Minnesota Legislature
HF 2420
as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
1.1 A bill for an act 1.2 relating to 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, and special taxes; establishing an 1.10 agricultural homestead credit; changing and allowing 1.11 tax credits, subtractions, and exemptions; changing 1.12 property tax valuation, assessment, levy, 1.13 classification, homestead, credit, aid, exemption, 1.14 review, appeal, abatement, and distribution 1.15 provisions; extending levy limits and changing levy 1.16 authority; providing for reverse referenda on certain 1.17 levy increases; phasing out health care provider 1.18 taxes; extending the suspension of the tax on certain 1.19 insurance premiums; reducing tax rates on lawful 1.20 gambling; changing tax increment financing law and 1.21 providing special authority for certain cities; 1.22 authorizing water and sanitary sewer districts; 1.23 providing for the funding of courts in certain 1.24 judicial districts; changing tax forfeiture and 1.25 delinquency provisions; changing and clarifying tax 1.26 administration, collection, enforcement, and penalty 1.27 provisions; freezing the taconite production tax and 1.28 providing for its distribution; providing for funding 1.29 for border cities; changing fiscal note requirements; 1.30 providing for deposit of tobacco settlement funds; 1.31 providing for allocation of certain budget surpluses; 1.32 requiring studies; establishing a task force; and 1.33 providing for appointments; transferring funds; 1.34 appropriating money; amending Minnesota Statutes 1998, 1.35 sections 3.986, subdivision 2; 3.987, subdivision 1; 1.36 16A.152, subdivision 2, and by adding a subdivision; 1.37 16A.1521; 60A.15, subdivision 1; 62J.041, subdivision 1.38 1; 62Q.095, subdivision 6; 92.51; 97A.065, subdivision 1.39 2; 214.16, subdivisions 2 and 3; 270.07, subdivision 1.40 1; 270.65; 270.67, by adding a subdivision; 270B.01, 1.41 subdivision 8; 270B.14, subdivision 1, and by adding a 1.42 subdivision; 271.01, subdivision 5; 271.21, 1.43 subdivision 2; 272.02, subdivision 1; 272.027; 272.03, 1.44 subdivision 6; 273.11, subdivisions 1a and 16; 1.45 273.111, by adding a subdivision; 273.124, 1.46 subdivisions 1, 7, 8, 13, 14, and by adding a 2.1 subdivision; 273.13, subdivisions 22, 23, 24, 25, 31, 2.2 and by adding a subdivision; 273.1382; 273.1398, 2.3 subdivisions 2, 8, and by adding a subdivision; 2.4 273.1399, subdivision 6; 273.20; 274.01, subdivision 2.5 1; 275.065, subdivisions 3, 5a, 6, 8, and by adding a 2.6 subdivision; 275.07, subdivision 1; 275.71, 2.7 subdivisions 2, 3, and 4; 276.131; 279.37, 2.8 subdivisions 1, 1a, and 2; 281.23, subdivisions 2, 4, 2.9 and 6; 282.01, subdivisions 1, 4, and 7; 282.04, 2.10 subdivision 2; 282.05; 282.08; 282.09; 282.241; 2.11 282.261, subdivision 4, and by adding a subdivision; 2.12 283.10; 287.01, subdivision 3, as amended; 287.05, 2.13 subdivisions 1, as amended, and 1a, as amended; 2.14 289A.02, subdivision 7; 289A.18, subdivision 4; 2.15 289A.20, subdivision 4; 289A.31, subdivision 2; 2.16 289A.40, subdivisions 1 and 1a; 289A.50, subdivision 2.17 7, and by adding a subdivision; 289A.56, subdivision 2.18 4; 289A.60, subdivisions 3 and 21; 290.01, 2.19 subdivisions 7, 19, 19a, 19b, 19f, 31, and by adding a 2.20 subdivision; 290.06, subdivisions 2c, 2d, and by 2.21 adding subdivisions; 290.0671, subdivision 1; 2.22 290.0672, subdivision 1; 290.0674, subdivisions 1 and 2.23 2; 290.091, subdivisions 1, 2, and 6; 290.0921, 2.24 subdivision 5; 290.095, subdivision 3; 290.17, 2.25 subdivisions 3, 4, and 6; 290.191, subdivisions 2 and 2.26 3; 290.9725; 290.9726, by adding a subdivision; 2.27 290A.03, subdivisions 3 and 15; 290B.03, subdivision 2.28 1; 290B.04, subdivisions 3 and 4; 290B.05, subdivision 2.29 1; 291.005, subdivision 1; 295.50, subdivision 4; 2.30 295.52, subdivision 7; 295.53, subdivision 1; 295.55, 2.31 subdivisions 2 and 3; 296A.16, by adding subdivisions; 2.32 297A.01, subdivision 15; 297A.15, subdivision 5; 2.33 297A.25, subdivisions 9, 11, 63, 73, and by adding 2.34 subdivisions; 297A.48, by adding a subdivision; 2.35 297B.01, subdivision 7; 297B.03; 297E.01, by adding a 2.36 subdivision; 297E.02, subdivisions 1, 3, 4, and 6; 2.37 297F.01, subdivision 23; 297F.17, subdivision 6; 2.38 297H.05; 297H.06, subdivision 2; 298.24, subdivision 2.39 1; 298.28, subdivision 9a; 299D.03, subdivision 5; 2.40 357.021, subdivision 1a; 360.55, by adding a 2.41 subdivision; 375.192, subdivision 2; 383C.482, 2.42 subdivision 1; 465.82, by adding a subdivision; 2.43 469.169, subdivision 12, and by adding a subdivision; 2.44 469.1735, by adding a subdivision; 469.176, 2.45 subdivision 4g; 469.1763, by adding a subdivision; 2.46 469.1771, subdivision 1, and by adding a subdivision; 2.47 469.1791, subdivision 3; 469.1813, subdivisions 1, 2, 2.48 3, 6, and by adding a subdivision; 469.1815, 2.49 subdivision 2; 473.249, subdivision 1; 473.252, 2.50 subdivision 2; 473.253, subdivision 1; 477A.03, 2.51 subdivision 2; 485.018, subdivision 5; 487.02, 2.52 subdivision 2; 487.32, subdivision 3; 487.33, 2.53 subdivision 5; and 574.34, subdivision 1; Laws 1988, 2.54 chapter 645, section 3; Laws 1997, chapter 231, 2.55 article 1, section 19, subdivisions 1 and 3; Laws 2.56 1997, chapter 231, article 3, section 9; Laws 1997, 2.57 First Special Session chapter 3, section 27; Laws 2.58 1997, Second Special Session chapter 2, section 6; 2.59 Laws 1998, chapter 389, article 1, section 1; and Laws 2.60 1998, chapter 389, article 8, section 44, subdivisions 2.61 5, 6, and 7, as amended; proposing coding for new law 2.62 in Minnesota Statutes, chapters 16A; 62Q; 256L; 275; 2.63 297A; 469; and 473; repealing Minnesota Statutes 1998, 2.64 sections 13.99, subdivision 86b; 16A.724; 16A.76; 2.65 92.22; 144.1484, subdivision 2; 256L.02, subdivision 2.66 3; 273.11, subdivision 10; 280.27; 281.13; 281.38; 2.67 284.01; 284.02; 284.03; 284.04; 284.05; 284.06; 2.68 295.50; 295.51; 295.52; 295.53; 295.54; 295.55; 2.69 295.56; 295.57; 295.58; 295.582; 295.59; 297E.12, 2.70 subdivision 3; 297F.19, subdivision 4; 297G.18, 2.71 subdivision 4; and 473.252, subdivisions 4 and 5; Laws 3.1 1997, chapter 231, article 1, section 19, subdivision 3.2 2; and Laws 1998, chapter 389, article 3, section 45. 3.3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 3.4 ARTICLE 1 3.5 SALES TAX REBATE 3.6 Section 1. [STATEMENT OF PURPOSE.] 3.7 (a) The state of Minnesota derives revenues from a variety 3.8 of taxes, fees, and other sources, including the state sales tax. 3.9 (b) It is fair and reasonable to refund the existing state 3.10 budget surplus in the form of a rebate of nonbusiness consumer 3.11 sales taxes paid by individuals in calendar year 1997. 3.12 (c) Information concerning the amount of sales tax paid at 3.13 various income levels is contained in the Minnesota tax 3.14 incidence report, which is written by the commissioner of 3.15 revenue and presented to the legislature according to Minnesota 3.16 Statutes, section 270.0682. 3.17 (d) It is fair and reasonable to use information contained 3.18 in the Minnesota tax incidence report to determine the 3.19 proportionate share of the sales tax rebate due each eligible 3.20 taxpayer since no effective or practical mechanism exists for 3.21 determining the amount of actual sales tax paid by each eligible 3.22 individual. 3.23 Sec. 2. [SALES TAX REBATE.] 3.24 (a) An individual who was eligible for a credit under Laws 3.25 1997, chapter 231, article 1, section 16, as amended by Laws 3.26 1997, First Special Session chapter 5, section 35, and Laws 3.27 1997, Third Special Session chapter 3, section 11, and Laws 3.28 1998, chapter 304, and Laws 1998, chapter 389, article 1, 3.29 section 3, and who filed for that credit on or before April 15, 3.30 1999, or who filed a 1997 Minnesota income tax return and had a 3.31 tax liability before refundable credits on that return of at 3.32 least $1 but did not file the claim for credit authorized under 3.33 Laws 1997, chapter 231, article 1, section 16, as amended, and 3.34 who was not claimed as a dependent on a 1997 federal income tax 3.35 return filed by another person, shall receive a sales tax rebate. 3.36 (b) The sales tax rebate for taxpayers who filed the claim 4.1 for credit authorized under Laws 1997, chapter 231, article 1, 4.2 section 16, as amended, or the 1997 Minnesota income tax return 4.3 as married filing joint or head of household must be computed 4.4 according to the following schedule: 4.5 Income Sales Tax Rebate 4.6 less than $2,500 $ 380 4.7 at least $2,500 but less than $5,000 $ 497 4.8 at least $5,000 but less than $10,000 $ 532 4.9 at least $10,000 but less than $15,000 $ 582 4.10 at least $15,000 but less than $20,000 $ 641 4.11 at least $20,000 but less than $25,000 $ 680 4.12 at least $25,000 but less than $30,000 $ 732 4.13 at least $30,000 but less than $35,000 $ 808 4.14 at least $35,000 but less than $40,000 $ 869 4.15 at least $40,000 but less than $45,000 $ 927 4.16 at least $45,000 but less than $50,000 $ 977 4.17 at least $50,000 but less than $60,000 $1,028 4.18 at least $60,000 but less than $70,000 $1,136 4.19 at least $70,000 but less than $80,000 $1,232 4.20 at least $80,000 but less than $90,000 $1,353 4.21 at least $90,000 but less than $100,000 $1,503 4.22 at least $100,000 but less than $120,000 $1,628 4.23 at least $120,000 but less than $140,000 $1,783 4.24 at least $140,000 but less than $160,000 $1,928 4.25 at least $160,000 but less than $180,000 $2,064 4.26 at least $180,000 but less than $200,000 $2,193 4.27 at least $200,000 but less than $400,000 $2,804 4.28 at least $400,000 but less than $600,000 $3,690 4.29 at least $600,000 but less than $800,000 $4,427 4.30 $800,000 and over $5,000 4.31 (c) The sales tax rebate for individuals who filed the 4.32 claim for credit authorized under Laws 1997, chapter 231, 4.33 article 1, section 16, as amended, or the 1997 Minnesota income 4.34 tax return, as single or married filing separately must be 4.35 computed according to the following schedule: 4.36 Income Sales Tax Rebate 5.1 less than $2,500 $ 217 5.2 at least $2,500 but less than $5,000 $ 264 5.3 at least $5,000 but less than $10,000 $ 318 5.4 at least $10,000 but less than $15,000 $ 432 5.5 at least $15,000 but less than $20,000 $ 492 5.6 at least $20,000 but less than $25,000 $ 526 5.7 at least $25,000 but less than $30,000 $ 546 5.8 at least $30,000 but less than $40,000 $ 604 5.9 at least $40,000 but less than $50,000 $ 688 5.10 at least $50,000 but less than $70,000 $ 823 5.11 at least $70,000 but less than $100,000 $1,016 5.12 at least $100,000 but less than $140,000 $1,224 5.13 at least $140,000 but less than $200,000 $1,478 5.14 at least $200,000 but less than $400,000 $2,004 5.15 $400,000 and over $2,500 5.16 (d) Individuals who were not residents of Minnesota for any 5.17 part of 1997 and who paid more than $10 in Minnesota sales tax 5.18 on nonbusiness consumer purchases in that year qualify for a 5.19 rebate under this paragraph only. Qualifying nonresidents must 5.20 file a claim for rebate on a form prescribed by the commissioner 5.21 before the later of May 15, 1999, or 30 days after the date of 5.22 enactment of this act. The claim must include receipts showing 5.23 the Minnesota sales tax paid and the date of the sale. Taxes 5.24 paid on purchases allowed in the computation of federal taxable 5.25 income or reimbursed by an employer are not eligible for the 5.26 rebate. The commissioner shall determine the qualifying taxes 5.27 paid and rebate the lesser of: 5.28 (1) 68.08 percent of that amount; or 5.29 (2) the maximum amount for which the claimant would have 5.30 been eligible as determined under paragraph (b) if the taxpayer 5.31 filed the 1997 federal income tax return as a married taxpayer 5.32 filing jointly or head of household, or as determined under 5.33 paragraph (c) for other taxpayers. 5.34 (e) "Income," for purposes of this section other than 5.35 paragraph (d), is taxable income as defined in section 63 of the 5.36 Internal Revenue Code of 1986, as amended through December 31, 6.1 1996, plus the sum of any additions to federal taxable income 6.2 for the taxpayer under Minnesota Statutes, section 290.01, 6.3 subdivision 19a, and reported on the original return submitted 6.4 to claim the credit under Laws 1997, chapter 231, article 1, 6.5 section 16, as amended, or by subsequent adjustments to that 6.6 return made within the time limits specified in paragraph (h). 6.7 For an individual who was a resident of Minnesota for less than 6.8 the entire year, the sales tax rebate equals the sales tax 6.9 rebate calculated under paragraph (b) or (c) multiplied by the 6.10 percentage determined pursuant to Minnesota Statutes, section 6.11 290.06, subdivision 2c, paragraph (e), as calculated on the 6.12 original return submitted to claim the credit under Laws 1997, 6.13 chapter 231, article 1, section 16, as amended, or by subsequent 6.14 adjustments to that return made within the time limits specified 6.15 in paragraph (h). For purposes of paragraph (d), "income" is 6.16 taxable income as defined in section 63 of the Internal Revenue 6.17 Code of 1986, as amended through December 31, 1996, and reported 6.18 on the taxpayer's original federal tax return for the first 6.19 taxable year beginning after December 31, 1996. 6.20 (f) The commissioner of revenue must begin making sales tax 6.21 rebates by June 1, 1999. Sales tax rebates not paid by July 1, 6.22 1999, shall bear interest at the rate specified in Minnesota 6.23 Statutes, section 270.75. 6.24 (g) A sales tax rebate shall not be adjusted based on 6.25 changes to the return on which the claim for credit authorized 6.26 under Laws 1997, chapter 231, article 1, section 16, as amended, 6.27 is based that are made by order of assessment after April 15, 6.28 1999, or made by the taxpayer that are filed with the 6.29 commissioner of revenue after April 15, 1999. 6.30 (h) Individuals who filed a joint claim for credit under 6.31 Laws 1997, chapter 231, article 1, section 16, as amended, shall 6.32 receive a joint sales tax rebate. After the sales tax rebate 6.33 has been issued, but before the check has been cashed, either 6.34 joint claimant may request a separate check for one-half of the 6.35 joint sales tax rebate. 6.36 (i) The commissioner may pay rebates required by this 7.1 section by electronic funds transfer to individuals who 7.2 requested their 1998 individual income tax refund be paid 7.3 through electronic funds transfer. The commissioner may make 7.4 the electronic funds transfer payments to the same financial 7.5 institution and into the same account as the 1998 individual 7.6 income tax refund. 7.7 (j) The sales tax rebate is a "Minnesota tax law" for 7.8 purposes of Minnesota Statutes, section 270B.01, subdivision 8. 7.9 (k) The sales tax rebate is "an overpayment of any tax 7.10 collected by the commissioner" for purposes of Minnesota 7.11 Statutes, section 270.07, subdivision 5. For purposes of this 7.12 paragraph, a joint sales tax rebate is payable to each spouse 7.13 equally. 7.14 (l) If the commissioner of revenue cannot locate an 7.15 individual entitled to a sales tax rebate by July 1, 2001, or if 7.16 an individual to whom a sales tax rebate was issued has not 7.17 cashed the check by July 1, 2001, the right to the sales tax 7.18 rebate shall lapse and the check shall be deposited in the 7.19 general fund. 7.20 (m) Individuals entitled to a sales tax rebate pursuant to 7.21 paragraph (a), but who did not receive one, and individuals who 7.22 receive a sales tax rebate that was not correctly computed, must 7.23 file a claim with the commissioner before July 1, 2000, in a 7.24 form prescribed by the commissioner. These claims shall be 7.25 treated as if they are a claim for refund under Minnesota 7.26 Statutes, section 289A.50, subdivisions 4 and 7. 7.27 (n) The sales tax rebate is a refund subject to revenue 7.28 recapture under Minnesota Statutes, chapter 270A. The 7.29 commissioner of revenue shall remit the entire refund to the 7.30 claimant agency, which shall, upon the request of the spouse who 7.31 does not owe the debt, refund one-half of the joint sales tax 7.32 rebate to the spouse who does not owe the debt. 7.33 (o) The amount necessary to make the sales tax rebates and 7.34 interest provided in this section is appropriated from the 7.35 general fund to the commissioner of revenue in fiscal years 7.36 1999, 2000, and 2001. The first $200,000,000 of this 8.1 appropriation is from the tax reform and reduction account. 8.2 (p) If a sales tax rebate check is cashed by someone other 8.3 than the payee or payees of the check, and the commissioner of 8.4 revenue determines that the check has been forged or improperly 8.5 endorsed, the commissioner may issue an order of assessment for 8.6 the amount of the check against the person or persons cashing 8.7 it. The assessment must be made within two years after the 8.8 check is cashed, but if cashing the check constitutes theft 8.9 under Minnesota Statutes, section 609.52, or forgery under 8.10 Minnesota Statutes, section 609.631, the assessment can be made 8.11 at any time. The assessment may be appealed administratively 8.12 and judicially. The commissioner may take action to collect the 8.13 assessment in the same manner as provided by Minnesota Statutes, 8.14 chapter 289A, for any other order of the commissioner assessing 8.15 tax. 8.16 (q) Notwithstanding Minnesota Statutes, sections 9.031, 8.17 16A.40, 16B.49, 16B.50, and any other law to the contrary, the 8.18 commissioner of revenue may take whatever actions the 8.19 commissioner deems necessary to pay the rebates required by this 8.20 section, and may, in consultation with the commissioner of 8.21 finance and the state treasurer, contract with a private vendor 8.22 or vendors to process, print, and mail the rebate checks or 8.23 warrants required under this section and receive and disburse 8.24 state funds to pay those checks or warrants. 8.25 Sec. 3. [PAYMENT TO STATE.] 8.26 (a) A taxpayer receiving a rebate under section 2 may 8.27 endorse and return the rebate check to the state and designate 8.28 that the returned rebate must be deposited in one or more of the 8.29 following accounts for use only for the purposes designated in 8.30 this section: 8.31 (1) an account for the basic sliding fee child care program 8.32 for child care assistance to families administered by the 8.33 commissioner of children, families, and learning under Minnesota 8.34 Statutes, section 119B.03; 8.35 (2) an account to lower kindergarten through grade 6 8.36 classroom size and reduce instructor-to-student ratios to an 9.1 average level of 1 to 17 to be administered by the commissioner 9.2 of children, families, and learning; 9.3 (3) the affordable rental investment fund to be used by the 9.4 housing finance agency for family rental housing assistance 9.5 under Minnesota Statutes, section 462A.21, subdivision 8b; 9.6 (4) the contaminated site cleanup and development account 9.7 to be used by the commissioner of trade and economic development 9.8 for contamination cleanup development grants under Minnesota 9.9 Statutes, sections 116J.551 to 116J.556; 9.10 (5) an account to increase funding of the State Board of 9.11 the Arts for grants under chapter 129D; and 9.12 (6) the general fund for use as appropriated by law. 9.13 (b) Each rebate check shall have printed on the back of the 9.14 check that it may be endorsed to the state of Minnesota and used 9.15 for the designated option under paragraph (a). If more than one 9.16 use of the rebate is designated, the rebate must be divided 9.17 evenly between the designated options. If a check is endorsed 9.18 and mailed to the state and no option is designated, the check 9.19 must be deposited in the general fund. 9.20 (c) The rebate check shall be accompanied by a notice 9.21 prepared by the commissioner of revenue that explains the 9.22 taxpayer's option to endorse the check to the state, and 9.23 explains the uses of the funds that the taxpayer may designate. 9.24 In preparing the notice, the commissioner of revenue shall 9.25 consult with the commissioners or agencies that administer the 9.26 funds or accounts. The notice shall also explain that a 9.27 taxpayer may cash the rebate check and mail a contribution of 9.28 any amount to the state and that the contribution must be used 9.29 for the option or options under paragraph (a) as designated by 9.30 the taxpayer. The notice shall contain in bold print the 9.31 address to which the endorsed check or a state contribution may 9.32 be mailed. 9.33 (d) Funds endorsed and mailed to the state and 9.34 contributions mailed to the state under this section shall be 9.35 deposited by the commissioner of finance in the fund or account 9.36 designated, and are appropriated to the agency or commissioner 10.1 designated by the taxpayer or contributor for use as provided in 10.2 this section. Funds appropriated under this paragraph are 10.3 available until expended. 10.4 (e) Funds appropriated under this section are in addition 10.5 to any funds appropriated for the purposes given in this section 10.6 and may not be used for any other purposes including the 10.7 reduction of any other appropriations. Funds appropriated to a 10.8 commissioner or agency under this section are not included in 10.9 the department's or agency's budget base. 10.10 Sec. 4. [APPROPRIATIONS.] 10.11 $1,000,000 is appropriated from the general fund to the 10.12 commissioner of revenue to administer the sales tax rebate for 10.13 fiscal year 1999. Any unencumbered balance remaining on June 10.14 30, 1999, does not cancel but is available for expenditure by 10.15 the commissioner of revenue until June 30, 2001. 10.16 Sec. 5. [EFFECTIVE DATE.] 10.17 Sections 1 to 4 are effective the day following final 10.18 enactment. 10.19 ARTICLE 2 10.20 INCOME AND FRANCHISE TAXES 10.21 Section 1. Minnesota Statutes 1998, section 289A.02, 10.22 subdivision 7, is amended to read: 10.23 Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically 10.24 defined otherwise, "Internal Revenue Code" means the Internal 10.25 Revenue Code of 1986, as amended through December 31,19971998. 10.26 Sec. 2. Minnesota Statutes 1998, section 290.01, 10.27 subdivision 7, is amended to read: 10.28 Subd. 7. [RESIDENT.] The term "resident" means (1) any 10.29 individual domiciled in Minnesota, except that an individual is 10.30 not a "resident" for the period of time that the individual is a 10.31 "qualified individual" as defined in section 911(d)(1) of the 10.32 Internal Revenue Code, if the qualified individual notifies the 10.33 county within three months of moving out of the country that 10.34 homestead status be revoked for the Minnesota residence of the 10.35 qualified individual, and the property is not classified as a 10.36 homestead while the individual remains a qualified individual; 11.1 and (2) any individual domiciled outside the state who maintains 11.2 a place of abode in the state and spends in the aggregate more 11.3 than one-half of the tax year in Minnesota, unless the 11.4 individual or the spouse of the individual is in the armed 11.5 forces of the United States, or the individual is covered under 11.6 the reciprocity provisions in section 290.081. 11.7 For purposes of this subdivision, presence within the state 11.8 for any part of a calendar day constitutes a day spent in the 11.9 state. Individuals shall keep adequate records to substantiate 11.10 the days spent outside the state. 11.11 The term "abode" means a dwelling maintained by an 11.12 individual, whether or not owned by the individual and whether 11.13 or not occupied by the individual, and includes a dwelling place 11.14 owned or leased by the individual's spouse. 11.15 Neither the commissioner nor any court shall consider 11.16 charitable contributions made by an individual within or without 11.17 the state in determining if the individual is domiciled in 11.18 Minnesota. 11.19 Sec. 3. Minnesota Statutes 1998, section 290.01, 11.20 subdivision 19, is amended to read: 11.21 Subd. 19. [NET INCOME.] The term "net income" means the 11.22 federal taxable income, as defined in section 63 of the Internal 11.23 Revenue Code of 1986, as amended through the date named in this 11.24 subdivision, incorporating any elections made by the taxpayer in 11.25 accordance with the Internal Revenue Code in determining federal 11.26 taxable income for federal income tax purposes, and with the 11.27 modifications provided in subdivisions 19a to 19f. 11.28 In the case of a regulated investment company or a fund 11.29 thereof, as defined in section 851(a) or 851(g) of the Internal 11.30 Revenue Code, federal taxable income means investment company 11.31 taxable income as defined in section 852(b)(2) of the Internal 11.32 Revenue Code, except that: 11.33 (1) the exclusion of net capital gain provided in section 11.34 852(b)(2)(A) of the Internal Revenue Code does not apply; 11.35 (2) the deduction for dividends paid under section 11.36 852(b)(2)(D) of the Internal Revenue Code must be applied by 12.1 allowing a deduction for capital gain dividends and 12.2 exempt-interest dividends as defined in sections 852(b)(3)(C) 12.3 and 852(b)(5) of the Internal Revenue Code; and 12.4 (3) the deduction for dividends paid must also be applied 12.5 in the amount of any undistributed capital gains which the 12.6 regulated investment company elects to have treated as provided 12.7 in section 852(b)(3)(D) of the Internal Revenue Code. 12.8 The net income of a real estate investment trust as defined 12.9 and limited by section 856(a), (b), and (c) of the Internal 12.10 Revenue Code means the real estate investment trust taxable 12.11 income as defined in section 857(b)(2) of the Internal Revenue 12.12 Code. 12.13 The net income of a designated settlement fund as defined 12.14 in section 468B(d) of the Internal Revenue Code means the gross 12.15 income as defined in section 468B(b) of the Internal Revenue 12.16 Code. 12.17 The Internal Revenue Code of 1986, as amended through 12.18 December 31, 1986, shall be in effect for taxable years 12.19 beginning after December 31, 1986. The provisions of sections 12.20 10104, 10202, 10203, 10204, 10206, 10212, 10221, 10222, 10223, 12.21 10226, 10227, 10228, 10611, 10631, 10632, and 10711 of the 12.22 Omnibus Budget Reconciliation Act of 1987, Public Law Number 12.23 100-203, the provisions of sections 1001, 1002, 1003, 1004, 12.24 1005, 1006, 1008, 1009, 1010, 1011, 1011A, 1011B, 1012, 1013, 12.25 1014, 1015, 1018, 2004, 3041, 4009, 6007, 6026, 6032, 6137, 12.26 6277, and 6282 of the Technical and Miscellaneous Revenue Act of 12.27 1988, Public Law Number 100-647, the provisions of sections 12.28 7811, 7816, and 7831 of the Omnibus Budget Reconciliation Act of 12.29 1989, Public Law Number 101-239, the provisions of sections 12.30 1305, 1704(r), and 1704(e)(1) of the Small Business Job 12.31 Protection Act, Public Law Number 104-188, and the provisions of 12.32 sections 975 and 1604(d)(2) and (e) of the Taxpayer Relief Act 12.33 of 1997, Public Law Number 105-34, and the provisions of section 12.34 4004 of the Omnibus Consolidated and Emergency Supplemental 12.35 Appropriations Act, 1999, Public Law Number 105-277, shall be 12.36 effective at the time they become effective for federal income 13.1 tax purposes. 13.2 The Internal Revenue Code of 1986, as amended through 13.3 December 31, 1987, shall be in effect for taxable years 13.4 beginning after December 31, 1987. The provisions of sections 13.5 4001, 4002, 4011, 5021, 5041, 5053, 5075, 6003, 6008, 6011, 13.6 6030, 6031, 6033, 6057, 6064, 6066, 6079, 6130, 6176, 6180, 13.7 6182, 6280, and 6281 of the Technical and Miscellaneous Revenue 13.8 Act of 1988, Public Law Number 100-647, the provisions of 13.9 sections 7815 and 7821 of the Omnibus Budget Reconciliation Act 13.10 of 1989, Public Law Number 101-239, and the provisions of 13.11 section 11702 of the Revenue Reconciliation Act of 1990, Public 13.12 Law Number 101-508, shall become effective at the time they 13.13 become effective for federal tax purposes. 13.14 The Internal Revenue Code of 1986, as amended through 13.15 December 31, 1988, shall be in effect for taxable years 13.16 beginning after December 31, 1988. The provisions of sections 13.17 7101, 7102, 7104, 7105, 7201, 7202, 7203, 7204, 7205, 7206, 13.18 7207, 7210, 7211, 7301, 7302, 7303, 7304, 7601, 7621, 7622, 13.19 7641, 7642, 7645, 7647, 7651, and 7652 of the Omnibus Budget 13.20 Reconciliation Act of 1989, Public Law Number 101-239, the 13.21 provision of section 1401 of the Financial Institutions Reform, 13.22 Recovery, and Enforcement Act of 1989, Public Law Number 101-73, 13.23 the provisions of sections 11701 and 11703 of the Revenue 13.24 Reconciliation Act of 1990, Public Law Number 101-508, and the 13.25 provisions of sections 1702(g) and 1704(f)(2)(A) and (B) of the 13.26 Small Business Job Protection Act, Public Law Number 104-188, 13.27 shall become effective at the time they become effective for 13.28 federal tax purposes. 13.29 The Internal Revenue Code of 1986, as amended through 13.30 December 31, 1989, shall be in effect for taxable years 13.31 beginning after December 31, 1989. The provisions of sections 13.32 11321, 11322, 11324, 11325, 11403, 11404, 11410, and 11521 of 13.33 the Revenue Reconciliation Act of 1990, Public Law Number 13.34 101-508, and the provisions of sections 13224 and 13261 of the 13.35 Omnibus Budget Reconciliation Act of 1993, Public Law Number 13.36 103-66, shall become effective at the time they become effective 14.1 for federal purposes. 