by other authority, if required, must be filed 258.16 with the secretary of state. Counterparts thereof must be 258.17 furnished to the board member and the secretary of the board. 258.18 Each member shall qualify by taking and subscribing the oath of 258.19 office prescribed by the Minnesota Constitution, article 5, 258.20 section 8. The oath, duly certified by the official 258.21 administering the same, must be filed with the secretary of 258.22 state and the secretary of the board. 258.23 Subd. 7. [BOARD MEMBERS' COMPENSATION.] Each board member, 258.24 except the chair, may be paid a per diem compensation in 258.25 accordance with the board's bylaws for meetings and for other 258.26 services as are specifically authorized by the board, not to 258.27 exceed the per diem amount under Minnesota Statutes, section 258.28 15.0575, subdivision 3, and not to exceed $1,000 in any one year. 258.29 The chair may be paid a per diem compensation in accordance with 258.30 the board's bylaws for meetings and for other services 258.31 specifically authorized by the board, not to exceed the per diem 258.32 amount under Minnesota Statutes, section 15.0575, subdivision 3, 258.33 and not to exceed $1,500 in any one year. All members of the 258.34 board must be reimbursed for all reasonable and necessary 258.35 expenses actually incurred in the performance of duties. 258.36 Sec. 3. [GENERAL PROVISIONS FOR ORGANIZATION AND OPERATION 259.1 OF BOARD.] 259.2 Subdivision 1. [ORGANIZATION; OFFICERS; MEETINGS; 259.3 SEAL.] After the selection and qualification of all board 259.4 members, the board must meet to organize the board at the call 259.5 of any two board members, upon seven days' notice by registered 259.6 mail to the remaining board members, at a time and place within 259.7 the district specified in the notice. A majority of the members 259.8 is a quorum at that meeting and all other meetings of the board, 259.9 but a lesser number may meet and adjourn from time to time and 259.10 compel the attendance of absent members. At the first meeting 259.11 the board shall select its officers and conduct other 259.12 organizational business as may be necessary. Thereafter the 259.13 board shall meet regularly at the time and place that the board 259.14 designates by resolution. Special meetings may be held at any 259.15 time upon call of the chair or any two members, upon written 259.16 notice sent by mail to each member at least three days before 259.17 the meeting, or upon other notice as the board by resolution may 259.18 provide, or without notice if each member is present or files 259.19 with the secretary a written consent to the meeting either 259.20 before or after the meeting. Except as otherwise provided in 259.21 sections 1 to 19, any action within the authority of the board 259.22 may be taken by the affirmative vote of a majority of the board 259.23 and may be taken by regular or adjourned regular meeting or at a 259.24 duly held special meeting, but in any case only if a quorum is 259.25 present. Meetings of the board must be open to the public. The 259.26 board may adopt a seal, which must be officially and judicially 259.27 noticed, to authenticate instruments executed by its authority, 259.28 but omission of the seal does not affect the validity of any 259.29 instrument. 259.30 Subd. 2. [CHAIR.] The board shall elect a chair from its 259.31 membership. The term of the first chair of the board expires on 259.32 January 1, 2001, and the terms of successor chairs expire on 259.33 January 1 of each succeeding year. The chair shall preside at 259.34 all meetings of the board, if present, and shall perform all 259.35 other duties and functions usually incumbent upon such an 259.36 officer, and all administrative functions assigned to the chair 260.1 by the board. The board shall elect a vice-chair from its 260.2 membership to act for the chair during temporary absence or 260.3 disability. 260.4 Subd. 3. [SECRETARY AND TREASURER.] The board shall select 260.5 persons who may, but need not be, members of the board, to act 260.6 as its secretary and treasurer. The two offices may be combined. 260.7 The secretary and treasurer shall hold office at the pleasure of 260.8 the board, subject to the terms of any contract of employment 260.9 that the board may enter into with the secretary or treasurer. 260.10 The secretary shall record the minutes of all meetings of the 260.11 board, and be the custodian of all books and records of the 260.12 board except those that the board entrusts to the custody of a 260.13 designated employee. The treasurer is the custodian of all 260.14 money received by the board except as the board otherwise 260.15 entrusts to the custody of a designated employee. The board may 260.16 appoint a deputy to perform any and all functions of either the 260.17 secretary or the treasurer. A secretary or treasurer who is not 260.18 a member of the board or a deputy of either does not have the 260.19 right to vote. 260.20 Subd. 4. [PUBLIC EMPLOYEES.] The executive director and 260.21 other persons employed by the district are public employees and 260.22 have all the rights and duties conferred on public employees 260.23 under Minnesota Statutes, sections 179A.01 to 179A.25. The 260.24 board may elect to have employees become members of either the 260.25 public employees retirement association or the Minnesota state 260.26 retirement system. The compensation and conditions of 260.27 employment of the employees must be governed by rules applicable 260.28 to state employees in the classified service and to the 260.29 provisions of Minnesota Statutes, chapter 15A. 260.30 Subd. 5. [PROCEDURES.] The board shall adopt resolutions 260.31 or bylaws establishing procedures for board action, personnel 260.32 administration, keeping records, approving claims, authorizing 260.33 or making disbursements, safekeeping funds, and auditing all 260.34 financial operations of the board. 260.35 Subd. 6. [SURETY BONDS AND INSURANCE.] The board may 260.36 procure surety bonds for its officers and employees, in amounts 261.1 deemed necessary to ensure proper performance of their duties 261.2 and proper accounting for funds in their custody. It may 261.3 procure insurance against risks to property and liability of the 261.4 board and its officers, agents, and employees for personal 261.5 injuries or death and property damage and destruction, in 261.6 amounts deemed necessary or desirable, with the force and effect 261.7 stated in Minnesota Statutes, chapter 466. 261.8 Sec. 4. [GENERAL POWERS OF BOARD.] 261.9 Subdivision 1. [SCOPE.] The board has all powers necessary 261.10 or convenient to discharge the duties imposed upon it by law. 261.11 The powers include those specified in this section, but the 261.12 express grant or enumeration of powers does not limit the 261.13 generality or scope of the grant of powers contained in this 261.14 subdivision. 261.15 Subd. 2. [SUIT.] The board may sue or be sued. 261.16 Subd. 3. [CONTRACT.] The board may enter into any contract 261.17 necessary or proper for the exercise of its powers or the 261.18 accomplishment of its purposes. 261.19 Subd. 4. [GIFTS, GRANTS, LOANS.] The board may accept 261.20 gifts, apply for and accept grants or loans of money or other 261.21 property from the United States, the state, or any person for 261.22 any of its purposes, enter into any agreement required in 261.23 connection with them, and hold, use, and dispose of the money or 261.24 property in accordance with the terms of the gift, grant, loan, 261.25 or agreement relating to it. With respect to loans or grants of 261.26 funds or real or personal property or other assistance from any 261.27 state or federal government or its agency or instrumentality, 261.28 the board may contract to do and perform all acts and things 261.29 required as a condition or consideration for the gift, grant, or 261.30 loan pursuant to state or federal law or regulations, whether or 261.31 not included among the powers expressly granted to the board in 261.32 sections 1 to 19. 261.33 Subd. 5. [COOPERATIVE ACTION.] The board may act under 261.34 Minnesota Statutes, section 471.59, or any other appropriate law 261.35 providing for joint or cooperative action between governmental 261.36 units. 262.1 Subd. 6. [STUDIES AND INVESTIGATIONS.] The board may 262.2 conduct research studies and programs, collect and analyze data, 262.3 prepare reports, maps, charts, and tables, and conduct all 262.4 necessary hearings and investigations in connection with the 262.5 design, construction, and operation of the district disposal 262.6 system. 262.7 Subd. 7. [EMPLOYEES, TERMS.] The board may employ on terms 262.8 it deems advisable, persons or firms performing engineering, 262.9 legal, or other services of a professional nature; require any 262.10 employee to obtain and file with it an individual bond or 262.11 fidelity insurance policy; and procure insurance in amounts it 262.12 deems necessary against liability of the board or its officers 262.13 or both, for personal injury or death and property damage or 262.14 destruction, with the force and effect stated in Minnesota 262.15 Statutes, chapter 466, and against risks of damage to or 262.16 destruction of any of its facilities, equipment, or other 262.17 property as it deems necessary. 262.18 Subd. 8. [PROPERTY RIGHTS, POWERS.] The board may acquire 262.19 by purchase, lease, condemnation, gift, or grant, any real or 262.20 personal property including positive and negative easements and 262.21 water and air rights, and it may construct, enlarge, improve, 262.22 replace, repair, maintain, and operate any interceptor, 262.23 treatment works, or water facility determined to be necessary or 262.24 convenient for the collection and disposal of sewage in the 262.25 district. Any local governmental unit and the commissioners of 262.26 transportation and natural resources are authorized to convey to 262.27 or permit the use of any of the above-mentioned facilities owned 262.28 or controlled by it, by the board, subject to the rights of the 262.29 holders of any bonds issued with respect to those facilities, 262.30 with or without compensation, without an election or approval by 262.31 any other governmental unit or agency. All powers conferred by 262.32 this subdivision may be exercised both within or without the 262.33 district as may be necessary for the exercise by the board of 262.34 its powers or the accomplishment of its purposes. The board may 262.35 hold, lease, convey, or otherwise dispose of the above-mentioned 262.36 property for its purposes upon the terms and in the manner it 263.1 deems advisable. Unless otherwise provided, the right to 263.2 acquire lands and property rights by condemnation may be 263.3 exercised only in accordance with Minnesota Statutes, sections 263.4 117.011 to 117.232, and applies to any property or interest in 263.5 the property owned by any local governmental unit. Property 263.6 devoted to an actual public use at the time, or held to be 263.7 devoted to such a use within a reasonable time, must not be so 263.8 acquired unless a court of competent jurisdiction determines 263.9 that the use proposed by the board is paramount to the existing 263.10 use. Except in the case of property in actual public use, the 263.11 board may take possession of any property on which condemnation 263.12 proceedings have been commenced at any time after the issuance 263.13 of a court order appointing commissioners for its condemnation. 263.14 Subd. 9. [RELATIONSHIP TO OTHER PROPERTIES.] The board may 263.15 construct or maintain its systems or facilities in, along, on, 263.16 under, over, or through public waters, streets, bridges, 263.17 viaducts, and other public rights-of-way without first obtaining 263.18 a franchise from a county or municipality having jurisdiction 263.19 over them. However, the facilities must be constructed and 263.20 maintained in accordance with the ordinances and resolutions of 263.21 the county or municipality relating to constructing, installing, 263.22 and maintaining similar facilities on public properties and must 263.23 not unnecessarily obstruct the public use of those rights-of-way. 263.24 Subd. 10. [DISPOSAL OF PROPERTY.] The board may sell, 263.25 lease, or otherwise dispose of any real or personal property 263.26 acquired by it which is no longer required for accomplishment of 263.27 its purposes. The property may be sold in the manner provided 263.28 by Minnesota Statutes, section 469.065, insofar as practical. 263.29 The board may give notice of sale as it deems appropriate. When 263.30 the board determines that any property or any part of the 263.31 district disposal system acquired from a local governmental unit 263.32 without compensation is no longer required but is required as a 263.33 local facility by the governmental unit from which it was 263.34 acquired, the board may by resolution transfer it to that 263.35 governmental unit. 263.36 Subd. 11. [AGREEMENTS WITH OTHER GOVERNMENTAL UNITS.] The 264.1 board may contract with the United States or any agency thereof, 264.2 any state or agency thereof, or any regional public planning 264.3 body in the state with jurisdiction over any part of the 264.4 district, or any other municipal or public corporation, or 264.5 governmental subdivision or agency or political subdivision in 264.6 any state, for the joint use of any facility owned by the board 264.7 or such entity, for the operation by that entity of any system 264.8 or facility of the board, or for the performance on the board's 264.9 behalf of any service, including but not limited to planning, on 264.10 terms as may be agreed upon by the contracting parties. Unless 264.11 designated by the board as a local water and sanitary sewer 264.12 facility, any treatment works or interceptor jointly used, or 264.13 operated on behalf of the board, as provided in this 264.14 subdivision, is deemed to be operated by the board for purposes 264.15 of including those facilities in the district disposal system. 264.16 Sec. 5. [COMPREHENSIVE PLAN.] 264.17 Subdivision 1. [BOARD PLAN AND PROGRAM.] The board shall 264.18 adopt a comprehensive plan for the collection, treatment, and 264.19 disposal of sewage in the district for a designated period the 264.20 board deems proper and reasonable. The board shall prepare and 264.21 adopt subsequent comprehensive plans for the collection, 264.22 treatment, and disposal of sewage in the district for each 264.23 succeeding designated period as the board deems proper and 264.24 reasonable. All comprehensive plans of the district shall be 264.25 subject to the planning and zoning authority of Scott county and 264.26 in conformance with all planning and zoning ordinances of Scott 264.27 county. The first plan, as modified by the board, and any 264.28 subsequent plan shall take into account the preservation and 264.29 best and most economic use of water and other natural resources 264.30 in the area; the preservation, use, and potential for use of 264.31 lands adjoining waters of the state to be used for the disposal 264.32 of sewage; and the impact the disposal system will have on 264.33 present and future land use in the area affected. In no case 264.34 shall the comprehensive plan provide for more than 325 264.35 connections to the disposal system. All connections must be 264.36 charged a full assessment. Connections made after the initial 265.1 assessment period ends must be charged an amount equal to the 265.2 initial assessment plus an adjustment for inflation and plus any 265.3 other charges determined to be reasonable and necessary by the 265.4 board. Deferred assessments may be permitted, as provided for 265.5 in Minnesota Statutes, chapter 429. The plans shall include the 265.6 general location of needed interceptors and treatment works, a 265.7 description of the area that is to be served by the various 265.8 interceptors and treatment works, a long-range capital 265.9 improvements program, and any other details as the board deems 265.10 appropriate. In developing the plans, the board shall consult 265.11 with persons designated for the purpose by governing bodies of 265.12 any governmental unit within the district to represent the 265.13 entities and shall consider the data, resources, and input 265.14 offered to the board by the entities and any planning agency 265.15 acting on behalf of one or more of the entities. Each plan, 265.16 when adopted, must be followed in the district and may be 265.17 revised as often as the board deems necessary. 265.18 Subd. 2. [COMPREHENSIVE PLANS; HEARING.] Before adopting 265.19 any subsequent comprehensive plan, the board shall hold a public 265.20 hearing on the proposed plan at a time and place in the district 265.21 that it selects. The hearing may be continued from time to 265.22 time. Not less than 45 days before the hearing, the board shall 265.23 publish notice of the hearing in a newspaper having general 265.24 circulation in the district, stating the date, time, and place 265.25 of the hearing, and the place where the proposed plan may be 265.26 examined by any interested person. At the hearing, all 265.27 interested persons must be permitted to present their views on 265.28 the plan. 265.29 Sec. 6. [POWERS TO ISSUE OBLIGATIONS AND IMPOSE SPECIAL 265.30 ASSESSMENTS.] 265.31 The Cedar lake area water and sanitary sewer board, in 265.32 order to implement the powers granted under sections 1 to 19 to 265.33 establish, maintain, and administer the Cedar lake area water 265.34 and sanitary sewer district, may issue obligations and impose 265.35 special assessments against benefited property within the limits 265.36 of the district benefited by facilities constructed under 266.1 sections 1 to 19 in the manner provided for local governments by 266.2 Minnesota Statutes, chapter 429. 266.3 Sec. 7. [SYSTEM EXPANSION; APPLICATION TO CITIES.] 266.4 The authority of the water and sanitary sewer board to 266.5 establish water or sewer or combined water and sewer systems 266.6 under this section extends to areas within the Cedar lake area 266.7 water and sanitary sewer district organized into cities when 266.8 requested by resolution of the governing body of the affected 266.9 city or when ordered by the Minnesota pollution control agency 266.10 after notice and hearing. For the purpose of any petition filed 266.11 or special assessment levied with respect to any system, the 266.12 entire area to be served within a city must be treated as if it 266.13 were owned by a single person, and the governing body shall 266.14 exercise all the rights and be subject to all the duties of an 266.15 owner of the area, and shall have power to provide for the 266.16 payment of all special assessments and other charges imposed 266.17 upon the area with respect to the system by the appropriation of 266.18 money, the collection of service charges, or the levy of taxes, 266.19 which shall be subject to no limitation of rate or amount. 266.20 Sec. 8. [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 266.21 Subdivision 1. [POWERS.] In addition to all other powers 266.22 conferred upon the board in sections 1 to 19, it has the powers 266.23 specified in this section. 266.24 Subd. 2. [DISCHARGE OF TREATED SEWAGE.] The board may 266.25 discharge the effluent from any treatment works operated by it 266.26 into any waters of the state, subject to approval of the agency 266.27 if required and in accordance with any effluent or water quality 266.28 standards lawfully adopted by the agency, any interstate agency, 266.29 or any federal agency having jurisdiction. 266.30 Subd. 3. [UTILIZATION OF DISTRICT SYSTEM.] The board may 266.31 require any person or local governmental unit to provide for the 266.32 discharge of any sewage, directly or indirectly, into the 266.33 district disposal system, or to connect any disposal system or a 266.34 part of it with the district disposal system wherever reasonable 266.35 opportunity for connection is provided; may regulate the manner 266.36 in which the connections are made; may require any person or 267.1 local governmental unit discharging sewage into the disposal 267.2 system to provide preliminary treatment for it; may prohibit the 267.3 discharge into the district disposal system of any substance 267.4 that it determines will or may be harmful to the system or any 267.5 persons operating it; and may require any local governmental 267.6 unit to discontinue the acquisition, betterment, or operation of 267.7 any facility for the unit's disposal system wherever and so far 267.8 as adequate service is or will be provided by the district 267.9 disposal system. 