14.2 The Internal Revenue Code of 1986, as amended through 14.3 December 31, 1990, shall be in effect for taxable years 14.4 beginning after December 31, 1990. 14.5 The provisions of section 13431 of the Omnibus Budget 14.6 Reconciliation Act of 1993, Public Law Number 103-66, shall 14.7 become effective at the time they became effective for federal 14.8 purposes. 14.9 The Internal Revenue Code of 1986, as amended through 14.10 December 31, 1991, shall be in effect for taxable years 14.11 beginning after December 31, 1991. 14.12 The provisions of sections 1936 and 1937 of the 14.13 Comprehensive National Energy Policy Act of 1992, Public Law 14.14 Number 102-486, the provisions of sections 13101, 13114, 13122, 14.15 13141, 13150, 13151, 13174, 13239, 13301, and 13442 of the 14.16 Omnibus Budget Reconciliation Act of 1993, Public Law Number 14.17 103-66, and the provisions of section 1604(a)(1), (2), and (3) 14.18 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 14.19 shall become effective at the time they become effective for 14.20 federal purposes. 14.21 The Internal Revenue Code of 1986, as amended through 14.22 December 31, 1992, shall be in effect for taxable years 14.23 beginning after December 31, 1992. 14.24 The provisions of sections 13116, 13121, 13206, 13210, 14.25 13222, 13223, 13231, 13232, 13233, 13239, 13262, and 13321 of 14.26 the Omnibus Budget Reconciliation Act of 1993, Public Law Number 14.27 103-66, the provisions of sections 1703(a), 1703(d), 1703(i), 14.28 1703(l), and 1703(m) of the Small Business Job Protection Act, 14.29 Public Law Number 104-188, and the provision of section 1604(c) 14.30 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 14.31 shall become effective at the time they become effective for 14.32 federal purposes. 14.33 The Internal Revenue Code of 1986, as amended through 14.34 December 31, 1993, shall be in effect for taxable years 14.35 beginning after December 31, 1993. 14.36 The provision of section 741 of Legislation to Implement 15.1 Uruguay Round of General Agreement on Tariffs and Trade, Public 15.2 Law Number 103-465, the provisions of sections 1, 2, and 3, of 15.3 the Self-Employed Health Insurance Act of 1995, Public Law 15.4 Number 104-7, the provision of section 501(b)(2) of the Health 15.5 Insurance Portability and Accountability Act, Public Law Number 15.6 104-191, the provisions of sections 1604 and 1704(p)(1) and (2) 15.7 of the Small Business Job Protection Act, Public Law Number 15.8 104-188, and the provisions of sections 1011, 1211(b)(1), and 15.9 1602(f) of the Taxpayer Relief Act of 1997, Public Law Number 15.10 105-34, shall become effective at the time they become effective 15.11 for federal purposes. 15.12 The Internal Revenue Code of 1986, as amended through 15.13 December 31, 1994, shall be in effect for taxable years 15.14 beginning after December 31, 1994. 15.15 The provisions of sections 1119(a), 1120, 1121, 1202(a), 15.16 1444, 1449(b), 1602(a), 1610(a), 1613, and 1805 of the Small 15.17 Business Job Protection Act, Public Law Number 104-188, the 15.18 provision of section 511 of the Health Insurance Portability and 15.19 Accountability Act, Public Law Number 104-191, and the 15.20 provisions of sections 1174 and 1601(i)(2) of the Taxpayer 15.21 Relief Act of 1997, Public Law Number 105-34, shall become 15.22 effective at the time they become effective for federal purposes. 15.23 The Internal Revenue Code of 1986, as amended through March 15.24 22, 1996, is in effect for taxable years beginning after 15.25 December 31, 1995. 15.26 The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 15.27 1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 15.28 1616, 1617, 1704(l), and 1704(m) of the Small Business Job 15.29 Protection Act, Public Law Number 104-188, the provisions of 15.30 Public Law Number 104-117,andthe provisions of sections 313(a) 15.31 and (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 15.32 1002, 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 15.33 1087, 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 15.34 1601(f)(5) and (h), and 1604(d)(1) of the Taxpayer Relief Act of 15.35 1997, Public Law Number 105-34, the provisions of section 6010 15.36 of the Internal Revenue Service Restructuring and Reform Act of 16.1 1998, Public Law Number 105-206, and the provisions of section 16.2 4003 of the Omnibus Consolidated and Emergency Supplemental 16.3 Appropriations Act, 1999, Public Law Number 105-277, shall 16.4 become effective at the time they become effective for federal 16.5 purposes. 16.6 The Internal Revenue Code of 1986, as amended through 16.7 December 31, 1996, shall be in effect for taxable years 16.8 beginning after December 31, 1996. 16.9 The provisions of sections 202(a) and (b), 221(a), 225, 16.10 312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 16.11 (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 16.12 1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 16.13 1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 16.14 of the Taxpayer Relief Act of 1997, Public Law Number 16.15 105-34, the provisions of sections 6004, 6005, 6012, 6013, 6015, 16.16 6016, 7002, and 7003 of the Internal Revenue Service 16.17 Restructuring and Reform Act of 1998, Public Law Number 105-206, 16.18 and the provisions of section 3001 of the Omnibus Consolidated 16.19 and Emergency Supplemental Appropriations Act, 1999, Public Law 16.20 Number 105-277, shall become effective at the time they become 16.21 effective for federal purposes. 16.22 The Internal Revenue Code of 1986, as amended through 16.23 December 31, 1997, shall be in effect for taxable years 16.24 beginning after December 31, 1997. 16.25 The provisions of sections 5002, 6009, 6011, and 7001 of 16.26 the Internal Revenue Service Restructuring and Reform Act of 16.27 1998, Public Law Number 105-206, the provisions of section 9010 16.28 of the Transportation Equity Act for the 21st Century, Public 16.29 Law Number 105-178, the provisions of sections 1004, 4002, and 16.30 5301 of the Omnibus Consolidation and Emergency Supplemental 16.31 Appropriations Act, 1999, Public Law Number 105-277, and the 16.32 provisions of section 303 of the Ricky Ray Hemophilia Relief 16.33 Fund Act of 1998, Public Law Number 105-369, shall become 16.34 effective at the time they become effective for federal purposes. 16.35 The Internal Revenue Code of 1986, as amended through 16.36 December 31, 1998, shall be in effect for taxable years 17.1 beginning after December 31, 1998. 17.2 Except as otherwise provided, references to the Internal 17.3 Revenue Code in subdivisions 19a to 19g mean the code in effect 17.4 for purposes of determining net income for the applicable year. 17.5 Sec. 4. Minnesota Statutes 1998, section 290.01, 17.6 subdivision 19a, is amended to read: 17.7 Subd. 19a. [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 17.8 individuals, estates, and trusts, there shall be added to 17.9 federal taxable income: 17.10 (1)(i) interest income on obligations of any state other 17.11 than Minnesota or a political or governmental subdivision, 17.12 municipality, or governmental agency or instrumentality of any 17.13 state other than Minnesota exempt from federal income taxes 17.14 under the Internal Revenue Code or any other federal statute, 17.15 and 17.16 (ii) exempt-interest dividends as defined in section 17.17 852(b)(5) of the Internal Revenue Code, except the portion of 17.18 the exempt-interest dividends derived from interest income on 17.19 obligations of the state of Minnesota or its political or 17.20 governmental subdivisions, municipalities, governmental agencies 17.21 or instrumentalities, but only if the portion of the 17.22 exempt-interest dividends from such Minnesota sources paid to 17.23 all shareholders represents 95 percent or more of the 17.24 exempt-interest dividends that are paid by the regulated 17.25 investment company as defined in section 851(a) of the Internal 17.26 Revenue Code, or the fund of the regulated investment company as 17.27 defined in section 851(g) of the Internal Revenue Code, making 17.28 the payment; and 17.29 (iii) for the purposes of items (i) and (ii), interest on 17.30 obligations of an Indian tribal government described in section 17.31 7871(c) of the Internal Revenue Code shall be treated as 17.32 interest income on obligations of the state in which the tribe 17.33 is located; 17.34 (2) the amount of income taxes paid or accrued within the 17.35 taxable year under this chapter and income taxes paid to any 17.36 other state or to any province or territory of Canada, to the 18.1 extent allowed as a deduction under section 63(d) of the 18.2 Internal Revenue Code, but the addition may not be more than the 18.3 amount by which the itemized deductions as allowed under section 18.4 63(d) of the Internal Revenue Code exceeds the amount of the 18.5 standard deduction as defined in section 63(c) of the Internal 18.6 Revenue Code. For the purpose of this paragraph, the 18.7 disallowance of itemized deductions under section 68 of the 18.8 Internal Revenue Code of 1986, income tax is the last itemized 18.9 deduction disallowed; 18.10 (3) the capital gain amount of a lump sum distribution to 18.11 which the special tax under section 1122(h)(3)(B)(ii) of the Tax 18.12 Reform Act of 1986, Public Law Number 99-514, applies; 18.13 (4) the amount of income taxes paid or accrued within the 18.14 taxable year under this chapter and income taxes paid to any 18.15 other state or any province or territory of Canada, to the 18.16 extent allowed as a deduction in determining federal adjusted 18.17 gross income. For the purpose of this paragraph, income taxes 18.18 do not include the taxes imposed by sections 290.0922, 18.19 subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 18.20(5) the amount of loss or expense included in federal18.21taxable income under section 1366 of the Internal Revenue Code18.22flowing from a corporation that has a valid election in effect18.23for the taxable year under section 1362 of the Internal Revenue18.24Code, but which is not allowed to be an "S" corporation under18.25section 290.9725;18.26(6) the amount of any distributions in cash or property18.27made to a shareholder during the taxable year by a corporation18.28that has a valid election in effect for the taxable year under18.29section 1362 of the Internal Revenue Code, but which is not18.30allowed to be an "S" corporation under section 290.9725 to the18.31extent not already included in federal taxable income under18.32section 1368 of the Internal Revenue Code;18.33(7) in the year stock of a corporation that had made a18.34valid election under section 1362 of the Internal Revenue Code18.35but was not an "S" corporation under section 290.9725 is sold or18.36disposed of in a transaction taxable under the Internal Revenue19.1Code, the amount of difference between the Minnesota basis of19.2the stock under subdivision 19f, paragraph (m), and the federal19.3basis if the Minnesota basis is lower than the shareholder's19.4federal basis;19.5(8)(5) the amount of expense, interest, or taxes 19.6 disallowed pursuant to section 290.10; and 19.7(9)(6) the amount of a partner's pro rata share of net 19.8 income which does not flow through to the partner because the 19.9 partnership elected to pay the tax on the income under section 19.10 6242(a)(2) of the Internal Revenue Code. 19.11 Sec. 5. Minnesota Statutes 1998, section 290.01, 19.12 subdivision 19b, is amended to read: 19.13 Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 19.14 individuals, estates, and trusts, there shall be subtracted from 19.15 federal taxable income: 19.16 (1) interest income on obligations of any authority, 19.17 commission, or instrumentality of the United States to the 19.18 extent includable in taxable income for federal income tax 19.19 purposes but exempt from state income tax under the laws of the 19.20 United States; 19.21 (2) if included in federal taxable income, the amount of 19.22 any overpayment of income tax to Minnesota or to any other 19.23 state, for any previous taxable year, whether the amount is 19.24 received as a refund or as a credit to another taxable year's 19.25 income tax liability; 19.26 (3) the amount paid to others, less the credit allowed 19.27 under section 290.0674, not to exceed $1,625 for eachdependent19.28 qualifying child in grades kindergarten to 6 and $2,500 for each 19.29dependentqualifying child in grades 7 to 12, for tuition, 19.30 textbooks, and transportation of eachdependentqualifying child 19.31 in attending an elementary or secondary school situated in 19.32 Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 19.33 wherein a resident of this state may legally fulfill the state's 19.34 compulsory attendance laws, which is not operated for profit, 19.35 and which adheres to the provisions of the Civil Rights Act of 19.36 1964 and chapter 363. For the purposes of this clause, 20.1 "tuition" includes fees or tuition as defined in section 20.2 290.0674, subdivision 1, clause (1). As used in this clause, 20.3 "textbooks" includes books and other instructional materials and 20.4 equipment used in elementary and secondary schools in teaching 20.5 only those subjects legally and commonly taught in public 20.6 elementary and secondary schools in this state. Equipment 20.7 expenses qualifying for deduction includes expenses as defined 20.8 and limited in section 290.0674, subdivision 1, clause (3). 20.9 "Textbooks" does not include instructional books and materials 20.10 used in the teaching of religious tenets, doctrines, or worship, 20.11 the purpose of which is to instill such tenets, doctrines, or 20.12 worship, nor does it include books or materials for, or 20.13 transportation to, extracurricular activities including sporting 20.14 events, musical or dramatic events, speech activities, driver's 20.15 education, or similar programs. For purposes of the subtraction 20.16 provided by this clause, "qualifying child" has the meaning 20.17 given in section 32(c)(3) of the Internal Revenue Code; 20.18 (4) to the extent included in federal taxable income, 20.19 distributions from a qualified governmental pension plan, an 20.20 individual retirement account, simplified employee pension, or 20.21 qualified plan covering a self-employed person that represent a 20.22 return of contributions that were included in Minnesota gross 20.23 income in the taxable year for which the contributions were made 20.24 but were deducted or were not included in the computation of 20.25 federal adjusted gross income. The distribution shall be 20.26 allocated first to return of contributions until the 20.27 contributions included in Minnesota gross income have been 20.28 exhausted. This subtraction applies only to contributions made 20.29 in a taxable year prior to 1985; 20.30 (5) income as provided under section 290.0802; 20.31 (6) the amount of unrecovered accelerated cost recovery 20.32 system deductions allowed under subdivision 19g; 20.33 (7) to the extent included in federal adjusted gross 20.34 income, income realized on disposition of property exempt from 20.35 tax under section 290.491; 20.36 (8) to the extent not deducted in determining federal 21.1 taxable income, the amount paid for health insurance of 21.2 self-employed individuals as determined under section 162(l) of 21.3 the Internal Revenue Code, except that the25percent limit does 21.4 not apply. If the taxpayer deducted insurance payments under 21.5 section 213 of the Internal Revenue Code of 1986, the 21.6 subtraction under this clause must be reduced by the lesser of: 21.7 (i) the total itemized deductions allowed under section 21.8 63(d) of the Internal Revenue Code, less state, local, and 21.9 foreign income taxes deductible under section 164 of the 21.10 Internal Revenue Code and the standard deduction under section 21.11 63(c) of the Internal Revenue Code; or 21.12 (ii) the lesser of (A) the amount of insurance qualifying 21.13 as "medical care" under section 213(d) of the Internal Revenue 21.14 Code to the extent not deducted under section 162(1) of the 21.15 Internal Revenue Code or excluded from income or (B) the total 21.16 amount deductible for medical care under section 213(a); 21.17 (9) the exemption amount allowed under Laws 1995, chapter 21.18 255, article 3, section 2, subdivision 3; 21.19 (10) to the extent included in federal taxable income, 21.20 postservice benefits for youth community service under section 21.21 124D.42 for volunteer service under United States Code, title 21.22 42, section 5011(d), as amended; 21.23(11) to the extent not subtracted under clause (1), the21.24amount of income or gain included in federal taxable income21.25under section 1366 of the Internal Revenue Code flowing from a21.26corporation that has a valid election in effect for the taxable21.27year under section 1362 of the Internal Revenue Code which is21.28not allowed to be an "S" corporation under section 290.9725;21.29(12) in the year stock of a corporation that had made a21.30valid election under section 1362 of the Internal Revenue Code21.31but was not an "S" corporation under section 290.9725 is sold or21.32disposed of in a transaction taxable under the Internal Revenue21.33Code, the amount of difference between the Minnesota basis of21.34the stock under subdivision 19f, paragraph (m), and the federal21.35basis if the Minnesota basis is higher than the shareholder's21.36federal basis; and22.1(13) an amount equal to an individual's, trust's, or22.2estate's net federal income tax liability for the tax year that22.3is attributable to items of income, expense, gain, loss, or22.4credits federally flowing to the taxpayer in the tax year from a22.5corporation, having a valid election in effect for federal tax22.6purposes under section 1362 of the Internal Revenue Code but not22.7treated as an "S" corporation for state tax purposes under22.8section 290.9725.22.9 (11) to the extent not deducted in determining federal 22.10 taxable income by an individual who does not itemize deductions 22.11 for federal income tax purposes for the taxable year, an amount 22.12 equal to 50 percent of the excess of charitable contributions 22.13 allowable as a deduction for the taxable year under section 22.14 170(a) of the Internal Revenue Code over $500; and 22.15 (12) to the extent included in federal taxable income, 22.16 holocaust victims' settlement payments for any injury incurred 22.17 as a result of the holocaust, if received by an individual who 22.18 was persecuted for racial or religious reasons by Nazi Germany 22.19 or any other Axis regime or an heir of such a person. 22.20 Sec. 6. Minnesota Statutes 1998, section 290.01, 22.21 subdivision 19f, is amended to read: 22.22 Subd. 19f. [BASIS MODIFICATIONS AFFECTING GAIN OR LOSS ON 22.23 DISPOSITION OF PROPERTY.] (a) For individuals, estates, and 22.24 trusts, the basis of property is its adjusted basis for federal 22.25 income tax purposes except as set forth in paragraphs (f), (g), 22.26 and (m). For corporations, the basis of property is its 22.27 adjusted basis for federal income tax purposes, without regard 22.28 to the time when the property became subject to tax under this 22.29 chapter or to whether out-of-state losses or items of tax 22.30 preference with respect to the property were not deductible 22.31 under this chapter, except that the modifications to the basis 22.32 for federal income tax purposes set forth in paragraphs (b) to 22.33 (j) are allowed to corporations, and the resulting modifications 22.34 to federal taxable income must be made in the year in which gain 22.35 or loss on the sale or other disposition of property is 22.36 recognized. 23.1 (b) The basis of property shall not be reduced to reflect 23.2 federal investment tax credit. 23.3 (c) The basis of property subject to the accelerated cost 23.4 recovery system under section 168 of the Internal Revenue Code 23.5 shall be modified to reflect the modifications in depreciation 23.6 with respect to the property provided for in subdivision 19e. 23.7 For certified pollution control facilities for which 23.8 amortization deductions were elected under section 169 of the 23.9 Internal Revenue Code of 1954, the basis of the property must be 23.10 increased by the amount of the amortization deduction not 23.11 previously allowed under this chapter. 23.12 (d) For property acquired before January 1, 1933, the basis 23.13 for computing a gain is the fair market value of the property as 23.14 of that date. The basis for determining a loss is the cost of 23.15 the property to the taxpayer less any depreciation, 23.16 amortization, or depletion, actually sustained before that 23.17 date. If the adjusted cost exceeds the fair market value of the 23.18 property, then the basis is the adjusted cost regardless of 23.19 whether there is a gain or loss. 23.20 (e) The basis is reduced by the allowance for amortization 23.21 of bond premium if an election to amortize was made pursuant to 23.22 Minnesota Statutes 1986, section 290.09, subdivision 13, and the 23.23 allowance could have been deducted by the taxpayer under this 23.24 chapter during the period of the taxpayer's ownership of the 23.25 property. 23.26 (f) For assets placed in service before January 1, 1987, 23.27 corporations, partnerships, or individuals engaged in the 23.28 business of mining ores other than iron ore or taconite 23.29 concentrates subject to the occupation tax under chapter 298 23.30 must use the occupation tax basis of property used in that 23.31 business. 23.32 (g) For assets placed in service before January 1, 1990, 23.33 corporations, partnerships, or individuals engaged in the 23.34 business of mining iron ore or taconite concentrates subject to 23.35 the occupation tax under chapter 298 must use the occupation tax 23.36 basis of property used in that business. 24.1 (h) In applying the provisions of sections 301(c)(3)(B), 24.2 312(f) and (g), and 316(a)(1) of the Internal Revenue Code, the 24.3 dates December 31, 1932, and January 1, 1933, shall be 24.4 substituted for February 28, 1913, and March 1, 1913, 24.5 respectively. 24.6 (i) In applying the provisions of section 362(a) and (c) of 24.7 the Internal Revenue Code, the date December 31, 1956, shall be 24.8 substituted for June 22, 1954. 24.9 (j) The basis of property shall be increased by the amount 24.10 of intangible drilling costs not previously allowed due to 24.11 differences between this chapter and the Internal Revenue Code. 24.12 (k) The adjusted basis of any corporate partner's interest 24.13 in a partnership is the same as the adjusted basis for federal 24.14 income tax purposes modified as required to reflect the basis 24.15 modifications set forth in paragraphs (b) to (j). The adjusted 24.16 basis of a partnership in which the partner is an individual, 24.17 estate, or trust is the same as the adjusted basis for federal 24.18 income tax purposes modified as required to reflect the basis 24.19 modifications set forth in paragraphs (f) and (g). 24.20 (l) The modifications contained in paragraphs (b) to (j) 24.21 also apply to the basis of property that is determined by 24.22 reference to the basis of the same property in the hands of a 24.23 different taxpayer or by reference to the basis of different 24.24 property. 24.25(m) If a corporation has a valid election in effect for the24.26taxable year under section 1362 of the Internal Revenue Code,24.27but is not allowed to be an "S" corporation under section24.28290.9725, and the corporation is liquidated or the individual24.29shareholder disposes of the stock, the Minnesota basis in the24.30shareholder's stock in the corporation shall be computed as if24.31the corporation were not an "S" corporation for federal tax24.32purposes.24.33 Sec. 7. Minnesota Statutes 1998, section 290.01, 24.34 subdivision 31, is amended to read: 24.35 Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically 24.36 defined otherwise, "Internal Revenue Code" means the Internal 25.1 Revenue Code of 1986, as amended through December 31,19971998. 25.2 Sec. 8. Minnesota Statutes 1998, section 290.01, is 25.3 amended by adding a subdivision to read: 25.4 Subd. 32. [HOLOCAUST SETTLEMENT PAYMENTS.] "Holocaust 25.5 victims' settlement payments" means: 25.6 (1) a payment received as a result of settlement of the 25.7 action entitled In re Holocaust Victims' Asset Litigation, in 25.8 United States district court for the eastern district of New 25.9 York, C.A. No. 96-4849; 25.10 (2) any amount received under the German Act Regulating 25.11 Unresolved Property Claims or any other foreign law providing 25.12 for payments for holocaust claims; and 25.13 (3) a payment received as a result of the settlement of a 25.14 holocaust claim not described in clause (1) or (2), including an 25.15 insurance claim, a claim relating to looted art or financial 25.16 assets, and a claim relating to slave labor wages. 25.17 Sec. 9. Minnesota Statutes 1998, section 290.06, 25.18 subdivision 2c, is amended to read: 25.19 Subd. 2c. [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 25.20 AND TRUSTS.] (a) The income taxes imposed by this chapter upon 25.21 married individuals filing joint returns and surviving spouses 25.22 as defined in section 2(a) of the Internal Revenue Code must be 25.23 computed by applying to their taxable net income the following 25.24 schedule of rates: 25.25 (1) On the first$19,910$34,500,65.5 percent; 25.26 (2) On all over$19,910$34,500, but not 25.27 over$79,120$113,360,87 percent; 25.28 (3) On all over$79,120$113,360,8.58 percent. 25.29 Married individuals filing separate returns, estates, and 25.30 trusts must compute their income tax by applying the above rates 25.31 to their taxable income, except that the income brackets will be 25.32 one-half of the above amounts. 25.33 (b) The income taxes imposed by this chapter upon unmarried 25.34 individuals must be computed by applying to taxable net income 25.35 the following schedule of rates: 25.36 (1) On the first$13,620$17,250,65.5 percent; 26.1 (2) On all over$13,620$17,250, but not 26.2 over$44,750$56,680,87 percent; 26.3 (3) On all over$44,750$56,680,8.58 percent. 26.4 (c) The income taxes imposed by this chapter upon unmarried 26.5 individuals qualifying as a head of household as defined in 26.6 section 2(b) of the Internal Revenue Code must be computed by 26.7 applying to taxable net income the following schedule of rates: 26.8 (1) On the first$16,770$25,870,65.5 percent; 26.9 (2) On all over$16,770$25,870, but not 26.10 over$67,390$85,020,87 percent; 26.11 (3) On all over$67,390$85,020,8.58 percent. 26.12 (d) In lieu of a tax computed according to the rates set 26.13 forth in this subdivision, the tax of any individual taxpayer 26.14 whose taxable net income for the taxable year is less than an 26.15 amount determined by the commissioner must be computed in 26.16 accordance with tables prepared and issued by the commissioner 26.17 of revenue based on income brackets of not more than $100. The 26.18 amount of tax for each bracket shall be computed at the rates 26.19 set forth in this subdivision, provided that the commissioner 26.20 may disregard a fractional part of a dollar unless it amounts to 26.21 50 cents or more, in which case it may be increased to $1. 26.22 (e) An individual who is not a Minnesota resident for the 26.23 entire year must compute the individual's Minnesota income tax 26.24 as provided in this subdivision. After the application of the 26.25 nonrefundable credits provided in this chapter, the tax 26.26 liability must then be multiplied by a fraction in which: 26.27 (1) the numerator is the individual's Minnesota source 26.28 federal adjusted gross income as defined in section 62 of the 26.29 Internal Revenue Codedisregarding income or loss flowing from a26.30corporation having a valid election for the taxable year under26.31section 1362 of the Internal Revenue Code but which is not an26.32"S" corporation under section 290.9725and increased by the 26.33 additions required under section 290.01, subdivision 19a, 26.34 clauses (1) and(9)(6), after applying the allocation and 26.35 assignability provisions of section 290.081, clause (a), or 26.36 290.17; and 27.1 (2) the denominator is the individual's federal adjusted 27.2 gross income as defined in section 62 of the Internal Revenue 27.3 Code of 1986, increased by the amounts specified in section 27.4 290.01, subdivision 19a, clauses (1), (5), (6), (7),and 27.5(9)(6), and reduced by the amounts specified in section 290.01, 27.6 subdivision 19b,clausesclause (1), (11), and (12). 27.7 Sec. 10. Minnesota Statutes 1998, section 290.06, 27.8 subdivision 2d, is amended to read: 27.9 Subd. 2d. [INFLATION ADJUSTMENT OF BRACKETS.] (a) For 27.10 taxable years beginning after December 31,19911999, the 27.11 minimum and maximum dollar amounts for each rate bracket for 27.12 which a tax is imposed in subdivision 2c shall be adjusted for 27.13 inflation by the percentage determined under paragraph (b). For 27.14 the purpose of making the adjustment as provided in this 27.15 subdivision all of the rate brackets provided in subdivision 2c 27.16 shall be the rate brackets as they existed for taxable years 27.17 beginning after December 31,19901998, and before January 27.18 1,19922000. The rate applicable to any rate bracket must not 27.19 be changed. The dollar amounts setting forth the tax shall be 27.20 adjusted to reflect the changes in the rate brackets. The rate 27.21 brackets as adjusted must be rounded to the nearest $10 amount. 