267.10 Subd. 4. [SYSTEM OF COST RECOVERY TO COMPLY WITH 267.11 APPLICABLE REGULATIONS.] Any charges, connection fees, or other 267.12 cost-recovery techniques imposed on persons discharging sewage 267.13 directly or indirectly into the district disposal system must 267.14 comply with applicable state and federal law, including state 267.15 and federal regulations governing grant applications. 267.16 Sec. 9. [BUDGET.] 267.17 (a) The board shall prepare and adopt, on or before October 267.18 1 in 2000 and each year thereafter, a budget showing for the 267.19 following calendar year or other fiscal year determined by the 267.20 board, sometimes referred to in sections 1 to 19 as the budget 267.21 year, estimated receipts of money from all sources, including 267.22 but not limited to payments by each local governmental unit, 267.23 federal or state grants, taxes on property, and funds on hand at 267.24 the beginning of the year, and estimated expenditures for: 267.25 (1) costs of operation, administration, and maintenance of 267.26 the district disposal system; 267.27 (2) cost of acquisition and betterment of the district 267.28 disposal system; and 267.29 (3) debt service, including principal and interest, on 267.30 general obligation bonds and certificates issued pursuant to 267.31 section 13, and any money judgments entered by a court of 267.32 competent jurisdiction. 267.33 (b) Expenditures within these general categories, and any 267.34 other categories as the board may from time to time determine, 267.35 must be itemized in detail as the board prescribes. The board 267.36 and its officers, agents, and employees must not spend money for 268.1 any purpose other than debt service without having set forth the 268.2 expense in the budget nor in excess of the amount set forth in 268.3 the budget for it. No obligation to make an expenditure of the 268.4 above-mentioned type is enforceable except as the obligation of 268.5 the person or persons incurring it. The board may amend the 268.6 budget at any time by transferring from one purpose to another 268.7 any sums except money for debt service and bond proceeds or by 268.8 increasing expenditures in any amount by which actual cash 268.9 receipts during the budget year exceed the total amounts 268.10 designated in the original budget. The creation of any 268.11 obligation under section 13, or the receipt of any federal or 268.12 state grant is a sufficient budget designation of the proceeds 268.13 for the purpose for which it is authorized, and of the tax or 268.14 other revenue pledged to pay the obligation and interest on it, 268.15 whether or not specifically included in any annual budget. 268.16 Sec. 10. [ALLOCATION OF COSTS.] 268.17 Subdivision 1. [DEFINITION OF CURRENT COSTS.] The 268.18 estimated cost of administration, operation, maintenance, and 268.19 debt service of the district disposal system to be paid by the 268.20 board in each fiscal year and the estimated costs of acquisition 268.21 and betterment of the system that are to be paid during the year 268.22 from funds other than state or federal grants and bond proceeds 268.23 and all other previously unallocated payments made by the board 268.24 pursuant to sections 1 to 19 to be allocated in the fiscal year 268.25 are referred to as current costs and must be allocated by the 268.26 board as provided in subdivision 2 in the budget for that year. 268.27 Subd. 2. [METHOD OF ALLOCATION OF CURRENT COSTS.] Current 268.28 costs must be allocated in the district on an equitable basis as 268.29 the board may determine by resolution to be in the best 268.30 interests of the district. The adoption or revision of any 268.31 method of allocation used by the board must be by the 268.32 affirmative vote of at least two-thirds of the members of the 268.33 board. 268.34 Sec. 11. [TAX LEVIES.] 268.35 To accomplish any duty imposed on it the board may, in 268.36 addition to the powers granted in sections 1 to 19 and in any 269.1 other law or charter, exercise the powers granted any 269.2 municipality by Minnesota Statutes, chapters 117, 412, 429, 475, 269.3 sections 115.46, 444.075, and 471.59, with respect to the area 269.4 in the district. The board may levy taxes upon all taxable 269.5 property in the district for all or a part of the amount payable 269.6 to the board, pursuant to section 10, to be assessed and 269.7 extended as a tax upon that taxable property by the county 269.8 auditor for the next calendar year, free from any limit of rate 269.9 or amount imposed by law or charter. The tax must be collected 269.10 and remitted in the same manner as other general taxes. 269.11 Sec. 12. [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 269.12 Subdivision 1. [PUBLIC HEARING REQUIREMENT ON SPECIFIC 269.13 PROJECT.] Before the board orders any project involving the 269.14 acquisition or betterment of any interceptor or treatment works, 269.15 all or a part of the cost of which will be allocated pursuant to 269.16 section 10 as current costs, the board must hold a public 269.17 hearing on the proposed project. The hearing must be held 269.18 following two publications in a newspaper having general 269.19 circulation in the district, stating the time and place of the 269.20 hearing, the general nature and location of the project, the 269.21 estimated total cost of acquisition and betterment, that portion 269.22 of costs estimated to be paid out of federal and state grants, 269.23 and that portion of costs estimated to be allocated. The 269.24 estimates must be best available at the time of the meeting and 269.25 if costs exceed the estimate, the project cannot proceed until 269.26 an additional public hearing is held, with notice as required at 269.27 the initial meeting. The two publications must be a week apart 269.28 and the hearing at least three days after the last publication. 269.29 Not less than 45 days before the hearing, notice of the hearing 269.30 must also be mailed to each clerk of all local governmental 269.31 units in the district, but failure to give mailed notice or any 269.32 defects in the notice does not invalidate the proceedings. The 269.33 project may include all or part of one or more interceptors or 269.34 treatment works. A hearing must not be held on a project unless 269.35 the project is within the area covered by the comprehensive plan 269.36 adopted by the board under section 5, except that the hearing 270.1 may be held simultaneously with a hearing on a comprehensive 270.2 plan. A hearing is not required with respect to a project, no 270.3 part of the costs of which are to be allocated as the current 270.4 costs of acquisition, betterment, and debt service. 270.5 Subd. 2. [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 270.6 board proposes to assess against benefited property within the 270.7 district all or any part of the allocable costs of the project 270.8 as provided in subdivision 5, the board shall, not less than two 270.9 weeks before the hearing provided for in subdivision 1, cause 270.10 mailed notice of the hearing to be given to the owner of each 270.11 parcel within the area proposed to be specially assessed and 270.12 shall also give two weeks' published notice of the hearing. The 270.13 notice of hearing must contain the same information provided in 270.14 the notice published by the board pursuant to subdivision 1, and 270.15 a description of the area proposed to be assessed. For the 270.16 purpose of giving mailed notice, owners are those shown to be on 270.17 the records of the county auditor or, in any county where tax 270.18 statements are mailed by the county treasurer, on the records of 270.19 the county treasurer; but other appropriate records may be used 270.20 for this purpose. For properties that are tax exempt or subject 270.21 to taxation on a gross earnings basis and not listed on the 270.22 records of the county auditor or the county treasurer, the 270.23 owners must be ascertained by any practicable means and mailed 270.24 notice given them as herein provided. Failure to give mailed 270.25 notice or any defects in the notice does not invalidate the 270.26 proceedings of the board. 270.27 Subd. 3. [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before 270.28 adoption of the resolution calling for a hearing under this 270.29 section, the board shall secure from the district engineer or 270.30 some other competent person of the board's selection a report 270.31 advising it in a preliminary way as to whether the proposed 270.32 project is feasible and whether it should be made as proposed or 270.33 in connection with some other project and the estimated costs of 270.34 the project as recommended. No error or omission in the report 270.35 invalidates the proceeding. The board may also take other steps 270.36 before the hearing, as will in its judgment provide helpful 271.1 information in determining the desirability and feasibility of 271.2 the project, including but not limited to preparation of plans 271.3 and specifications and advertisement for bids on them. The 271.4 hearing may be adjourned from time to time and a resolution 271.5 ordering the project may be adopted at any time within six 271.6 months after the date of hearing. In ordering the project the 271.7 board may reduce but not increase the extent of the project as 271.8 stated in the notice of hearing and shall find that the project 271.9 as ordered is in accordance with the comprehensive plan and 271.10 program adopted by the board pursuant to section 5. 271.11 Subd. 4. [EMERGENCY ACTION.] If the board by resolution 271.12 adopted by the affirmative vote of not less than two-thirds of 271.13 its members determines that an emergency exists requiring the 271.14 immediate purchase of materials or supplies or the making of 271.15 emergency repairs, it may order the purchase of those supplies 271.16 and materials and the making of the repairs before any hearing 271.17 required under this section. The board must set as early a date 271.18 as practicable for the hearing at the time it declares the 271.19 emergency. All other provisions of this section must be 271.20 followed in giving notice of and conducting the hearing. 271.21 Nothing in this subdivision prevents the board or its agents 271.22 from purchasing maintenance supplies or incurring maintenance 271.23 costs without regard to the requirements of this section. 271.24 Subd. 5. [POWER OF THE BOARD TO SPECIALLY ASSESS.] The 271.25 board may specially assess all or any part of the costs of 271.26 acquisition and betterment as provided in this subdivision, of 271.27 any project ordered under this section. The special assessments 271.28 must be levied in accordance with Minnesota Statutes, sections 271.29 429.051 to 429.081, except as otherwise provided in this 271.30 subdivision. No other provisions of Minnesota Statutes, chapter 271.31 429, apply. For purposes of levying the special assessments, 271.32 the hearing on the project required in subdivision 1 serves as 271.33 the hearing on the making of the original improvement provided 271.34 for by Minnesota Statutes, section 429.051. The area assessed 271.35 may be less than but may not exceed the area proposed to be 271.36 assessed as stated in the notice of hearing on the project 272.1 provided for in subdivision 2. 272.2 Sec. 13. [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 272.3 Subdivision 1. [BUDGET ANTICIPATION CERTIFICATES OF 272.4 INDEBTEDNESS.] At any time after adoption of its annual budget 272.5 and in anticipation of the collection of tax and other revenues 272.6 estimated and set forth by the board in the budget, except in 272.7 the case of deficiency taxes levied under this subdivision and 272.8 taxes levied for the payment of certificates issued under 272.9 subdivision 2, the board may, by resolution, authorize the 272.10 issuance, negotiation, and sale, in accordance with subdivision 272.11 4 in the form and manner and upon terms it determines, of its 272.12 negotiable general obligation certificates of indebtedness in 272.13 aggregate principal amounts not exceeding 50 percent of the 272.14 total amount of tax collections and other revenues, and maturing 272.15 not later than three months after the close of the budget year 272.16 in which issued. The proceeds of the sale of the certificates 272.17 must be used solely for the purposes for which the tax 272.18 collections and other revenues are to be expended under the 272.19 budget. 272.20 All the tax collections and other revenues included in the 272.21 budget for the budget year, after the expenditure of the tax 272.22 collections and other revenues in accordance with the budget, 272.23 must be irrevocably pledged and appropriated to a special fund 272.24 to pay the principal and interest on the certificates when due. 272.25 If for any reason the tax collections and other revenues are 272.26 insufficient to pay the certificates and interest when due, the 272.27 board shall levy a tax in the amount of the deficiency on all 272.28 taxable property in the district and shall appropriate this 272.29 amount when received to the special fund. 272.30 Subd. 2. [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 272.31 any budget year the receipts of tax and other revenues should 272.32 for some unforeseen cause become insufficient to pay the board's 272.33 current expenses, or if any public emergency should subject it 272.34 to the necessity of making extraordinary expenditures, the board 272.35 may by resolution authorize the issuance, negotiation, and sale, 272.36 in accordance with subdivision 4 in the form and manner and upon 273.1 the terms and conditions it determines, of its negotiable 273.2 general obligation certificates of indebtedness in an amount 273.3 sufficient to meet the deficiency. The board shall levy on all 273.4 taxable property in the district a tax sufficient to pay the 273.5 certificates and interest on the certificates and shall 273.6 appropriate all collections of the tax to a special fund created 273.7 for the payment of the certificates and the interest on them. 273.8 Certificates issued under this subdivision mature not later than 273.9 April 1 in the year following the year in which the tax is 273.10 collectible. 273.11 Subd. 3. [GENERAL OBLIGATION BONDS.] The board may by 273.12 resolution authorize the issuance of general obligation bonds 273.13 for the acquisition or betterment of any part of the district 273.14 disposal system, including but without limitation the payment of 273.15 interest during construction and for a reasonable period 273.16 thereafter, or for the refunding of outstanding bonds, 273.17 certificates of indebtedness, or judgments. The board shall 273.18 pledge its full faith and credit and taxing power for the 273.19 payment of the bonds and shall provide for the issuance and sale 273.20 and for the security of the bonds in the manner provided in 273.21 Minnesota Statutes, chapter 475. The board has the same powers 273.22 and duties as a municipality issuing bonds under that law, 273.23 except that no election is required and the debt limitations of 273.24 Minnesota Statutes, chapter 475, do not apply to the bonds. The 273.25 board may also pledge for the payment of the bonds and deduct 273.26 from the amount of any tax levy required under Minnesota 273.27 Statutes, section 475.61, subdivision 1, and any revenues 273.28 receivable under any state and federal grants anticipated by the 273.29 board and may covenant to refund the bonds if and when and to 273.30 the extent that for any reason the revenues, together with other 273.31 funds available and appropriated for that purpose, are not 273.32 sufficient to pay all principal and interest due or about to 273.33 become due, provided that the revenues have not been anticipated 273.34 by the issuance of certificates under subdivision 1. 273.35 Subd. 4. [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.] 273.36 Certificates issued under subdivisions 1 and 2 may be issued and 274.1 sold by negotiation, without public sale, and may be sold at a 274.2 price equal to the percentage of the par value of the 274.3 certificates, plus accrued interest, and bearing interest at the 274.4 rate determined by the board. An election is not required to 274.5 authorize the issuance of the certificates. The certificates 274.6 must bear the same rate of interest after maturity as before and 274.7 the full faith and credit and taxing power of the board must be 274.8 pledged to the payment of the certificates. 274.9 Sec. 14. [DEPOSITORIES.] 274.10 The board shall designate one or more national or state 274.11 banks, or trust companies authorized to do a banking business, 274.12 as official depositories for money of the board, and shall 274.13 require the treasurer to deposit all or a part of the money in 274.14 those institutions. The designation must be in writing and set 274.15 forth all the terms and conditions upon which the deposits are 274.16 made, and must be signed by the chair and treasurer and made a 274.17 part of the minutes of the board. 274.18 Sec. 15. [MONEY, ACCOUNTS, AND INVESTMENTS.] 274.19 Subdivision 1. [RECEIPT AND APPLICATION.] Money received 274.20 by the board must be deposited or invested by the treasurer and 274.21 disposed of as the board may direct in accordance with its 274.22 budget; provided that any money that has been pledged or 274.23 dedicated by the board to the payment of obligations or interest 274.24 on the obligations or expenses incident thereto, or for any 274.25 other specific purpose authorized by law, must be paid by the 274.26 treasurer into the fund to which it has been pledged. 274.27 Subd. 2. [FUNDS AND ACCOUNTS.] (a) The board's treasurer 274.28 shall establish funds and accounts as may be necessary or 274.29 convenient to handle the receipts and disbursements of the board 274.30 in an orderly fashion. 274.31 (b) The funds and accounts must be audited annually by a 274.32 certified public accountant at the expense of the district. 274.33 Subd. 3. [DEPOSIT AND INVESTMENT.] The money on hand in 274.34 those funds and accounts may be deposited in the official 274.35 depositories of the board or invested as provided in this 274.36 subdivision. Any amount not currently needed or required by law 275.1 to be kept in cash on deposit may be invested in obligations 275.2 authorized for the investment of municipal sinking funds by 275.3 Minnesota Statutes, section 475.66. The money may also be held 275.4 under certificates of deposit issued by any official depository 275.5 of the board. 275.6 Subd. 4. [BOND PROCEEDS.] The use of proceeds of all bonds 275.7 issued by the board for the acquisition and betterment of the 275.8 district disposal system, and the use, other than investment, of 275.9 all money on hand in any sinking fund or funds of the board, is 275.10 governed by the provisions of Minnesota Statutes, chapter 475, 275.11 the provisions of sections 1 to 19, and the provisions of 275.12 resolutions authorizing the issuance of the bonds. When 275.13 received, the bond proceeds must be transferred to the treasurer 275.14 of the board for safekeeping, investment, and payment of the 275.15 costs for which they were issued. 275.16 Subd. 5. [AUDIT.] The board shall provide for and pay the 275.17 cost of an independent annual audit of its official books and 275.18 records by the state auditor or a public accountant authorized 275.19 to perform that function under Minnesota Statutes, chapter 6. 275.20 Sec. 16. [SERVICE CONTRACTS WITH GOVERNMENTAL ENTITIES 275.21 OUTSIDE THE JURISDICTION OF THE BOARD.] 