27.22 If the rate bracket ends in $5, it must be rounded up to the 27.23 nearest $10 amount. 27.24 (b) The commissioner shall adjust the rate brackets and by 27.25 the percentage determined pursuant to the provisions of section 27.26 1(f) of the Internal Revenue Code, except that in section 27.27 1(f)(3)(B) the word "19901998" shall be substituted for the 27.28 word "19871992." For19912000, the commissioner shall then 27.29 determine the percent change from the 12 months ending on August 27.30 31,19901998, to the 12 months ending on August 31,19911999, 27.31 and in each subsequent year, from the 12 months ending on August 27.32 31,19901998, to the 12 months ending on August 31 of the year 27.33 preceding the taxable year. The determination of the 27.34 commissioner pursuant to this subdivision shall not be 27.35 considered a "rule" and shall not be subject to the 27.36 Administrative Procedure Act contained in chapter 14. 28.1 No later than December 15 of each year, the commissioner 28.2 shall announce the specific percentage that will be used to 28.3 adjust the tax rate brackets. 28.4 Sec. 11. Minnesota Statutes 1998, section 290.06, is 28.5 amended by adding a subdivision to read: 28.6 Subd. 26. [BANK S CORPORATIONS.] A shareholder of an S 28.7 corporation subject to tax under section 290.9725, clause (2), 28.8 is allowed a credit against the tax imposed under this chapter. 28.9 The credit equals 85 percent of the tax apportioned to the 28.10 shareholder under section 290.9726, subdivision 7, for the 28.11 taxable year. 28.12 Sec. 12. Minnesota Statutes 1998, section 290.06, is 28.13 amended by adding a subdivision to read: 28.14 Subd. 27. [TAX PAID TO ANOTHER STATE; CORPORATIONS.] (a) A 28.15 credit is allowed against the tax imposed under subdivision 1 28.16 for tax paid to another state. 28.17 (b) The amount of the credit equals the amount of 28.18 qualifying tax paid to the other state for the taxable year, 28.19 multiplied by the taxpayer's apportionment percentage under 28.20 section 290.191. If the item of income or gain is assigned or 28.21 allocated to Minnesota as nonbusiness income, the entire amount 28.22 of the qualifying tax is allowed as a credit. The maximum 28.23 amount of the credit is limited to the tax liability under 28.24 subdivision 1 for the taxable year and, in no case, may the 28.25 credit exceed the reduction in the amount of tax under 28.26 subdivision 1 if the item of income or gain were excluded from 28.27 net income. 28.28 (c) For purposes of this subdivision, "qualifying tax" 28.29 means the amount of tax paid to another state on an item of 28.30 income or gain for the taxable year, if: 28.31 (1) the law of the other state requires and the taxpayer 28.32 allocates or assigns the entire amount of the income or gain to 28.33 the other state; and 28.34 (2) the income or gain is taxable under subdivision 1 as 28.35 business income or is assigned to Minnesota as nonbusiness 28.36 income. 29.1 Sec. 13. Minnesota Statutes 1998, section 290.0671, 29.2 subdivision 1, is amended to read: 29.3 Subdivision 1. [CREDIT ALLOWED.] (a) An individual is 29.4 allowed a credit against the tax imposed by this chapter equal 29.5 to a percentage of earned income. To receive a credit, a 29.6 taxpayer must be eligible for a credit under section 32 of the 29.7 Internal Revenue Code. 29.8 (b) For individuals with no qualifying children, the credit 29.9 equals 1.1475 percent of the first $4,460 of earned income. The 29.10 credit is reduced by 1.1475 percent of earned income or modified 29.11 adjusted gross income, whichever is greater, in excess of 29.12 $5,570, but in no case is the credit less than zero. 29.13 (c) For individuals with one qualifying child, the credit 29.14 equals 6.8 percent of the first $6,680 of earned income and 8.5 29.15 percent of earned income over $11,650 but less than $12,990. 29.16 The credit is reduced by 4.77 percent of earned income or 29.17 modified adjusted gross income, whichever is greater, in excess 29.18 of $14,560, but in no case is the credit less than zero. 29.19 (d) For individuals with two or more qualifying children, 29.20 the credit equals eight percent of the first $9,390 of earned 29.21 income and 20 percent of earned income over $14,350 but less 29.22 than $16,230. The credit is reduced by 8.8 percent of earned 29.23 income or modified adjusted gross income, whichever is greater, 29.24 in excess of $17,280, but in no case is the credit less than 29.25 zero. 29.26 (e) For a nonresident or part-year resident, the credit 29.27 must be allocated based on the percentage calculated under 29.28 section 290.06, subdivision 2c, paragraph (e). 29.29 (f) For a person who was a resident for the entire tax year 29.30 and has earned income not subject to tax under this chapter, the 29.31 credit must be allocated based on the ratio of federal adjusted 29.32 gross income reduced by the earned income not subject to tax 29.33 under this chapter over federal adjusted gross income. 29.34 (g) The commissioner shall construct tables showing the 29.35 amount of the credit at various income levels and make them 29.36 available to taxpayers. The tables shall follow the schedule 30.1 contained in this subdivision, except that the commissioner may 30.2 graduate the transition between income brackets. 30.3 Sec. 14. Minnesota Statutes 1998, section 290.0672, 30.4 subdivision 1, is amended to read: 30.5 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 30.6 section, the following terms have the meanings given. 30.7 (b) "Long-term care insurance" means a policy that: 30.8 (1) qualifies for a deduction under section 213 of the 30.9 Internal Revenue Code, disregarding the 7.5 percent income test; 30.10 or meets the requirements given in section 62A.46; or provides 30.11 similar coverage issued under the laws of another jurisdiction; 30.12 and 30.13 (2) does not have a lifetime long-term care benefit limit 30.14 of less than $100,000; and 30.15 (3)includes inflation protection that meets or exceedshas 30.16 been offered in compliance with the inflation protection 30.17 requirements ofthe long-term care insurance model regulation30.18cited undersection7702B(g)(2)(A)(i)(x) of the Internal Revenue30.19Code62S.23. 30.20 (c) "Qualified beneficiary" means the taxpayer or the 30.21 taxpayer's spouse. 30.22 (d) "Premiums deducted in determining federal taxable 30.23 income" means the lesser of (1) long-term care insurance 30.24 premiums that qualify as deductions under section 213 of the 30.25 Internal Revenue Code; and (2) the total amount deductible for 30.26 medical care under section 213 of the Internal Revenue Code. 30.27 Sec. 15. Minnesota Statutes 1998, section 290.0674, 30.28 subdivision 1, is amended to read: 30.29 Subdivision 1. [CREDIT ALLOWED.] An individual is allowed 30.30 a credit against the tax imposed by this chapter in an amount 30.31 equal to the amount paid for education-related expenses for 30.32 adependentqualifying child in kindergarten through grade 12. 30.33 For purposes of this section, "education-related expenses" means: 30.34 (1) fees or tuition for instruction by an instructor under 30.35 section 120A.22, subdivision 10, clause (1), (2), (3), (4), or 30.36 (5), for instruction outside the regular school day or school 31.1 year, including tutoring, driver's education offered as part of 31.2 school curriculum, regardless of whether it is taken from a 31.3 public or private entity or summer camps, in grade or age 31.4 appropriate curricula that supplement curricula and instruction 31.5 available during the regular school year, that assists a 31.6 dependent to improve knowledge of core curriculum areas or to 31.7 expand knowledge and skills under the graduation rule under 31.8 section 120B.02 and that do not include the teaching of 31.9 religious tenets, doctrines, or worship, the purpose of which is 31.10 to instill such tenets, doctrines, or worship; 31.11 (2) expenses for textbooks, including books and other 31.12 instructional materials and equipment used in elementary and 31.13 secondary schools in teaching only those subjects legally and 31.14 commonly taught in public elementary and secondary schools in 31.15 this state. "Textbooks" does not include instructional books 31.16 and materials used in the teaching of religious tenets, 31.17 doctrines, or worship, the purpose of which is to instill such 31.18 tenets, doctrines, or worship, nor does it include books or 31.19 materials for extracurricular activities including sporting 31.20 events, musical or dramatic events, speech activities, driver's 31.21 education, or similar programs; 31.22 (3) a maximum expense of $200 per family for personal 31.23 computer hardware, excluding single purpose processors, and 31.24 educational software that assists a dependent to improve 31.25 knowledge of core curriculum areas or to expand knowledge and 31.26 skills under the graduation rule under section 120B.02 purchased 31.27 for use in the taxpayer's home and not used in a trade or 31.28 business regardless of whether the computer is required by the 31.29 dependent's school; and 31.30 (4) the amount paid to others for transportation of a 31.31dependentqualifying child attending an elementary or secondary 31.32 school situated in Minnesota, North Dakota, South Dakota, Iowa, 31.33 or Wisconsin, wherein a resident of this state may legally 31.34 fulfill the state's compulsory attendance laws, which is not 31.35 operated for profit, and which adheres to the provisions of the 31.36 Civil Rights Act of 1964 and chapter 363. 32.1 For purposes of this section, "qualifying child" has the 32.2 meaning given in section 32(c)(3) of the Internal Revenue Code. 32.3 Sec. 16. Minnesota Statutes 1998, section 290.0674, 32.4 subdivision 2, is amended to read: 32.5 Subd. 2. [LIMITATIONS.] (a) For claimants with income not 32.6 greater than $33,500, the maximum credit allowed is $1,000 per 32.7 qualifying child and $2,000 per family. No credit is allowed 32.8 for education-related expenses for claimants with income greater 32.9 than$33,500$37,500. The maximum credit per child is reduced 32.10 by $1 for each $4 of household income over $33,500, and the 32.11 maximum credit per family is reduced by $2 for each $4 of 32.12 household income over $33,500, but in no case is the credit less 32.13 than zero. 32.14 For purposes of this section "income" has the meaning given 32.15 in section 290.067, subdivision 2a. In the case of a married 32.16 claimant, a credit is not allowed unless a joint income tax 32.17 return is filed. 32.18 (b) For a nonresident or part-year resident, the credit 32.19 determined under subdivision 1 and the maximum credit amount in 32.20 paragraph (a) must be allocated using the percentage calculated 32.21 in section 290.06, subdivision 2c, paragraph (e). 32.22 Sec. 17. Minnesota Statutes 1998, section 290.091, 32.23 subdivision 1, is amended to read: 32.24 Subdivision 1. [IMPOSITION OF TAX.] In addition to all 32.25 other taxes imposed by this chapter a tax is imposed on 32.26 individuals, estates, and trusts equal to the excess (if any) of 32.27 (a) an amount equal toseven6.5 percent of alternative 32.28 minimum taxable income after subtracting the exemption amount, 32.29 over 32.30 (b) the regular tax for the taxable year. 32.31 Sec. 18. Minnesota Statutes 1998, section 290.091, 32.32 subdivision 2, is amended to read: 32.33 Subd. 2. [DEFINITIONS.] For purposes of the tax imposed by 32.34 this section, the following terms have the meanings given: 32.35 (a) "Alternative minimum taxable income" means the sum of 32.36 the following for the taxable year: 33.1 (1) the taxpayer's federal alternative minimum taxable 33.2 income as defined in section 55(b)(2) of the Internal Revenue 33.3 Code; 33.4 (2) the taxpayer's itemized deductions allowed in computing 33.5 federal alternative minimum taxable income, but excluding: 33.6 (i) the Minnesota charitable contribution deduction; 33.7 (ii) the medical expense deduction; 33.8 (iii) the casualty, theft, and disaster loss deduction;and33.9 (iv) the impairment-related work expenses of a disabled 33.10 person; and 33.11 (v) holocaust victims' settlement payments to the extent 33.12 allowed under section 290.01, subdivision 19b; and 33.13 (3) for depletion allowances computed under section 613A(c) 33.14 of the Internal Revenue Code, with respect to each property (as 33.15 defined in section 614 of the Internal Revenue Code), to the 33.16 extent not included in federal alternative minimum taxable 33.17 income, the excess of the deduction for depletion allowable 33.18 under section 611 of the Internal Revenue Code for the taxable 33.19 year over the adjusted basis of the property at the end of the 33.20 taxable year (determined without regard to the depletion 33.21 deduction for the taxable year); 33.22 (4) to the extent not included in federal alternative 33.23 minimum taxable income, the amount of the tax preference for 33.24 intangible drilling cost under section 57(a)(2) of the Internal 33.25 Revenue Code determined without regard to subparagraph (E); 33.26 (5) to the extent not included in federal alternative 33.27 minimum taxable income, the amount of interest income as 33.28 provided by section 290.01, subdivision 19a, clause (1); 33.29(6) amounts added to federal taxable income as provided by33.30section 290.01, subdivision 19a, clauses (5), (6), and (7);33.31 less the sum of the amounts determined under the following 33.32 clauses (1) to(4)(3): 33.33 (1) interest income as defined in section 290.01, 33.34 subdivision 19b, clause (1); 33.35 (2) an overpayment of state income tax as provided by 33.36 section 290.01, subdivision 19b, clause (2), to the extent 34.1 included in federal alternative minimum taxable income; and 34.2 (3) the amount of investment interest paid or accrued 34.3 within the taxable year on indebtedness to the extent that the 34.4 amount does not exceed net investment income, as defined in 34.5 section 163(d)(4) of the Internal Revenue Code. Interest does 34.6 not include amounts deducted in computing federal adjusted gross 34.7 income; and. 34.8(4) amounts subtracted from federal taxable income as34.9provided by section 290.01, subdivision 19b, clauses (11) and34.10(12).34.11 In the case of an estate or trust, alternative minimum 34.12 taxable income must be computed as provided in section 59(c) of 34.13 the Internal Revenue Code. 34.14 (b) "Investment interest" means investment interest as 34.15 defined in section 163(d)(3) of the Internal Revenue Code. 34.16 (c) "Tentative minimum tax" equalsseven6.5 percent of 34.17 alternative minimum taxable income after subtracting the 34.18 exemption amount determined under subdivision 3. 34.19 (d) "Regular tax" means the tax that would be imposed under 34.20 this chapter (without regard to this section and section 34.21 290.032), reduced by the sum of the nonrefundable credits 34.22 allowed under this chapter. 34.23 (e) "Net minimum tax" means the minimum tax imposed by this 34.24 section. 34.25 (f) "Minnesota charitable contribution deduction" means a 34.26 charitable contribution deduction under section 170 of the 34.27 Internal Revenue Code to or for the use of an entity described 34.28 in section 290.21, subdivision 3, clauses (a) to (e). When the 34.29 federal deduction for charitable contributions is limited under 34.30 section 170(b) of the Internal Revenue Code, the allowable 34.31 contributions in the year of contribution are deemed to be first 34.32 contributions to entities described in section 290.21, 34.33 subdivision 3, clauses (a) to (e). 34.34 Sec. 19. Minnesota Statutes 1998, section 290.091, 34.35 subdivision 6, is amended to read: 34.36 Subd. 6. [CREDIT FOR PRIOR YEARS' LIABILITY.] (a) A credit 35.1 is allowed against the tax imposed by this chapter on 35.2 individuals, trusts, and estates equal to the minimum tax credit 35.3 for the taxable year. The minimum tax credit equals the 35.4 adjusted net minimum tax for taxable years beginning after 35.5 December 31, 1988, reduced by the minimum tax credits allowed in 35.6 a prior taxable year. The credit may not exceed the excess (if 35.7 any) for the taxable year of 35.8 (1) the regular tax, over 35.9 (2) the greater of (i) the tentative alternative minimum 35.10 tax, or (ii) zero. 35.11 (b) The adjusted net minimum tax for a taxable year equals 35.12 the lesser of the net minimum tax or the excess (if any) of 35.13 (1) the tentative minimum tax, over 35.14 (2)seven6.5 percent of the sum of 35.15 (i) adjusted gross income as defined in section 62 of the 35.16 Internal Revenue Code, 35.17 (ii) interest income as defined in section 290.01, 35.18 subdivision 19a, clause (1), 35.19 (iii)the amount added to federal taxable income as35.20provided by section 290.01, subdivision 19a, clauses (5), (6),35.21and (7),35.22(iv)interest on specified private activity bonds, as 35.23 defined in section 57(a)(5) of the Internal Revenue Code, to the 35.24 extent not included under clause (ii), 35.25(v)(iv) depletion as defined in section 57(a)(1), 35.26 determined without regard to the last sentence of paragraph (1), 35.27 of the Internal Revenue Code, less 35.28(vi)(v) the deductions allowed in computing alternative 35.29 minimum taxable income provided in subdivision 2, paragraph (a), 35.30 clause (2) of the first series of clauses and clauses (1), 35.31 (2), and (3), and (4)of the second series of clauses, and 35.32(vii)(vi) the exemption amount determined under 35.33 subdivision 3. 35.34 In the case of an individual who is not a Minnesota 35.35 resident for the entire year, adjusted net minimum tax must be 35.36 multiplied by the fraction defined in section 290.06, 36.1 subdivision 2c, paragraph (e). In the case of a trust or 36.2 estate, adjusted net minimum tax must be multiplied by the 36.3 fraction defined under subdivision 4, paragraph (b). 36.4 Sec. 20. Minnesota Statutes 1998, section 290.0921, 36.5 subdivision 5, is amended to read: 36.6 Subd. 5. [CHARITABLE CONTRIBUTIONS.] (a) A deduction from 36.7 alternative minimum taxable net income is allowed equal to 36.8 the contributions subject to the deduction for charitable 36.9 contributions under section 290.21, subdivision 3, without 36.10 application of the limitation in section 290.21, subdivision 3. 36.11 The deduction allowable for capital gain property is limited to 36.12 the adjusted basis of the property as defined in section 290.01, 36.13 subdivision 19f. The term capital gain property has the meaning 36.14 given by section 170(b)(1)(C)(iv) of the Internal Revenue Code, 36.15 but does not include property to which an election under section 36.16 170(b)(1)(C)(iii) of the Internal Revenue Code applies. 36.17 (b) The amount of the deduction may not exceed 15 percent 36.18 of alternative minimum taxable net income less the deduction 36.19 allowed under subdivision 6. 36.20 Sec. 21. Minnesota Statutes 1998, section 290.095, 36.21 subdivision 3, is amended to read: 36.22 Subd. 3. [CARRYOVER.] (a) A net operating loss incurred in 36.23 a taxable year: (i) beginning after December 31, 1986, shall be 36.24 a net operating loss carryover to each of the 15 taxable years 36.25 following the taxable year of such loss; (ii) beginning before 36.26 January 1, 1987, shall be a net operating loss carryover to each 36.27 of the five taxable years following the taxable year of such 36.28 loss subject to the provisions of Minnesota Statutes 1986, 36.29 section 290.095; and (iii) beginning before January 1, 1987, 36.30 shall be a net operating loss carryback to each of the three 36.31 taxable years preceding the loss year subject to the provisions 36.32 of Minnesota Statutes 1986, section 290.095. 36.33 (b) The entire amount of the net operating loss for any 36.34 taxable year shall be carried to the earliest of the taxable 36.35 years to which such loss may be carried. The portion of such 36.36 loss which shall be carried to each of the other taxable years 37.1 shall be the excess, if any, of the amount of such loss over the 37.2 sum of the taxable net income, adjusted by the modifications 37.3 specified in subdivision 4, for each of the taxable years to 37.4 which such loss may be carried. 37.5 (c) Where a corporationdoes business both within and37.6without Minnesota, andapportions its income under the 37.7 provisions of section 290.191, the net operating loss deduction 37.8 incurred in any taxable year shall be allowed to the extent of 37.9 the apportionment ratio of the loss year. 37.10 (d) The provisions of sections 381, 382, and 384 of the 37.11 Internal Revenue Code apply to carryovers in certain corporate 37.12 acquisitions and special limitations on net operating loss 37.13 carryovers. The limitation amount determined under section 382 37.14 shall be applied to net income, before apportionment, in each 37.15 post change year to which a loss is carried. 37.16 Sec. 22. Minnesota Statutes 1998, section 290.17, 37.17 subdivision 3, is amended to read: 37.18 Subd. 3. [TRADE ORBUSINESS INCOME; GENERAL RULE.] All 37.19 income of a unitary business is subject to apportionment except 37.20 nonbusiness income. Income derived fromcarrying on a trade or37.21 a unitary business must be assigned to this state if thetrade37.22orunitary business is conducted wholly within this state, 37.23 assigned outside this state if conducted wholly without this 37.24 state and apportioned between this state and other states and 37.25 countries under this subdivision if conducted partly within and 37.26 partly without this state. For purposes of determining whether 37.27 atrade orunitary business is carried on exclusively within or 37.28 without this state: 37.29 (a) Atrade orunitary business physically located 37.30 exclusively within this state is nevertheless carried on partly 37.31 within and partly without this state if any of the principles 37.32 set forth in section 290.191 for the allocation of sales or 37.33 receipts within or without this state when applied to the 37.34 taxpayer's situation result in the allocation of any sales or 37.35 receipts without this state. 37.36 (b) Atrade orunitary business physically located 38.1 exclusively without this state is nevertheless carried on partly 38.2 within and partly without this state if any of the principles 38.3 set forth in section 290.191 for the allocation of sales or 38.4 receipts within or without this state when applied to the 38.5 taxpayer's situation result in the allocation of any sales or 38.6 receipts without this state. The jurisdiction to tax such a 38.7 business under this chapter must be determined in accordance 38.8 with sections 290.014 and 290.015. 38.9 Sec. 23. Minnesota Statutes 1998, section 290.17, 38.10 subdivision 4, is amended to read: 38.11 Subd. 4. [UNITARY BUSINESS PRINCIPLE.] (a) If a trade or 38.12 business conducted wholly within this state or partly within and 38.13 partly without this state is part of a unitary business, the 38.14 entire income of the unitary business is subject to 38.15 apportionment pursuant to section 290.191. Notwithstanding 38.16 subdivision 2, paragraph (c), none of the income of a unitary 38.17 business is considered to be derived from any particular source 38.18 and none may be allocated to a particular place except as 38.19 provided by the applicable apportionment formula. The 38.20 provisions of this subdivision do not apply tofarm income38.21subject to subdivision 5, paragraph (a),business income subject 38.22 to subdivision 5,paragraph (b) or (c),income of an insurance 38.23 company determined under section 290.35, or income of an 38.24 investment company determined under section 290.36. 38.25 (b) The term "unitary business" means business activities 38.26 or operations whichare of mutual benefit, dependent upon, or38.27contributory to one another, individually or as a groupresult 38.28 in a flow of value between them. The term may be applied within 38.29 a single legal entity or between multiple entities and without 38.30 regard to whether each entity is a sole proprietorship, a 38.31 corporation, a partnership or a trust. 38.32 (c) Unity is presumed whenever there is unity of ownership, 38.33 operation, and use, evidenced by centralized management or 38.34 executive force, centralized purchasing, advertising, 38.35 accounting, or other controlled interaction, but the absence of 38.36 these centralized activities will not necessarily evidence a 39.1 nonunitary business. Unity is also presumed when business 39.2 activities or operations are of mutual benefit, dependent upon 39.3 or contributory to one another, either individually or as a 39.4 group. 39.5 (d) Where a business operation conducted in Minnesota is 39.6 owned by a business entity that carries on business activity 39.7 outside the state different in kind from that conducted within 39.8 this state, and the other business is conducted entirely outside 39.9 the state, it is presumed that the two business operations are 39.10 unitary in nature, interrelated, connected, and interdependent 39.11 unless it can be shown to the contrary. 39.12 (e) Unity of ownership is not deemed to exist when a 39.13 corporation is involved unless that corporation is a member of a 39.14 group of two or more business entities and more than 50 percent 39.15 of the voting stock of each member of the group is directly or 39.16 indirectly owned by a common owner or by common owners, either 39.17 corporate or noncorporate, or by one or more of the member 39.18 corporations of the group. For this purpose, the term "voting 39.19 stock" shall include membership interests of mutual insurance 39.20 holding companies formed under section 60A.077. 39.21 (f) The net income and apportionment factors under section 39.22 290.191 or 290.20 of foreign corporations and other foreign 39.23 entities which are part of a unitary business shall not be 39.24 included in the net income or the apportionment factors of the 39.25 unitary business. A foreign corporation or other foreign entity 39.26 which is required to file a return under this chapter shall file 39.27 on a separate return basis. The net income and apportionment 39.28 factors under section 290.191 or 290.20 of foreign operating 39.29 corporations shall not be included in the net income or the 39.30 apportionment factors of the unitary business except as provided 39.31 in paragraph (g). 39.32 (g) The adjusted net income of a foreign operating 39.33 corporation shall be deemed to be paid as a dividend on the last 39.34 day of its taxable year to each shareholder thereof, in 39.35 proportion to each shareholder's ownership, with which such 39.36 corporation is engaged in a unitary business. Such deemed 40.1 dividend shall be treated as a dividend under section 290.21, 40.2 subdivision 4. 40.3 Dividends actually paid by a foreign operating corporation 40.4 to a corporate shareholder which is a member of the same unitary 40.5 business as the foreign operating corporation shall be 40.6 eliminated from the net income of the unitary business in 40.7 preparing a combined report for the unitary business. The 40.8 adjusted net income of a foreign operating corporation shall be 40.9 its net income adjusted as follows: 40.10 (1) any taxes paid or accrued to a foreign country, the 40.11 commonwealth of Puerto Rico, or a United States possession or 40.12 political subdivision of any of the foregoing shall be a 40.13 deduction; and 40.14 (2) the subtraction from federal taxable income for 40.15 payments received from foreign corporations or foreign operating 40.16 corporations under section 290.01, subdivision 19d, clause (11), 40.17 shall not be allowed. 40.18 If a foreign operating corporation incurs a net loss, 40.19 neither income nor deduction from that corporation shall be 40.20 included in determining the net income of the unitary business. 40.21 (h) For purposes of determining the net income of a unitary 40.22 business and the factors to be used in the apportionment of net 40.23 income pursuant to section 290.191 or 290.20, there must be 40.24 included only the income and apportionment factors of domestic 40.25 corporations or other domestic entities other than foreign 40.26 operating corporations that are determined to be part of the 40.27 unitary business pursuant to this subdivision, notwithstanding 40.28 that foreign corporations or other foreign entities might be 40.29 included in the unitary business. 40.30 (i) Deductions for expenses, interest, or taxes otherwise 40.31 allowable under this chapter that are connected with or 40.32 allocable against dividends, deemed dividends described in 40.33 paragraph (g), or royalties, fees, or other like income 40.34 described in section 290.01, subdivision 19d, clause (11), shall 40.35 not be disallowed. 