275.22 (a) The board may contract with the United States or any 275.23 agency of the federal government, any state or its agency, or 275.24 any municipal or public corporation, governmental subdivision or 275.25 agency or political subdivision in any state, outside the 275.26 jurisdiction of the board, for furnishing services to those 275.27 entities, including but not limited to planning for and the 275.28 acquisition, betterment, operation, administration, and 275.29 maintenance of any or all interceptors, treatment works, and 275.30 local water and sanitary sewer facilities. The board may 275.31 include as one of the terms of the contract that the entity must 275.32 pay to the board an amount agreed upon as a reasonable estimate 275.33 of the proportionate share properly allocable to the entity of 275.34 costs of acquisition, betterment, and debt service previously 275.35 allocated in the district. When payments are made by entities 275.36 to the board, they must be applied in reduction of the total 276.1 amount of costs thereafter allocated in the district, on an 276.2 equitable basis as the board deems to be in the best interests 276.3 of the district, applying so far as practicable and appropriate 276.4 the criteria set forth in section 10, subdivision 2. A 276.5 municipality in the state of Minnesota may enter into a contract 276.6 and perform all acts and things required as a condition or 276.7 consideration therefor consistent with the purposes of sections 276.8 1 to 19, whether or not included among the powers otherwise 276.9 granted to the municipality by law or charter. 276.10 (b) The board shall contract with a qualified entity to 276.11 make necessary inspections of the district facilities, and to 276.12 otherwise process or assist in processing any of the work of the 276.13 district. 276.14 Sec. 17. [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES, 276.15 AND EQUIPMENT.] 276.16 When the board orders a project involving the acquisition 276.17 or betterment of a part of the district disposal system, it 276.18 shall cause plans and specifications of the project to be made, 276.19 or if previously made, to be modified, if necessary, and to be 276.20 approved by the agency if required, and after any required 276.21 approval by the agency, one or more contracts for work and 276.22 materials called for by the plans and specification may be 276.23 awarded as provided in Minnesota Statutes, section 471.345. 276.24 Sec. 18. [PROPERTY EXEMPT FROM TAXATION.] 276.25 Any properties, real or personal, owned, leased, 276.26 controlled, used, or occupied by the water and sanitary sewer 276.27 board for any purpose under sections 1 to 19 are declared to be 276.28 acquired, owned, leased, controlled, used, and occupied for 276.29 public, governmental, and municipal purposes, and are exempt 276.30 from taxation by the state or any political subdivision of the 276.31 state. The properties are subject to special assessments levied 276.32 by a political subdivision for a local improvement in amounts 276.33 proportionate to and not exceeding the special benefit received 276.34 by the properties from the improvement. 276.35 Sec. 19. [RELATION TO EXISTING LAWS.] 276.36 Sections 1 to 19 must be given full effect notwithstanding 277.1 the provisions of any law or charter inconsistent with sections 277.2 1 to 19. The powers conferred on the board under sections 1 to 277.3 19 do not in any way diminish or supersede the powers conferred 277.4 on the agency by Minnesota Statutes, chapters 115 to 116. 277.5 Sec. 20. [BANNING JUNCTION AREA WATER AND SANITARY SEWER 277.6 DISTRICT; DEFINITIONS.] 277.7 Subdivision 1. [APPLICATION.] For the purposes of sections 277.8 20 to 38, the terms defined in this section have the meanings 277.9 given them. 277.10 Subd. 2. [DISTRICT.] "Banning Junction area water and 277.11 sanitary sewer district" and "district" mean the area over which 277.12 the Banning Junction area water and sanitary sewer board has 277.13 jurisdiction, including the town of Finlayson and the city of 277.14 Finlayson in Pine county and Banning state park, but only that 277.15 part of the township described in the comprehensive plan adopted 277.16 by the board pursuant to section 24. 277.17 Subd. 3. [BOARD.] "Water and sanitary sewer board" or 277.18 "board" means the Banning Junction area water and sanitary sewer 277.19 board established for the district as provided in subdivision 2. 277.20 Subd. 4. [PERSON.] "Person" means an individual, 277.21 partnership, corporation, limited liability company, 277.22 cooperative, or other organization or entity, public or private. 277.23 Subd. 5. [LOCAL GOVERNMENTAL UNITS.] "Local governmental 277.24 units" or "governmental units" means the town of Finlayson, the 277.25 department of natural resources, and the city of Finlayson. 277.26 Subd. 6. [ACQUISITION; BETTERMENT.] "Acquisition" and 277.27 "betterment" have the meanings given in Minnesota Statutes, 277.28 chapter 475. 277.29 Subd. 7. [AGENCY.] "Agency" means the Minnesota pollution 277.30 control agency created in Minnesota Statutes, chapter 116. 277.31 Subd. 8. [SEWAGE.] "Sewage" means all liquid or 277.32 water-carried waste products from whatever sources derived, 277.33 together with any groundwater infiltration and surface water as 277.34 may be present. 277.35 Subd. 9. [POLLUTION OF WATER; SEWER SYSTEM.] "Pollution of 277.36 water" and "sewer system" have the meanings given in Minnesota 278.1 Statutes, section 115.01. 278.2 Subd. 10. [TREATMENT WORKS; DISPOSAL SYSTEM.] "Treatment 278.3 works" and "disposal system" have the meanings given in 278.4 Minnesota Statutes, section 115.01. 278.5 Subd. 11. [INTERCEPTOR.] "Interceptor" means a sewer and 278.6 its necessary appurtenances, including but not limited to mains, 278.7 pumping stations, and sewage flow-regulating and -measuring 278.8 stations, that is: 278.9 (1) designed for or used to conduct sewage originating in 278.10 more than one local governmental unit; 278.11 (2) designed or used to conduct all or substantially all 278.12 the sewage originating in a single local governmental unit from 278.13 a point of collection in that unit to an interceptor or 278.14 treatment works outside that unit; or 278.15 (3) determined by the board to be a major collector of 278.16 sewage used or designed to serve a substantial area in the 278.17 district. 278.18 Subd. 12. [DISTRICT DISPOSAL SYSTEM.] "District disposal 278.19 system" means any and all interceptors or treatment works owned, 278.20 constructed, or operated by the board unless designated by the 278.21 board as local water and sanitary sewer facilities. 278.22 Subd. 13. [MUNICIPALITY.] "Municipality" means any home 278.23 rule charter or statutory city or town. 278.24 Subd. 14. [TOTAL COSTS.] "Total costs of acquisition and 278.25 betterment" and "costs of acquisition and betterment" mean all 278.26 acquisition and betterment expenses permitted to be financed out 278.27 of stopped bond proceeds issued in accordance with section 32, 278.28 whether or not the expenses are in fact financed out of the bond 278.29 proceeds. 278.30 Subd. 15. [CURRENT COSTS.] "Current costs of acquisition, 278.31 betterment, and debt service" means interest and principal 278.32 estimated to be due during the budget year on bonds issued to 278.33 finance said acquisition and betterment and all other costs of 278.34 acquisition and betterment estimated to be paid during the year 278.35 from funds other than bond proceeds and federal or state grants. 278.36 Subd. 16. [RESIDENT.] "Resident" means the owner of a 279.1 dwelling located in the district and receiving water or sewer 279.2 service. 279.3 Sec. 21. [WATER AND SANITARY SEWER BOARD.] 279.4 Subdivision 1. [ESTABLISHMENT.] A water and sanitary sewer 279.5 district is established for the town of Finlayson, for the 279.6 Banning state park, under the jurisdiction of the Minnesota 279.7 department of natural resources, and for the city of Finlayson 279.8 in Pine county, to be known as the Banning Junction area water 279.9 and sanitary sewer district. The water and sewer district is 279.10 under the control and management of the Banning Junction area 279.11 water and sanitary sewer board. The board is established as a 279.12 public corporation and political subdivision of the state with 279.13 perpetual succession and all the rights, powers, privileges, 279.14 immunities, and duties that may be validly granted to or imposed 279.15 upon a municipal corporation, as provided in sections 20 to 38. 279.16 Subd. 2. [MEMBERS AND SELECTION.] The board is composed of 279.17 five members selected as follows: the town board shall meet to 279.18 appoint three members, one of whom shall be an elected township 279.19 officer, and two of whom shall be persons served by the system, 279.20 the city shall appoint one member, and the department of natural 279.21 resources shall appoint one member to the water and sanitary 279.22 sewer board and each board member shall have one vote. The 279.23 first terms must be as follows: one for one year, two for two 279.24 years, and two for three years, fixed by lot at the district's 279.25 first meeting. Thereafter, all terms are for three years. 279.26 Subd. 3. [TIME LIMITS FOR SELECTION.] The board members 279.27 must be selected as provided in subdivision 2 within 60 days 279.28 after sections 20 to 38 become effective. The successor to each 279.29 board member must be selected at any time within 60 days before 279.30 the expiration of the member's term in the same manner as the 279.31 predecessor was selected. A vacancy on the board must be filled 279.32 within 60 days after it occurs. 279.33 Subd. 4. [VACANCIES.] If the office of a board member 279.34 becomes vacant, the vacancy must be filled for the unexpired 279.35 term in the manner provided for selection of the member who 279.36 vacated the office. The office is deemed vacant under the 280.1 conditions specified in Minnesota Statutes, section 351.02. 280.2 Subd. 5. [REMOVAL.] A board member may be removed by the 280.3 unanimous vote of the governing body appointing the member, with 280.4 or without cause, or for malfeasance or nonfeasance in the 280.5 performance of official duties as provided by Minnesota 280.6 Statutes, sections 351.14 to 351.23. 280.7 Subd. 6. [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A 280.8 certificate of selection of every board member selected under 280.9 subdivision 2 stating the term for which selected, must be made 280.10 by the respective town clerks, city administrator, and by the 280.11 commissioner of natural resources. The certificates, with the 280.12 approval appended by other authority, if required, must be filed 280.13 with the secretary of state. Counterparts thereof must be 280.14 furnished to the board member and the secretary of the board. 280.15 Each member shall qualify by taking and subscribing the oath of 280.16 office prescribed by the Minnesota Constitution, article V, 280.17 section 6. The oath, duly certified by the official 280.18 administering the same, must be filed with the secretary of 280.19 state and the secretary of the board. 280.20 Subd. 7. [BOARD MEMBERS' COMPENSATION.] Each board member, 280.21 except the chair, may be paid a per diem compensation in 280.22 accordance with the board's bylaws for meetings and for other 280.23 services as are specifically authorized by the board, not to 280.24 exceed the per diem amount under Minnesota Statutes, section 280.25 15.0575, subdivision 3, and not to exceed $1,000 in any one 280.26 year. The chair may be paid a per diem compensation in 280.27 accordance with the board's bylaws for meetings and for other 280.28 services specifically authorized by the board, not to exceed the 280.29 per diem amount under Minnesota Statutes, section 15.0575, 280.30 subdivision 3, and not to exceed $1,500 in any one year. All 280.31 members of the board must be reimbursed for all reasonable and 280.32 necessary expenses actually incurred in the performance of 280.33 duties. 280.34 Sec. 22. [GENERAL PROVISIONS FOR ORGANIZATION AND 280.35 OPERATION OF BOARD.] 280.36 Subdivision 1. [ORGANIZATION; OFFICERS; MEETINGS; SEAL.] 281.1 After the selection and qualification of all board members, they 281.2 shall meet to organize the board at the call of any two board 281.3 members, upon seven days' notice by registered mail to the 281.4 remaining board members, at a time and place within the district 281.5 specified in the notice. A majority of the members shall 281.6 constitute a quorum at that meeting and all other meetings of 281.7 the board, but a lesser number may meet and adjourn from time to 281.8 time and compel the attendance of absent members. At the first 281.9 meeting the board shall select its officers and conduct other 281.10 organizational business as may be necessary. Thereafter the 281.11 board shall meet regularly at the time and place that the board 281.12 designates by resolution. Special meetings may be held at any 281.13 time upon call of the chair or any two members, upon written 281.14 notice sent by mail to each member at least three days before 281.15 the meeting, or upon other notice as the board by resolution may 281.16 provide, or without notice if each member is present or files 281.17 with the secretary a written consent to the meeting either 281.18 before or after the meeting. Except as otherwise provided in 281.19 sections 20 to 38, any action within the authority of the board 281.20 may be taken by the affirmative vote of a majority of the board 281.21 and may be taken by regular or adjourned regular meeting or at a 281.22 duly held special meeting, but in any case only if a quorum is 281.23 present. Meetings of the board must be open to the public. The 281.24 board may adopt a seal, which must be officially and judicially 281.25 noticed, to authenticate instruments executed by its authority, 281.26 but omission of the seal does not affect the validity of any 281.27 instrument. 281.28 Subd. 2. [CHAIR.] The board shall elect a chair from its 281.29 membership. The term of the first chair of the board shall 281.30 expire on January 1, 2001, and the terms of successor chairs 281.31 expire on January 1 of each succeeding year. The chair shall 281.32 preside at all meetings of the board, if present, and shall 281.33 perform all other duties and functions usually incumbent upon 281.34 such an officer, and all administrative functions assigned to 281.35 the chair by the board. The board shall elect a vice-chair from 281.36 its membership to act for the chair during temporary absence or 282.1 disability. 282.2 Subd. 3. [SECRETARY AND TREASURER.] The board shall select 282.3 a person or persons who may, but need not be, a member or 282.4 members of the board, to act as its secretary and treasurer. 282.5 The secretary and treasurer shall hold office at the pleasure of 282.6 the board, subject to the terms of any contract of employment 282.7 that the board may enter into with the secretary or treasurer. 282.8 The secretary shall record the minutes of all meetings of the 282.9 board, and be the custodian of all books and records of the 282.10 board except those that the board entrusts to the custody of a 282.11 designated employee. The treasurer is the custodian of all 282.12 money received by the board except as the board otherwise 282.13 entrusts to the custody of a designated employee. The board may 282.14 appoint a deputy to perform any and all functions of either the 282.15 secretary or the treasurer. A secretary or treasurer who is not 282.16 a member of the board or a deputy of either does not have the 282.17 right to vote. 282.18 Subd. 4. [EXECUTIVE DIRECTOR.] The board may appoint an 282.19 executive director, selected solely upon the basis of training, 282.20 experience, and other qualifications and who shall serve at the 282.21 pleasure of the board and at a compensation to be determined by 282.22 the board. The executive director need not be a resident of the 282.23 district. The executive director may also be selected by the 282.24 board to serve as either secretary or treasurer, or both, of the 282.25 board. The executive director shall attend all meetings of the 282.26 board, but shall not vote, and shall have the following powers 282.27 and duties: 282.28 (1) to see that all resolutions, rules, regulations, or 282.29 orders of the board are enforced; 282.30 (2) to appoint and remove, upon the basis of merit and 282.31 fitness, all subordinate officers and regular employees of the 282.32 board except the secretary and the treasurer and their deputies; 282.33 (3) to present to the board plans, studies, and other 282.34 reports prepared for board purposes and recommend to the board 282.35 for adoption the measures the executive director deems necessary 282.36 to enforce or carry out the powers and the duties of the board, 283.1 or the efficient administration of the affairs of the board; 283.2 (4) to keep the board fully advised as to its financial 283.3 condition, and to prepare and submit to the board and to the 283.4 governing bodies of the local governmental units, the board's 283.5 annual budget and other financial information the board may 283.6 request; 283.7 (5) to recommend to the board for adoption rules and 283.8 regulations the executive director deems necessary for the 283.9 efficient operation of the district disposal system; and 283.10 (6) to perform other duties prescribed by the board. 283.11 Subd. 5. [PUBLIC EMPLOYEES.] The executive director and 283.12 other persons employed by the district are public employees and 283.13 have all the rights and duties conferred on public employees 283.14 under Minnesota Statutes, sections 179A.01 to 179A.25. The 283.15 board may elect to have employees become members of either the 283.16 public employees retirement association or the Minnesota state 283.17 retirement system. The compensation and conditions of 283.18 employment of the employees must be governed by rules applicable 283.19 to state employees in the classified service and to the 283.20 provisions of Minnesota Statutes, chapter 15A. 283.21 Subd. 6. [PROCEDURES.] The board shall adopt resolutions 283.22 or bylaws establishing procedures for board action, personnel 283.23 administration, keeping records, approving claims, authorizing 283.24 or making disbursements, safekeeping funds, and auditing all 283.25 financial operations of the board. 283.26 Subd. 7. [SURETY BONDS AND INSURANCE.] The board may 283.27 procure surety bonds for its officers and employees, in amounts 283.28 deemed necessary to ensure proper performance of their duties 283.29 and proper accounting for funds in their custody. It may 283.30 procure insurance against risks to property and liability of the 283.31 board and its officers, agents, and employees for personal 283.32 injuries or death and property damage and destruction, in 283.33 amounts deemed necessary or desirable, with the force and effect 283.34 stated in Minnesota Statutes, chapter 466. 283.35 Sec. 23. [GENERAL POWERS OF BOARD.] 283.36 Subdivision 1. [SCOPE.] The board has all powers necessary 284.1 or convenient to discharge the duties imposed upon it by law. 284.2 The powers include those specified in this section, but the 284.3 express grant or enumeration of powers does not limit the 284.4 generality or scope of the grant of powers contained in this 284.5 subdivision. 284.6 Subd. 2. [SUIT.] The board may sue or be sued. 284.7 Subd. 3. [CONTRACT.] The board may enter into any contract 284.8 necessary or proper for the exercise of its powers or the 284.9 accomplishment of its purposes. 284.10 Subd. 4. [GIFTS, GRANTS, LOANS.] The board may accept 284.11 gifts, apply for and accept grants or loans of money or other 284.12 property from the United States, the state, or any person for 284.13 any of its purposes, enter into any agreement required in 284.14 connection with them, and hold, use, and dispose of the money or 284.15 property in accordance with the terms of the gift, grant, loan, 284.16 or agreement relating to it. With respect to loans or grants of 284.17 funds or real or personal property or other assistance from any 284.18 state or federal government or its agency or instrumentality, 284.19 the board may contract to do and perform all acts and things 284.20 required as a condition or consideration for the gift, grant, or 284.21 loan pursuant to state or federal law or regulations, whether or 284.22 not included among the powers expressly granted to the board in 284.23 sections 20 to 38. 284.24 Subd. 5. [COOPERATIVE ACTION.] The board may act under 284.25 Minnesota Statutes, section 471.59, or any other appropriate law 284.26 providing for joint or cooperative action between governmental 284.27 units. 284.28 Subd. 6. [STUDIES AND INVESTIGATIONS.] The board may 284.29 conduct research studies and programs, collect and analyze data, 284.30 prepare reports, maps, charts, and tables, and conduct all 284.31 necessary hearings and investigations in connection with the 284.32 design, construction, and operation of the district disposal 284.33 system. 284.34 Subd. 7. [EMPLOYEES, TERMS.] The board may employ on terms 284.35 it deems advisable, persons or firms performing engineering, 284.36 legal, or other services of a professional nature; require any 285.1 employee to obtain and file with it an individual bond or 285.2 fidelity insurance policy; and procure insurance in amounts it 285.3 deems necessary against liability of the board or its officers 285.4 or both, for personal injury or death and property damage or 285.5 destruction, with the force and effect stated in Minnesota 285.6 Statutes, chapter 466, and against risks of damage to or 285.7 destruction of any of its facilities, equipment, or other 285.8 property as it deems necessary. 285.9 Subd. 8. [PROPERTY RIGHTS, POWERS.] The board may acquire 285.10 by purchase, lease, condemnation, gift, or grant, any real or 285.11 personal property including positive and negative easements and 285.12 water and air rights, and it may construct, enlarge, improve, 285.13 replace, repair, maintain, and operate any interceptor, 285.14 treatment works, or water facility determined to be necessary or 285.15 convenient for the collection and disposal of sewage in the 285.16 district. Any local governmental unit and the commissioners of 285.17 transportation and natural resources are authorized to convey to 285.18 or permit the use of any of the above-mentioned facilities owned 285.19 or controlled by it, by the board, subject to the rights of the 285.20 holders of any bonds issued with respect to those facilities, 285.21 with or without compensation, without an election or approval by 285.22 any other governmental unit or agency. All powers conferred by 285.23 this subdivision may be exercised both within or without the 285.24 district as may be necessary for the exercise by the board of 285.25 its powers or the accomplishment of its purposes. The board may 285.26 hold, lease, convey, or otherwise dispose of the above-mentioned 285.27 property for its purposes upon the terms and in the manner it 285.28 deems advisable. Unless otherwise provided, the right to 285.29 acquire lands and property rights by condemnation may be 285.30 exercised only in accordance with Minnesota Statutes, sections 285.31 117.011 to 117.232, and shall apply to any property or interest 285.32 in the property owned by any local governmental unit. No 285.33 property devoted to an actual public use at the time, or held to 285.34 be devoted to such a use within a reasonable time, shall be so 285.35 acquired unless a court of competent jurisdiction determines 285.36 that the use proposed by the board is paramount to the existing 286.1 use. Except in the case of property in actual public use, the 286.2 board may take possession of any property on which condemnation 286.3 proceedings have been commenced at any time after the issuance 286.4 of a court order appointing commissioners for its condemnation. 286.5 Subd. 9. [RELATIONSHIP TO OTHER PROPERTIES.] The board may 286.6 construct or maintain its systems or facilities in, along, on, 286.7 under, over, or through public waters, streets, bridges, 286.8 viaducts, and other public rights-of-way without first obtaining 286.9 a franchise from a county or municipality having jurisdiction 286.10 over them. However, the facilities must be constructed and 286.11 maintained in accordance with the ordinances and resolutions of 286.12 the county or municipality relating to constructing, installing, 286.13 and maintaining similar facilities on public properties and must 286.14 not unnecessarily obstruct the public use of those rights-of-way. 286.15 Subd. 10. [DISPOSAL OF PROPERTY.] The board may sell, 286.16 lease, or otherwise dispose of any real or personal property 286.17 acquired by it which is no longer required for accomplishment of 286.18 its purposes. The property may be sold in the manner provided 286.19 by Minnesota Statutes, section 469.065, insofar as practical. 286.20 The board may give notice of sale as it deems appropriate. When 286.21 the board determines that any property or any part of the 286.22 district disposal system acquired from a local governmental unit 286.23 without compensation is no longer required but is required as a 286.24 local facility by the governmental unit from which it was 286.25 acquired, the board may by resolution transfer it to that 286.26 governmental unit. 286.27 Subd. 11. [AGREEMENTS WITH OTHER GOVERNMENTAL UNITS.] The 286.28 board may contract with the United States or any agency thereof, 286.29 any state or agency thereof, or any regional public planning 286.30 body in the state with jurisdiction over any part of the 286.31 district, or any other municipal or public corporation, or 286.32 governmental subdivision or agency or political subdivision in 286.33 any state, for the joint use of any facility owned by the board 286.34 or such entity, for the operation by that entity of any system 286.35 or facility of the board, or for the performance on the board's 286.36 behalf of any service, including but not limited to planning, on 287.1 terms as may be agreed upon by the contracting parties. Unless 287.2 designated by the board as a local water and sanitary sewer 287.3 facility, any treatment works or interceptor jointly used, or 287.4 operated on behalf of the board, as provided in this 287.5 subdivision, is deemed to be operated by the board for purposes 287.6 of including those facilities in the district disposal system. 287.7 Sec. 24. [COMPREHENSIVE PLAN.] 287.8 Subdivision 1. [BOARD PLAN AND PROGRAM.] The board shall 287.9 adopt a comprehensive plan for the collection, treatment, and 287.10 disposal of sewage in the district for a designated period the 287.11 board deems proper and reasonable. The board shall prepare and 287.12 adopt subsequent comprehensive plans for the collection, 287.13 treatment, and disposal of sewage in the district for each 287.14 succeeding designated period as the board deems proper and 287.15 reasonable. The first plan, as modified by the board, and any 287.16 subsequent plan shall take into account the preservation and 287.17 best and most economic use of water and other natural resources 287.18 in the area; the preservation, use, and potential for use of 287.19 lands adjoining waters of the state to be used for the disposal 287.20 of sewage; and the impact the disposal system will have on 287.21 present and future land use in the area affected. The plans 287.22 shall include the general location of needed interceptors and 287.23 treatment works, a description of the area that is to be served 287.24 by the various interceptors and treatment works, a long-range 287.25 capital improvements program, and any other details as the board 287.26 deems appropriate. In developing the plans, the board shall 287.27 consult with persons designated for the purpose by governing 287.28 bodies of any governmental unit within the district to represent 287.29 the entities and shall consider the data, resources, and input 287.30 offered to the board by the entities and any planning agency 287.31 acting on behalf of one or more of the entities. Each plan, 287.32 when adopted, must be followed in the district and may be 287.33 revised as often as the board deems necessary. 287.34 Subd. 2. [COMPREHENSIVE PLANS; HEARING.] Before adopting 287.35 any subsequent comprehensive plan, the board shall hold a public 287.36 hearing on the proposed plan at a time and place in the district 288.1 that it selects. The hearing may be continued from time to 288.2 time. Not less than 45 days before the hearing, the board shall 288.3 publish notice of the hearing in a newspaper having general 288.4 circulation in the district, stating the date, time, and place 288.5 of the hearing, and the place where the proposed plan may be 288.6 examined by any interested person. At the hearing, all 288.7 interested persons must be permitted to present their views on 288.8 the plan. 288.9 Subd. 3. [GOVERNMENTAL UNIT PLANS AND PROGRAMS; 288.10 COORDINATION WITH BOARD'S RESPONSIBILITIES.] Once the board's 288.11 plan is adopted, no construction project involving the 288.12 construction of new sewers or other disposal facilities may be 288.13 undertaken by the local governmental unit unless its governing 288.14 body shall first find the project to be in accordance with the 288.15 governmental unit's comprehensive plan and program as approved 288.16 by the board. Before approval by the board of the comprehensive 288.17 plan and program of any local governmental unit in the district, 288.18 no water and sanitary sewer construction project may be 288.19 undertaken by the governmental unit unless approval of the 288.20 project is first secured from the board as to those features of 288.21 the project affecting the board's responsibilities as determined 288.22 by the board. 288.23 Sec. 25. [POWERS TO ISSUE OBLIGATIONS AND IMPOSE SPECIAL 288.24 ASSESSMENTS.] 288.25 The Banning Junction area water and sanitary sewer board, 288.26 in order to implement the powers granted under sections 20 to 38 288.27 to establish, maintain, and administer the Banning Junction area 288.28 water and sanitary sewer district, may issue obligations and 288.29 impose special assessments against benefited property within the 288.30 limits of the district benefited by facilities constructed under 288.31 sections 20 to 38 in the manner provided for local governments 288.32 by Minnesota Statutes, chapter 429. 288.33 Sec. 26. [SYSTEM EXPANSION; APPLICATION TO CITIES.] 288.34 The authority of the water and sanitary sewer board to 288.35 establish water or sewer or combined water and sewer systems 288.36 under this section extends to areas within the Banning Junction 289.1 area water and sanitary sewer district organized into cities 289.2 when requested by resolution of the governing body of the 289.3 affected city or when ordered by the Minnesota pollution control 289.4 agency after notice and hearing. For the purpose of any 289.5 petition filed or special assessment levied with respect to any 289.6 system, the entire area to be served within a city must be 289.7 treated as if it were owned by a single person, and the 289.8 governing body shall exercise all the rights and be subject to 289.9 all the duties of an owner of the area, and shall have power to 289.10 provide for the payment of all special assessments and other 289.11 charges imposed upon the area with respect to the system by the 289.12 appropriation of money, the collection of service charges, or 289.13 the levy of taxes, which shall be subject to no limitation of 289.14 rate or amount. 289.15 Sec. 27. [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 289.16 Subdivision 1. [POWERS.] In addition to all other powers 289.17 conferred upon the board in sections 20 to 38, it has the powers 289.18 specified in this section. 289.19 Subd. 2. [DISCHARGE OF TREATED SEWAGE.] The board may 289.20 discharge the effluent from any treatment works operated by it 289.21 into any waters of the state, subject to approval of the agency 289.22 if required and in accordance with any effluent or water quality 289.23 standards lawfully adopted by the agency, any interstate agency, 289.24 or any federal agency having jurisdiction. 289.25 Subd. 3. [UTILIZATION OF DISTRICT SYSTEM.] The board may 289.26 require any person or local governmental unit to provide for the 289.27 discharge of any sewage, directly or indirectly, into the 289.28 district disposal system, or to connect any disposal system or a 289.29 part of it with the district disposal system wherever reasonable 289.30 opportunity for connection is provided; may regulate the manner 289.31 in which the connections are made; may require any person or 289.32 local governmental unit discharging sewage into the disposal 289.33 system to provide preliminary treatment for it; may prohibit the 289.34 discharge into the district disposal system of any substance 289.35 that it determines will or may be harmful to the system or any 289.36 persons operating it; and may require any local governmental 290.1 unit to discontinue the acquisition, betterment, or operation of 290.2 any facility for the unit's disposal system wherever and so far 290.3 as adequate service is or will be provided by the district 290.4 disposal system. 290.5 Subd. 4. [SYSTEM OF COST RECOVERY TO COMPLY WITH 290.6 APPLICABLE REGULATIONS.] Any charges, connection fees, or other 290.7 cost-recovery techniques imposed on persons discharging sewage 290.8 directly or indirectly into the district disposal system must 290.9 comply with applicable state and federal law, including state 290.10 and federal regulations governing grant applications. 290.11 Sec. 28. [BUDGET.] 290.12 The board shall prepare and adopt, on or before October 1 290.13 in 1999 and each year thereafter, a budget showing for the 290.14 following calendar year or other fiscal year determined by the 290.15 board, sometimes referred to in sections 20 to 38 as the budget 290.16 year, estimated receipts of money from all sources, including 290.17 but not limited to payments by each local governmental unit, 290.18 federal or state grants, taxes on property, and funds on hand at 290.19 the beginning of the year, and estimated expenditures for: 290.20 (1) costs of operation, administration, and maintenance of 290.21 the district disposal system; 290.22 (2) cost of acquisition and betterment of the district 290.23 disposal system; and 290.24 (3) debt service, including principal and interest, on 290.25 general obligation bonds and certificates issued pursuant to 290.26 section 32, and any money judgments entered by a court of 290.27 competent jurisdiction. Expenditures within these general 290.28 categories, and any other categories as the board may from time 290.29 to time determine, must be itemized in detail as the board 290.30 prescribes. The board and its officers, agents, and employees 290.31 shall not spend money for any purpose other than debt service 290.32 without having set forth the expense in the budget nor in excess 290.33 of the amount set forth in the budget for it. No obligation to 290.34 make an expenditure of the above-mentioned type is enforceable 290.35 except as the obligation of the person or persons incurring it. 290.36 The board may amend the budget at any time by transferring from 291.1 one purpose to another any sums except money for debt service 291.2 and bond proceeds or by increasing expenditures in any amount by 291.3 which actual cash receipts during the budget year exceed the 291.4 total amounts designated in the original budget. The creation 291.5 of any obligation under section 32 or the receipt of any federal 291.6 or state grant is a sufficient budget designation of the 291.7 proceeds for the purpose for which it is authorized, and of the 291.8 tax or other revenue pledged to pay the obligation and interest 291.9 on it, whether or not specifically included in any annual budget. 291.10 Sec. 29. [ALLOCATION OF COSTS.] 291.11 Subdivision 1. [DEFINITION OF CURRENT COSTS.] The 291.12 estimated cost of administration, operation, maintenance, and 291.13 debt service of the district disposal system to be paid by the 291.14 board in each fiscal year and the estimated costs of acquisition 291.15 and betterment of the system that are to be paid during the year 291.16 from funds other than state or federal grants and bond proceeds 291.17 and all other previously unallocated payments made by the board 291.18 pursuant to sections 20 to 38 to be allocated in the fiscal year 291.19 are referred to as current costs and must be allocated by the 291.20 board as provided in subdivision 2 in the budget for that year. 291.21 Subd. 2. [METHOD OF ALLOCATION OF CURRENT COSTS.] Current 291.22 costs must be allocated in the district on an equitable basis as 291.23 the board may determine by resolution to be in the best 291.24 interests of the district. The adoption or revision of any 291.25 method of allocation used by the board must be by the 291.26 affirmative vote of at least two-thirds of the members of the 291.27 board. 291.28 Sec. 30. [TAX LEVIES.] 291.29 To accomplish any duty imposed on it the board may, in 291.30 addition to the powers granted in sections 20 to 38 and in any 291.31 other law or charter, exercise the powers granted any 291.32 municipality by Minnesota Statutes, chapters 117, 412, 429, 475, 291.33 sections 115.46, 444.075, and 471.59, with respect to the area 291.34 in the district. The board may levy taxes upon all taxable 291.35 property in the district for all or a part of the amount payable 291.36 to the board, pursuant to section 29, to be assessed and 292.1 extended as a tax upon that taxable property by the county 292.2 auditor for the next calendar year, free from any limitation of 292.3 rate or amount imposed by law or charter. The tax must be 292.4 collected and remitted in the same manner as other general taxes. 292.5 Sec. 31. [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 292.6 Subdivision 1. [PUBLIC HEARING REQUIREMENT ON SPECIFIC 292.7 PROJECT.] Before the board orders any project involving the 292.8 acquisition or betterment of any interceptor or treatment works, 292.9 all or a part of the cost of which will be allocated pursuant to 292.10 section 29 as current costs, the board shall hold a public 292.11 hearing on the proposed project. The hearing must be held 292.12 following two publications in a newspaper having general 292.13 circulation in the district, stating the time and place of the 292.14 hearing, the general nature and location of the project, the 292.15 estimated total cost of acquisition and betterment, that portion 292.16 of costs estimated to be paid out of federal and state grants, 292.17 and that portion of costs estimated to be allocated. The 292.18 estimates must be best available at the time of the meeting and 292.19 if costs exceed the estimate, the project cannot proceed until 292.20 an additional public hearing is held, with notice as required at 292.21 the initial meeting. The two publications must be a week apart 292.22 and the hearing at least three days after the last publication. 292.23 Not less than 45 days before the hearing, notice of the hearing 292.24 must also be mailed to each clerk of all local governmental 292.25 units in the district, but failure to give mailed notice or any 292.26 defects in the notice does not invalidate the proceedings. The 292.27 project may include all or part of one or more interceptors or 292.28 treatment works. No hearing may be held on any project unless 292.29 the project is within the area covered by the comprehensive plan 292.30 adopted by the board pursuant to section 24 except that the 292.31 hearing may be held simultaneously with a hearing on a 292.32 comprehensive plan. A hearing is not required with respect to a 292.33 project, no part of the costs of which are to be allocated as 292.34 the current costs of acquisition, betterment, and debt service. 