40.36 (j) Each corporation or other entity, except a sole 41.1 proprietorship, that is part of a unitary business must file 41.2 combined reports as the commissioner determines. On the 41.3 reports, all intercompany transactions between entities included 41.4 pursuant to paragraph (h) must be eliminated and the entire net 41.5 income of the unitary business determined in accordance with 41.6 this subdivision is apportioned among the entities by using each 41.7 entity's Minnesota factors for apportionment purposes in the 41.8 numerators of the apportionment formula and the total factors 41.9 for apportionment purposes of all entities included pursuant to 41.10 paragraph (h) in the denominators of the apportionment formula. 41.11 (k) If a corporation has been divested from a unitary 41.12 business and is included in a combined report for a fractional 41.13 part of the common accounting period of the combined report: 41.14 (1) its income includable in the combined report is its 41.15 income incurred for that part of the year determined by 41.16 proration or separate accounting; and 41.17 (2) its sales, property, and payroll included in the 41.18 apportionment formula must be prorated or accounted for 41.19 separately. 41.20 Sec. 24. Minnesota Statutes 1998, section 290.17, 41.21 subdivision 6, is amended to read: 41.22 Subd. 6. [NONBUSINESS INCOME.]For a trade or business for41.23which allocation of income within and without this state is41.24required, if the taxpayer has any income not connected with the41.25trade or business carried on partly within and partly without41.26this state that income must be allocated under subdivision 2.41.27Intangible property is employed in a trade or business if the41.28owner of the property holds it as a means of furthering the41.29trade or business.(a) Nonbusiness income is income of the 41.30 unitary business that cannot be apportioned by this state 41.31 because of the United States Constitution or the constitution of 41.32 the state of Minnesota and includes income that cannot 41.33 constitutionally be apportioned to this state and is derived 41.34 from a capital transaction that solely serves an investment 41.35 function. Nonbusiness income must be allocated under 41.36 subdivision 2. 42.1 (b) A taxpayer may elect that all income, whether or not 42.2 connected with the trade or business carried on partly within 42.3 and partly without this state, is business income apportionable 42.4 under subdivision 3 and is not subject to paragraph (a) and 42.5 subdivision 2. The election is effective and irrevocable for 42.6 the following ten taxable years after the taxable year in which 42.7 the election is made. The election is binding on all members of 42.8 a unitary business. 42.9 Sec. 25. Minnesota Statutes 1998, section 290.191, 42.10 subdivision 2, is amended to read: 42.11 Subd. 2. [APPORTIONMENT FORMULA OF GENERAL APPLICATION.] 42.12 Except for those trades or businesses required to use a 42.13 different formula under subdivision 3 or section 290.35 or 42.14 290.36, and for those trades or businesses that receive 42.15 permission to use some other method under section 290.20 or 42.16 under subdivision 4, a trade or business required to apportion 42.17 its net income must apportion its income to this state on the 42.18 basis of the percentage obtained by taking the sum of: 42.19 (1)7080 percent of the percentage which the sales made 42.20 within this state in connection with the trade or business 42.21 during the tax period are of the total sales wherever made in 42.22 connection with the trade or business during the tax period;42.23 (2)1510 percent of the percentage which the total 42.24 tangible property used by the taxpayer in this state in 42.25 connection with the trade or business during the tax period is 42.26 of the total tangible property, wherever located, used by the 42.27 taxpayer in connection with the trade or business during the tax 42.28 period; and 42.29 (3)1510 percent of the percentage which the taxpayer's 42.30 total payrolls paid or incurred in this state or paid in respect 42.31 to labor performed in this state in connection with the trade or 42.32 business during the tax period are of the taxpayer's total 42.33 payrolls paid or incurred in connection with the trade or 42.34 business during the tax period. 42.35 Sec. 26. Minnesota Statutes 1998, section 290.191, 42.36 subdivision 3, is amended to read: 43.1 Subd. 3. [APPORTIONMENT FORMULA FOR FINANCIAL 43.2 INSTITUTIONS.] Except for an investment company required to 43.3 apportion its income under section 290.36, a financial 43.4 institution that is required to apportion its net income must 43.5 apportion its net income to this state on the basis of the 43.6 percentage obtained by taking the sum of: 43.7 (1)7080 percent of the percentage which the receipts from 43.8 within this state in connection with the trade or business 43.9 during the tax period are of the total receipts in connection 43.10 with the trade or business during the tax period, from wherever 43.11 derived; 43.12 (2)1510 percent of the percentage which the sum of the 43.13 total tangible property used by the taxpayer in this state and 43.14 the intangible property owned by the taxpayer and attributed to 43.15 this state in connection with the trade or business during the 43.16 tax period is of the sum of the total tangible property, 43.17 wherever located, used by the taxpayer and the intangible 43.18 property owned by the taxpayer and attributed to all states in 43.19 connection with the trade or business during the tax period; and 43.20 (3)1510 percent of the percentage which the taxpayer's 43.21 total payrolls paid or incurred in this state or paid in respect 43.22 to labor performed in this state in connection with the trade or 43.23 business during the tax period are of the taxpayer's total 43.24 payrolls paid or incurred in connection with the trade or 43.25 business during the tax period. 43.26 Sec. 27. Minnesota Statutes 1998, section 290.9725, is 43.27 amended to read: 43.28 290.9725 [S CORPORATION.] 43.29 For purposes of this chapter, the term "S corporation" 43.30 means any corporation having a valid election in effect for the 43.31 taxable year under section 1362 of the Internal Revenue Code,43.32except that a corporation which either:43.33(1) is a financial institution to which either section 58543.34or section 593 of the Internal Revenue Code applies; or43.35(2) has a wholly owned subsidiary as described in section43.361361(b)(3)(B) of the Internal Revenue Code which is a financial44.1institution as described above44.2is not an "S" corporation for the purposes of this chapter. An 44.3 S corporation shall not be subject to the taxes imposed by this 44.4 chapter, except: 44.5 (1) the taxes imposed under sections 290.0922, 290.92, 44.6 290.9727, 290.9728, and 290.9729; and 44.7 (2) the tax under sections 290.06, subdivision 1, and 44.8 290.0921 apply to a financial institution to which either 44.9 section 585 or 593 of the Internal Revenue Code applies or that 44.10 has a wholly owned subsidiary as described in section 44.11 1361(b)(3)(B) of the Internal Revenue Code which is a financial 44.12 institution under section 585 or 593 of the Internal Revenue 44.13 Code. 44.14 Sec. 28. Minnesota Statutes 1998, section 290.9726, is 44.15 amended by adding a subdivision to read: 44.16 Subd. 7. [FINANCIAL INSTITUTIONS.] An S corporation that 44.17 is subject to the tax under section 290.9725, clause (2), must 44.18 report to each shareholder an apportionment of the S 44.19 corporation's tax obligation for the taxable year for purposes 44.20 of the credit under section 290.06, subdivision 26. The 44.21 apportionment to a shareholder must be made in proportion to the 44.22 amount of taxable income of the S corporation apportioned to the 44.23 shareholder. 44.24 Sec. 29. Minnesota Statutes 1998, section 290A.03, 44.25 subdivision 3, is amended to read: 44.26 Subd. 3. [INCOME.] (1) "Income" means the sum of the 44.27 following: 44.28 (a) federal adjusted gross income as defined in the 44.29 Internal Revenue Code; and 44.30 (b) the sum of the following amounts to the extent not 44.31 included in clause (a): 44.32 (i) all nontaxable income; 44.33 (ii) the amount of a passive activity loss that is not 44.34 disallowed as a result of section 469, paragraph (i) or (m) of 44.35 the Internal Revenue Code and the amount of passive activity 44.36 loss carryover allowed under section 469(b) of the Internal 45.1 Revenue Code; 45.2 (iii) an amount equal to the total of any discharge of 45.3 qualified farm indebtedness of a solvent individual excluded 45.4 from gross income under section 108(g) of the Internal Revenue 45.5 Code; 45.6 (iv) cash public assistance and relief; 45.7 (v) any pension or annuity (including railroad retirement 45.8 benefits, all payments received under the federal Social 45.9 Security Act, supplemental security income, and veterans 45.10 benefits), which was not exclusively funded by the claimant or 45.11 spouse, or which was funded exclusively by the claimant or 45.12 spouse and which funding payments were excluded from federal 45.13 adjusted gross income in the years when the payments were made; 45.14 (vi) interest received from the federal or a state 45.15 government or any instrumentality or political subdivision 45.16 thereof; 45.17 (vii) workers' compensation; 45.18 (viii) nontaxable strike benefits; 45.19 (ix) the gross amounts of payments received in the nature 45.20 of disability income or sick pay as a result of accident, 45.21 sickness, or other disability, whether funded through insurance 45.22 or otherwise; 45.23 (x) a lump sum distribution under section 402(e)(3) of the 45.24 Internal Revenue Code; 45.25 (xi) contributions made by the claimant to an individual 45.26 retirement account, including a qualified voluntary employee 45.27 contribution; simplified employee pension plan; self-employed 45.28 retirement plan; cash or deferred arrangement plan under section 45.29 401(k) of the Internal Revenue Code; or deferred compensation 45.30 plan under section 457 of the Internal Revenue Code; and 45.31 (xii) nontaxable scholarship or fellowship grants. 45.32 In the case of an individual who files an income tax return 45.33 on a fiscal year basis, the term "federal adjusted gross income" 45.34 shall mean federal adjusted gross income reflected in the fiscal 45.35 year ending in the calendar year. Federal adjusted gross income 45.36 shall not be reduced by the amount of a net operating loss 46.1 carryback or carryforward or a capital loss carryback or 46.2 carryforward allowed for the year. 46.3 (2) "Income" does not include: 46.4 (a) amounts excluded pursuant to the Internal Revenue Code, 46.5 sections 101(a) and 102; 46.6 (b) amounts of any pension or annuity which was exclusively 46.7 funded by the claimant or spouse and which funding payments were 46.8 not excluded from federal adjusted gross income in the years 46.9 when the payments were made; 46.10 (c) surplus food or other relief in kind supplied by a 46.11 governmental agency; 46.12 (d) relief granted under this chapter;or46.13 (e) child support payments received under a temporary or 46.14 final decree of dissolution or legal separation; or 46.15 (f) holocaust settlement payments as defined in section 46.16 290.01, subdivision 32. 46.17 (3) The sum of the following amounts may be subtracted from 46.18 income: 46.19 (a) for the claimant's first dependent, the exemption 46.20 amount multiplied by 1.4; 46.21 (b) for the claimant's second dependent, the exemption 46.22 amount multiplied by 1.3; 46.23 (c) for the claimant's third dependent, the exemption 46.24 amount multiplied by 1.2; 46.25 (d) for the claimant's fourth dependent, the exemption 46.26 amount multiplied by 1.1; 46.27 (e) for the claimant's fifth dependent, the exemption 46.28 amount; and 46.29 (f) if the claimant or claimant's spouse was disabled or 46.30 attained the age of 65 on or before December 31 of the year for 46.31 which the taxes were levied or rent paid, the exemption amount. 46.32 For purposes of this subdivision, the "exemption amount" 46.33 means the exemption amount under section 151(d) of the Internal 46.34 Revenue Code for the taxable year for which the income is 46.35 reported. 46.36 (4) Notwithstanding any other law to the contrary, for 47.1 purposes of determining eligibility, levels of assistance, and 47.2 participant payments or fees for state programs other than those 47.3 in chapter 518, "income" does not include holocaust settlement 47.4 payments as defined in section 290.01, subdivision 32. For 47.5 purposes of determining fees under section 256E.08, subdivision 47.6 6, counties must exclude holocaust settlement payments, as 47.7 defined in section 290.01, subdivision 32, from income. 47.8 Sec. 30. Minnesota Statutes 1998, section 290A.03, 47.9 subdivision 15, is amended to read: 47.10 Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 47.11 means the Internal Revenue Code of 1986, as amended through 47.12 December 31,19971998. 47.13 Sec. 31. Minnesota Statutes 1998, section 291.005, 47.14 subdivision 1, is amended to read: 47.15 Subdivision 1. Unless the context otherwise clearly 47.16 requires, the following terms used in this chapter shall have 47.17 the following meanings: 47.18 (1) "Federal gross estate" means the gross estate of a 47.19 decedent as valued and otherwise determined for federal estate 47.20 tax purposes by federal taxing authorities pursuant to the 47.21 provisions of the Internal Revenue Code. 47.22 (2) "Minnesota gross estate" means the federal gross estate 47.23 of a decedent after (a) excluding therefrom any property 47.24 included therein which has its situs outside Minnesota and (b) 47.25 including therein any property omitted from the federal gross 47.26 estate which is includable therein, has its situs in Minnesota, 47.27 and was not disclosed to federal taxing authorities. 47.28 (3) "Personal representative" means the executor, 47.29 administrator or other person appointed by the court to 47.30 administer and dispose of the property of the decedent. If 47.31 there is no executor, administrator or other person appointed, 47.32 qualified, and acting within this state, then any person in 47.33 actual or constructive possession of any property having a situs 47.34 in this state which is included in the federal gross estate of 47.35 the decedent shall be deemed to be a personal representative to 47.36 the extent of the property and the Minnesota estate tax due with 48.1 respect to the property. 48.2 (4) "Resident decedent" means an individual whose domicile 48.3 at the time of death was in Minnesota. 48.4 (5) "Nonresident decedent" means an individual whose 48.5 domicile at the time of death was not in Minnesota. 48.6 (6) "Situs of property" means, with respect to real 48.7 property, the state or country in which it is located; with 48.8 respect to tangible personal property, the state or country in 48.9 which it was normally kept or located at the time of the 48.10 decedent's death; and with respect to intangible personal 48.11 property, the state or country in which the decedent was 48.12 domiciled at death. 48.13 (7) "Commissioner" means the commissioner of revenue or any 48.14 person to whom the commissioner has delegated functions under 48.15 this chapter. 48.16 (8) "Internal Revenue Code" means the United States 48.17 Internal Revenue Code of 1986, as amended through December 31, 48.1819971998. 48.19 Sec. 32. [NONBUSINESS INCOME; PRE-1999 TAX YEARS.] 48.20 If all items of income, gain, or loss are reported by a 48.21 taxpayer as business income or loss on an original or amended 48.22 return for a tax year to which this section applies, the 48.23 commissioner of revenue shall not adjust the tax liability for 48.24 that tax year, or for any other tax year affected by a carryover 48.25 from that tax year, by treating any of the items as nonbusiness 48.26 income or loss under Minnesota Statutes, section 290.17, 48.27 subdivision 6. Any adjustment treating an item as nonbusiness 48.28 income or loss ordered by the commissioner before the effective 48.29 date of this section must be reversed if the order is subject to 48.30 administrative or judicial challenge on the effective date and 48.31 such a challenge is timely filed. The reporting of any item as 48.32 nonbusiness income, gain, or loss does not preclude the 48.33 application of this section if the taxpayer may not 48.34 constitutionally be required to treat the item as business 48.35 income, gain, or loss. 48.36 Sec. 33. [BANK S CORPORATION SHAREHOLDERS; ALTERNATIVE 49.1 MINIMUM TAX.] 49.2 For taxable years beginning after December 31, 1997, and 49.3 before January 1, 1999, a taxpayer is allowed a deduction in 49.4 computing alternative minimum taxable income under Minnesota 49.5 Statutes 1998, section 290.091, subdivision 2, paragraph (a), 49.6 equal to the amount of the subtraction under Minnesota Statutes 49.7 1998, section 290.01, subdivision 19b, clause (13). 49.8 Sec. 34. [APPROPRIATION.] 49.9 (a) $50,000 is appropriated from the general fund to the 49.10 commissioner of revenue to make grants to one or more nonprofit 49.11 organizations, qualifying under section 501(c)(3) of the 49.12 Internal Revenue Code of 1986, to coordinate, facilitate, 49.13 encourage, and aid in the provision of taxpayer assistance 49.14 services. In making grants under this appropriation, the 49.15 commissioner shall give preference to organizations that will 49.16 use the grants to attract new and train new and existing 49.17 volunteers to provide taxpayer assistance. This appropriation 49.18 is available for fiscal years 1999 and 2000. 49.19 (b) "Taxpayer assistance services" means accounting and tax 49.20 preparation services provided by volunteers to low-income and 49.21 disadvantaged Minnesota residents to help them file federal and 49.22 state income tax returns and Minnesota property tax refund 49.23 claims and to provide personal representation before the 49.24 department of revenue and the Internal Revenue Service. 49.25 Sec. 35. [EFFECTIVE DATE.] 49.26 (a) Sections 1, 7, 30, and 31 are effective at the same 49.27 time federal changes made by the Internal Revenue Service 49.28 Restructuring and Reform Act of 1998, Public Law Number 105-206, 49.29 and the Omnibus Consolidation and Emergency Supplemental 49.30 Appropriations Act, 1999, Public Law Number 105-277, which are 49.31 incorporated into Minnesota Statutes, chapters 289A, 290, 290A, 49.32 and 291 by these sections become effective for federal tax 49.33 purposes. 49.34 (b) Section 2 is intended to clarify rather than to change 49.35 the definition of resident and is effective for all 49.36 examinations, claims for refund, administrative appeals, and 50.1 court proceedings that are pending or begin on or after the day 50.2 following final enactment. 50.3 (c) Sections 4 to 6, 8 to 12, 14 to 19, 22, 23, the changes 50.4 to clauses (b), (c), and (j), and 24 to 29 are effective for tax 50.5 years beginning after December 31, 1998. 50.6 (d) Section 13 is effective for tax years beginning after 50.7 December 31, 1997. 50.8 (e) Sections 20, 21, and 23, the changes to clause (a), are 50.9 effective for tax years beginning on or after the day following 50.10 final enactment. 50.11 (f) Section 32 is effective on the day after final 50.12 enactment and applies to tax years beginning before January 1, 50.13 1999. 50.14 (g) Section 33 is effective for tax years after December 50.15 31, 1997, and beginning before January 1, 1999. 50.16 (h) Section 34 is effective the day following final 50.17 enactment. 50.18 ARTICLE 3 50.19 SALES AND USE TAXES 50.20 Section 1. Minnesota Statutes 1998, section 289A.18, 50.21 subdivision 4, is amended to read: 50.22 Subd. 4. [SALES AND USE TAX RETURNS.] (a) Sales and use 50.23 tax returns must be filed on or before the 20th day of the month 50.24 following the close of the preceding reporting period, except 50.25 that annual use tax returns provided for under section 289A.11, 50.26 subdivision 1, must be filed by April 15 following the close of 50.27 the calendar year, in the case of individuals. Annual use tax 50.28 returns of businesses, including sole proprietorships, and 50.29 annual sales tax returns must be filed by February 5 following 50.30 the close of the calendar year. 50.31 (b) Except for the return for the June reporting period, 50.32 which is due on the following August 25, returns filed by 50.33 retailers required to remit liabilities by means of funds 50.34 transfer under section 289A.20, subdivision 4, paragraph (d), 50.35 are due on or before the 25th day of the month following the 50.36 close of the preceding reporting period. 51.1 (c) If a retailer has an average sales and use tax 51.2 liability, including local sales and use taxes administered by 51.3 the commissioner, equal to or less than $500 per month in any 51.4 quarter of a calendar year, and has substantially complied with 51.5 the tax laws during the preceding four calendar quarters, the 51.6 retailer may request authorization to file and pay the taxes 51.7 quarterly in subsequent calendar quarters. The authorization 51.8 remains in effect during the period in which the retailer's 51.9 quarterly returns reflect sales and use tax liabilities of less 51.10 than $1,500 and there is continued compliance with state tax 51.11 laws. 51.12 (d) If a retailer has an average sales and use tax 51.13 liability, including local sales and use taxes administered by 51.14 the commissioner, equal to or less than $100 per month during a 51.15 calendar year, and has substantially complied with the tax laws 51.16 during that period, the retailer may request authorization to 51.17 file and pay the taxes annually in subsequent years. The 51.18 authorization remains in effect during the period in which the 51.19 retailer's annual returns reflect sales and use tax liabilities 51.20 of less than $1,200 and there is continued compliance with state 51.21 tax laws. 51.22 (e) The commissioner may also grant quarterly or annual 51.23 filing and payment authorizations to retailers if the 51.24 commissioner concludes that the retailers' future tax 51.25 liabilities will be less than the monthly totals identified in 51.26 paragraphs (c) and (d). An authorization granted under this 51.27 paragraph is subject to the same conditions as an authorization 51.28 granted under paragraphs (c) and (d). 51.29 (f) A taxpayer who is a materials supplier may report gross 51.30 receipts either on: 51.31 (1) the cash basis as the consideration is received; or 51.32 (2) the accrual basis as sales are made. 51.33 As used in this paragraph, "materials supplier" means a person 51.34 who provides materials for the improvement of real property; who 51.35 is primarily engaged in the sale of lumber and building 51.36 materials-related products to owners, contractors, 52.1 subcontractors, repairers, or consumers; who is authorized to 52.2 file a mechanics lien upon real property and improvements under 52.3 chapter 514; and who files with the commissioner an election to 52.4 file sales and use tax returns on the basis of this paragraph. 52.5 Sec. 2. Minnesota Statutes 1998, section 289A.20, 52.6 subdivision 4, is amended to read: 52.7 Subd. 4. [SALES AND USE TAX.] (a) The taxes imposed by 52.8 chapter 297A are due and payable to the commissioner monthly on 52.9 or before the 20th day of the month following the month in which 52.10 the taxable event occurred, or following another reporting 52.11 period as the commissioner prescribes or as allowed under 52.12 section 289A.18, subdivision 4, paragraph (f), except that use 52.13 taxes due on an annual use tax return as provided under section 52.14 289A.11, subdivision 1, are payable by April 15 following the 52.15 close of the calendar year. 52.16 (b) A vendor having a liability of $120,000 or more during 52.17 a fiscal year ending June 30 must remit the June liability for 52.18 the next year in the following manner: 52.19 (1) Two business days before June 30 of the year, the 52.20 vendor must remit 75 percent of the estimated June liability to 52.21 the commissioner. 52.22 (2) On or before August 14 of the year, the vendor must pay 52.23 any additional amount of tax not remitted in June. 52.24 (c) A vendor having a liability of $120,000 or more during 52.25 a fiscal year ending June 30 must remit all liabilities in the 52.26 subsequent calendar year by means of a funds transfer as defined 52.27 in section 336.4A-104, paragraph (a). The funds transfer 52.28 payment date, as defined in section 336.4A-401, must be on or 52.29 before the 14th day of the month following the month in which 52.30 the taxable event occurred, or on or before the 14th day of the 52.31 month following the month in which the sale is reported under 52.32 section 289A.18, subdivision 4, except for 75 percent of the 52.33 estimated June liability, which is due two business days before 52.34 June 30. The remaining amount of the June liability is due on 52.35 August 14. If the date the tax is due is not a funds transfer 52.36 business day, as defined in section 336.4A-105, paragraph (a), 53.1 clause (4), the payment date must be on or before the funds 53.2 transfer business day next following the date the tax is due. 53.3 (d) If the vendor required to remit by electronic funds 53.4 transfer as provided in paragraph (c) is unable due to 53.5 reasonable cause to determine the actual sales and use tax due 53.6 on or before the due date for payment, the vendor may remit an 53.7 estimate of the tax owed using one of the following options: 53.8 (1) 100 percent of the tax reported on the previous month's 53.9 sales and use tax return; 53.10 (2) 100 percent of the tax reported on the sales and use 53.11 tax return for the same month in the previous calendar year; or 53.12 (3) 95 percent of the actual tax due. 53.13 Any additional amount of tax that is not remitted on or 53.14 before the due date for payment, must be remitted with the 53.15 return. If a vendor fails to remit the actual liability or does 53.16 not remit using one of the estimate options by the due date for 53.17 payment, the vendor must remit actual liability as provided in 53.18 paragraph (c) in all subsequent periods. This paragraph does 53.19 not apply to the June sales and use tax liability. 53.20 Sec. 3. Minnesota Statutes 1998, section 289A.56, 53.21 subdivision 4, is amended to read: 53.22 Subd. 4. [CAPITAL EQUIPMENT REFUNDS; REFUNDS TO 53.23 PURCHASERS.] Notwithstanding subdivision 3, for refunds payable 53.24 under section 297A.15, subdivision 5, interest is computed from 53.25 the date the refund claim is filed with the commissioner. For 53.26 refunds payable under section 289A.50, subdivision 2a, interest 53.27 is computed from the 20th day of the month following the month 53.28 of the invoice date for the purchase which is the subject of the 53.29 refund, if the refund claim includes a detailed schedule of 53.30 purchases made during each of the periods in the claim. If the 53.31 refund claim submitted does not contain a schedule reflecting 53.32 purchases made in each period, interest is computed from the 53.33 date the claim was filed. 53.34 Sec. 4. Minnesota Statutes 1998, section 297A.01, 53.35 subdivision 15, is amended to read: 53.36 Subd. 15. "Farm machinery" means new or used machinery, 54.1 equipment, implements, accessories, and contrivances used 54.2 directly and principally in the production for sale, but not 54.3 including the processing, of livestock, dairy animals, dairy 54.4 products, poultry and poultry products, fruits, vegetables, 54.5 trees and shrubs as nursery stock, forage, grains and bees and 54.6 apiary products. "Farm machinery" includes: 54.7 (1) machinery for the preparation, seeding or cultivation 54.8 of soil for growing agricultural crops and sod, harvesting and 54.9 threshing of agricultural products, harvesting or mowing of sod, 54.10 and certain machinery for dairy, livestock and poultry farms; 54.11 (2) barn cleaners, milking systems, grain dryers, automatic 54.12 feeding systems and similar installations, whether or not the 54.13 equipment is installed by the seller and becomes part of the 54.14 real property; 54.15 (3) irrigation equipment sold for exclusively agricultural 54.16 use, including pumps, pipe fittings, valves, sprinklers and 54.17 other equipment necessary to the operation of an irrigation 54.18 system when sold as part of an irrigation system, whether or not 54.19 the equipment is installed by the seller and becomes part of the 54.20 real property; 54.21 (4) logging equipment, including chain saws used for 54.22 commercial logging; 54.23 (5) fencing used for the containment of farmed cervidae, as 54.24 defined in section 17.451, subdivision 2; 54.25 (6) primary and backup generator units used to generate 54.26 electricity for the purpose of operating farm machinery, as 54.27 defined in this subdivision, or providing light or space heating 54.28 necessary for the production of livestock, dairy animals, dairy 54.29 products, or poultry and poultry products; and 54.30 (7) aquaculture production equipment as defined in 54.31 subdivision 19. 54.32 Repair or replacement parts for farm machinery shall not be 54.33 included in the definition of farm machinery. 54.34 Tools, shop equipment, grain bins, feed bunks, fencing 54.35 material except fencing material covered by clause (5), 54.36 communication equipment and other farm supplies shall not be 55.1 considered to be farm machinery. "Farm machinery" does not 55.2 include motor vehicles taxed under chapter 297B, snowmobiles, 55.3 snow blowers, lawn mowers except those used in the production of 55.4 sod for sale, garden-type tractors or garden tillers and the 55.5 repair and replacement parts for those vehicles and machines. 