292.35 Subd. 2. [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 292.36 board proposes to assess against benefited property within the 293.1 district all or any part of the allocable costs of the project 293.2 as provided in subdivision 5, the board shall, not less than two 293.3 weeks before the hearing provided for in subdivision 1, cause 293.4 mailed notice of the hearing to be given to the owner of each 293.5 parcel within the area proposed to be specially assessed and 293.6 shall also give two weeks' published notice of the hearing. The 293.7 notice of hearing must contain the same information provided in 293.8 the notice published by the board pursuant to subdivision 1, and 293.9 a description of the area proposed to be assessed. For the 293.10 purpose of giving mailed notice, owners are those shown to be on 293.11 the records of the county auditor or, in any county where tax 293.12 statements are mailed by the county treasurer, on the records of 293.13 the county treasurer; but other appropriate records may be used 293.14 for this purpose. For properties that are tax exempt or subject 293.15 to taxation on a gross earnings basis and not listed on the 293.16 records of the county auditor or the county treasurer, the 293.17 owners must be ascertained by any practicable means and mailed 293.18 notice given them as herein provided. Failure to give mailed 293.19 notice or any defects in the notice does not invalidate the 293.20 proceedings of the board. 293.21 Subd. 3. [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before 293.22 adoption of the resolution calling for a hearing under this 293.23 section, the board shall secure from the district engineer or 293.24 some other competent person of the board's selection a report 293.25 advising it in a preliminary way as to whether the proposed 293.26 project is feasible and whether it should be made as proposed or 293.27 in connection with some other project and the estimated costs of 293.28 the project as recommended. No error or omission in the report 293.29 invalidates the proceeding. The board may also take other steps 293.30 before the hearing, as will in its judgment provide helpful 293.31 information in determining the desirability and feasibility of 293.32 the project, including but not limited to preparation of plans 293.33 and specifications and advertisement for bids on them. The 293.34 hearing may be adjourned from time to time and a resolution 293.35 ordering the project may be adopted at any time within six 293.36 months after the date of hearing. In ordering the project the 294.1 board may reduce but not increase the extent of the project as 294.2 stated in the notice of hearing and shall find that the project 294.3 as ordered is in accordance with the comprehensive plan and 294.4 program adopted by the board pursuant to section 24. 294.5 Subd. 4. [EMERGENCY ACTION.] If the board by resolution 294.6 adopted by the affirmative vote of not less than two-thirds of 294.7 its members determines that an emergency exists requiring the 294.8 immediate purchase of materials or supplies or the making of 294.9 emergency repairs, it may order the purchase of those supplies 294.10 and materials and the making of the repairs before any hearing 294.11 required under this section, provided that the board shall set 294.12 as early a date as practicable for the hearing at the time it 294.13 declares the emergency. All other provisions of this section 294.14 must be followed in giving notice of and conducting the 294.15 hearing. Nothing herein may be construed as preventing the 294.16 board or its agents from purchasing maintenance supplies or 294.17 incurring maintenance costs without regard to the requirements 294.18 of this section. 294.19 Subd. 5. [POWER OF THE BOARD TO SPECIALLY ASSESS.] The 294.20 board may specially assess all or any part of the costs of 294.21 acquisition and betterment as herein provided, of any project 294.22 ordered pursuant to this section. The special assessments must 294.23 be levied in accordance with the provisions of Minnesota 294.24 Statutes, sections 429.051 to 429.081, except as otherwise 294.25 provided in this subdivision. No other provisions of Minnesota 294.26 Statutes, chapter 429, apply. For purposes of levying the 294.27 special assessments, the hearing on the project required in 294.28 subdivision 1 serves as the hearing on the making of the 294.29 original improvement provided for by Minnesota Statutes, section 294.30 429.051. The area assessed may be less than but may not exceed 294.31 the area proposed to be assessed as stated in the notice of 294.32 hearing on the project provided for in subdivision 2. 294.33 Sec. 32. [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 294.34 Subdivision 1. [BUDGET ANTICIPATION CERTIFICATES OF 294.35 INDEBTEDNESS.] At any time after adoption of its annual budget 294.36 and in anticipation of the collection of tax and other revenues 295.1 estimated and set forth by the board in the budget, except in 295.2 the case of deficiency taxes levied under this subdivision and 295.3 taxes levied for the payment of certificates issued under 295.4 subdivision 2, the board may, by resolution, authorize the 295.5 issuance, negotiation, and sale, in accordance with subdivision 295.6 4 in the form and manner and upon terms it determines, of its 295.7 negotiable general obligation certificates of indebtedness in 295.8 aggregate principal amounts not exceeding 50 percent of the 295.9 total amount of tax collections and other revenues, and maturing 295.10 not later than three months after the close of the budget year 295.11 in which issued. The proceeds of the sale of the certificates 295.12 must be used solely for the purposes for which the tax 295.13 collections and other revenues are to be expended pursuant to 295.14 the budget. 295.15 All the tax collections and other revenues included in the 295.16 budget for the budget year, after the expenditure of the tax 295.17 collections and other revenues in accordance with the budget, 295.18 must be irrevocably pledged and appropriated to a special fund 295.19 to pay the principal and interest on the certificates when due. 295.20 If for any reason the tax collections and other revenues are 295.21 insufficient to pay the certificates and interest when due, the 295.22 board shall levy a tax in the amount of the deficiency on all 295.23 taxable property in the district and shall appropriate this 295.24 amount when received to the special fund. 295.25 Subd. 2. [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 295.26 any budget year the receipts of tax and other revenues should 295.27 for some unforeseen cause become insufficient to pay the board's 295.28 current expenses, or if any public emergency should subject it 295.29 to the necessity of making extraordinary expenditures, the board 295.30 may by resolution authorize the issuance, negotiation, and sale, 295.31 in accordance with subdivision 4 in the form and manner and upon 295.32 the terms and conditions it determines, of its negotiable 295.33 general obligation certificates of indebtedness in an amount 295.34 sufficient to meet the deficiency. The board shall levy on all 295.35 taxable property in the district a tax sufficient to pay the 295.36 certificates and interest on the certificates and shall 296.1 appropriate all collections of the tax to a special fund created 296.2 for the payment of the certificates and the interest on them. 296.3 Certificates issued under this subdivision mature not later than 296.4 April 1 in the year following the year in which the tax is 296.5 collectible. 296.6 Subd. 3. [GENERAL OBLIGATION BONDS.] The board may by 296.7 resolution authorize the issuance of general obligation bonds 296.8 for the acquisition or betterment of any part of the district 296.9 disposal system, including but without limitation the payment of 296.10 interest during construction and for a reasonable period 296.11 thereafter, or for the refunding of outstanding bonds, 296.12 certificates of indebtedness, or judgments. The board shall 296.13 pledge its full faith and credit and taxing power for the 296.14 payment of the bonds and shall provide for the issuance and sale 296.15 and for the security of the bonds in the manner provided in 296.16 Minnesota Statutes, chapter 475. The board has the same powers 296.17 and duties as a municipality issuing bonds under that law, 296.18 except that no election is required and the debt limitations of 296.19 Minnesota Statutes, chapter 475, do not apply to the bonds. The 296.20 board may also pledge for the payment of the bonds and deduct 296.21 from the amount of any tax levy required under Minnesota 296.22 Statutes, section 475.61, subdivision 1, and any revenues 296.23 receivable under any state and federal grants anticipated by the 296.24 board and may covenant to refund the bonds if and when and to 296.25 the extent that for any reason the revenues, together with other 296.26 funds available and appropriated for that purpose, are not 296.27 sufficient to pay all principal and interest due or about to 296.28 become due, provided that the revenues have not been anticipated 296.29 by the issuance of certificates under subdivision 1. 296.30 Subd. 4. [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.] 296.31 Certificates issued under subdivisions 1 and 2 may be issued and 296.32 sold by negotiation, without public sale, and may be sold at a 296.33 price equal to the percentage of the par value of the 296.34 certificates, plus accrued interest, and bearing interest at the 296.35 rate determined by the board. No election is required to 296.36 authorize the issuance of the certificates. The certificates 297.1 must bear the same rate of interest after maturity as before and 297.2 the full faith and credit and taxing power of the board must be 297.3 pledged to the payment of the certificates. 297.4 Sec. 33. [DEPOSITORIES.] 297.5 The board shall designate one or more national or state 297.6 banks, or trust companies authorized to do a banking business, 297.7 as official depositories for money of the board, and shall 297.8 require the treasurer to deposit all or a part of the money in 297.9 those institutions. The designation must be in writing and must 297.10 set forth all the terms and conditions upon which the deposits 297.11 are made, and must be signed by the chair and treasurer and made 297.12 a part of the minutes of the board. 297.13 Sec. 34. [MONEY, ACCOUNTS, AND INVESTMENTS.] 297.14 Subdivision 1. [RECEIPT AND APPLICATION.] Money received 297.15 by the board must be deposited or invested by the treasurer and 297.16 disposed of as the board may direct in accordance with its 297.17 budget; provided that any money that has been pledged or 297.18 dedicated by the board to the payment of obligations or interest 297.19 on the obligations or expenses incident thereto, or for any 297.20 other specific purpose authorized by law, must be paid by the 297.21 treasurer into the fund to which it has been pledged. 297.22 Subd. 2. [FUNDS AND ACCOUNTS.] (a) The board's treasurer 297.23 shall establish funds and accounts as may be necessary or 297.24 convenient to handle the receipts and disbursements of the board 297.25 in an orderly fashion. 297.26 (b) The funds and accounts must be audited annually by a 297.27 certified public accountant at the expense of the district. 297.28 Subd. 3. [DEPOSIT AND INVESTMENT.] The money on hand in 297.29 those funds and accounts may be deposited in the official 297.30 depositories of the board or invested as provided in this 297.31 subdivision. Any amount not currently needed or required by law 297.32 to be kept in cash on deposit may be invested in obligations 297.33 authorized for the investment of municipal sinking funds by 297.34 Minnesota Statutes, section 475.66. The money may also be held 297.35 under certificates of deposit issued by any official depository 297.36 of the board. 298.1 Subd. 4. [BOND PROCEEDS.] The use of proceeds of all bonds 298.2 issued by the board for the acquisition and betterment of the 298.3 district disposal system, and the use, other than investment, of 298.4 all money on hand in any sinking fund or funds of the board, is 298.5 governed by the provisions of Minnesota Statutes, chapter 475, 298.6 the provisions of sections 20 to 38, and the provisions of 298.7 resolutions authorizing the issuance of the bonds. When 298.8 received, the bond proceeds must be transferred to the treasurer 298.9 of the board for safekeeping, investment, and payment of the 298.10 costs for which they were issued. 298.11 Subd. 5. [AUDIT.] The board shall provide for and pay the 298.12 cost of an independent annual audit of its official books and 298.13 records by the state auditor or a public accountant authorized 298.14 to perform that function under Minnesota Statutes, chapter 6. 298.15 Sec. 35. [SERVICE CONTRACTS WITH GOVERNMENTAL ENTITIES 298.16 OUTSIDE THE JURISDICTION OF THE BOARD.] 298.17 (a) The board may contract with the United States or any 298.18 agency of the federal government, any state or its agency, or 298.19 any municipal or public corporation, governmental subdivision or 298.20 agency or political subdivision in any state, outside the 298.21 jurisdiction of the board, for furnishing services to those 298.22 entities, including but not limited to planning for and the 298.23 acquisition, betterment, operation, administration, and 298.24 maintenance of any or all interceptors, treatment works, and 298.25 local water and sanitary sewer facilities. The board may 298.26 include as one of the terms of the contract that the entity must 298.27 pay to the board an amount agreed upon as a reasonable estimate 298.28 of the proportionate share properly allocable to the entity of 298.29 costs of acquisition, betterment, and debt service previously 298.30 allocated in the district. When payments are made by entities 298.31 to the board, they must be applied in reduction of the total 298.32 amount of costs thereafter allocated in the district, on an 298.33 equitable basis as the board deems to be in the best interests 298.34 of the district, applying so far as practicable and appropriate 298.35 the criteria set forth in section 29, subdivision 2. A 298.36 municipality in the state of Minnesota may enter into a contract 299.1 and perform all acts and things required as a condition or 299.2 consideration therefor consistent with the purposes of sections 299.3 20 to 38, whether or not included among the powers otherwise 299.4 granted to the municipality by law or charter. 299.5 (b) The board shall contract with a qualified entity to 299.6 make necessary inspections on the district facilities, and to 299.7 otherwise process or assist in processing any of the work of the 299.8 district. 299.9 Sec. 36. [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES, 299.10 AND EQUIPMENT.] 299.11 When the board orders a project involving the acquisition 299.12 or betterment of a part of the district disposal system, it 299.13 shall cause plans and specifications of the project to be made, 299.14 or if previously made, to be modified, if necessary, and to be 299.15 approved by the agency if required, and after any required 299.16 approval by the agency, one or more contracts for work and 299.17 materials called for by the plans and specification may be 299.18 awarded as provided in Minnesota Statutes, section 471.345. 299.19 Sec. 37. [PROPERTY EXEMPT FROM TAXATION.] 299.20 Any properties, real or personal, owned, leased, 299.21 controlled, used, or occupied by the water and sanitary sewer 299.22 board for any purpose under sections 20 to 38 are declared to be 299.23 acquired, owned, leased, controlled, used, and occupied for 299.24 public, governmental, and municipal purposes, and are exempt 299.25 from taxation by the state or any political subdivision of the 299.26 state, provided that the properties are subject to special 299.27 assessments levied by a political subdivision for a local 299.28 improvement in amounts proportionate to and not exceeding the 299.29 special benefit received by the properties from the 299.30 improvement. No possible use of any properties in any manner 299.31 different from their use as part of a disposal system at the 299.32 time may be considered in determining the special benefit 299.33 received by the properties. All assessments are subject to 299.34 final approval by the board, whose determination of the benefits 299.35 is conclusive upon the political subdivision levying the 299.36 assessment. 300.1 Sec. 38. [RELATION TO EXISTING LAWS.] 300.2 The provisions of sections 20 to 38 must be given full 300.3 effect notwithstanding the provisions of any law or charter 300.4 inconsistent with sections 20 to 38. The powers conferred on 300.5 the board under sections 20 to 38 do not in any way diminish or 300.6 supersede the powers conferred on the agency by Minnesota 300.7 Statutes, chapters 115 to 116. 300.8 Sec. 39. [EFFECTIVE DATE.] 300.9 Sections 1 to 19 are effective the day after a certificate 300.10 of approval under Minnesota Statutes, section 645.021, 300.11 subdivision 3, is filed by the last of the four local 300.12 governmental units subject to sections 1 to 19. 300.13 Sections 20 to 38 are effective as to the city and the town 300.14 of Finlayson separately the day after the certificate of 300.15 approval of the governing body of each is filed as provided in 300.16 Minnesota Statutes, section 645.021, subdivision 3. 300.17 ARTICLE 15 300.18 AUTOMATIC REBATE IN ENACTED BUDGET 300.19 Section 1. [16A.1522] [REBATE REQUIREMENTS.] 300.20 Subdivision 1. [FORECAST.] If, on the basis of a forecast 300.21 of general fund revenues and expenditures in November of an 300.22 even-numbered year or February of an odd-numbered year, the 300.23 commissioner projects a positive unrestricted budgetary general 300.24 fund balance at the close of the biennium that exceeds one-half 300.25 of one percent of total general fund biennial revenues, the 300.26 commissioner shall designate the entire balance as available for 300.27 rebate to the taxpayers of this state. In forecasting, 300.28 projecting, or designating the unrestricted budgetary general 300.29 fund balance or general fund biennial revenue under this 300.30 section, the commissioner shall not include any balance or 300.31 revenue attributable to settlement payments received after July 300.32 1, 1998, and before July 1, 2001, as defined in Section IIB of 300.33 the settlement document, filed May 18, 1998, in State v. Philip 300.34 Morris, Inc., No. C1-94-8565 (Minnesota District Court, Second 300.35 Judicial District). 300.36 Subd. 2. [PLAN.] If the commissioner designates an amount 301.1 for rebate in either forecast, the governor shall present a plan 301.2 to the legislature for rebating that amount. The plan must 301.3 provide for payments to begin no later than August 15 of the 301.4 odd-numbered year. By April 15 of each odd-numbered year, the 301.5 legislature shall enact, modify, or reject the plan presented by 301.6 the governor. 301.7 Subd. 3. [CERTIFICATION.] By July 15 of each odd-numbered 301.8 year, based on a preliminary analysis of the general fund 301.9 balance at the end of the fiscal year June 30, the commissioner 301.10 of finance shall certify to the commissioner of revenue the 301.11 amount available for rebate. 301.12 Subd. 4. [TRANSFER TO TAX RELIEF ACCOUNT.] Any positive 301.13 unrestricted budgetary general fund balance on June 30 of an 301.14 odd-numbered year is appropriated to the commissioner for 301.15 transfer to the tax relief account. 301.16 Subd. 5. [APPROPRIATION.] A sum sufficient to pay any 301.17 rebate due under the plan enacted under subdivision 2 is 301.18 appropriated from the general fund to the commissioner of 301.19 revenue. 301.20 Sec. 2. [ABOLISHING TAX REFORM AND REDUCTION ACCOUNT.] 301.21 The tax reform and reduction account created in Laws 1998, 301.22 chapter 389, article 9, section 2, subdivision 2, clause (2), is 301.23 abolished. The balance in the account shall revert to the 301.24 unrestricted general fund balance. 301.25 Sec. 3. [EFFECTIVE DATE.] 301.26 Section 1 is effective September 1, 1999. Section 2 is 301.27 effective the day following final enactment. 301.28 ARTICLE 16 301.29 MISCELLANEOUS 301.30 Section 1. Minnesota Statutes 1998, section 3.986, 301.31 subdivision 2, is amended to read: 301.32 Subd. 2. [LOCAL FISCAL IMPACT.] (a) "Local fiscal impact" 301.33 means increased or decreased costs or revenues that a political 301.34 subdivision would incur as a result of a law enacted after June 301.35 30, 1997, or rule proposed after December 31,19981999: 301.36 (1) that mandates a new program, eliminates an existing 302.1 mandated program, requires an increased level of service of an 302.2 existing program, or permits a decreased level of service in an 302.3 existing mandated program; 302.4 (2) that implements or interprets federal law and, by its 302.5 implementation or interpretation, increases or decreases program 302.6 or service levels beyond the level required by the federal law; 302.7 (3) that implements or interprets a statute or amendment 302.8 adopted or enacted pursuant to the approval of a statewide 302.9 ballot measure by the voters and, by its implementation or 302.10 interpretation, increases or decreases program or service levels 302.11 beyond the levels required by the ballot measure; 302.12 (4) that removes an option previously available to 302.13 political subdivisions, or adds an option previously unavailable 302.14 to political subdivisions, thus requiring higher program or 302.15 service levels or permitting lower program or service levels, or 302.16 prohibits a specific activity and so forces political 302.17 subdivisions to use a more costly alternative to provide a 302.18 mandated program or service; 302.19 (5) that requires that an existing program or service be 302.20 provided in a shorter time period and thus increases the cost of 302.21 the program or service, or permits an existing mandated program 302.22 or service to be provided in a longer time period, thus 302.23 permitting a decrease in the cost of the program or service; 302.24 (6) that adds new requirements to an existing optional 302.25 program or service and thus increases the cost of the program or 302.26 service because the political subdivisions have no reasonable 302.27 alternative other than to continue the optional program; 302.28 (7) that affects local revenue collections by changes in 302.29 property or sales and use tax exemptions; 302.30 (8) that requires costs previously incurred at local option 302.31 that have subsequently been mandated by the state; or 302.32 (9) that requires payment of a new fee or increases the 302.33 amount of an existing fee, or permits the elimination or 302.34 decrease of an existing fee mandated by the state. 302.35 (b) When state law is intended to achieve compliance with 302.36 federal law or court orders, state mandates shall be determined 303.1 as follows: 303.2 (1) if the federal law or court order is discretionary, the 303.3 state law is a state mandate; 303.4 (2) if the state law exceeds what is required by the 303.5 federal law or court order, only the provisions of the state law 303.6 that exceed the federal requirements are a state mandate; and 303.7 (3) if the state law does not exceed what is required by 303.8 the federal statute or regulation or court order, the state law 303.9 is not a state mandate. 303.10 Sec. 2. Minnesota Statutes 1998, section 3.987, 303.11 subdivision 1, is amended to read: 303.12 Subdivision 1. [LOCAL IMPACT NOTES.] The commissioner of 303.13 finance shall coordinate the development of a local impact note 303.14 for any proposed legislation introduced after June 30, 1997, or 303.15 any rule proposed after December 31,19981999, upon request of 303.16 the chair or the ranking minority member of either legislative 303.17 tax committee. Upon receipt of a request to prepare a local 303.18 impact note, the commissioner must notify the authors of the 303.19 proposed legislation or, for an administrative rule, the head of 303.20 the relevant executive agency or department, that the request 303.21 has been made. The local impact note must be made available to 303.22 the public upon request. If the action is among the exceptions 303.23 listed in section 3.988, a local impact note need not be 303.24 requested nor prepared. The commissioner shall make a 303.25 reasonable and timely estimate of the local fiscal impact on 303.26 each type of political subdivision that would result from the 303.27 proposed legislation. The commissioner of finance may require 303.28 any political subdivision or the commissioner of an 303.29 administrative agency of the state to supply in a timely manner 303.30 any information determined to be necessary to determine local 303.31 fiscal impact. The political subdivision, its representative 303.32 association, or commissioner shall convey the requested 303.33 information to the commissioner of finance with a signed 303.34 statement to the effect that the information is accurate and 303.35 complete to the best of its ability. The political subdivision, 303.36 its representative association, or commissioner, when requested, 304.1 shall update its determination of local fiscal impact based on 304.2 actual cost or revenue figures, improved estimates, or both. 304.3 Upon completion of the note, the commissioner must provide a 304.4 copy to the authors of the proposed legislation or, for an 304.5 administrative rule, to the head of the relevant executive 304.6 agency or department. 304.7 Sec. 3. [16A.77] [TOBACCO SETTLEMENT FUND.] 304.8 (a) A tobacco settlement fund is established in the state 304.9 treasury. Amounts in the fund are available only for purposes 304.10 authorized by appropriation by the legislature. The governor 304.11 shall make recommendations to the legislature regarding use of 304.12 the money in the fund. 304.13 (b) The commissioner of finance shall credit all settlement 304.14 payments received after July 1, 1998, and before July 1, 2001, 304.15 as defined in Section IIB of the settlement document, filed May 304.16 18, 1998, in the State of Minnesota et al. vs. Philip Morris et 304.17 al., to the tobacco settlement fund. All other payments to the 304.18 state resulting from the specified litigation shall be credited 304.19 to the general fund. 304.20 Sec. 4. Minnesota Statutes 1998, section 270.07, 304.21 subdivision 1, is amended to read: 304.22 Subdivision 1. [POWERS OF COMMISSIONER; APPLICATION FOR 304.23 ABATEMENT; ORDERS.] (a) The commissioner of revenue shall 304.24 prescribe the form of all blanks and books required under this 304.25 chapter and shall hear and determine all matters of grievance 304.26 relating to taxation. Except for matters delegated to the 304.27 various boards of county commissioners under section 375.192, 304.28 and except as otherwise provided by law, the commissioner shall 304.29 have power to grant such reduction or abatement of net tax 304.30 capacities or taxes and of any costs, penalties or interest 304.31 thereon as the commissioner may deem just and equitable, and to 304.32 order the refundment, in whole or in part, of any taxes, costs, 304.33 penalties or interest thereon which have been erroneously or 304.34 unjustly paid. Application therefor shall be submitted with a 304.35 statement of facts in the case and the favorable recommendation 304.36 of the county board or of the board of abatement of any city 305.1 where any such board exists, and the county auditor of the 305.2 county wherein such tax was levied or paid. In the case of taxes 305.3 other than gross earnings taxes, the order may be made only on 305.4 application and approval as provided in this paragraph. No 305.5 reduction, abatement, or refundment of any special assessments 305.6 made or levied by any municipality for local improvements shall 305.7 be made unless it is also approved by the board of review or 305.8 similar taxing authority of such municipality. 305.9 (b) The commissioner has the power to grant reductions or 305.10 abatements of gross earnings tax. An application for reduction 305.11 of gross earnings taxes may be made directly to the commissioner 305.12 without the favorable action of the county board and county 305.13 auditor. The commissioner shall direct that any gross earnings 305.14 taxes that may have been erroneously or unjustly paid be applied 305.15 against unpaid taxes due from the applicant. 305.16 (c) The commissioner shall forward to the county auditor a 305.17 copy of the order made by the commissioner in all cases in which 305.18 the approval of the county board is required. 305.19 (d) The commissioner may refer any question that may arise 305.20 in reference to the true construction of this chapter to the 305.21 attorney general, and the decision thereon shall be in force and 305.22 effect until annulled by the judgment of a court of competent 305.23 jurisdiction. 305.24 (e) The commissioner may by written order abate, reduce, or 305.25 refund any penalty or interest imposed by any law relating to 305.26 taxation, if in the commissioner's opinion the failure to timely 305.27 pay the tax or failure to timely file the return is due to 305.28 reasonable cause, or if the taxpayer is located in a 305.29 presidentially declared disaster area.The order shall be made305.30on application of the taxpayer to the commissioner.305.31(f) If an order issued under this subdivision is for an305.32abatement, reduction, or refund of over $5,000, it shall be305.33valid only if approved in writing by the attorney general.305.34(g)(f) An appeal may not be taken to the tax court from 305.35 any order of the commissioner of revenue made in the exercise of 305.36 the discretionary authority granted in paragraph (a) with 306.1 respect to the reduction or abatement of real or personal 306.2 property taxes in response to a taxpayer's application for an 306.3 abatement, reduction, or refund of taxes, net tax capacities, 306.4 costs, penalties, or interest. 306.5 Sec. 5. Minnesota Statutes 1998, section 270.65, is 306.6 amended to read: 306.7 270.65 [DATE OF ASSESSMENT; DEFINITION.] 306.8 For purposes of taxes administered by the commissioner, the 306.9 term "date of assessment" means the date a return was filed or 306.10 the date a return should have been filed, whichever is later; 306.11 or, in the case of taxes determined by the commissioner, "date 306.12 of assessment" means the date of the order assessing taxes; or, 306.13 in the case of an amended return filed by the taxpayer, the 306.14 assessment date is the date the return was filed with the 306.15 commissioner; or, in the case of a check from a taxpayer that is 306.16 dishonored and results in an erroneous refund being given to the 306.17 taxpayer, remittance of the check is deemed to be an assessment 306.18 and the "date of assessment" is the date the check was received 306.19 by the commissioner. 306.20 Sec. 6. Minnesota Statutes 1998, section 270.67, is 306.21 amended by adding a subdivision to read: 306.22 Subd. 4. [OFFER-IN-COMPROMISE AND INSTALLMENT PAYMENT 306.23 PROGRAM.] (a) In implementing the authority provided in 306.24 subdivision 1 or in section 8.30 to accept offers of installment 306.25 payments or offers-in-compromise of tax liabilities, the 306.26 commissioner of revenue shall prescribe guidelines for employees 306.27 of the department of revenue to determine whether an 306.28 offer-in-compromise or an offer to make installment payments is 306.29 adequate and should be accepted to resolve a dispute. In 306.30 prescribing the guidelines, the commissioner shall develop and 306.31 publish schedules of national and local allowances designed to 306.32 provide that taxpayers entering into a compromise or payment 306.33 agreement have an adequate means to provide for basic living 306.34 expenses. The guidelines must provide that the taxpayer's 306.35 ownership interest in a motor vehicle, to the extent of the 306.36 value allowed in section 550.37, will not be considered as an 307.1 asset; in the case of an offer related to a joint tax liability 307.2 of spouses, that value of two motor vehicles must be excluded. 307.3 The guidelines must provide that employees of the department 307.4 shall determine, on the basis of the facts and circumstances of 307.5 each taxpayer, whether the use of the schedules is appropriate 307.6 and that employees must not use the schedules to the extent the 307.7 use would result in the taxpayer not having adequate means to 307.8 provide for basic living expenses. The guidelines must provide 307.9 that: 307.10 (1) an employee of the department shall not reject an 307.11 offer-in-compromise or an offer to make installment payments 307.12 from a low-income taxpayer solely on the basis of the amount of 307.13 the offer; and 307.14 (2) in the case of an offer-in-compromise which relates 307.15 only to issues of liability of the taxpayer: 307.16 (i) the offer must not be rejected solely because the 307.17 commissioner is unable to locate the taxpayer's return or return 307.18 information for verification of the liability; and 307.19 (ii) the taxpayer shall not be required to provide an 307.20 audited, reviewed, or compiled financial statement. 307.21 (b) The commissioner shall establish procedures: 307.22 (1) that require presentation of a counteroffer or a 307.23 written rejection of the offer by the commissioner if the amount 307.24 offered by the taxpayer in an offer-in-compromise or an offer to 307.25 make installment payments is not accepted by the commissioner; 307.26 (2) for an administrative review of any written rejection 307.27 of a proposed offer-in-compromise or installment agreement made 307.28 by a taxpayer under this section before the rejection is 307.29 communicated to the taxpayer; 307.30 (3) that allow a taxpayer to request reconsideration of any 307.31 written rejection of the offer or agreement to the commissioner 307.32 of revenue to determine whether the rejection is reasonable and 307.33 appropriate under the circumstances; and 307.34 (4) that provide for notification to the taxpayer when an 307.35 offer-in-compromise has been accepted, and issuance of 307.36 certificates of release of any liens imposed under section 308.1 270.69 related to the liability which is the subject of the 308.2 compromise. 308.3 Sec. 7. Minnesota Statutes 1998, section 270.78, is 308.4 amended to read: 308.5 270.78 [PENALTY FOR FAILURE TO MAKE PAYMENT BY ELECTRONIC 308.6 FUNDS TRANSFER.] 308.7(a)In addition to other applicable penalties imposed by 308.8 law, after notification from the commissioner of revenue to the 308.9 taxpayer that payments for a tax administered by the 308.10 commissioner are required to be made by means of electronic 308.11 funds transfer, and the payments are remitted by some other 308.12 means, there is a penalty in the amount of five percent of each 308.13 payment that should have been remitted electronically. The 308.14 penalty can be abated under the abatement procedures prescribed 308.15 in section 270.07, subdivision 6, if the failure to remit the 308.16 payment electronically is due to reasonable cause. The penalty 308.17 bears interest at the rate specified in section 270.75 from the 308.18 due date of the payment of the tax to the date of payment of the 308.19 penalty. 308.20(b) The penalty under paragraph (a) does not apply if the308.21taxpayer pays by other means the amount due at least three308.22business days before the date the payment is due. This308.23paragraph does not apply after December 31, 1997.308.24 Sec. 8. Minnesota Statutes 1998, section 270A.03, 308.25 subdivision 2, is amended to read: 308.26 Subd. 2. [CLAIMANT AGENCY.] "Claimant agency" means any 308.27 state agency, as defined by section 14.02, subdivision 2, the 308.28 regents of the University of Minnesota, any district court of 308.29 the state, any county, any statutory or home rule charter city 308.30 presenting a claim for a municipal hospital or a public library, 308.31 a hospital district, a private nonprofit hospital that leases 308.32 its building from the county in which it is located, any public 308.33 agency responsible for child support enforcement, any public 308.34 agency responsible for the collection of court-ordered 308.35 restitution, and any public agency established by general or 308.36 special law that is responsible for the administration of a 309.1 low-income housing program. 309.2 Sec. 9. Minnesota Statutes 1998, section 270A.07, 309.3 subdivision 2, is amended to read: 309.4 Subd. 2. [SETOFF PROCEDURES.] (a) The commissioner, upon 309.5 receipt of notification, shall initiate procedures to detect any 309.6 refunds otherwise payable to the debtor. When the commissioner 309.7 determines that a refund is due to a debtor whose debt was 309.8 submitted by a claimant agency, the commissioner shall first 309.9 deduct the fee in subdivision 1 and then remit the refund or the 309.10 amount claimed, whichever is less, to the agency. In 309.11 transferring or remitting moneys to the claimant agency, the 309.12 commissioner shall provide information indicating the amount 309.13 applied against each debtor's obligation and the debtor's 309.14 address listed on the tax return. 309.15 (b) The commissioner shall remit to the debtor the amount 309.16 of any refund due in excess of the debt submitted for setoff by 309.17 the claimant agency. Notice of the amount setoff and address of 309.18 the claimant agency shall accompany any disbursement to the 309.19 debtor of the balance of a refund. The notice shall also advise 309.20 the debtor of the right to contest the validity of the claim, 309.21 other than a claim based upon child support under section 309.22 518.171, 518.54, 518.551, or chapter 518C at a hearing, subject 309.23 to the restrictions in this paragraph. The debtor must assert 309.24 this right by written request to the claimant agency, which 309.25 request the claimant agency must receive within 45 days of the 309.26 date of the notice. This right does not apply to (1) issues 309.27 relating to the validity of the claim that have been previously 309.28 raised at a hearing under this section or section 270A.09; (2) 309.29 issues relating to the validity of the claim that were not 309.30 timely raised by the debtor under section 270A.08, subdivision 309.31 2;or(3) issues relating to the validity of the claim that have 309.32 been previously raised at a hearing conducted under rules 309.33 promulgated by the United States Department of Housing and Urban 309.34 Development or any public agency that is responsible for the 309.35 administration of a low-income housing program, or that were not 309.36 timely raised by the debtor under those rules; or (4) issues 310.1 relating to the validity of the claim for which a hearing is 310.2 discretionary under section 270A.09. 310.3 Sec. 10. Minnesota Statutes 1998, section 270A.08, 310.4 subdivision 2, is amended to read: 310.5 Subd. 2. [REQUIREMENTS OF NOTICE.] (a) This written notice 310.6 shall clearly and with specificity set forth the basis for the 310.7 claim to the refund including the name of the benefit program 310.8 involved if the debt arises from a public assistance grant and 310.9 the dates on which the debt was incurred and, further, shall 310.10 advise the debtor of the claimant agency's intention to request 310.11 setoff of the refund against the debt. 310.12 (b) Except as provided in paragraph (c), the notice will 310.13 also advise the debtor that the debt can be setoff against a 310.14 refund unless the time period allowed by law for collecting the 310.15 debt has expired, and will advise the debtor of the right to 310.16 contest the validity of the claim at a hearing. The debtor must 310.17 assert this right by written request to the claimant agency, 310.18 which request the agency must receive within 45 days of the 310.19 mailing date of the original notice or of the corrected notice, 310.20 as required by subdivision 1. If the debtor has not received 310.21 the notice, the 45 days shall not commence until the debtor has 310.22 received actual notice. The debtor shall have the burden of 310.23 showing no notice and shall be entitled to a hearing on the 310.24 issue of notice as well as on the merits. 310.25 (c) If the claimant agency is a public agency that is 310.26 responsible for the administration of a low-income housing 310.27 program, the notice will also advise the debtor that the debt 310.28 can be set off against a refund unless the time period allowed 310.29 by law for collecting the debt has expired. If the public 310.30 agency has provided the debtor with the opportunity to contest 310.31 the issues relating to the validity of the claim at a hearing 310.32 under rules promulgated by the United States Department of 310.33 Housing and Urban Development or the public agency, the notice 310.34 will advise the debtor of that fact and advise the debtor that 310.35 no further hearing may be requested by the debtor to contest the 310.36 validity of the claim. 