55.6 Sec. 5. Minnesota Statutes 1998, section 297A.25, 55.7 subdivision 9, is amended to read: 55.8 Subd. 9. [MATERIALS CONSUMED IN PRODUCTION.] The gross 55.9 receipts from the sale of and the storage, use, or consumption 55.10 of all materials, including chemicals, fuels, petroleum 55.11 products, lubricants, packaging materials, including returnable 55.12 containers used in packaging food and beverage products, feeds, 55.13 seeds, fertilizers, electricity, gas and steam, used or consumed 55.14 in agricultural or industrial production of personal property 55.15 intended to be sold ultimately at retail, whether or not the 55.16 item so used becomes an ingredient or constituent part of the 55.17 property produced are exempt. Seeds, trees, fertilizers, and 55.18 herbicides purchased for use by farmers in the Conservation 55.19 Reserve Program under United States Code, title 16, section 55.20 590h, as amended through December 31, 1991, the Integrated Farm 55.21 Management Program under section 1627 of Public Law Number 55.22 101-624, the Wheat and Feed Grain Programs under sections 301 to 55.23 305 and 401 to 405 of Public Law Number 101-624, and the 55.24 conservation reserve program under sections 103F.505 to 55.25 103F.531, are included in this exemption. Sales to a 55.26 veterinarian of materials used or consumed in the care, 55.27 medication, and treatment of horses and agricultural production 55.28 animals are exempt under this subdivision. Chemicals used for 55.29 cleaning food processing machinery and equipment are included in 55.30 this exemption. Materials, including chemicals, fuels, and 55.31 electricity purchased by persons engaged in agricultural or 55.32 industrial production to treat waste generated as a result of 55.33 the production process are included in this exemption. Such 55.34 production shall include, but is not limited to, research, 55.35 development, design or production of any tangible personal 55.36 property, manufacturing, processing (other than by restaurants 56.1 and consumers) of agricultural products whether vegetable or 56.2 animal, commercial fishing, refining, smelting, reducing, 56.3 brewing, distilling, printing, mining, quarrying, lumbering, 56.4 generating electricity and the production of road building 56.5 materials. Such production shall not include painting, 56.6 cleaning, repairing or similar processing of property except as 56.7 part of the original manufacturing process. Machinery, 56.8 equipment, implements, tools, accessories, appliances, 56.9 contrivances, furniture and fixtures, used in such production 56.10 and fuel, electricity, gas or steam used for space heating or 56.11 lighting, are not included within this exemption; however, 56.12 accessory tools, equipment and other short lived items, which 56.13 are separate detachable units used in producing a direct effect 56.14 upon the product, where such items have an ordinary useful life 56.15 of less than 12 months, are included within the exemption 56.16 provided herein. The following materials, tools, and equipment 56.17 used in metalcasting are exempt under this subdivision: 56.18 crucibles, thermocouple protection sheaths and tubes, stalk 56.19 tubes, refractory materials, molten metal filters and filter 56.20 boxes, and degassing lances. Electricity used to make snow for 56.21 outdoor use for ski hills, ski slopes, or ski trails is included 56.22 in this exemption. Petroleum and special fuels used in 56.23 producing or generating power for propelling ready-mixed 56.24 concrete trucks on the public highways of this state are not 56.25 included in this exemption. 56.26 Sec. 6. Minnesota Statutes 1998, section 297A.25, 56.27 subdivision 11, is amended to read: 56.28 Subd. 11. [SALES TO GOVERNMENT.] The gross receipts from 56.29 all sales, including sales in which title is retained by a 56.30 seller or a vendor or is assigned to a third party under an 56.31 installment sale or lease purchase agreement under section 56.32 465.71, of tangible personal property to, and all storage, use 56.33 or consumption of such property by, the United States and its 56.34 agencies and instrumentalities, the University of Minnesota, 56.35 state universities, community colleges, technical colleges, 56.36 state academies, the Lola and Rudy Perpich Minnesota center for 57.1 arts education, an instrumentality of a political subdivision 57.2 that is accredited as an optional/special function school by the 57.3 North Central Association of Colleges and Schools, school 57.4 districts, public libraries, public library systems, 57.5 multicounty, multitype library systems as defined in section 57.6 134.001, county law libraries under chapter 134A, the state 57.7 library under section 480.09, and the legislative reference 57.8 library are exempt. 57.9 As used in this subdivision, "school districts" means 57.10 public school entities and districts of every kind and nature 57.11 organized under the laws of the state of Minnesota, including, 57.12 without limitation, school districts, intermediate school 57.13 districts, education districts, service cooperatives, secondary 57.14 vocational cooperative centers, special education cooperatives, 57.15 joint purchasing cooperatives, telecommunication cooperatives, 57.16 regional management information centers, and any instrumentality 57.17 of a school district, as defined in section 471.59. 57.18 Sales exempted by this subdivision include sales under 57.19 section 297A.01, subdivision 3, paragraph (f). 57.20 Sales to hospitals and nursing homes owned and operated by 57.21 political subdivisions of the state are exempt under this 57.22 subdivision. 57.23 Sales of supplies and equipment used in the operation of an 57.24 ambulance service owned and operated by a political subdivision 57.25 of the state are exempt under this subdivision provided that the 57.26 supplies and equipment are used in the course of providing 57.27 medical care. Sales to a political subdivision of repair and 57.28 replacement parts for emergency rescue vehicles and fire trucks 57.29 and apparatus are exempt under this subdivision. 57.30 Sales to a political subdivision of machinery and 57.31 equipment, except for motor vehicles, used directly for mixed 57.32 municipal solid waste management services at a solid waste 57.33 disposal facility as defined in section 115A.03, subdivision 10, 57.34 are exempt under this subdivision. 57.35 Sales to political subdivisions of chore and homemaking 57.36 services to be provided to elderly or disabled individuals are 58.1 exempt. 58.2 Sales to a county or town of gravel and of machinery, 58.3 equipment, and accessories, except motor vehicles, used 58.4 exclusively for road and bridge maintenance, and leases of motor 58.5 vehicles exempt from tax under section 297B.03, clause (10), are 58.6 exempt. 58.7 Sales of telephone services to the department of 58.8 administration that are used to provide telecommunications 58.9 services through the intertechnologies revolving fund are exempt 58.10 under this subdivision. 58.11 This exemption shall not apply to building, construction or 58.12 reconstruction materials purchased by a contractor or a 58.13 subcontractor as a part of a lump-sum contract or similar type 58.14 of contract with a guaranteed maximum price covering both labor 58.15 and materials for use in the construction, alteration, or repair 58.16 of a building or facility. This exemption does not apply to 58.17 construction materials purchased by tax exempt entities or their 58.18 contractors to be used in constructing buildings or facilities 58.19 which will not be used principally by the tax exempt entities. 58.20 This exemption does not apply to the leasing of a motor 58.21 vehicle as defined in section 297B.01, subdivision 5, except for 58.22 leases entered into by the United States or its agencies or 58.23 instrumentalities. 58.24 The tax imposed on sales to political subdivisions of the 58.25 state under this section applies to all political subdivisions 58.26 other than those explicitly exempted under this subdivision, 58.27 notwithstanding section 115A.69, subdivision 6, 116A.25, 58.28 360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 58.29 469.127, 473.448, 473.545, or 473.608 or any other law to the 58.30 contrary enacted before 1992. 58.31 Sales exempted by this subdivision include sales made to 58.32 other states or political subdivisions of other states, if the 58.33 sale would be exempt from taxation if it occurred in that state, 58.34 but do not include sales under section 297A.01, subdivision 3, 58.35 paragraphs (c) and (e). 58.36 Sec. 7. Minnesota Statutes 1998, section 297A.25, 59.1 subdivision 63, is amended to read: 59.2 Subd. 63. [HOSPITALS AND OUTPATIENT SURGICAL CENTERS.] (a) 59.3 The gross receipts from the sale of tangible personal property 59.4 to, and the storage, use, or consumption of such property by, a 59.5 hospital are exempt, if the property purchased is to be used in 59.6 providing hospital services to human beings. For purposes of 59.7 this subdivision, "hospital" means a hospital organized and 59.8 operated for charitable purposes within the meaning of section 59.9 501(c)(3) of the Internal Revenue Code of 1986, as amended, and 59.10 licensed under chapter 144 or by any other jurisdiction. For 59.11 purposes of this subdivision, "hospital services"aremeans 59.12 services authorized or required to be performed by 59.13 a"hospital"hospital under chapter 144 andregulationsrules 59.14 thereunder or under the applicable licensure law of any other 59.15 jurisdiction.This exemption does59.16 (b) The gross receipts from the sale of tangible personal 59.17 property to, and the storage, use, or consumption of such 59.18 property by, an outpatient surgical center are exempt, if the 59.19 property purchased is to be used in providing outpatient 59.20 surgical services to human beings. For purposes of this 59.21 subdivision, "outpatient surgical center" means an outpatient 59.22 surgical center organized and operated for charitable purposes 59.23 within the meaning of section 501(c)(3) of the Internal Revenue 59.24 Code of 1986, as amended, and licensed under chapter 144 or by 59.25 any other jurisdiction. For the purposes of this subdivision, 59.26 "outpatient surgical services" means: (1) services authorized 59.27 or required to be performed by an outpatient surgical center 59.28 under chapter 144 and rules thereunder or under the applicable 59.29 licensure law of any other jurisdiction; and (2) urgent care. 59.30 For purposes of this subdivision, "urgent care" means health 59.31 services furnished to a person whose medical condition is 59.32 sufficiently acute to require treatment unavailable through, or 59.33 inappropriate to be provided by, a clinic or physician's office, 59.34 but not so acute as to require treatment in a hospital emergency 59.35 room. 59.36 (c) These exemptions do not apply to purchases made by a 60.1 clinic, physician's office, or any other medical facility not 60.2 operating as a hospital or outpatient surgical center, even 60.3 though the clinic, office, or facility may be owned and operated 60.4 by a hospital or outpatient surgical center. Sales exempted by 60.5 this subdivision do not include sales under section 297A.01, 60.6 subdivision 3, paragraphs (c) and (e).This exemption60.7doesThese exemptions do not apply to building, construction, or 60.8 reconstruction materials purchased by a contractor or a 60.9 subcontractor as a part of a lump-sum contract or similar type 60.10 of contract with a guaranteed maximum price covering both labor 60.11 and materials for use in the construction, alteration, or repair 60.12 of a hospital or outpatient surgical center.This exemption60.13doesThese exemptions do not apply to construction materials to 60.14 be used in constructing buildings or facilities which will not 60.15 be used principally by a hospital or outpatient surgical 60.16 center.This exemption doesThese exemptions do not apply to 60.17 the leasing of a motor vehicle as defined in section 297B.01, 60.18 subdivision 5. 60.19 Sec. 8. Minnesota Statutes 1998, section 297A.25, 60.20 subdivision 73, is amended to read: 60.21 Subd. 73. [BIOSOLIDS PROCESSING EQUIPMENT.] The gross 60.22 receipts from the sale of and the storage, use, or consumption 60.23 of equipment designed to process, dewater, and recycle biosolids 60.24 for wastewater treatment facilities of political subdivisions, 60.25 and materials incidental to installation of that 60.26 equipment, including materials used to construct buildings to 60.27 house that equipment, are exempt. 60.28 Sec. 9. Minnesota Statutes 1998, section 297A.25, is 60.29 amended by adding a subdivision to read: 60.30 Subd. 79. [PRIZES.] The gross receipts from the sales of 60.31 tangible personal property which will be given as prizes to 60.32 players in games of skill or chance conducted at events such as 60.33 community festivals, fairs, and carnivals lasting less than six 60.34 days are exempt. This exemption shall not apply to property 60.35 awarded as prizes in connection with lawful gambling as defined 60.36 in section 349.12 or the state lottery. 61.1 Sec. 10. Minnesota Statutes 1998, section 297A.25, is 61.2 amended by adding a subdivision to read: 61.3 Subd. 80. [CONSTRUCTION MATERIALS AND SUPPLIES; 61.4 AGRICULTURAL PROCESSING FACILITY.] Purchases of construction 61.5 materials, supplies, and equipment are exempt from the sales and 61.6 use taxes imposed under this chapter, regardless of whether 61.7 purchased by the owner or a contractor, subcontractor, or 61.8 builder, if: 61.9 (1) the materials, supplies, and equipment are used or 61.10 consumed in the expansion, remodeling, or improvement of a 61.11 facility used for cattle slaughtering; 61.12 (2) the cost of the expansion or improvement project 61.13 exceeds $15,000,000; 61.14 (3) the expansion, remodeling, or improvement of the 61.15 facility will be used to fabricate beef; 61.16 (4) the number of jobs at the facility will increase by at 61.17 least 150 when the project is completed; and 61.18 (5) the project is completed by December 31, 2001. 61.19 Sec. 11. Minnesota Statutes 1998, section 297A.25, is 61.20 amended by adding a subdivision to read: 61.21 Subd. 81. [SMOKING CESSATION DEVICES.] The gross receipts 61.22 from the sale of and the storage, use, or consumption of items 61.23 of personal property that are approved by the Federal Drug 61.24 Administration for use exclusively to assist individuals to 61.25 refrain from smoking tobacco, such as nicotine patches and 61.26 nicotine gum, are exempt. 61.27 Sec. 12. Minnesota Statutes 1998, section 297A.25, is 61.28 amended by adding a subdivision to read: 61.29 Subd. 82. [TELEVISION COMMERCIALS.] The gross receipts 61.30 from the sale of and storage, use, or consumption of tangible 61.31 personal property which is primarily used or consumed in the 61.32 preproduction, production, or postproduction of any television 61.33 commercial and any such commercial, regardless of the medium in 61.34 which it is transferred, are exempt. "Preproduction" and 61.35 "production" include but are not limited to all activities 61.36 related to the preparation for shooting and the shooting of 62.1 television commercials, including film processing. Equipment 62.2 rented for the preproduction and production activities is 62.3 exempt. "Postproduction" includes but is not limited to all 62.4 activities related to the finishing and duplication of 62.5 television commercials. This exemption does not apply to 62.6 tangible personal property used primarily in administration, 62.7 general management, or marketing. Machinery and equipment 62.8 purchased for use in producing such commercials and fuel, 62.9 electricity, gas, or steam used for space heating or lighting 62.10 are not exempt under this subdivision. 62.11 Sec. 13. Minnesota Statutes 1998, section 297A.25, is 62.12 amended by adding a subdivision to read: 62.13 Subd. 83. [CONSTRUCTION MATERIALS AND EQUIPMENT; BIOMASS 62.14 ELECTRICAL GENERATING FACILITY.] The gross receipts from the 62.15 purchases of materials and supplies used or consumed in, and 62.16 equipment incorporated into, the construction, improvement, or 62.17 expansion of a facility using biomass to generate electricity 62.18 are exempt from the sales and use taxes imposed under this 62.19 chapter, regardless of whether purchased by the owner or a 62.20 contractor, subcontractor, or builder, if: 62.21 (1) the facility exclusively utilizes residue wood, 62.22 sawdust, bark, chipped wood, or brush to generate electricity; 62.23 (2) the facility utilizes a reciprocated grate combination 62.24 system; and 62.25 (3) the total gross capacity of the facility is 15 to 21 62.26 megawatts. 62.27 Sec. 14. Minnesota Statutes 1998, section 297A.48, is 62.28 amended by adding a subdivision to read: 62.29 Subd. 7a. [DETERMINATION OF WHERE SALES OCCUR.] In 62.30 determining whether a sale occurs within a political 62.31 subdivision, the retailer may use the zip code of the 62.32 purchaser's delivery address only if that zip code area is 62.33 entirely contained within the political subdivision. If the zip 62.34 code area contains more than one political subdivision, the 62.35 retailer must use the purchaser's actual delivery address to 62.36 determine the local sales tax that is imposed. Notwithstanding 63.1 subdivision 10, this subdivision applies to all local sales 63.2 taxes without regard to the date of authorization. 63.3 Sec. 15. [297A.2532] [HEALTH CLUBS; SALES TAX NOTICE.] 63.4 Each organization, whether or not incorporated, whose 63.5 primary business purpose is to provide access to equipment and 63.6 services for aerobic or anaerobic exercise for the promotion of 63.7 health and fitness which is not member governed or member 63.8 controlled, and which is subject to the sales tax by virtue of 63.9 section 297A.01, subdivision 3, paragraph (k), shall separately 63.10 identify in its membership agreement or invoices the sales tax 63.11 collected by the organization on the organization's initiation 63.12 fees and membership dues. 63.13 Sec. 16. Minnesota Statutes 1998, section 297B.01, 63.14 subdivision 7, is amended to read: 63.15 Subd. 7. [SALE, SELLS, SELLING, PURCHASE, PURCHASED, OR 63.16 ACQUIRED.] "Sale," "sells," "selling," "purchase," "purchased," 63.17 or "acquired" means any transfer of title of any motor vehicle, 63.18 whether absolutely or conditionally, for a consideration in 63.19 money or by exchange or barter for any purpose other than resale 63.20 in the regular course of business. Any motor vehicle utilized 63.21 by the owner only by leasing such vehicle to others or by 63.22 holding it in an effort to so lease it, and which is put to no 63.23 other use by the owner other than resale after such lease or 63.24 effort to lease, shall be considered property purchased for 63.25 resale. The terms also shall include any transfer of title or 63.26 ownership of a motor vehicle byway of gift or by any other63.27manner or by anyother meanswhatsoever, for or without 63.28 consideration, except that these terms shall not include: 63.29 (a) the acquisition of a motor vehicle by inheritance from 63.30 or by bequest of, a decedent who owned it; 63.31 (b) the transfer of a motor vehicle which was previously 63.32 licensed in the names of two or more joint tenants and 63.33 subsequently transferred without monetary consideration to one 63.34 or more of the joint tenants; 63.35 (c) the transfer of a motor vehicle by way of gift between 63.36a husband and wife or parent and childindividuals, when the 64.1 transfer is with no monetary or other consideration or in 64.2 expectation of consideration and the parties to the transfer 64.3 submit an affidavit to this effect at the time the title 64.4 transfer is recorded; 64.5 (d) the voluntary or involuntary transfer of a motor 64.6 vehicle between a husband and wife in a divorce proceeding; or 64.7 (e) the transfer of a motor vehicle by way of a gift to an 64.8 organization that is exempt from federal income taxation under 64.9 section 501(c)(3) of the Internal Revenue Code, as amended 64.10 through December 31, 1996, when the motor vehicle will be used 64.11 exclusively for religious, charitable, or educational purposes. 64.12 Sec. 17. Minnesota Statutes 1998, section 297B.03, is 64.13 amended to read: 64.14 297B.03 [EXEMPTIONS.] 64.15 There is specifically exempted from the provisions of this 64.16 chapter and from computation of the amount of tax imposed by it 64.17 the following: 64.18 (1) Purchase or use, including use under a lease purchase 64.19 agreement or installment sales contract made pursuant to section 64.20 465.71, of any motor vehicle by the United States and its 64.21 agencies and instrumentalities and by any person described in 64.22 and subject to the conditions provided in section 297A.25, 64.23 subdivision 18. 64.24 (2) Purchase or use of any motor vehicle by any person who 64.25 was a resident of another state at the time of the purchase and 64.26 who subsequently becomes a resident of Minnesota, provided the 64.27 purchase occurred more than 60 days prior to the date such 64.28 person began residing in the state of Minnesota. 64.29 (3) Purchase or use of any motor vehicle by any person 64.30 making a valid election to be taxed under the provisions of 64.31 section 297A.211. 64.32 (4) Purchase or use of any motor vehicle previously 64.33 registered in the state of Minnesota when such transfer 64.34 constitutes a transfer within the meaning of section 351 or 721 64.35 of the Internal Revenue Code of 1986, as amended through 64.36 December 31, 1988. 65.1 (5) Purchase or use of any vehicle owned by a resident of 65.2 another state and leased to a Minnesota based private or for 65.3 hire carrier for regular use in the transportation of persons or 65.4 property in interstate commerce provided the vehicle is titled 65.5 in the state of the owner or secured party, and that state does 65.6 not impose a sales tax or sales tax on motor vehicles used in 65.7 interstate commerce. 65.8 (6) Purchase or use of a motor vehicle by a private 65.9 nonprofit or public educational institution for use as an 65.10 instructional aid in automotive training programs operated by 65.11 the institution. "Automotive training programs" includes motor 65.12 vehicle body and mechanical repair courses but does not include 65.13 driver education programs. 65.14 (7) Purchase of a motor vehicle for use as an ambulance by 65.15 an ambulance service licensed under section 144E.10. 65.16 (8) Purchase of a motor vehicle by or for a public library, 65.17 as defined in section 134.001, subdivision 2, as a bookmobile or 65.18 library delivery vehicle. 65.19 (9) Purchase of a ready-mixed concrete truck. 65.20 (10) Purchase or use of a motor vehicle by a county or town 65.21 for use exclusively for road maintenance, including snowplows 65.22 and dump trucks, but not including automobiles, vans, or pickup 65.23 trucks. 65.24 Sec. 18. Laws 1998, chapter 389, article 8, section 44, 65.25 subdivision 5, is amended to read: 65.26 Subd. 5. [USE OF REVENUES.] (a) Revenues received from the 65.27 taxes authorized by subdivisions 1 to 4 must be used to pay for 65.28 the cost of collecting the taxes; to pay all or part of the 65.29 capital or administrative cost of the acquisition, construction, 65.30 and improvement of the Central Minnesota Events Center and 65.31 related on-site and off-site improvements; and to pay for the 65.32 operating deficit, if any, in the first five years of operation 65.33 of the facility. Authorized expenses related to acquisition, 65.34 construction, and improvement of the center include, but are not 65.35 limited to, acquiring property, paying construction and 65.36 operating expenses related to the development of the facility, 66.1 and securing and paying debt service on bonds or other 66.2 obligations issued to finance construction or improvement of the 66.3 authorized facility. 66.4 (b) In addition, if the revenues collected from a tax 66.5 imposed in subdivisions 1 to 4 are greater than the amount 66.6 needed to meet obligations under paragraph (a) in any year, the 66.7 surplus may be returned to the cities in a manner agreed upon by 66.8 the participating cities under this section, to be used by the 66.9 cities for projects of regional significance, limited to the 66.10 acquisition and improvement of park land and open space; the 66.11 purchase, renovation, and construction of public buildings and 66.12 land primarily used for the arts, libraries, and community 66.13 centers; and for debt service on bonds issued for these 66.14 purposes. The amount of surplus revenues raised by a tax will 66.15 be determined either as provided for by an applicable joint 66.16 powers agreement or by a governing entity in charge of 66.17 administering the project in paragraph (a). 66.18 (c) If start of the Central Minnesota Events Center under 66.19 paragraph (a) is delayed, the cities may still impose the tax, 66.20 and use a portion of the revenue to fund the projects under 66.21 paragraph (b), provided that revenues are reserved to pay future 66.22 costs of the construction of the events center in paragraph (a) 66.23 as provided by a joint powers agreement or by a governing entity 66.24 in charge of administering the project. If a decision is made 66.25 not to proceed with the event center under paragraph (a) or 66.26 construction of the event center has not begun by December 31, 66.27 2008, the funds in the reserve account shall be distributed to 66.28 the cities based on the joint powers agreement to pay for other 66.29 projects permitted under paragraph (b). All revenues raised 66.30 from these taxes after December 31, 2008, must be used 66.31 exclusively to pay off bonds for the event center project under 66.32 paragraph (a) and to pay off bonds issued under subdivision 6. 66.33 Sec. 19. Laws 1998, chapter 389, article 8, section 44, 66.34 subdivision 6, is amended to read: 66.35 Subd. 6. [BONDING AUTHORITY.] (a) The cities named in 66.36 subdivision 1 may issue bonds under Minnesota Statutes, chapter 67.1 475, to finance the acquisition, construction, and improvement 67.2 of the Central Minnesota Events Center. An election to approve 67.3 the bonds under Minnesota Statutes, section 475.58, may be held 67.4 in combination with the election to authorize imposition of the 67.5 tax under subdivision 1. Whether to permit imposition of the 67.6 tax and issuance of bonds may be posed to the voters as a single 67.7 question. The question must state that the sales tax revenues 67.8 are pledged to pay the bonds, but that the bonds are general 67.9 obligations and will be guaranteed by the city's property taxes. 67.10 (b) The issuance of bonds under this subdivision is not 67.11 subject to Minnesota Statutes, section 275.60. 67.12 (c) The bonds are not included in computing any debt 67.13 limitation applicable to the city, and the levy of taxes under 67.14 Minnesota Statutes, section 475.61, to pay principal of and 67.15 interest on the bonds is not subject to any levy limitation. 67.16 The aggregate principal amount of bonds issued by all cities 67.17 named in subdivision 1, plus the aggregate of the taxes used 67.18 directly to pay eligible capital expenditures and improvements 67.19 for the Central Minnesota Events Center, may not exceed 67.20 $50,000,000, plus an amount equal to the costs related to 67.21 issuance of the bonds, less any amount made available to the 67.22 cities for the project described in subdivision 5 under the 67.23 capital expenditure legislation adopted during the 1998 session 67.24 of the legislature. 67.25 (d) The taxes may be pledged to and used for the payment of 67.26 the bonds and any bonds issued to refund them, only if the bonds 67.27 and any refunding bonds are general obligations of the city. 67.28 (e) The cities named in subdivision 1 may issue bonds for 67.29 the projects listed in subdivision 5, paragraph (b), under 67.30 regular bonding authority. Bonds for these projects, to be paid 67.31 from tax revenues under this section, may not be issued after 67.32 December 31, 2008. 67.33 Sec. 20. Laws 1998, chapter 389, article 8, section 44, 67.34 subdivision 7, as amended by Laws 1998, chapter 408, section 20, 67.35 is amended to read: 67.36 Subd. 7. [TERMINATION OF TAXES.] The taxes imposed by each 68.1 city under subdivisions 1 to 4 expire at the earlier of 30 years 68.2 or when sufficient funds have been received from the taxes to 68.3 finance the obligations under subdivisions 5, paragraph (a), and 68.4 6, and to prepay or retire at maturity the principal, interest, 68.5 and premium due on the original bonds issued for the initial 68.6 acquisition, construction, and improvement of the Central 68.7 Minnesota Events Center as determined under an applicable joint 68.8 powers agreement or by a governing entity in charge of 68.9 administering the project. Any funds remaining after completion 68.10 of the project and retirement or redemption of the bonds may be 68.11 placed in the general funds of the cities imposing the taxes. 68.12 The taxes imposed by a city under this section may expire at an 68.13 earlier time by city ordinance, if authorized under the 68.14 applicable joint powers agreement or by the governing entity in 68.15 charge of administering the project. 