311.1 Sec. 11. Minnesota Statutes 1998, section 287.01, 311.2 subdivision 3, as amended by Laws 1999, chapter 31, section 1, 311.3 is amended to read: 311.4 Subd. 3. [DEBT.] "Debt" means the principal amount of an 311.5 obligation to pay moneyor to perform or refrain from performing311.6an actthat is secured in whole or in part by a mortgage of an 311.7 interest in real property. 311.8 Sec. 12. Minnesota Statutes 1998, section 287.05, 311.9 subdivision 1, as amended by Laws 1999, chapter 31, section 5, 311.10 is amended to read: 311.11 Subdivision 1. [REAL PROPERTY OUTSIDE MINNESOTA.] (a) When 311.12 a multistate mortgage is intended to secure only a portion of a 311.13 debt amount recited or referred to in the mortgage, the mortgage 311.14 may contain the following statement, or its equivalent, on the 311.15 first page: "Notwithstanding anything to the contrary herein, 311.16 enforcement of this mortgage in Minnesota is limited to a debt 311.17 amount of $....... under chapter 287 of Minnesota Statutes." In 311.18 such case, the tax shall be imposed based only on the amount of 311.19 debt so stated to be secured by real property located in this 311.20 state; and, the effect of the mortgage, or any amendment or 311.21 extension, as evidence in any court in this state, or as notice 311.22 for any purpose in this state, shall be limited to the amount 311.23 contained in the statement and for which the tax has been 311.24 paid and additional amounts for accrued interest and advances 311.25 not subject to tax under section 287.035 or 287.05, subdivision 311.26 4. 311.27 (b) All multistate mortgages not taxed under paragraph (a) 311.28 shall be taxed under sections 287.01 to 287.13 as if the real 311.29 property identified in the mortgage secures payment of that 311.30 portion of the maximum debt amount referred to, or incorporated 311.31 by reference, in the mortgage that is equal to a fraction the 311.32 numerator of which is the value of the real property described 311.33 in the mortgage that is located in this state and the 311.34 denominator of which is the value of all the real property 311.35 described in the mortgage. 311.36 Sec. 13. Minnesota Statutes 1998, section 287.05, 312.1 subdivision 1a, as amended by Laws 1999, chapter 31, section 5, 312.2 is amended to read: 312.3 Subd. 1a. [REAL PROPERTY IN THIS STATE SECURES PORTION OF 312.4 DEBT.] (a) When the real property identified in a mortgage is 312.5 located entirely in this state and is intended to secure only a 312.6 portion of a debt amount recited or referred to in the mortgage, 312.7 the mortgage may contain the following statement, or its 312.8 equivalent, on the first page: "Notwithstanding anything to the 312.9 contrary herein, enforcement of this mortgage is limited to a 312.10 debt amount of $....... under chapter 287 of Minnesota 312.11 Statutes." In such case, the tax shall be imposed based only on 312.12 the amount of debt so stated to be secured by real property; 312.13 and, the effect of the mortgage, or any amendment or extension, 312.14 as evidence in any court in this state, or as notice for any 312.15 purpose in this state, shall be limited to the amount contained 312.16 in the statement and for which the tax has been paid and 312.17 additional amounts for accrued interest and advances not subject 312.18 to tax under section 287.035 or 287.05, subdivision 4. 312.19 (b) All mortgages that are not multistate mortgages and 312.20 that are not taxed under paragraph (a) shall be taxed under 312.21 sections 287.01 to 287.13 as if the real property identified in 312.22 the mortgage secures payment of the maximum debt amount referred 312.23 to, or incorporated by reference, in the mortgage. 312.24 Sec. 14. Minnesota Statutes 1998, section 289A.31, 312.25 subdivision 2, is amended to read: 312.26 Subd. 2. [JOINT INCOME TAX RETURNS.] (a) If a joint income 312.27 tax return is made by a husband and wife, the liability for the 312.28 tax is joint and several. A spouse whois relieved ofqualifies 312.29 for relief from a liability attributable toa substantialan 312.30 underpayment under section6013(e)6015(b) of the Internal 312.31 Revenue Code isalsorelieved of the state income tax liability 312.32 on thesubstantialunderpayment. 312.33 (b) In the case of individuals who were a husband and wife 312.34 prior to the dissolution of their marriage or their legal 312.35 separation, or prior to the death of one of the individuals, for 312.36 tax liabilities reported on a joint or combined return, the 313.1 liability of each person is limited to the proportion of the tax 313.2 due on the return that equals that person's proportion of the 313.3 total tax due if the husband and wife filed separate returns for 313.4 the taxable year. This provision is effective only when the 313.5 commissioner receives written notice of the marriage 313.6 dissolution, legal separation, or death of a spouse from the 313.7 husband or wife. No refund may be claimed by an ex-spouse, 313.8 legally separated or widowed spouse for any taxes paid more than 313.9 60 days before receipt by the commissioner of the written notice. 313.10 Sec. 15. Minnesota Statutes 1998, section 289A.40, 313.11 subdivision 1, is amended to read: 313.12 Subdivision 1. [TIME LIMIT; GENERALLY.] Unless otherwise 313.13 provided in this chapter, a claim for a refund of an overpayment 313.14 of state tax must be filed within 3-1/2 years from the date 313.15 prescribed for filing the return, plus any extension of time 313.16 granted for filing the return, but only if filed within the 313.17 extended time, or one year from the date of an order assessing 313.18 tax under section 289A.37, subdivision 1, or an order 313.19 determining an appeal under section 289A.65, subdivision 8, or 313.20 one year from the date of a return made by the commissioner 313.21 under section 289A.35, upon payment in full of the tax, 313.22 penalties, and interest shown on the order or return made by the 313.23 commissioner, whichever period expires later. Claims for 313.24 refund, except for taxes under chapter 297A, filed after the 313.25 3-1/2 year period but within the one-year period are limited to 313.26 the amount of the tax, penalties, and interest on the order or 313.27 return made by the commissioner and to issues determined by the 313.28 order or return made by the commissioner. 313.29 In the case of assessments under section 289A.38, 313.30 subdivision 5 or 6, claims for refund under chapter 297A filed 313.31 after the 3-1/2 year period but within the one-year period are 313.32 limited to the amount of the tax, penalties, and interest on the 313.33 order or return made by the commissioner that are due for the 313.34 period before the 3-1/2 year period. 313.35 Sec. 16. Minnesota Statutes 1998, section 289A.40, 313.36 subdivision 1a, is amended to read: 314.1 Subd. 1a. [INDIVIDUAL INCOME TAXES;REASONABLE314.2CAUSESUSPENSION DURING PERIOD OF DISABILITY.] If the 314.3 taxpayerestablishes reasonable cause for failing to timely file314.4the return required by section 289A.08, subdivision 1, files the314.5required return within ten years of the date specified in314.6section 289A.18, subdivision 1, and independently verifies that314.7an overpayment has been made, the commissioner shall grant a314.8refund claimed by the original return, notwithstanding the314.9limitations of subdivision 1meets the requirements for 314.10 suspending the running of the time period to file a claim for 314.11 refund under section 6511(h) of the Internal Revenue Code, the 314.12 time period in subdivision 1 for the taxpayer to file a claim 314.13 for an individual income tax refund is suspended. 314.14 Sec. 17. Minnesota Statutes 1998, section 289A.50, is 314.15 amended by adding a subdivision to read: 314.16 Subd. 1a. [REFUND FORM.] On or before January 1, 2000, the 314.17 commissioner of revenue shall prepare and make available to 314.18 taxpayers a form for filing claims for refund of taxes paid in 314.19 excess of the amount due. If the commissioner fails to prepare 314.20 a form under this subdivision by January 1, 2000, any claims for 314.21 refund made after January 1, 2000, and up to ten days after the 314.22 form is made available to taxpayers are deemed to be made in 314.23 compliance with the requirement of the form. 314.24 Sec. 18. Minnesota Statutes 1998, section 289A.50, 314.25 subdivision 7, is amended to read: 314.26 Subd. 7. [REMEDIES.] (a) If the taxpayer is notified by 314.27 the commissioner that the refund claim is denied in whole or in 314.28 part, the taxpayer may: 314.29 (1) file an administrative appeal as provided in section 314.30 289A.65, or an appeal with the tax court, within 60 days after 314.31 issuance of the commissioner's notice of denial; or 314.32 (2) file an action in the district court to recover the 314.33 refund. 314.34 (b) An action in the district court on a denied claim for 314.35 refund must be brought within 18 months of the date of the 314.36 denial of the claim by the commissioner. 315.1 (c) No action in the district court or the tax court shall 315.2 be brought within six months of the filing of the refund claim 315.3 unless the commissioner denies the claim within that period. 315.4 (d) If a taxpayer files a claim for refund and the 315.5 commissioner has not issued a denial of the claim, the taxpayer 315.6 may bring an action in the district court or the tax court at 315.7 any time after the expiration of six months of the time the 315.8 claim was filed, but within four years of the date that the315.9claim was filed. 315.10 (e) The commissioner and the taxpayer may agree to extend 315.11 the period for bringing an action in the district court. 315.12 (f) An action for refund of tax by the taxpayer must be 315.13 brought in the district court of the district in which lies the 315.14 county of the taxpayer's residence or principal place of 315.15 business. In the case of an estate or trust, the action must be 315.16 brought at the principal place of its administration. Any 315.17 action may be brought in the district court for Ramsey county. 315.18 Sec. 19. Minnesota Statutes 1998, section 289A.55, 315.19 subdivision 9, is amended to read: 315.20 Subd. 9. [INTEREST ON PENALTIES.] (a) A penalty imposed 315.21 under section 289A.60, subdivision 1, 2, 3, 4, 5,or6, or 21 315.22 bears interest from the date the return or payment was required 315.23 to be filed or paid, including any extensions, to the date of 315.24 payment of the penalty. 315.25 (b) A penalty not included in paragraph (a) bears interest 315.26 only if it is not paid within ten days from the date of notice. 315.27 In that case interest is imposed from the date of notice to the 315.28 date of payment. 315.29 Sec. 20. Minnesota Statutes 1998, section 289A.60, 315.30 subdivision 3, is amended to read: 315.31 Subd. 3. [COMBINED PENALTIES.] When penalties are imposed 315.32 under subdivisions 1 and 2,except for the minimum penalty under315.33subdivision 2,the penalties imposed under both subdivisions 315.34 combined must not exceed 38 percent. 315.35 Sec. 21. Minnesota Statutes 1998, section 289A.60, 315.36 subdivision 21, is amended to read: 316.1 Subd. 21. [PENALTY FOR FAILURE TO MAKE PAYMENT BY 316.2 ELECTRONIC FUNDS TRANSFER.](a)In addition to other applicable 316.3 penalties imposed by this section, after notification from the 316.4 commissioner to the taxpayer that payments are required to be 316.5 made by means of electronic funds transfer under section 316.6 289A.20, subdivision 2, paragraph (e), or 4, paragraph (d), or 316.7 289A.26, subdivision 2a, and the payments are remitted by some 316.8 other means, there is a penalty in the amount of five percent of 316.9 each payment that should have been remitted electronically. The 316.10 penalty can be abated under the abatement procedures prescribed 316.11 in section 270.07, subdivision 6, if the failure to remit the 316.12 payment electronically is due to reasonable cause. 316.13(b) The penalty under paragraph (a) does not apply if the316.14taxpayer pays by other means the amount due at least three316.15business days before the date the payment is due. This316.16paragraph does not apply after December 31, 1997.316.17 Sec. 22. Minnesota Statutes 1998, section 297A.15, 316.18 subdivision 5, is amended to read: 316.19 Subd. 5. [REFUND; APPROPRIATION.] Notwithstanding the 316.20 provisions of sections 297A.02, subdivision 5, and 297A.25, 316.21 subdivision 42, the tax on sales of capital equipment, and 316.22 replacement capital equipment, shall be imposed and collected as 316.23 if the rate under section 297A.02, subdivision 1, applied. Upon 316.24 application by the purchaser, on forms prescribed by the 316.25 commissioner, a refund equal to the reduction in the tax due as 316.26 a result of the application of the exemption under section 316.27 297A.25, subdivision 42, and the rate under section 297A.02, 316.28 subdivision 5, shall be paid to the purchaser. The application 316.29 must include sufficient information to permit the commissioner 316.30 to verify the sales tax paid for the project. The application 316.31 shall include information necessary for the commissioner 316.32 initially to verify that the purchases qualified as capital 316.33 equipment under section 297A.25, subdivision 42, or replacement 316.34 capital equipment under section 297A.01, subdivision 20. No 316.35 more than two applications for refunds may be filed under this 316.36 subdivision in a calendar year. Unless otherwise specifically 317.1 provided by this subdivision, the provisions ofsectionsections 317.2 289A.40 and 289A.50 apply to the refunds payable under this 317.3 subdivision. There is annually appropriated to the commissioner 317.4 of revenue the amount required to make the refunds. 317.5 The amount to be refunded shall bear interest at the rate 317.6 in section 270.76 from the date the refund claim is filed with 317.7 the commissioner. 317.8 Sec. 23. Minnesota Statutes 1998, section 360.55, is 317.9 amended by adding a subdivision to read: 317.10 Subd. 8. [AGRICULTURAL AIRCRAFT.] Aircraft registered with 317.11 the Federal Aviation Administration as restricted category 317.12 aircraft used for agricultural purposes must be listed for 317.13 taxation and registration upon filing by the owner a sworn 317.14 affidavit with the commissioner. The affidavit must state: 317.15 (1) the name and address of the owner; 317.16 (2) the name and address of the person from whom purchased; 317.17 (3) the aircraft's make, year, model number, federal 317.18 registration number, and manufacturer's identification number; 317.19 and 317.20 (4) that the aircraft is owned and operated solely for 317.21 agricultural operations and purposes. 317.22 The owner shall file the affidavit and pay an annual fee 317.23 established under sections 360.511 to 360.67, which must not 317.24 exceed $500. Should the aircraft be operated other than for 317.25 agricultural purposes, the owner shall list the aircraft for 317.26 taxation and registration under sections 360.511 to 360.67. If 317.27 the aircraft is sold, the new owner shall list the aircraft for 317.28 taxation and registration under this subdivision or under 317.29 sections 360.511 to 360.67, as applicable. 317.30 Sec. 24. Minnesota Statutes 1998, section 414.11, is 317.31 amended to read: 317.32 414.11 [MUNICIPAL BOARD SUNSET.] 317.33 The municipal board shall terminate onDecember 31June 1, 317.34 1999, and all of its authority and duties under this chapter 317.35 shall be transferred to the office of strategic and long-range 317.36 planning according to section 15.039, and any money remaining 318.1 available on that date of the amount appropriated to the 318.2 municipal board for fiscal year 2000 is transferred and 318.3 appropriated to the director of the office of strategic and 318.4 long-range planning to be used for the purposes of this chapter. 318.5 Sec. 25. [414.12] [DIRECTOR'S POWERS.] 318.6 Notwithstanding anything to the contrary in sections 414.01 318.7 to 414.11, the director of the office of strategic and 318.8 long-range planning, upon consultation with affected parties and 318.9 considering the procedures and principles established in 318.10 sections 414.01 to 414.11, and Laws 1997, chapter 202, article 318.11 4, sections 1 to 13, may require alternative dispute resolution 318.12 processes, including those provided in chapter 14, in the 318.13 execution of the office's duties under this chapter. 318.14 Sec. 26. Minnesota Statutes 1998, section 469.169, 318.15 subdivision 12, is amended to read: 318.16 Subd. 12. [ADDITIONAL ZONE ALLOCATIONS.] (a) In addition 318.17 to tax reductions authorized in subdivisions 7, 8, 9, 10, and 318.18 11, the commissioner shall allocate tax reductions to border 318.19 city enterprise zones located on the western border of the state. 318.20 The cumulative total amount of tax reductions for all years of 318.21 the program under sections 469.1731 to 469.1735, is limited to: 318.22 (1) for the city of Breckenridge, $394,000; 318.23 (2) for the city of Dilworth, $118,200; 318.24 (3) for the city of East Grand Forks, $788,000; 318.25 (4) for the city of Moorhead, $591,000; and 318.26 (5) for the city of Ortonville, $78,800. 318.27 Allocations made under this subdivision may be used for tax 318.28 reductions provided in section 469.1732 or 469.1734 or for 318.29 reimbursements under section 469.1735, subdivision 3, but only 318.30 if the municipality determines that the granting of the tax 318.31 reduction or offset is necessary to enable a business to expand 318.32 within a city or to attract a business to a city. Limitations 318.33 on allocations under subdivision 7 do not apply to this 318.34 allocation. 318.35 (b) The limit in the allocation in paragraph (a) for a 318.36 municipality may be waived by the commissioner if the 319.1 commissioner of revenue finds that the municipality must provide 319.2 an incentive under section 469.1732 or 469.1734 that, by itself 319.3 or when aggregated with all other tax reductions granted by the 319.4 municipality under those provisions, exceeds the municipality's 319.5 maximum allocation under paragraph (a), in order to obtain or 319.6 retain a business in the city that would not occur in the 319.7 municipality without the incentive. The limit may be waived 319.8 only if the commissioner finds that the business for which the 319.9 tax incentives are to be provided: 319.10 (1) requires a private capital investment of at least 319.11 $1,000,000 within the city; 319.12 (2) employs at least 25 new or additional full-time 319.13 equivalent employees within the city; and 319.14 (3) pays its employees at the location in the city wages 319.15 that, on the average, will exceed the average wage paid in the 319.16 county in which the municipality is located. 319.17 Sec. 27. Minnesota Statutes 1998, section 469.169, is 319.18 amended by adding a subdivision to read: 319.19 Subd. 14. [ADDITIONAL BORDER CITY ALLOCATIONS.] In 319.20 addition to tax reductions authorized in subdivisions 7 to 12, 319.21 the commissioner may allocate $1,500,000 for tax reductions to 319.22 border city enterprise zones in cities located on the western 319.23 border of the state. The commissioner shall make allocations to 319.24 zones in cities on the western border on a per capita basis. 319.25 Allocations made under this subdivision may be used for tax 319.26 reductions as provided in section 469.171, or other offsets of 319.27 taxes imposed on or remitted by businesses located in the 319.28 enterprise zone, but only if the municipality determines that 319.29 the granting of the tax reduction or offset is necessary in 319.30 order to retain a business within or attract a business to the 319.31 zone. Limitations on allocations under subdivision 7, do not 319.32 apply to this allocation. 319.33 Sec. 28. Minnesota Statutes 1998, section 469.1735, is 319.34 amended by adding a subdivision to read: 319.35 Subd. 4. [APPROPRIATION; WAIVERS.] An amount sufficient to 319.36 fund any tax reductions under a waiver made by the commissioner 320.1 under section 469.169, subdivision 12, paragraph (b), is 320.2 appropriated to the commissioner of revenue from the general 320.3 fund. This appropriation may not be deducted from the dollar 320.4 limits under this section or section 469.169 or 469.1734. 320.5 Sec. 29. Laws 1997, Second Special Session chapter 2, 320.6 section 6, is amended to read: 320.7 Sec. 6. TRADE AND ECONOMIC 320.8 DEVELOPMENT 8,200,000 320.9 Notwithstanding the requirement in 320.10 Minnesota Statutes, section 469.169, 320.11 subdivision 11, as added by Laws 1997, 320.12 chapter 231, article 16, section 20, to 320.13 base allocations to zones in cities on 320.14 the state's western border on a per 320.15 capita basis, $1,200,000 is a one-time 320.16 appropriation from the general fund to 320.17 the commissioner of trade and economic 320.18 development for border city enterprise 320.19 competitiveness grants under Minnesota 320.20 Statutes, sections 469.166 to 469.173. 320.21 Funds shall be allocated to communities 320.22 with significant business losses that 320.23 are at risk of losing business tax base 320.24 due to noncompetitiveness with North 320.25 Dakota and South Dakota and shall be 320.26 available to communities for locally 320.27 administered measures to retain their 320.28 job base. Allocations made under this 320.29 paragraph may be used for tax 320.30 reductions as provided in Minnesota 320.31 Statutes, section 469.171, or other 320.32 offsets of taxes imposed on or remitted 320.33 by businesses located in the enterprise 320.34 zone, but only if the municipality 320.35 determines that the granting of the tax 320.36 reduction or offset is necessary in 320.37 order to retain a business within or 320.38 attract a business to the zone. 320.39 Limitations on allocations under 320.40 Minnesota Statutes, section 469.169, 320.41 subdivision 7, do not apply to this 320.42 appropriation. Enterprise zones that 320.43 receive allocations under this 320.44 paragraph may continue in effect for 320.45 purposes of those allocations 320.46 throughDecember 31, 1998June 30, 1999. 320.47 $6,000,000 is a one-time appropriation 320.48 from the general fund to the Minnesota 320.49 investment fund for grants to local 320.50 units of government for locally 320.51 administered operating loan programs 320.52 for businesses directly and adversely 320.53 affected by the floods. Loan criteria 320.54 and requirements shall be locally 320.55 established with approval by the 320.56 department. For the purposes of this 320.57 appropriation, Minnesota Statutes, 320.58 sections 116J.8731, subdivisions 3, 4, 320.59 5, and 7, and 116J.991, are waived. 320.60 Businesses that receive grants or loans 320.61 from this appropriation shall set goals 320.62 for jobs retained and wages paid within 320.63 the area designated under Presidential 321.1 Declaration of Major Disaster, DR-1175. 321.2 $1,000,000 is a one-time appropriation 321.3 from the petroleum tank release cleanup 321.4 fund to the commissioner of trade and 321.5 economic development. Notwithstanding 321.6 Minnesota Statutes, section 115C.08, 321.7 subdivision 4, as amended by Laws 1997, 321.8 chapter 200, article 2, section 4, 321.9 these funds are to be used for grants 321.10 to buy out property substantially 321.11 damaged by a petroleum tank release. 321.12 Sec. 30. Laws 1999, chapter 112, section 1, subdivision 1, 321.13 is amended to read: 321.14 Subdivision 1. [DEFINITIONS.] (a) The definitions in this 321.15 subdivision apply to this section. 321.16 (b) "Acre" means an acre of effective agricultural use land 321.17 within the state of Minnesota as reported to the farm service 321.18 agency on form 156EZ for the purposes of this subdivision and 321.19 subdivisions 2 and 9. 321.20 (c) "Commissioner" means the commissioner of revenue. 321.21 (d) "Effective agricultural use land" means the land 321.22 suitable for growing an agricultural crop and excludes land 321.23 enrolled in the conservation reserve program established by 321.24 Minnesota Statutes, section 103F.515, or the water bank program 321.25 established by Minnesota Statutes, section 103F.601. 321.26 (e) "Farm" or "farm operation" means an agricultural 321.27 production operation with a unique farm number as reported on 321.28 form 156EZ to the farm service agency, which includes at least 321.29 40 acres of effective agricultural use land. "Farm" also 321.30 includes an agricultural production operation, which contains 321.31 less than 40 acres of effective agriculture use if the farm 321.32 operator operates another farm qualifying under this paragraph. 321.33 (f) "Farm operator" means a person who is identified as the 321.34 operator of a farm on form 156EZ filed with the farm service 321.35 agency. 321.36 (g) "Farm service agency" means the United States Farm 321.37 Service Agency. 321.38 (h) "Farmer" or "farmer at risk" means a person who 321.39 produces an agricultural crop or livestock and is reported to 321.40 the farm service agency as bearing a percentage of the risk for 322.1 the farm operation. 322.2 (i) "Livestock" means cattle, hogs, poultry, and sheep. 322.3 (j) "Livestock production facility" means a farm that has 322.4 produced at least $10,000 in sales of unprocessed livestock or 322.5 unprocessed dairy products as reported on schedule F or form 322.6 1065 or form 1120 or 1120S of the farmer's federal income tax 322.7 return for either taxable years beginning in calendar year 1997 322.8 or 1998. 322.9 (k) "Person" includes individuals, fiduciaries, estates, 322.10 trusts, partnerships, joint ventures, and corporations. 322.11 Sec. 31. Laws 1999, chapter 112, section 1, subdivision 3, 322.12 is amended to read: 322.13 Subd. 3. [LIVESTOCK PRODUCERS.] Afarmerperson who owns 322.14 or resides on property homesteaded under section 273.124, 322.15 subdivision 1, paragraph (c), and operates a livestock 322.16 production facility on 160 acres or less may elect the 322.17 agricultural property tax refund under subdivisions 4 to 8 in 322.18 lieu of the per acre payment under subdivision 2. To qualify, 322.19 thefarmerperson must apply for the refund as provided in 322.20 subdivisions 4 to 8. The 40 acre minimum farm size under 322.21 subdivision 1 does not apply to eligibility under subdivisions 4 322.22 to 8. 322.23 Sec. 32. Laws 1999, chapter 112, section 1, subdivision 4, 322.24 is amended to read: 322.25 Subd. 4. [REFUND.] The refund equals the full amount of 322.26 the property tax payment due and payable on May 15, 1999, on a 322.27 livestock production facility that is class 1b agricultural 322.28 homestead property or class 2a agricultural homestead property 322.29 as defined in Minnesota Statutes, section 273.13, excluding that 322.30 portion of the tax attributable to the house, garage, and 322.31 surrounding acre of land. If a portion of the property was 322.32 leased for the agricultural production year, the refund amount 322.33 shall beprorated so that only the portion of the property which322.34was not leased for the agricultural production year qualifies322.35for the refundreduced by $4 for each acre that was leased for 322.36 the agricultural production year. 323.1 Sec. 33. Laws 1999, chapter 112, section 1, subdivision 9, 323.2 is amended to read: 323.3 Subd. 9. [ALTERNATE QUALIFICATION.] (a) If an agricultural 323.4 production operation does not meet the definition of a farm 323.5 under subdivision 1 solely because (1) the farm operator had not 323.6 filed a form 156EZ with the farm service agency, (2) there was 323.7 an error in the farm service agency's records, or (3) an 323.8 operator operates more than one farm and the acres of effective 323.9 agricultural use land ofeacha farm is less than 40 acres, but 323.10 the combined acres of effective agricultural use land of all 323.11 land operated by that operator is at least 40 acres, the 323.12 commissioner may allow the farm operator to apply for payment 323.13 under subdivision 2 after providing such information as the 323.14 commissioner may require to determine the number of acres that 323.15 would be comparable to the effective agricultural use land 323.16 listed on form 156EZ. 323.17 (b) If the number of acres of effective agricultural use 323.18 land for crop year 1998 for a farm is greater than indicated in 323.19 the farm service agency's records, the commissioner may allow a 323.20 farm operator to apply for payment on the greater acreage after 323.21 providing such information as the commissioner may require. 323.22 (c) If a person who produced an agricultural crop or 323.23 livestock in 1998 and bore a portion of the risk for the farm 323.24 operation does not meet the definition of a farmer under 323.25 subdivision 1 solely because that information was not reported 323.26 to the farm service agency, or because there was an error in the 323.27 farm service agency's records, the commissioner may allow the 323.28 farmer to be included on an application for payment under 323.29 subdivision 2 after the farmer provides such information as the 323.30 commissioner may require to determine the farmer was at risk for 323.31 that farm. 323.32 Sec. 34. [COST ESTIMATES.] 323.33 Any waiver granted under Minnesota Statutes, section 323.34 469.169, subdivision 12, paragraph (b), must be reported within 323.35 60 days to the commissioner of finance and the chairs of the 323.36 house and senate tax committees. 324.1 Sec. 35. [CITY OF RICHFIELD; AIRPORT IMPACT ZONE; 324.2 FINANCING.] 324.3 Subdivision 1. [DESIGNATION OF AIRPORT IMPACT ZONE.] There 324.4 is established within the city of Richfield an airport impact 324.5 zone consisting of the real property described as follows: 324.6 commencing at the intersection of the north city limits with the 324.7 w'ly ROW line of trunk highway 77, thence south along the w'ly 324.8 ROW line of trunk highway 77 to the n'ly ROW line of interstate 324.9 highway 494, thence west along the n'ly ROW line of interstate 324.10 highway 494 to the center line of Bloomington Avenue, thence 324.11 north on the center line of Bloomington Avenue to the n'ly ROW 324.12 line of East 77th Street to a point 133.2 feet east of the e'ly 324.13 ROW line of Bloomington Avenue, thence north on a line parallel 324.14 with and 133.2 feet east of the e'ly ROW line of Bloomington 324.15 Avenue to the north city limits, thence east along the north 324.16 city limits to the point of beginning. 324.17 Subd. 2. [AIRPORT IMPACTS DEFINED.] The legislature finds 324.18 that: 324.19 (1) the area included within the airport impact zone 324.20 defined under this section will experience significant and 324.21 unique adverse environmental and socioeconomic impacts directly 324.22 associated with the operation of the Minneapolis-St. Paul 324.23 International Airport; 324.24 (2) whether funded directly by the metropolitan airports 324.25 commission or by other means, expenditures for mitigation of 324.26 those airport-created impacts involve an aspect of the airport's 324.27 capital and operating expenses and will be made for airport 324.28 purposes; 324.29 (3) appropriate measures to mitigate those adverse impacts 324.30 include but are not limited to housing replacement activities; 324.31 and 324.32 (4) the state legislature has authorized the expansion of 324.33 the Minneapolis-St. Paul International Airport in order to 324.34 accommodate the future economic growth of the state. The 324.35 environmental quality board has adopted findings that identify 324.36 the need to make land uses in the area identified in subdivision 325.1 1 compatible with airport uses. 325.2 Subd. 3. [METROPOLITAN AIRPORTS COMMISSION BONDS; 325.3 SECURITY.] The metropolitan airports commission shall issue and 325.4 sell its obligations in an aggregate principal amount not to 325.5 exceed $30,000,000, after deducting costs of issuance, discount, 325.6 and capitalized interest. The metropolitan airports commission 325.7 shall, not later than January 30, 2000, transfer $30,000,000 to 325.8 the city of Richfield to be used to finance the costs of land 325.9 and structure acquisition, demolition, relocation and site 325.10 clearance, and public improvements within the airport impact tax 325.11 zone established under subdivision 1, including, without 325.12 limitation, the following housing replacement activities 325.13 anywhere within the city: rehabilitation, acquisition, 325.14 demolition, relocation assistance, and relocation of existing 325.15 single-family or multifamily housing, and financing of new or 325.16 existing single-family or multifamily housing that replaces 325.17 housing units eliminated by redevelopment within the airport 325.18 impact zone. 325.19 Subd. 4. [TERMS.] The obligations must be secured by the 325.20 revenues and pledges from the metropolitan airports commission 325.21 in accordance with subdivision 5, and must be issued in 325.22 accordance with chapter 475, provided that no election is 325.23 required, net debt limits do not apply, and the obligations must 325.24 mature no later than 35 years from the date of issue of the 325.25 original obligations. The metropolitan airports commission may 325.26 issue obligations to refund any obligations issued under this 325.27 section, the principal amount of which shall not be included in 325.28 computing the limits on amount of obligations issuable by the 325.29 commission under this section. 325.30 Subd. 5. [SECURITY; METROPOLITAN AIRPORTS COMMISSION 325.31 PAYMENTS.] (a) Notwithstanding anything to the contrary in 325.32 Minnesota Statutes, sections 473.601 to 473.679, on or before 325.33 the due date of each principal and interest payment on 325.34 obligations issued under this section, the treasurer of the 325.35 metropolitan airports commission shall remit from any available 325.36 funds to the trustee or paying agent for the obligations an 326.1 amount sufficient for the payment, without further order from 326.2 the commission. The metropolitan airports commission shall be 326.3 obligated to the holders of obligations issued under this 326.4 section, to establish, revise from time to time, and collect 326.5 landing fees according to schedules such as to produce revenues, 326.6 together with other revenues not restricted by law or regulation 326.7 available to the metropolitan airport commission, at all times 326.8 sufficient to pay 105 percent of principal and interest on all 326.9 obligations issued under this section. 326.10 (b) Notwithstanding anything to the contrary in Minnesota 326.11 Statutes, sections 473.601 to 473.679, any obligations issued 326.12 under this section shall be further secured by the pledge of the 326.13 full faith and credit of the metropolitan airports commission, 326.14 which shall be obligated to levy upon all taxable property 326.15 within the metropolitan area a tax at the times and in the 326.16 amounts, if any, as may be required to provide funds sufficient 326.17 to pay all the obligations and interest thereon in the event 326.18 revenues pledged under paragraph (a), are insufficient for that 326.19 purpose. This tax, if ever required to be levied, shall not be 326.20 subject to any limitation of rate or amount. 326.21 (c) The pledges described in this section shall be made by 326.22 resolution of the metropolitan airports commission. The 326.23 security afforded by this section extends equally and ratably to 326.24 all bonds issued under this section and all bonds issued by the 326.25 metropolitan airports commission secured by similar pledges. 326.26 Subd. 6. [OBLIGATION DEFINED.] In subdivisions 1 to 5, 326.27 "obligation" has the meaning given in Minnesota Statutes, 326.28 section 475.51, subdivision 3. The term includes obligations 326.29 issued to refund prior obligations issued under this section. 326.30 Subd. 7. [COMPLIANCE WITH FEDERAL LAW; NO ADDITIONAL 326.31 COMMITMENTS.] (a) Nothing in this section shall require the 326.32 metropolitan airports commission to violate federal law or 326.33 regulation, including the Federal Aviation Administration 326.34 revenue diversion policy. 326.35 (b) If this section violates federal law or regulations, 326.36 including the Federal Aviation Administration revenue diversion 327.1 policy, the requirements imposed upon the metropolitan airports 327.2 commission under this section are terminated and shall not 327.3 become commitments of the state. 327.4 Subd. 8. [RELATIONSHIP TO REQUIREMENTS UNDER 327.5 AGREEMENT.] The requirements imposed upon the metropolitan 327.6 airports commission under this section are in addition to any 327.7 requirements imposed upon the commission under the 327.8 Richfield-metropolitan airports commission noise mitigation 327.9 agreement dated December 18, 1998. 327.10 Sec. 36. [EXTENSIONS FOR OPERATION ALLIED FORCE SERVICE 327.11 MEMBERS.] 327.12 The limitations of time provided by Minnesota Statutes, 327.13 chapter 289A relating to administration of taxes, chapter 290 327.14 relating to income taxes, chapter 271 relating to the tax court 327.15 for filing returns, paying taxes, claiming refunds, commencing 327.16 action thereon, appealing to the tax court from orders relating 327.17 to income taxes, and the filing of petitions under chapter 278, 327.18 and appealing to the Supreme Court from decisions of the tax 327.19 court relating to income taxes are extended, as provided in the 327.20 special rule for section 7508 of the Internal Revenue Code in 327.21 section 1, paragraph (c), of Public Law Number 106-21. 327.22 Sec. 37. [TRANSFER.] 327.23 The commissioner of finance shall transfer $2,000,000 from 327.24 the conservation fund under Minnesota Statutes, section 40A.151, 327.25 to the general fund on July 1, 1999. 327.26 Sec. 38. [APPROPRIATION.] 327.27 $143,000 is appropriated to the commissioner of revenue 327.28 from the general fund for the cost of administering this act. 327.29 This appropriation is for fiscal year 2000 and any unspent 327.30 amount may be carried over to fiscal year 2001. This is a 327.31 one-time appropriation and not part of the budget base for the 327.32 department. 327.33 Sec. 39. [REPEALER.] 327.34 Minnesota Statutes 1998, sections 297E.12, subdivision 3; 327.35 297F.19, subdivision 4; and 297G.18, subdivision 4, are repealed. 327.36 Sec. 40. [EFFECTIVE DATES.] 328.1 Sections 4, 21, 22, 25, and 29 to 34 are effective the day 328.2 following final enactment. 328.3 Section 5 is effective for checks received on or after the 328.4 day following final enactment. 328.5 Section 6 is effective the day following final enactment, 328.6 and applies to offers-in-compromise submitted after June 30, 328.7 1999. 328.8 Sections 7 and 19 are effective for payments due on or 328.9 after the day following final enactment. 328.10 Sections 8, 9, and 10 are effective for claims for setoff 328.11 submitted to the commissioner of revenue by claimant agencies 328.12 after June 30, 1999. 328.13 Sections 11 to 13 are effective for documents executed, 328.14 recorded, or registered after June 30, 1999. 328.15 Section 14, paragraph (a), is effective at the same time 328.16 that section 6015(b) of the Internal Revenue Code is effective 328.17 for federal tax purposes. Section 14, paragraph (b), is 328.18 effective for claims for innocent spouse relief, requests for 328.19 allocation of joint income tax liability, and taxes filed or 328.20 paid on or after the day following final enactment. 328.21 Section 15 is effective for orders issued on or after the 328.22 day following final enactment. 328.23 Section 16 is effective for disabilities existing on or 328.24 after the date of enactment for which claims for refund have not 328.25 expired under the time limit in Minnesota Statutes, section 328.26 289A.40, subdivision 1. Claims based upon reasonable cause must 328.27 be filed prior to the expiration of the repealed ten-year period 328.28 or within one year after the date of enactment, whichever is 328.29 earlier. 328.30 Section 18 is effective for refund claims filed on or after 328.31 the day following final enactment. 328.32 Section 20 is effective for tax years ending on or after 328.33 the day following final enactment. 328.34 Section 23 is effective for aircraft registered after June 328.35 30, 1999. 328.36 Section 24 is effective June 1, 1999. 329.1 Section 36 is effective at the same time section 1, 329.2 paragraph (c), of Public Law Number 106-21 becomes effective.