68.16 If the cities that pass a referendum required under 68.17 subdivision61 determine that the revenues raised from the sum 68.18 of all the taxes authorized by referendum under thissubdivision68.19 section will not be sufficient to fund the project in 68.20 subdivision 5, paragraph (a), none of the authorized taxes may 68.21 be imposed. 68.22 If the taxes are imposed, as allowed under subdivision 5, 68.23 paragraph (c), and the cities determine at a later date that 68.24 there are not sufficient funds to fund the Central Minnesota 68.25 Events Center under subdivision 5, paragraph (a), or the funding 68.26 for the event center has not been determined by December 31, 68.27 2008, the taxes will be terminated as soon as sufficient 68.28 revenues are raised to prepay or retire at maturity the 68.29 principal, interest, and premium due on bonds issued under 68.30 subdivision 6, paragraph (e). 68.31 Sec. 21. [EFFECTIVE DATES.] 68.32 Sections 1, 2, 4, 6, 7, 9, 11, 12, and 17 are effective for 68.33 sales and purchases made after June 30, 1999. 68.34 Section 3 is effective for amended returns and refund 68.35 claims filed on or after July 1, 1999. 68.36 Section 5 is effective the day following final enactment 69.1 and applies retroactively to all open tax years and to 69.2 assessments and appeals under Minnesota Statutes, sections 69.3 289A.38 and 289A.65, for which the time limits have not expired 69.4 on the date of final enactment of this act. The provisions of 69.5 Minnesota Statutes, section 289A.50, apply to refunds claimed 69.6 under section 5. Refunds claimed under section 5 must be filed 69.7 by the later of December 31, 1999, or the time limit under 69.8 Minnesota Statutes, section 289A.40, subdivision 1. 69.9 Section 8 is effective retroactively for sales and 69.10 purchases made after June 30, 1998. 69.11 Section 10 is effective for purchases and sales made after 69.12 the date of final enactment. 69.13 Section 13 is effective for purchases made after the date 69.14 of final enactment and before July 1, 2001. 69.15 Section 14 is effective the day following final enactment. 69.16 Section 16 is effective July 1, 1999. 69.17 ARTICLE 4 69.18 SPECIAL TAXES 69.19 Section 1. Minnesota Statutes 1998, section 287.01, 69.20 subdivision 3, as amended by Laws 1999, chapter 31, section 1, 69.21 is amended to read: 69.22 Subd. 3. [DEBT.] "Debt" means the principal amount of an 69.23 obligation to pay moneyor to perform or refrain from performing69.24an actthat is secured in whole or in part by a mortgage of an 69.25 interest in real property. 69.26 Sec. 2. Minnesota Statutes 1998, section 287.05, 69.27 subdivision 1, as amended by Laws 1999, chapter 31, section 5, 69.28 is amended to read: 69.29 Subdivision 1. [REAL PROPERTY OUTSIDE MINNESOTA.] (a) When 69.30 a multistate mortgage is intended to secure only a portion of a 69.31 debt amount recited or referred to in the mortgage, the mortgage 69.32 may contain the following statement, or its equivalent, on the 69.33 first page: "Notwithstanding anything to the contrary herein, 69.34 enforcement of this mortgage in Minnesota is limited to a debt 69.35 amount of $....... under chapter 287 of Minnesota Statutes." In 69.36 such case, the tax shall be imposed based only on the amount of 70.1 debt so stated to be secured by real property located in this 70.2 state; and, the effect of the mortgage, or any amendment or 70.3 extension, as evidence in any court in this state, or as notice 70.4 for any purpose in this state, shall be limited to the amount 70.5 contained in the statement and for which the tax has been 70.6 paid and additional amounts for accrued interest and advances 70.7 not subject to tax under section 287.035 or 287.05, subdivision 70.8 4. 70.9 (b) All multistate mortgages not taxed under paragraph (a) 70.10 shall be taxed under sections 287.01 to 287.13 as if the real 70.11 property identified in the mortgage secures payment of that 70.12 portion of the maximum debt amount referred to, or incorporated 70.13 by reference, in the mortgage that is equal to a fraction the 70.14 numerator of which is the value of the real property described 70.15 in the mortgage that is located in this state and the 70.16 denominator of which is the value of all the real property 70.17 described in the mortgage. 70.18 Sec. 3. Minnesota Statutes 1998, section 287.05, 70.19 subdivision 1a, as amended by Laws 1999, chapter 31, section 5, 70.20 is amended to read: 70.21 Subd. 1a. [REAL PROPERTY IN THIS STATE SECURES PORTION OF 70.22 DEBT.] (a) When the real property identified in a mortgage is 70.23 located entirely in this state and is intended to secure only a 70.24 portion of a debt amount recited or referred to in the mortgage, 70.25 the mortgage may contain the following statement, or its 70.26 equivalent, on the first page: "Notwithstanding anything to the 70.27 contrary herein, enforcement of this mortgage is limited to a 70.28 debt amount of $....... under chapter 287 of Minnesota 70.29 Statutes." In such case, the tax shall be imposed based only on 70.30 the amount of debt so stated to be secured by real property; 70.31 and, the effect of the mortgage, or any amendment or extension, 70.32 evidence in any court in this state, or as notice for any 70.33 purpose in this state, shall be limited to the amount contained 70.34 in the statement and for which the tax has been paid and 70.35 additional amounts for accrued interest and advances not subject 70.36 to tax under section 287.035 or 287.05, subdivision 4. 71.1 (b) All mortgages that are not multistate mortgages and 71.2 that are not taxed under paragraph (a) shall be taxed under 71.3 sections 287.01 to 287.13 as if the real property identified in 71.4 the mortgage secures payment of the maximum debt amount referred 71.5 to, or incorporated by reference, in the mortgage. 71.6 Sec. 4. Minnesota Statutes 1998, section 296A.16, is 71.7 amended by adding a subdivision to read: 71.8 Subd. 4a. [UNDYED KEROSENE; REFUNDS.] Notwithstanding 71.9 subdivision 1, the commissioner shall allow a refund of the tax 71.10 paid on undyed kerosene used exclusively for a purpose other 71.11 than as fuel for a motor vehicle using the streets and 71.12 highways. To obtain a refund, the person making the sale to an 71.13 end user must meet the Internal Revenue Service requirements for 71.14 sales from a blocked pump. A claim for a refund may be filed as 71.15 provided in this section. 71.16 Sec. 5. Minnesota Statutes 1998, section 296A.16, is 71.17 amended by adding a subdivision to read: 71.18 Subd. 4b. [RACING GASOLINE; REFUNDS.] Notwithstanding 71.19 subdivision 1, the commissioner shall allow a licensed 71.20 distributor a refund of the tax paid on leaded gasoline of 110 71.21 octane or more that does not meet ASTM specification D4814 for 71.22 gasoline and that is sold in bulk for use in nonregistered motor 71.23 vehicles. A claim for a refund may be filed as provided for in 71.24 this section. 71.25 Sec. 6. Minnesota Statutes 1998, section 297E.01, is 71.26 amended by adding a subdivision to read: 71.27 Subd. 17a. [BUSINESS DAY.] "Business day" means Monday 71.28 through Friday, excluding any holidays as defined in section 71.29 645.44. 71.30 Sec. 7. Minnesota Statutes 1998, section 297E.02, 71.31 subdivision 1, is amended to read: 71.32 Subdivision 1. [IMPOSITION.] A tax is imposed on all 71.33 lawful gambling other than (1)pull-tabs purchased and placed71.34into inventory after January 1, 1987,pull-tab deals or games; 71.35and(2)tipboards purchased and placed into inventory after June71.3630, 1988tipboard deals or games; and (3) items listed in 72.1 section 297E.01, subdivision 8, clauses (4) and (5), at the rate 72.2 of9.58.5 percent on the gross receipts as defined in section 72.3 297E.01, subdivision 8, less prizes actually paid. The tax 72.4 imposed by this subdivision is in lieu of the tax imposed by 72.5 section 297A.02 and all local taxes and license fees except a 72.6 fee authorized under section 349.16, subdivision 8, or a tax 72.7 authorized under subdivision 5. 72.8 The tax imposed under this subdivision is payable by the 72.9 organization or party conducting, directly or indirectly, the 72.10 gambling. 72.11 Sec. 8. Minnesota Statutes 1998, section 297E.02, 72.12 subdivision 3, is amended to read: 72.13 Subd. 3. [COLLECTION; DISPOSITION.] Taxes imposed by this 72.14 section other than in subdivision 4 are due and payable to the 72.15 commissioner when the gambling tax return is required to be 72.16 filed. Taxes imposed by subdivision 4 are due and payable to 72.17 the commissioner on or before the last business day of the month 72.18 following the month in which the taxable sale was made. Returns 72.19 covering the taxes imposed under this section must be filed with 72.20 the commissioner on or before the 20th day of the month 72.21 following the close of the previous calendar month. The 72.22 commissioner may require that the returns be filed via magnetic 72.23 media or electronic data transfer. The proceeds, along with the 72.24 revenue received from all license fees and other fees under 72.25 sections 349.11 to 349.191, 349.211, and 349.213, must be paid 72.26 to the state treasurer for deposit in the general fund. 72.27 Sec. 9. Minnesota Statutes 1998, section 297E.02, 72.28 subdivision 4, is amended to read: 72.29 Subd. 4. [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed 72.30 on the sale of each deal of pull-tabs and tipboards sold by a 72.31 distributor. The rate of the tax is1.91.7 percent of the 72.32 ideal gross of the pull-tab or tipboard deal. The sales tax 72.33 imposed by chapter 297A on the sale of the pull-tabs and 72.34 tipboards by the distributor is imposed on the retail sales 72.35 price less the tax imposed by this subdivision. The retail sale 72.36 of pull-tabs or tipboards by the organization is exempt from 73.1 taxes imposed by chapter 297A and is exempt from all local taxes 73.2 and license fees except a fee authorized under section 349.16, 73.3 subdivision 8. 73.4 (b) The liability for the tax imposed by this section is 73.5 incurred when the pull-tabs and tipboards are delivered by the 73.6 distributor to the customer or to a common or contract carrier 73.7 for delivery to the customer, or when received by the customer's 73.8 authorized representative at the distributor's place of 73.9 business, regardless of the distributor's method of accounting 73.10 or the terms of the sale. 73.11 The tax imposed by this subdivision is imposed on all sales 73.12 of pull-tabs and tipboards, except the following: 73.13 (1) sales to the governing body of an Indian tribal 73.14 organization for use on an Indian reservation; 73.15 (2) sales to distributors licensed under the laws of 73.16 another state or of a province of Canada, as long as all 73.17 statutory and regulatory requirements are met in the other state 73.18 or province; 73.19 (3) sales of promotional tickets as defined in section 73.20 349.12; and 73.21 (4) pull-tabs and tipboards sold to an organization that 73.22 sells pull-tabs and tipboards under the exemption from licensing 73.23 in section 349.166, subdivision 2. A distributor shall require 73.24 an organization conducting exempt gambling to show proof of its 73.25 exempt status before making a tax-exempt sale of pull-tabs or 73.26 tipboards to the organization. A distributor shall identify, on 73.27 all reports submitted to the commissioner, all sales of 73.28 pull-tabs and tipboards that are exempt from tax under this 73.29 subdivision. 73.30 (c) A distributor having a liability of $120,000 or more 73.31 during a fiscal year ending June 30 must remit all liabilities 73.32 in the subsequent calendar year by a funds transfer as defined 73.33 in section 336.4A-104, paragraph (a). The funds transfer 73.34 payment date, as defined in section 336.4A-401, must be on or 73.35 before the date the tax is due. If the date the tax is due is 73.36 not a funds transfer business day, as defined in section 74.1 336.4A-105, paragraph (a), clause (4), the payment date must be 74.2 on or before the funds transfer business day next following the 74.3 date the tax is due. 74.4 (d) Any customer who purchases deals of pull-tabs or 74.5 tipboards from a distributor may file an annual claim for a 74.6 refund or credit of taxes paid pursuant to this subdivision for 74.7 unsold pull-tab and tipboard tickets. The claim must be filed 74.8 with the commissioner on a form prescribed by the commissioner 74.9 by March 20 of the year following the calendar year for which 74.10 the refund is claimed. The refund must be filed as part of the 74.11 customer's February monthly return. The refund or credit is 74.12 equal to1.91.7 percent of the face value of the unsold 74.13 pull-tab or tipboard tickets, provided that the refund or credit 74.14 will be1.951.8 percent of the face value of the unsold 74.15 pull-tab or tipboard tickets for claims for a refund or credit 74.16 of taxes filed on the February19992000 monthly return. The 74.17 refund claimed will be applied as a credit against tax owing 74.18 under this chapter on the February monthly return. If the 74.19 refund claimed exceeds the tax owing on the February monthly 74.20 return, that amount will be refunded. The amount refunded will 74.21 bear interest pursuant to section 270.76 from 90 days after the 74.22 claim is filed. 74.23 Sec. 10. Minnesota Statutes 1998, section 297E.02, 74.24 subdivision 6, is amended to read: 74.25 Subd. 6. [COMBINED RECEIPTS TAX.] In addition to the taxes 74.26 imposed under subdivisions 1 and 4, a tax is imposed on the 74.27 combined receipts of the organization. As used in this section, 74.28 "combined receipts" is the sum of the organization's gross 74.29 receipts from lawful gambling less gross receipts directly 74.30 derived from the conduct of bingo, raffles, and paddlewheels, as 74.31 defined in section 297E.01, subdivision 8, for the fiscal year. 74.32 The combined receipts of an organization are subject to a tax 74.33 computed according to the following schedule: 74.34 If the combined receipts for the The tax is: 74.35 fiscal year are: 74.36 Not over $500,000 zero 75.1 Over $500,000, but not over 75.2 $700,0001.91.7 percent of the 75.3 amount over $500,000, but 75.4 not over $700,000 75.5 Over $700,000, but not over 75.6 $900,000$3,800$3,400 plus3.875.7 3.4 percent of the amount 75.8 over $700,000, but 75.9 not over $900,000 75.10 Over $900,000$11,400$10,200 plus5.775.11 5.1 percent of the 75.12 amount over $900,000 75.13 Sec. 11. Minnesota Statutes 1998, section 297F.01, 75.14 subdivision 23, is amended to read: 75.15 Subd. 23. [WHOLESALE PRICE.] "Wholesale price" means the 75.16 established price for which a manufacturer or person sells a 75.17 tobacco product to a distributor, exclusive of any discount or 75.18 other reduction. 75.19 Sec. 12. Minnesota Statutes 1998, section 297F.17, 75.20 subdivision 6, is amended to read: 75.21 Subd. 6. [TIME LIMIT FOR BAD DEBTDEDUCTIONREFUND.] 75.22 Claims for refund must be filed with the commissionerwithin one75.23year ofduring the one-year period beginning with the timely 75.24 filingdateof the taxpayer's federal income tax return 75.25 containing the bad debt deduction that is being claimed. 75.26 Claimants under this subdivision are subject to the notice 75.27 requirements of section 289A.38, subdivision 7. 75.28 Sec. 13. Minnesota Statutes 1998, section 297H.05, is 75.29 amended to read: 75.30 297H.05 [SELF-HAULERS.] 75.31 (a) A self-hauler of mixed municipal solid waste shall pay 75.32 the tax to the operator of the waste management facility to 75.33 which the waste is delivered at the rate imposed under section 75.34 297H.03, based on the sales price of the waste management 75.35 services. 75.36 (b) A self-hauler of non-mixed-municipal solid waste shall 76.1 pay the tax to the operator of the waste management facility to 76.2 which the waste is delivered at the rate imposed under section 76.3 297H.04. 76.4 (c) The tax imposed on the self-hauler of 76.5 non-mixed-municipal solid waste may be based either on the 76.6 capacity of the container, the actual volume, or the 76.7 weight-to-volume conversion schedule in paragraph (d). However, 76.8 the tax must be calculated by the operator using the same method 76.9 for calculating the tipping fee so that both are calculated 76.10 according to container capacity, actual volume, or weight. 76.11 (d) The weight-to-volume conversion schedule for: 76.12 (1) construction debris as defined in section 115A.03, 76.13 subdivision 7, is one ton equals 3.33 cubic yards, or $2 per 76.14 ton; 76.15 (2) industrial waste as defined in section 115A.03, 76.16 subdivision 13a, is equal to 60 cents per cubic yard. The 76.17 commissioner of revenue, after consultation with the 76.18 commissioner of the pollution control agency, shall determine, 76.19 and may publish by notice, a conversion schedule for various 76.20 industrial wastes; and 76.21 (3) infectious waste as defined in section 116.76, 76.22 subdivision 12, and pathological waste as defined in section 76.23 116.76, subdivision 14, is 150 pounds equals one cubic yard, or 76.24 60 cents per 150 pounds. 76.25 (e) For mixed municipal solid waste the tax is imposed upon 76.26 the difference between the market price and the tip fee at a 76.27 processing or disposal facility if the tip fee is less than the 76.28 market price and the political subdivision subsidizes the cost 76.29 of service at the facility. The political subdivision is liable 76.30 for the tax. 76.31 Sec. 14. Minnesota Statutes 1998, section 297H.06, 76.32 subdivision 2, is amended to read: 76.33 Subd. 2. [MATERIALS.] The tax is not imposed upon charges 76.34 to generators of mixed municipal solid waste or upon the volume 76.35 of non-mixed-municipal solid waste for waste management services 76.36 to manage the following materials: 77.1 (1) mixed municipal solid waste and non-mixed-municipal 77.2 solid waste generated outside of Minnesota; 77.3 (2) recyclable materials that are separated for recycling 77.4 by the generator, collected separately from other waste, and 77.5 recycled, to the extent the price of the service for handling 77.6 recyclable material is separately itemized; 77.7 (3) recyclable non-mixed-municipal solid waste that is 77.8 separated for recycling by the generator, collected separately 77.9 from other waste, delivered to a waste facility for the purpose 77.10 of recycling, and recycled; 77.11 (4) industrial waste, when it is transported to a facility 77.12 owned and operated by the same person that generated it; 77.13 (5) mixed municipal solid waste from a recycling facility 77.14 that separates or processes recyclable materials and reduces the 77.15 volume of the waste by at least 85 percent, provided that the 77.16 exempted waste is managed separately from other waste; 77.17 (6) recyclable materials that are separated from mixed 77.18 municipal solid waste by the generator, collected and delivered 77.19 to a waste facility that recycles at least 85 percent of its 77.20 waste, and are collected with mixed municipal solid waste that 77.21 is segregated in leakproof bags, provided that the mixed 77.22 municipal solid waste does not exceed five percent of the total 77.23 weight of the materials delivered to the facility and is 77.24 ultimately delivered to a waste facility identified as a 77.25 preferred waste management facility in county solid waste plans 77.26 under section 115A.46; 77.27 (7) through December 31, 2002, source-separated compostable 77.28 waste, if the waste is delivered to a facility exempted as 77.29 described in this clause. To initially qualify for an 77.30 exemption, a facility must apply for an exemption in its 77.31 application for a new or amended solid waste permit to the 77.32 pollution control agency. The first time a facility applies to 77.33 the agency it must certify in its application that it will 77.34 comply with the criteria in items (i) to (v) and the 77.35 commissioner of the agency shall so certify to the commissioner 77.36 of revenue who must grant the exemption. For each subsequent 78.1 calendar year, by October 1 of the preceding year, the facility 78.2 must apply to the agency for certification to renew its 78.3 exemption for the following year. The application must be filed 78.4 according to the procedures of, and contain the information 78.5 required by, the agency. The commissioner of revenue shall 78.6 grant the exemption if the commissioner of the pollution control 78.7 agency finds and certifies to the commissioner of revenue that 78.8 based on an evaluation of the composition of incoming waste and 78.9 residuals and the quality and use of the product: 78.10 (i) generators separate materials at the source; 78.11 (ii) the separation is performed in a manner appropriate to 78.12 the technology specific to the facility that: 78.13 (A) maximizes the quality of the product; 78.14 (B) minimizes the toxicity and quantity of residuals; and 78.15 (C) provides an opportunity for significant improvement in 78.16 the environmental efficiency of the operation; 78.17 (iii) the operator of the facility educates generators, in 78.18 coordination with each county using the facility, about 78.19 separating the waste to maximize the quality of the waste stream 78.20 for technology specific to the facility; 78.21 (iv) process residuals do not exceed 15 percent of the 78.22 weight of the total material delivered to the facility; and 78.23 (v) the final product is accepted for use;and78.24 (8) waste and waste by-products for which the tax has been 78.25 paid; and 78.26 (9) daily cover for landfills that has been approved in 78.27 writing by the Minnesota pollution control agency. 78.28 Sec. 15. [EFFECTIVE DATES.] 78.29 Sections 1 to 3 are effective for documents executed, 78.30 recorded, or registered after June 30, 1999. 78.31 Section 4 is effective retroactively for sales made after 78.32 June 30, 1998. Section 5 is effective retroactively for sales 78.33 made after January 31, 1999. Section 6 is effective August 1, 78.34 1999. Sections 7, 9, and 10 are effective July 1, 1999. 78.35 Section 8 is effective for taxes first becoming due on or after 78.36 August 1, 1999. Sections 11 and 14 are effective the day 79.1 following final enactment. Section 12 is effective for refund 79.2 claims filed on or after July 1, 1999. Section 13 is effective 79.3 for services provided on or after July 1, 1999. 79.4 ARTICLE 5 79.5 MINNESOTACARE 79.6 Section 1. Minnesota Statutes 1998, section 60A.15, 79.7 subdivision 1, is amended to read: 79.8 Subdivision 1. [DOMESTIC AND FOREIGN COMPANIES.] (a) On or 79.9 before April 1, June 1, and December 1 of each year, every 79.10 domestic and foreign company, including town and farmers' mutual 79.11 insurance companies, domestic mutual insurance companies, marine 79.12 insurance companies, health maintenance organizations, community 79.13 integrated service networks, and nonprofit health service plan 79.14 corporations, shall pay to the commissioner of revenue 79.15 installments equal to one-third of the insurer's total estimated 79.16 tax for the current year. Except as provided in paragraphs (d), 79.17 (e), (h), and (i), installments must be based on a sum equal to 79.18 two percent of the premiums described in paragraph (b). 79.19 (b) Installments under paragraph (a), (d), or (e) are 79.20 percentages of gross premiums less return premiums on all direct 79.21 business received by the insurer in this state, or by its agents 79.22 for it, in cash or otherwise, during such year. 79.23 (c) Failure of a company to make payments of at least 79.24 one-third of either (1) the total tax paid during the previous 79.25 calendar year or (2) 80 percent of the actual tax for the 79.26 current calendar year shall subject the company to the penalty 79.27 and interest provided in this section, unless the total tax for 79.28 the current tax year is $500 or less. 79.29 (d) For health maintenance organizations, nonprofit health 79.30 service plan corporations, and community integrated service 79.31 networks, the installments must be based on an amount determined 79.32 under paragraph (h) or (i). 79.33 (e) For purposes of computing installments for town and 79.34 farmers' mutual insurance companies and for mutual property 79.35 casualty companies with total assets on December 31, 1989, of 79.36 $1,600,000,000 or less, the following rates apply: 80.1 (1) for all life insurance, two percent; 80.2 (2) for town and farmers' mutual insurance companies and 80.3 for mutual property and casualty companies with total assets of 80.4 $5,000,000 or less, on all other coverages, one percent; and 80.5 (3) for mutual property and casualty companies with total 80.6 assets on December 31, 1989, of $1,600,000,000 or less, on all 80.7 other coverages, 1.26 percent. 80.8 (f) If the aggregate amount of premium tax payments under 80.9 this section and the fire marshal tax payments under section 80.10 299F.21 made during a calendar year is equal to or exceeds 80.11 $120,000, all tax payments in the subsequent calendar year must 80.12 be paid by means of a funds transfer as defined in section 80.13 336.4A-104, paragraph (a). The funds transfer payment date, as 80.14 defined in section 336.4A-401, must be on or before the date the 80.15 payment is due. If the date the payment is due is not a funds 80.16 transfer business day, as defined in section 336.4A-105, 80.17 paragraph (a), clause (4), the payment date must be on or before 80.18 the funds transfer business day next following the date the 80.19 payment is due. 80.20 (g) Premiums under medical assistance, general assistance 80.21 medical care, the MinnesotaCare program, and the Minnesota 80.22 comprehensive health insurance plan and all payments, revenues, 80.23 and reimbursements received from the federal government for 80.24 Medicare-related coverage as defined in section 62A.31, 80.25 subdivision 3, paragraph (e), are not subject to tax under this 80.26 section. 80.27 (h) For calendar years 1997, 1998,and1999, 2000, and 80.28 2001, the installments for health maintenance organizations, 80.29 community integrated service networks, and nonprofit health 80.30 service plan corporations must be based on an amount equal to 80.31 one percent of premiums described under paragraph (b).Health80.32maintenance organizations, community integrated service80.33networks, and nonprofit health service plan corporations that80.34have met the cost containment goals established under section80.3562J.04 in the individual and small employer market for calendar80.36year 1996 are exempt from payment of the tax imposed under this81.1section for premiums paid after March 30, 1997, and before April81.21, 1998.Health maintenance organizations, community integrated 81.3 service networks, and nonprofit health service plan corporations 81.4 that have met the cost containment goals established under 81.5 section 62J.04 in the individual and small employer market for 81.6 calendar year 1997 are exempt from payment of the tax imposed 81.7 under this section for premiums paid after March 30, 1998, and 81.8 before April 1, 1999. Health maintenance organizations, 81.9 community integrated service networks, and nonprofit health 81.10 service plan corporations that have met the cost containment 81.11 goals established under section 62J.04 in the individual and 81.12 small employer market for the previous calendar year1998are 81.13 exempt from payment of the tax imposed under this section for 81.14 premiums paidafter March 30, 1999, and before January 1,81.152000during the calendar year. 81.16 (i) For calendar years after19992001, the commissioner of 81.17 finance shall determine the balance of the health care access 81.18 fund on September 1 of each year beginning September 1,199981.19 2001. If the commissioner determines that there is no 81.20 structural deficit for the next fiscal year, no tax shall be 81.21 imposed under paragraph (d) for the following calendar year. If 81.22 the commissioner determines that there will be a structural 81.23 deficit in the fund for the following fiscal year, then the 81.24 commissioner, in consultation with the commissioner of revenue, 81.25 shall determine the amount needed to eliminate the structural 81.26 deficit and a tax shall be imposed under paragraph (d) for the 81.27 following calendar year. The commissioner shall determine the 81.28 rate of the tax as either one-quarter of one percent, one-half 81.29 of one percent, three-quarters of one percent, or one percent of 81.30 premiums described in paragraph (b), whichever is the lowest of 81.31 those rates that the commissioner determines will produce 81.32 sufficient revenue to eliminate the projected structural 81.33 deficit. The commissioner of finance shall publish in the State 81.34 Register by October 1 of each year the amount of tax to be 81.35 imposed for the following calendar year. In determining the 81.36 structural balance of the health care access fund for fiscal 82.1 years 2000 and 2001, the commissioner shall disregard the 82.2 transfer amount from the health care access fund to the general 82.3 fund for expenditures associated with the services provided to 82.4 pregnant women and children under the age of two enrolled in the 82.5 MinnesotaCare program. 82.6 (j) In approving the premium rates as required in sections 82.7 62L.08, subdivision 8, and 62A.65, subdivision 3, the 82.8 commissioners of health and commerce shall ensure that any 82.9 exemption from the tax as described in paragraphs (h) and (i) is 82.10 reflected in the premium rate. 82.11 Sec. 2. Minnesota Statutes 1998, section 62J.041, 82.12 subdivision 1, is amended to read: 82.13 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 82.14 section, the following definitions apply. 82.15 (b) "Health plan company" has the definition provided in 82.16 section 62Q.01. 82.17 (c) "Total expenditures" means incurred claims or 82.18 expenditures on health care services, administrative expenses, 82.19 charitable contributions, and all other payments made by health 82.20 plan companies out of premium revenues. 82.21 (d) "Net expenditures" means total expenditures minus 82.22 exempted taxes and assessments and payments or allocations made 82.23 to establish or maintain reserves. 82.24 (e) "Exempted taxes and assessments" means direct payments 82.25 for taxes to government agencies, contributions to the Minnesota 82.26 comprehensive health association, the medical assistance 82.27 provider's surcharge under section 256.9657, the MinnesotaCare 82.28 provider tax under Minnesota Statutes 1998, section 295.52, 82.29 assessments by the health coverage reinsurance association, 82.30 assessments by the Minnesota life and health insurance guaranty 82.31 association, assessments by the Minnesota risk adjustment 82.32 association, and any new assessments imposed by federal or state 82.33 law. 82.34 (f) "Consumer cost-sharing or subscriber liability" means 82.35 enrollee coinsurance, copayment, deductible payments, and 82.36 amounts in excess of benefit plan maximums. 83.1 Sec. 3. Minnesota Statutes 1998, section 62Q.095, 83.2 subdivision 6, is amended to read: 83.3 Subd. 6. [EXEMPTION.] A health plan company, to the extent 83.4 that it operates as a staff model health plan companyas defined83.5in section 295.50, subdivision 12b,by employing allied 83.6 independent health care providers to deliver health care 83.7 services to enrollees, is exempt from this section. For 83.8 purposes of this subdivision, "staff model health plan company" 83.9 means a health plan company as defined in section 62Q.01, 83.10 subdivision 4, which employs one or more types of health care 83.11 providers to deliver health care services to the health plan 83.12 company's enrollees. 83.13 Sec. 4. [62Q.68] [PASS-THROUGH OF SAVINGS TO CONSUMERS.] 83.14 Subdivision 1. [REDUCED PREMIUMS.] All health plan 83.15 companies shall pass on to consumers, in the form of reduced 83.16 premium rates, all savings resulting from the phase-out and 83.17 repeal of the MinnesotaCare provider taxes imposed under 83.18 Minnesota Statutes 1998, section 295.52, and the resulting 83.19 reduction in the transfer of additional expenses generated by 83.20 Minnesota Statutes 1998, section 295.52, obligations to third 83.21 party contracts under Minnesota Statutes 1998, section 295.582. 83.22 Subd. 2. [DOCUMENTING COMPLIANCE.] Each health plan 83.23 company shall include with its annual renewal for certification 83.24 of authority or licensure documentation indicating compliance 83.25 with subdivision 1. 83.26 Subd. 3. [ENFORCEMENT.] If the appropriate commissioner 83.27 finds that a health plan company has not complied with 83.28 subdivision 1, the commissioner may take enforcement action 83.29 against that health plan company. The commissioner may, by 83.30 order, fine or censure the health plan company or revoke or 83.31 suspend the certificate of authority or license of the health 83.32 plan company to do business in this state if the commissioner 83.33 finds that the health plan company has not complied with this 83.34 section. The health plan company may appeal the commissioner's 83.35 order through a contested case hearing in accordance with 83.36 chapter 14. 84.1 Sec. 5. Minnesota Statutes 1998, section 214.16, 84.2 subdivision 2, is amended to read: 84.3 Subd. 2. [BOARD COOPERATION REQUIRED.] The board shall 84.4 assist the commissioner of health in data collection activities 84.5 required under Laws 1992, chapter 549, article 7, and shall84.6assist the commissioner of revenue in activities related to84.7collection of the health care provider tax required under Laws84.81992, chapter 549, article 9. Upon the request of the 84.9 commissioneror the commissioner of revenue, the board shall 84.10 make available names and addresses of current licensees and 84.11 provide other information or assistance as needed. 84.12 Sec. 6. Minnesota Statutes 1998, section 214.16, 84.13 subdivision 3, is amended to read: 84.14 Subd. 3. [GROUNDS FOR DISCIPLINARY ACTION.] The board 84.15 shall take disciplinary action, which may include license 84.16 revocation, against a regulated person for: 84.17 (1) intentional failure to provide the commissioner of 84.18 health with the data required under chapter 62J; 84.19(2) intentional failure to provide the commissioner of84.20revenue with data on gross revenue and other information84.21required for the commissioner to implement sections 295.50 to84.22295.58;84.23(3) intentional failure to pay the health care provider tax84.24required under section 295.52;and 84.25(4)(2) entering into a contract or arrangement that is 84.26 prohibited under sections 62J.70 to 62J.73. 84.27 Sec. 7. [256L.021] [USE OF TOBACCO SETTLEMENT PROCEEDS.] 84.28 (a) The commissioner of finance for fiscal years 2000 and 84.29 2001 shall deposit the annual payments due under the terms of 84.30 the tobacco settlement into the health care access fund 84.31 established under section 16A.724. 84.32 (b) If the commissioner of finance determines that there 84.33 will be a sufficient surplus to permit the tobacco settlement 84.34 annual payments to be deposited in the health care access fund 84.35 under section 16A.152, subdivision 2a, for fiscal years 2002 and 84.36 2003, the commissioner of finance shall deposit all tobacco 85.1 settlement annual payments in the health care access fund. 85.2 (c) For purposes of this section, "tobacco settlement" 85.3 means the consent judgment entered in the case of State of 85.4 Minnesota v. Philip Morris Inc. et al. in Minnesota district 85.5 court for the second judicial district, Ramsey county (court 85.6 file number C1-94-8565). 85.7 Sec. 8. [256L.022] [MINNESOTACARE PROGRAM FINANCIAL 85.8 MANAGEMENT.] 85.9 Subdivision 1. [FORECASTING FUNDS.] The MinnesotaCare 85.10 program is not an entitlement. The commissioner of human 85.11 services shall not expend more funds than the appropriations 85.12 made available by the legislature. Appropriations made 85.13 available must include the state-appropriated funds and federal 85.14 funds specified for this purpose and other available funds 85.15 transferred from other accounts as allowed by Minnesota law. 85.16 Regardless of this limitation on expenditures, the total 85.17 projected costs of this program must be forecasted and 85.18 recognized in the fund balance. 85.19 Subd. 2. [DETERMINATION BY COMMISSIONER.] As part of each 85.20 state revenue and expenditure forecast, the commissioner shall 85.21 make an assessment of expected MinnesotaCare program 85.22 expenditures for the remainder of the current biennium and for 85.23 the following biennium. If the commissioner determines that 85.24 projected MinnesotaCare expenditures during a biennium will 85.25 exceed the total of: (1) the funds projected to be available in 85.26 the health care access fund; and (2) projected annual payments 85.27 from the tobacco settlement required to be deposited in the 85.28 health care access fund under section 256L.021 for that 85.29 biennium, the commissioner of human services and the 85.30 commissioner of finance shall implement subdivision 1, effective 85.31 on the first day of the biennium for which the commissioner of 85.32 human services makes the determination. 85.33 Subd. 3. [CONTINGENT APPLICABILITY.] This section is 85.34 effective only if the commissioner of human services makes a 85.35 determination under subdivision 2 that projected MinnesotaCare 85.36 program expenditures will exceed available funding during a 86.1 biennium. If the commissioner makes this determination, this 86.2 section is effective on the first day of the biennium for which 86.3 the commissioner makes the determination. 86.4 Sec. 9. Minnesota Statutes 1998, section 270B.01, 86.5 subdivision 8, is amended to read: 86.6 Subd. 8. [MINNESOTA TAX LAWS.] For purposes of this 86.7 chapter only, unless expressly stated otherwise, "Minnesota tax 86.8 laws" means the taxes, refunds, and fees administered by or paid 86.9 to the commissioner under chapters 115B (except taxes imposed 86.10 under sections 115B.21 to 115B.24), 289A (except taxes imposed 86.11 under sections 298.01, 298.015, and 298.24), 290, 290A, 291, 86.12 297A, and 297Hand sections 295.50 to 295.59, or any similar 86.13 Indian tribal tax administered by the commissioner pursuant to 86.14 any tax agreement between the state and the Indian tribal 86.15 government, and includes any laws for the assessment, 86.16 collection, and enforcement of those taxes, refunds, and fees. 86.17 Sec. 10. Minnesota Statutes 1998, section 270B.14, 86.18 subdivision 1, is amended to read: 86.19 Subdivision 1. [DISCLOSURE TO COMMISSIONER OF HUMAN 86.20 SERVICES.] (a) On the request of the commissioner of human 86.21 services, the commissioner shall disclose return information 86.22 regarding taxes imposed by chapter 290, and claims for refunds 86.23 under chapter 290A, to the extent provided in paragraph (b) and 86.24 for the purposes set forth in paragraph (c). 86.25 (b) Data that may be disclosed are limited to data relating 86.26 to the identity, whereabouts, employment, income, and property 86.27 of a person owing or alleged to be owing an obligation of child 86.28 support. 86.29 (c) The commissioner of human services may request data 86.30 only for the purposes of carrying out the child support 86.31 enforcement program and to assist in the location of parents who 86.32 have, or appear to have, deserted their children. Data received 86.33 may be used only as set forth in section 256.978. 86.34 (d) The commissioner shall provide the records and 86.35 information necessary to administer the supplemental housing 86.36 allowance to the commissioner of human services. 87.1 (e) At the request of the commissioner of human services, 87.2 the commissioner of revenue shall electronically match the 87.3 social security numbers and names of participants in the 87.4 telephone assistance plan operated under sections 237.69 to 87.5 237.711, with those of property tax refund filers, and determine 87.6 whether each participant's household income is within the 87.7 eligibility standards for the telephone assistance plan. 87.8 (f) The commissioner may provide records and information 87.9 collected under Minnesota Statutes 1998, sections 295.50 to 87.10 295.59, to the commissioner of human services for purposes of 87.11 the Medicaid Voluntary Contribution and Provider-Specific Tax 87.12 Amendments of 1991, Public Law Number 102-234. Upon the written 87.13 agreement by the United States Department of Health and Human 87.14 Services to maintain the confidentiality of the data, the 87.15 commissioner may provide records and information collected under 87.16 Minnesota Statutes 1998, sections 295.50 to 295.59, to the 87.17 Health Care Financing Administration section of the United 87.18 States Department of Health and Human Services for purposes of 87.19 meeting federal reporting requirements. 87.20 (g) The commissioner may provide records and information to 87.21 the commissioner of human services as necessary to administer 87.22 the early refund of refundable tax credits. 87.23 (h) The commissioner may disclose information to the 87.24 commissioner of human services necessary to verify income for 87.25 eligibility and premium payment under the MinnesotaCare program, 87.26 under section 256L.05, subdivision 2. 87.27 Sec. 11. Minnesota Statutes 1998, section 295.50, 87.28 subdivision 4, is amended to read: 87.29 Subd. 4. [HEALTH CARE PROVIDER.] (a) "Health care 87.30 provider" means: 87.31 (1) a person whose health care occupation is regulated or 87.32 required to be regulated by the state of Minnesota furnishing 87.33 any or all of the following goods or services directly to a 87.34 patient or consumer: medical, surgical, optical, visual, 87.35 dental, hearing, nursing services, drugs, laboratory, diagnostic 87.36 or therapeutic services; 88.1 (2) a person who provides goods and services not listed in 88.2 clause (1) that qualify for reimbursement under the medical 88.3 assistance program provided under chapter 256B; 88.4 (3) a staff model health plan company; 88.5 (4) an ambulance service required to be licensed; or 88.6 (5) a person who sells or repairs hearing aids and related 88.7 equipment or prescription eyewear. 88.8 (b) Health care provider does not include: (1) hospitals; 88.9 medical supplies distributors, except as specified under 88.10 paragraph (a), clause (5); nursing homes licensed under chapter 88.11 144A or licensed in any other jurisdiction; pharmacies; surgical 88.12 centers; bus and taxicab transportation, or any other providers 88.13 of transportation services other than ambulance services 88.14 required to be licensed; supervised living facilities for 88.15 persons with mental retardation or related conditions, licensed 88.16 under Minnesota Rules, parts 4665.0100 to 4665.9900; residential 88.17 care homes licensed under chapter 144B; board and lodging 88.18 establishments providing only custodial services that are 88.19 licensed under chapter 157 and registered under section 157.17 88.20 to provide supportive services or health supervision services; 88.21 adult foster homes as defined in Minnesota Rules, part 88.22 9555.5105; day training and habilitation services for adults 88.23 with mental retardation and related conditions as defined in 88.24 section 252.41, subdivision 3; and boarding care homes, as 88.25 defined in Minnesota Rules, part 4655.0100.; 88.26(c) For purposes of this subdivision, "directly to a88.27patient or consumer" includes goods and services provided in88.28connection with independent medical examinations under section88.2965B.56 or other examinations for purposes of litigation or88.30insurance claims.88.31 (2) home health agencies as defined in Minnesota Rules, 88.32 part 9505.0175, subpart 15; a person providing personal care 88.33 services and supervision of personal care services as defined in 88.34 Minnesota Rules, part 9505.0335; a person providing private duty 88.35 nursing services as defined in Minnesota Rules, part 9505.0360; 88.36 and home care providers required to be licensed under chapter 89.1 144A; 89.2 (3) a person who employs health care providers solely for 89.3 the purpose of providing patient services to its employees; and 89.4 (4) an educational institution that employs health care 89.5 providers solely for the purpose of providing patient services 89.6 to its students if the institution does not receive fee for 89.7 service payments or payments for extended coverage. 89.8 Sec. 12. Minnesota Statutes 1998, section 295.52, 89.9 subdivision 7, is amended to read: 89.10 Subd. 7. [TAX REDUCTION.] (a) Notwithstanding subdivisions 89.11 1, 1a, 2, 3, and 4, the tax imposed under this section equals 89.12 for calendaryearsyear: 89.13 (1) 1998and, 1999shall be equal to, and 2000, 1.5 89.14 percent of the gross revenues received on or after January 1, 89.15 1998, and before January 1,2000. The commissioner shall extend89.16the reduced tax rate of 1.5 percent for gross revenues received89.17on or after January 1, 2000, and before January 1, 2002, if the89.18commissioner of finance determines that the health care access89.19fund structural balance projected for fiscal year 2001 will89.20remain positive, prior to any increase of the one percent89.21premium tax under section 60A.15, subdivision 1, paragraph (h),89.22and prior to any tax expenditures related to the increase in the89.23maximum tax credit for research expenses under section 295.53,89.24subdivision 4a, as amended by Laws 1997, chapter 2252001; 89.25 (2) 2001, 0.5 percent of the gross revenues received on or 89.26 after January 1, 2001, and before January 1, 2002; and 89.27 (3) 2002 and later for gross revenues received on or after 89.28 January 1, 2002, zero. 89.29 (b) The rates under paragraph (a) must be reduced as 89.30 provided in section 16A.152, subdivision 2a, if the commissioner 89.31 of finance determines that $50,000,000 or more of additional 89.32 annual tobacco settlement monies will be deposited in the health 89.33 care access fund in the 2002-2003 biennium. 89.34 Sec. 13. Minnesota Statutes 1998, section 295.53, 89.35 subdivision 1, is amended to read: 89.36 Subdivision 1. [EXEMPTIONS.] (a) The following payments 90.1 are excluded from the gross revenues subject to the hospital, 90.2 surgical center, or health care provider taxes under sections 90.3 295.50 to 295.57: 90.4 (1) payments received for services provided under the 90.5 Medicare program, including payments received from the 90.6 government, and organizations governed by sections 1833 and 1876 90.7 of title XVIII of the federal Social Security Act, United States 90.8 Code, title 42, section 1395, and enrollee deductibles, 90.9 coinsurance, and copayments, whether paid by the Medicare 90.10 enrollee or by a Medicare supplemental coverage as defined in 90.11 section 62A.011, subdivision 3, clause (10). Payments for 90.12 services not covered by Medicare are taxable; 90.13 (2) medical assistance payments including payments received 90.14 directly from the government or from a prepaid plan; 90.15 (3) payments received for home health care services; 90.16 (4) payments received from hospitals or surgical centers 90.17 for goods and services on which liability for tax is imposed 90.18 under section 295.52 or the source of funds for the payment is 90.19 exempt under clause (1), (2), (7), (8),or(10), or (13); 90.20 (5) payments received from health care providers for goods 90.21 and services on which liability for tax is imposed under this 90.22 chapter or the source of funds for the payment is exempt under 90.23 clause (1), (2), (7), (8),or(10), or (13); 90.24 (6) amounts paid for legend drugs, other than nutritional 90.25 products, to a wholesale drug distributor who is subject to tax 90.26 under section 295.52, subdivision 3, reduced by reimbursements 90.27 received for legend drugs under clauses (1), (2), (7), and (8); 90.28 (7) payments received under the general assistance medical 90.29 care program including payments received directly from the 90.30 government or from a prepaid plan; 90.31 (8) payments received for providing services under the 90.32 MinnesotaCare program including payments received directly from 90.33 the government or from a prepaid plan and enrollee deductibles, 90.34 coinsurance, and copayments. For purposes of this clause, 90.35 coinsurance means the portion of payment that the enrollee is 90.36 required to pay for the covered service; 91.1 (9) payments received by a health care provider or the 91.2 wholly owned subsidiary of a health care provider for care 91.3 provided outside Minnesotato a patient who is not domiciled in91.4Minnesota; 91.5 (10) payments received from the chemical dependency fund 91.6 under chapter 254B; 91.7 (11) payments received in the nature of charitable 91.8 donations that are not designated for providing patient services 91.9 to a specific individual or group; 91.10 (12) payments received for providing patient services 91.11 incurred through a formal program of health care research 91.12 conducted in conformity with federal regulations governing 91.13 research on human subjects. Payments received from patients or 91.14 from other persons paying on behalf of the patients are subject 91.15 to tax; 91.16 (13) payments received from any governmental agency for 91.17 services benefiting the public, not including payments made by 91.18 the government in its capacity as an employer or insurer; 91.19 (14) payments received for services provided by community 91.20 residential mental health facilities licensed under Minnesota 91.21 Rules, parts 9520.0500 to 9520.0690, community support programs 91.22 and family community support programs approved under Minnesota 91.23 Rules, parts 9535.1700 to 9535.1760, and community mental health 91.24 centers as defined in section 245.62, subdivision 2; 91.25 (15) government payments received by a regional treatment 91.26 center; 91.27 (16) payments received for hospice care services; 91.28 (17) payments received by a health care provider for 91.29 hearing aids and related equipment or prescription eyewear 91.30 delivered outside of Minnesota; 91.31 (18) payments received bya post-secondaryan educational 91.32 institution from student tuition, student activity fees, health 91.33 care service fees, government appropriations, donations, or 91.34 grants. Fee for service payments and payments for extended 91.35 coverage are taxable;and91.36 (19) payments received for services provided by: assisted 92.1 living programs and congregate housing programs; 92.2 (20) payments received from nursing homes licensed under 92.3 chapter 144A for services provided to a nursing home; and 92.4 (21) payments received for examinations for purposes of 92.5 utilization reviews, insurance claims or eligibility, 92.6 litigation, and employment, including reviews of medical records 92.7 for those purposes. 92.8 (b) Payments received by wholesale drug distributors for 92.9 legend drugs sold directly to veterinarians or veterinary bulk 92.10 purchasing organizations are excluded from the gross revenues 92.11 subject to the wholesale drug distributor tax under sections 92.12 295.50 to 295.59. 92.13 Sec. 14. Minnesota Statutes 1998, section 295.55, 92.14 subdivision 2, is amended to read: 92.15 Subd. 2. [ESTIMATED TAX; HOSPITALS; SURGICAL CENTERS.] (a) 92.16 Each hospital or surgical center must make estimated payments of 92.17 the taxes for the calendar year in monthly installments to the 92.18 commissioner within 15 days after the end of the month. 92.19 (b) Estimated tax payments are not required of hospitals or 92.20 surgical centers if: (1) the tax for the current calendar year 92.21 is less than $500; or (2) the tax for the previous calendar year 92.22 is less than $500, if the taxpayer had a tax liability and was 92.23 doing business the entire year; or (3) if a hospital has been 92.24 allowed a grant under section 144.1484, subdivision 2, for the 92.25 year. 92.26 (c) Underpayment of estimated installments bear interest at 92.27 the rate specified in section 270.75, from the due date of the 92.28 payment until paid or until the due date of the annual returnat92.29the rate specified in section 270.75whichever comes first. An 92.30 underpayment of an estimated installment is the difference 92.31 between the amount paid and the lesser of (1) 90 percent of 92.32 one-twelfth of the tax for the calendar year or (2) one-twelfth 92.33 of the total tax for theactual gross revenues received during92.34the monthprevious calendar year if the taxpayer had a tax 92.35 liability and was doing business the entire year. 92.36 Sec. 15. Minnesota Statutes 1998, section 295.55, 93.1 subdivision 3, is amended to read: 93.2 Subd. 3. [ESTIMATED TAX; OTHER TAXPAYERS.] (a) Each 93.3 taxpayer, other than a hospital or surgical center, must make 93.4 estimated payments of the taxes for the calendar year in 93.5 quarterly installments to the commissioner by April 15, July 15, 93.6 October 15, and January 15 of the following calendar year. 93.7 (b) Estimated tax payments are not required if: (1) the 93.8 tax for the current calendar year is less than $500; or (2) the 93.9 tax for the previous calendar year is less than $500, if the 93.10 taxpayer had a tax liability and was doing business the entire 93.11 year. 93.12 (c) Underpayment of estimated installments bear interest at 93.13 the rate specified in section 270.75, from the due date of the 93.14 payment until paid or until the due date of the annual returnat93.15the rate specified in section 270.75whichever comes first. An 93.16 underpayment of an estimated installment is the difference 93.17 between the amount paid and the lesser of (1) 90 percent of 93.18 one-quarter of the tax for the calendar year or (2) one-quarter 93.19 of the total tax for theactual gross revenues received during93.20the quarterprevious calendar year if the taxpayer had a tax 93.21 liability and was doing business the entire year. 93.22 Sec. 16. [REPEALER.] 93.23 (a) Minnesota Statutes 1998, sections 13.99, subdivision 93.24 86b; 144.1484, subdivision 2; 295.50; 295.51; 295.52; 295.53; 93.25 295.54; 295.55; 295.56; 295.57; 295.58; 295.582; and 295.59, are 93.26 repealed effective January 1, 2002. 93.27 (b) Minnesota Statutes 1998, sections 16A.76; and 256L.02, 93.28 subdivision 3, are repealed effective January 1, 2000. 93.29 Sec. 17. [CONTINGENT REPEALER; HEALTH CARE ACCESS FUND.] 93.30 Subdivision 1. [REPEALER.] Minnesota Statutes 1998, 93.31 section 16A.724, is repealed, effective as provided under 93.32 subdivision 3. 93.33 Subd. 2. [TRANSFER TO GENERAL FUND.] Upon repeal of the 93.34 health care access fund under subdivision 1, the commissioner of 93.35 finance shall transfer any funds in the health care access fund 93.36 to the general fund and the health care access fund is combined 94.1 with and becomes part of the general fund. 94.2 Subd. 3. [CONTINGENT EFFECTIVE DATE.] This section is 94.3 effective only if the commissioner of human services makes a 94.4 determination under Minnesota Statutes, section 256L.022, that 94.5 projected MinnesotaCare program expenditures will exceed 94.6 available funding during a biennium. If the commissioner makes 94.7 this determination, this section is effective on the first day 94.8 of the biennium for which the commissioner makes the 94.9 determination. 94.10 Sec. 18. [EFFECTIVE DATE.] 94.11 Sections 2, 3, 5, 6, 9, and 10 are effective January 1, 94.12 2002. 94.13 Section 4 is effective January 1, 2000, and applies to 94.14 premium rates for health plans issued or renewed on or after 94.15 that date. 94.16 The provisions of section 11, striking clause (c), and 94.17 section 13, clause (21), are effective for services provided 94.18 after December 31, 1998. The rest of section 11, the rest of 94.19 section 13 and sections 14 and 15 are effective for payments 94.20 received on or after January 1, 2000. 94.21 Section 16, paragraph (a), is effective January 1, 2002, 94.22 and applies to tax years beginning on or after that date. 94.23 ARTICLE 6 94.24 PROPERTY TAXES 94.25 Section 1. Minnesota Statutes 1998, section 16A.1521, is 94.26 amended to read: 94.27 16A.1521 [PROPERTY TAX REFORM ACCOUNT.] 94.28 Subdivision 1. [ESTABLISHMENT; USES OF FUNDS.] (a) A 94.29 property tax reform account is established in the general fund. 94.30 (b) Amounts in the account are available for and may only 94.31 be spent to reform the property tax system by: 94.32 (1) reducing the class rates to the target rates specified 94.33 insection 273.13,subdivision322, or to further reduce the 94.34 ratio of the highest class rate to the lowest class rate; 94.35 (2) increasing state education aids to reduce property 94.36 taxes; 95.1 (3) increasing the state share of education funding to 70 95.2 percent; 95.3 (4) increasing the education homestead credit; or 95.4 (5) increasing the property tax refund. 95.5As provided by section 273.13, subdivision 32, the governor95.6shall recommend to the legislature usesThe primary use of money 95.7 in the account is to compress class rate ratios, while 95.8 mitigating the shifting of relative property tax burdens from 95.9 one class to another through the mechanisms listed in clauses 95.10 (2) through (5). 95.11 (c) The balance in the account does not cancel and remains 95.12 in the account until appropriated for property tax reform. 95.13 Investment earnings on the account are credited to the account. 95.14 Subd. 2. [TARGET CLASS RATES.] The following class rates 95.15 are established as state property tax policy goals: 95.16 (1) three percent for the upper tier of 95.17 commercial-industrial property; 95.18 (2) two percent for apartment property; and 95.19 (3) 1.5 percent for the upper tier of other residential 95.20 property. 95.21 Sec. 2. Minnesota Statutes 1998, section 271.01, 95.22 subdivision 5, is amended to read: 95.23 Subd. 5. [JURISDICTION.] The tax court shall have 95.24 statewide jurisdiction. Except for an appeal to the supreme 95.25 court or any other appeal allowed under this subdivision, the 95.26 tax court shall be the sole, exclusive, and final authority for 95.27 the hearing and determination of all questions of law and fact 95.28 arising under the tax laws of the state, as defined in this 95.29 subdivision, in those cases that have been appealed to the tax 95.30 court and in any case that has been transferred by the district 95.31 court to the tax court. The tax court shall have no 95.32 jurisdiction in any case that does not arise under the tax laws 95.33 of the state or in any criminal case or in any case determining 95.34 or granting title to real property or in any case that is under 95.35 the probate jurisdiction of the district court. The small 95.36 claims division of the tax court shall have no jurisdiction in 96.1 any case dealing with property valuation or assessment for 96.2 property tax purposes until the taxpayer has appealed the 96.3 valuation or assessment to the county board of equalization, and 96.4 in those towns and cities which have not transferred their 96.5 duties to the county, the town or city board of equalization, 96.6 except for: (i) those taxpayers whose original assessments are 96.7 determined by the commissioner of revenue; and (ii) those 96.8 taxpayers appealing a denial of a current year application for 96.9 the homestead classification for their property and the denial 96.10 was not reflected on a valuation notice issued in the year. The 96.11 tax court shall have no jurisdiction in any case involving an 96.12 order of the state board of equalization unless a taxpayer 96.13 contests the valuation of property. Laws governing taxes, aids, 96.14 and related matters administered by the commissioner of revenue, 96.15 laws dealing with property valuation, assessment or taxation of 96.16 property for property tax purposes, and any other laws that 96.17 contain provisions authorizing review of taxes, aids, and 96.18 related matters by the tax court shall be considered tax laws of 96.19 this state subject to the jurisdiction of the tax court. This 96.20 subdivision shall not be construed to prevent an appeal, as 96.21 provided by law, to an administrative agency, board of 96.22 equalization, review under section 274.13, subdivision 1c, or to 96.23 the commissioner of revenue. Wherever used in this chapter, the 96.24 term commissioner shall mean the commissioner of revenue, unless 96.25 otherwise specified. 96.26 Sec. 3. Minnesota Statutes 1998, section 271.21, 96.27 subdivision 2, is amended to read: 96.28 Subd. 2. [JURISDICTION.] At the election of the taxpayer, 96.29 the small claims division shall have jurisdiction only in the 96.30 following matters: 96.31 (a)incases involving valuation, assessment, or taxation 96.32 of real or personal property, if the taxpayer has satisfied the 96.33 requirements of section 271.01, subdivision 5, and: (i) the 96.34 issue is a denial of a current year application for the 96.35 homestead classification for the taxpayer's property and the 96.36 denial was not reflected on a valuation notice issued in the 97.1 year; or (ii) in the case of nonhomestead property, the 97.2 assessor's estimated market value is less than $100,000; or 97.3 (b) any other case concerning the tax laws as defined in 97.4 section 271.01, subdivision 5, in which the amount in 97.5 controversy does not exceed $5,000, including penalty and 97.6 interest. 97.7 Sec. 4. Minnesota Statutes 1998, section 272.02, 97.8 subdivision 1, is amended to read: 97.9 Subdivision 1. [EXEMPT PROPERTY DESCRIBED.] All property 97.10 described in this section to the extent herein limited shall be 97.11 exempt from taxation: 97.12 (1) All public burying grounds. 97.13 (2) All public schoolhouses. 97.14 (3) All public hospitals. 97.15 (4) All academies, colleges, and universities, and all 97.16 seminaries of learning. 97.17 (5) All churches, church property, and houses of worship. 97.18 (6) Institutions of purely public charity except parcels of 97.19 property containing structures and the structures described in 97.20 section 273.13, subdivision 25, paragraph (e), other than those 97.21 that qualify for exemption under clause (25). 97.22 (7) All public property exclusively used for any public 97.23 purpose. 97.24 (8) Except for the taxable personal property enumerated 97.25 below, all personal property and the property described in 97.26 section 272.03, subdivision 1, paragraphs (c) and (d), shall be 97.27 exempt. 97.28 The following personal property shall be taxable: 97.29 (a) personal property which is part of an electric 97.30 generating, transmission, or distribution system or a pipeline 97.31 system transporting or distributing water, gas, crude oil, or 97.32 petroleum products or mains and pipes used in the distribution 97.33 of steam or hot or chilled water for heating or cooling 97.34 buildings and structures; 97.35 (b) railroad docks and wharves which are part of the 97.36 operating property of a railroad company as defined in section 98.1 270.80; 98.2 (c) personal property defined in section 272.03, 98.3 subdivision 2, clause (3); 98.4 (d) leasehold or other personal property interests which 98.5 are taxed pursuant to section 272.01, subdivision 2; 273.124, 98.6 subdivision 7; or 273.19, subdivision 1; or any other law 98.7 providing the property is taxable as if the lessee or user were 98.8 the fee owner; 98.9 (e) manufactured homes and sectional structures, including 98.10 storage sheds, decks, and similar removable improvements 98.11 constructed on the site of a manufactured home, sectional 98.12 structure, park trailer or travel trailer as provided in section 98.13 273.125, subdivision 8, paragraph (f); and 98.14 (f) flight property as defined in section 270.071. 98.15 (9) Personal property used primarily for the abatement and 98.16 control of air, water, or land pollution to the extent that it 98.17 is so used, and real property which is used primarily for 98.18 abatement and control of air, water, or land pollution as part 98.19 of an agricultural operation, as a part of a centralized 98.20 treatment and recovery facility operating under a permit issued 98.21 by the Minnesota pollution control agency pursuant to chapters 98.22 115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 98.23 and 7045.0020 to 7045.1260, as a wastewater treatment facility 98.24 and for the treatment, recovery, and stabilization of metals, 98.25 oils, chemicals, water, sludges, or inorganic materials from 98.26 hazardous industrial wastes, or as part of an electric 98.27 generation system. For purposes of this clause, personal 98.28 property includes ponderous machinery and equipment used in a 98.29 business or production activity that at common law is considered 98.30 real property. 98.31 Any taxpayer requesting exemption of all or a portion of 98.32 any real property or any equipment or device, or part thereof, 98.33 operated primarily for the control or abatement of air or water 98.34 pollution shall file an application with the commissioner of 98.35 revenue. The equipment or device shall meet standards, rules, 98.36 or criteria prescribed by the Minnesota pollution control 99.1 agency, and must be installed or operated in accordance with a 99.2 permit or order issued by that agency. The Minnesota pollution 99.3 control agency shall upon request of the commissioner furnish 99.4 information or advice to the commissioner. On determining that 99.5 property qualifies for exemption, the commissioner shall issue 99.6 an order exempting the property from taxation. The equipment or 99.7 device shall continue to be exempt from taxation as long as the 99.8 permit issued by the Minnesota pollution control agency remains 99.9 in effect. 99.10 (10) Wetlands. For purposes of this subdivision, 99.11 "wetlands" means: (i) land described in section 103G.005, 99.12 subdivision 15a; (ii) land which is mostly under water, produces 99.13 little if any income, and has no use except for wildlife or 99.14 water conservation purposes, provided it is preserved in its 99.15 natural condition and drainage of it would be legal, feasible, 99.16 and economically practical for the production of livestock, 99.17 dairy animals, poultry, fruit, vegetables, forage and grains, 99.18 except wild rice; or (iii) land in a wetland preservation area 99.19 under sections 103F.612 to 103F.616. "Wetlands" under items (i) 99.20 and (ii) include adjacent land which is not suitable for 99.21 agricultural purposes due to the presence of the wetlands, but 99.22 do not include woody swamps containing shrubs or trees, wet 99.23 meadows, meandered water, streams, rivers, and floodplains or 99.24 river bottoms. Exemption of wetlands from taxation pursuant to 99.25 this section shall not grant the public any additional or 99.26 greater right of access to the wetlands or diminish any right of 99.27 ownership to the wetlands. 99.28 (11) Native prairie. The commissioner of the department of 99.29 natural resources shall determine lands in the state which are 99.30 native prairie and shall notify the county assessor of each 99.31 county in which the lands are located. Pasture land used for 99.32 livestock grazing purposes shall not be considered native 99.33 prairie for the purposes of this clause. Upon receipt of an 99.34 application for the exemption provided in this clause for lands 99.35 for which the assessor has no determination from the 99.36 commissioner of natural resources, the assessor shall refer the 100.1 application to the commissioner of natural resources who shall 100.2 determine within 30 days whether the land is native prairie and 100.3 notify the county assessor of the decision. Exemption of native 100.4 prairie pursuant to this clause shall not grant the public any 100.5 additional or greater right of access to the native prairie or 100.6 diminish any right of ownership to it. 100.7 (12) Property used in a continuous program to provide 100.8 emergency shelter for victims of domestic abuse, provided the 100.9 organization that owns and sponsors the shelter is exempt from 100.10 federal income taxation pursuant to section 501(c)(3) of the 100.11 Internal Revenue Code of 1986, as amended through December 31, 100.12 1992, notwithstanding the fact that the sponsoring organization 100.13 receives funding under section 8 of the United States Housing 100.14 Act of 1937, as amended. 100.15 (13) If approved by the governing body of the municipality 100.16 in which the property is located, property not exceeding one 100.17 acre which is owned and operated by any senior citizen group or 100.18 association of groups that in general limits membership to 100.19 persons age 55 or older and is organized and operated 100.20 exclusively for pleasure, recreation, and other nonprofit 100.21 purposes, no part of the net earnings of which inures to the 100.22 benefit of any private shareholders; provided the property is 100.23 used primarily as a clubhouse, meeting facility, or recreational 100.24 facility by the group or association and the property is not 100.25 used for residential purposes on either a temporary or permanent 100.26 basis. 100.27 (14) To the extent provided by section 295.44, real and 100.28 personal property used or to be used primarily for the 100.29 production of hydroelectric or hydromechanical power on a site 100.30 owned by the federal government, the state, or a local 100.31 governmental unit which is developed and operated pursuant to 100.32 the provisions of section 103G.535. 100.33 (15) If approved by the governing body of the municipality 100.34 in which the property is located, and if construction is 100.35 commenced after June 30, 1983: 100.36 (a) a "direct satellite broadcasting facility" operated by 101.1 a corporation licensed by the federal communications commission 101.2 to provide direct satellite broadcasting services using direct 101.3 broadcast satellites operating in the 12-ghz. band; and 101.4 (b) a "fixed satellite regional or national program service 101.5 facility" operated by a corporation licensed by the federal 101.6 communications commission to provide fixed satellite-transmitted 101.7 regularly scheduled broadcasting services using satellites 101.8 operating in the 6-ghz. band. 101.9 An exemption provided by clause (15) shall apply for a period 101.10 not to exceed five years. When the facility no longer qualifies 101.11 for exemption, it shall be placed on the assessment rolls as 101.12 provided in subdivision 4. Before approving a tax exemption 101.13 pursuant to this paragraph, the governing body of the 101.14 municipality shall provide an opportunity to the members of the 101.15 county board of commissioners of the county in which the 101.16 facility is proposed to be located and the members of the school 101.17 board of the school district in which the facility is proposed 101.18 to be located to meet with the governing body. The governing 101.19 body shall present to the members of those boards its estimate 101.20 of the fiscal impact of the proposed property tax exemption. 101.21 The tax exemption shall not be approved by the governing body 101.22 until the county board of commissioners has presented its 101.23 written comment on the proposal to the governing body or 30 days 101.24 have passed from the date of the transmittal by the governing 101.25 body to the board of the information on the fiscal impact, 101.26 whichever occurs first. 101.27 (16) Real and personal property owned and operated by a 101.28 private, nonprofit corporation exempt from federal income 101.29 taxation pursuant to United States Code, title 26, section 101.30 501(c)(3), primarily used in the generation and distribution of 101.31 hot water for heating buildings and structures. 101.32 (17) Notwithstanding section 273.19, state lands that are 101.33 leased from the department of natural resources under section 101.34 92.46. 101.35 (18) Electric power distribution lines and their 101.36 attachments and appurtenances, that are used primarily for 102.1 supplying electricity to farmers at retail. 102.2 (19) Transitional housing facilities. "Transitional 102.3 housing facility" means a facility that meets the following 102.4 requirements. (i) It provides temporary housing to individuals, 102.5 couples, or families. (ii) It has the purpose of reuniting 102.6 families and enabling parents or individuals to obtain 102.7 self-sufficiency, advance their education, get job training, or 102.8 become employed in jobs that provide a living wage. (iii) It 102.9 provides support services such as child care, work readiness 102.10 training, and career development counseling; and a 102.11 self-sufficiency program with periodic monitoring of each 102.12 resident's progress in completing the program's goals. (iv) It 102.13 provides services to a resident of the facility for at least 102.14 three months but no longer than three years, except residents 102.15 enrolled in an educational or vocational institution or job 102.16 training program. These residents may receive services during 102.17 the time they are enrolled but in no event longer than four 102.18 years. (v) It is owned and operated or under lease from a unit 102.19 of government or governmental agency under a property 102.20 disposition program and operated by one or more organizations 102.21 exempt from federal income tax under section 501(c)(3) of the 102.22 Internal Revenue Code of 1986, as amended through December 31, 102.23 1992. This exemption applies notwithstanding the fact that the 102.24 sponsoring organization receives financing by a direct federal 102.25 loan or federally insured loan or a loan made by the Minnesota 102.26 housing finance agency under the provisions of either Title II 102.27 of the National Housing Act or the Minnesota Housing Finance 102.28 Agency Law of 1971 or rules promulgated by the agency pursuant 102.29 to it, and notwithstanding the fact that the sponsoring 102.30 organization receives funding under Section 8 of the United 102.31 States Housing Act of 1937, as amended. 102.32 (20) Real and personal property, including leasehold or 102.33 other personal property interests, owned and operated by a 102.34 corporation if more than 50 percent of the total voting power of 102.35 the stock of the corporation is owned collectively by: (i) the 102.36 board of regents of the University of Minnesota, (ii) the 103.1 University of Minnesota Foundation, an organization exempt from 103.2 federal income taxation under section 501(c)(3) of the Internal 103.3 Revenue Code of 1986, as amended through December 31, 1992, and 103.4 (iii) a corporation organized under chapter 317A, which by its 103.5 articles of incorporation is prohibited from providing pecuniary 103.6 gain to any person or entity other than the regents of the 103.7 University of Minnesota; which property is used primarily to 103.8 manage or provide goods, services, or facilities utilizing or 103.9 relating to large-scale advanced scientific computing resources 103.10 to the regents of the University of Minnesota and others. 103.11 (21)(a) Small scale wind energy conversion systems 103.12 installed after January 1, 1991, and used as an electric power 103.13 source are exempt. 103.14 "Small scale wind energy conversion systems" are wind 103.15 energy conversion systems, as defined in section 216C.06, 103.16 subdivision 12, including the foundation or support pad, which 103.17 are (i) used as an electric power source; (ii) located within 103.18 one county and owned by the same owner; and (iii) produce two 103.19 megawatts or less of electricity as measured by nameplate 103.20 ratings. 103.21 (b) Medium scale wind energy conversion systems installed 103.22 after January 1, 1991, are treated as follows: (i) the 103.23 foundation and support pad are taxable; (ii) the associated 103.24 supporting and protective structures are exempt for the first 103.25 five assessment years after they have been constructed, and 103.26 thereafter, 30 percent of the market value of the associated 103.27 supporting and protective structures are taxable; and (iii) the 103.28 turbines, blades, transformers, and its related equipment, are 103.29 exempt. "Medium scale wind energy conversion systems" are wind 103.30 energy conversion systems as defined in section 216C.06, 103.31 subdivision 12, including the foundation or support pad, which 103.32 are: (i) used as an electric power source; (ii) located within 103.33 one county and owned by the same owner; and (iii) produce more 103.34 than two but equal to or less than 12 megawatts of energy as 103.35 measured by nameplate ratings. 103.36 (c) Large scale wind energy conversion systems installed 104.1 after January 1, 1991, are treated as follows: 25 percent of 104.2 the market value of all property is taxable, including (i) the 104.3 foundation and support pad; (ii) the associated supporting and 104.4 protective structures; and (iii) the turbines, blades, 104.5 transformers, and its related equipment. "Large scale wind 104.6 energy conversion systems" are wind energy conversion systems as 104.7 defined in section 216C.06, subdivision 12, including the 104.8 foundation or support pad, which are: (i) used as an electric 104.9 power source; and (ii) produce more than 12 megawatts of energy 104.10 as measured by nameplate ratings. 104.11 (22) Containment tanks, cache basins, and that portion of 104.12 the structure needed for the containment facility used to 104.13 confine agricultural chemicals as defined in section 18D.01, 104.14 subdivision 3, as required by the commissioner of agriculture 104.15 under chapter 18B or 18C. 104.16 (23) Photovoltaic devices, as defined in section 216C.06, 104.17 subdivision 13, installed after January 1, 1992, and used to 104.18 produce or store electric power. 104.19 (24) Real and personal property owned and operated by a 104.20 private, nonprofit corporation exempt from federal income 104.21 taxation pursuant to United States Code, title 26, section 104.22 501(c)(3), primarily used for an ice arena or ice rink, and used 104.23 primarily for youth and high school programs. 104.24 (25) A structure that is situated on real property that is 104.25 used for: 104.26 (i) housing for the elderly or for low- and moderate-income 104.27 families as defined in Title II of the National Housing Act, as 104.28 amended through December 31, 1990, and funded by a direct 104.29 federal loan or federally insured loan made pursuant to Title II 104.30 of the act; or 104.31 (ii) housing lower income families or elderly or 104.32 handicapped persons, as defined in Section 8 of the United 104.33 States Housing Act of 1937, as amended. 104.34 In order for a structure to be exempt under item (i) or 104.35 (ii), it must also meet each of the following criteria: 104.36 (A) is owned by an entity which is operated as a nonprofit 105.1 corporation organized under chapter 317A; 105.2 (B) is owned by an entity which has not entered into a 105.3 housing assistance payments contract under Section 8 of the 105.4 United States Housing Act of 1937, or, if the entity which owns 105.5 the structure has entered into a housing assistance payments 105.6 contract under Section 8 of the United States Housing Act of 105.7 1937, the contract provides assistance for less than 90 percent 105.8 of the dwelling units in the structure, excluding dwelling units 105.9 intended for management or maintenance personnel; 105.10 (C) operates an on-site congregate dining program in which 105.11 participation by residents is mandatory, and provides assisted 105.12 living or similar social and physical support services for 105.13 residents; and 105.14 (D) was not assessed and did not pay tax under chapter 273 105.15 prior to the 1991 levy, while meeting the other conditions of 105.16 this clause. 105.17 An exemption under this clause remains in effect for taxes 105.18 levied in each year or partial year of the term of its permanent 105.19 financing. 105.20 (26) Real and personal property that is located in the 105.21 Superior National Forest, and owned or leased and operated by a 105.22 nonprofit organization that is exempt from federal income 105.23 taxation under section 501(c)(3) of the Internal Revenue Code of 105.24 1986, as amended through December 31, 1992, and primarily used 105.25 to provide recreational opportunities for disabled veterans and 105.26 their families. 105.27 (27) Manure pits and appurtenances, which may include 105.28 slatted floors and pipes, installed or operated in accordance 105.29 with a permit, order, or certificate of compliance issued by the 105.30 Minnesota pollution control agency. The exemption shall 105.31 continue for as long as the permit, order, or certificate issued 105.32 by the Minnesota pollution control agency remains in effect. 105.33 (28) Notwithstanding clause (8), item (a), attached 105.34 machinery and other personal property which is part of a 105.35 facility containing a cogeneration system as described in 105.36 section 216B.166, subdivision 2, paragraph (a), if the 106.1 cogeneration system has met the following criteria: (i) the 106.2 system utilizes natural gas as a primary fuel and the 106.3 cogenerated steam initially replaces steam generated from 106.4 existing thermal boilers utilizing coal; (ii) the facility 106.5 developer is selected as a result of a procurement process 106.6 ordered by the public utilities commission; and (iii) 106.7 construction of the facility is commenced after July 1, 1994, 106.8 and before July 1, 1997. 106.9 (29) Real property acquired by a home rule charter city, 106.10 statutory city, county, town, or school district under a lease 106.11 purchase agreement or an installment purchase contract during 106.12 the term of the lease purchase agreement as long as and to the 106.13 extent that the property is used by the city, county, town, or 106.14 school district and devoted to a public use and to the extent it 106.15 is not subleased to any private individual, entity, association, 106.16 or corporation in connection with a business or enterprise 106.17 operated for profit. 106.18 (30) Property owned by a nonprofit charitable organization 106.19 that qualifies for tax exemption under section 501(c)(3) of the 106.20 Internal Revenue Code of 1986, as amended through December 31, 106.21 1997, that is intended to be used as a business incubator in a 106.22 high-unemployment county but is not occupied on the assessment 106.23 date. As used in this clause, a "business incubator" is a 106.24 facility used for the development of nonretail businesses, 106.25 offering access to equipment, space, services, and advice to the 106.26 tenant businesses, for the purpose of encouraging economic 106.27 development, diversification, and job creation in the area 106.28 served by the organization, and "high-unemployment county" is a 106.29 county that had an average annual unemployment rate of 7.9 106.30 percent or greater in 1997. Property that qualifies for the 106.31 exemption under this clause is limited to no more than two 106.32 contiguous parcels and structures that do not exceed in the 106.33 aggregate 40,000 square feet. This exemption expires after 106.34 taxes payable in 2005. 106.35 (31) Notwithstanding any other law to the contrary, real 106.36 property that meets the following criteria is exempt: 107.1 (i) constitutes a wastewater treatment system (a) 107.2 constructed by a municipality using public funds, (b) operates 107.3 under a State Disposal System Permit issued by the Minnesota 107.4 pollution control agency pursuant to chapters 115 and 116 and 107.5 Minnesota Rules, chapter 700l, and (c) applies its effluent to 107.6 land used as part of an agricultural operation; 107.7 (ii) is located within a municipality of a population of 107.8 less than 10,000; 107.9 (iii) is used for treatment of effluent from a private 107.10 potato processing facility; and 107.11 (iv) is owned by a municipality and operated by a private 107.12 entity under agreement with that municipality. 107.13 (32) Notwithstanding clause (8), item (a), attached 107.14 machinery and other personal property which is part of a 107.15 simple-cycle combustion-turbine electric generation facility 107.16 that exceeds 250 megawatts of installed capacity and that meets 107.17 the requirements of this clause. At the time of construction, 107.18 the facility must: 107.19 (i) not be owned by a public utility as defined in section 107.20 216B.02, subdivision 4; 107.21 (ii) utilize natural gas as a primary fuel; 107.22 (iii) be located within 20 miles of the intersection of an 107.23 existing 42-inch (outside diameter) natural gas pipeline and a 107.24 345-kilovolt high-voltage electric transmission line; and 107.25 (iv) be designed to provide peaking, emergency backup, or 107.26 contingency services, and have received a certificate of need 107.27 pursuant to section 216B.243 demonstrating demand for its 107.28 capacity. 107.29 Construction of the facility must be commenced after July 1, 107.30 1999, and before July 1, 2003. Property eligible for this 107.31 exemption does not include electric transmission lines and 107.32 interconnections or gas pipelines and interconnections 107.33 appurtenant to the property or the facility. 107.34 Sec. 5. Minnesota Statutes 1998, section 272.027, is 107.35 amended to read: 107.36 272.027 [PERSONAL PROPERTY USED TO GENERATE ELECTRICITY FOR 108.1 PRODUCTION AND RESALE.] 108.2 Subdivision 1. [ELECTRICITY GENERATED TO PRODUCE GOODS AND 108.3 SERVICES.] Personal property used to generate electric power is 108.4 exempt from property taxation if the electric power is used to 108.5 manufacture or produce goods, products, or services, other than 108.6 electric power, by the owner of the electric generation 108.7 plant. Except as provided in subdivisions 2 and 3, the 108.8 exemption does not apply to property used to produce electric 108.9 power for sale to others and does not apply to real property. 108.10 In determining the value subject to tax, a proportionate share 108.11 of the value of the generating facilities, equal to the 108.12 proportion that the power sold to others bears to the total 108.13 generation of the plant, is subject to the general property tax 108.14 in the same manner as other property. Power generated in such a 108.15 plant and exchanged for an equivalent amount of power that is 108.16 used for the manufacture or production of goods, products, or 108.17 services other than electric power by the owner of the 108.18 generating plant is considered to be used by the owner of the 108.19 plant. 108.20 Subd. 2. [EXEMPTION FOR CUSTOMER OWNED PROPERTY 108.21 TRANSFERRED TO A UTILITY.] (a) Tools, implements, and machinery 108.22 of an electric generating facility are exempt if all the 108.23 following requirements are met: 108.24 (1) the electric generating facilities were operational and 108.25 met the requirements for exemption of personal property under 108.26 subdivision 1 on January 2, 1999; and 108.27 (2) the generating facility is sold to a Minnesota electric 108.28 utility. 108.29 (b) Any tools, implements, and machinery installed to 108.30 increase generation capacity are also exempt under this section 108.31 provided that the existing tools, implements, and machinery are 108.32 exempt under paragraph (a). 108.33 Subd. 3. [EXEMPTION ELECTRIC POWER PLANT PERSONAL 108.34 PROPERTY; TACONITE AND STEEL MILL.] 108.35 Tools, implements, and machinery of an electric generating 108.36 facility are exempt if all the following requirements are met: 109.1 (1) the electric generating facility, when completed, will 109.2 have a capacity of at least 450 megawatts; 109.3 (2) the electric generating facility is adjacent to a 109.4 taconite mine direct-reduction steel mill; and 109.5 (3) the electric generating facility supplied over 60 109.6 percent of its electricity generated in the prior year to the 109.7 adjacent direct-reduction plant and steel mill. 109.8 Sec. 6. Minnesota Statutes 1998, section 272.03, 109.9 subdivision 6, is amended to read: 109.10 Subd. 6. [TRACT, LOT, PARCEL, AND PIECE OR PARCEL.] 109.11 (a) "Tract," "lot," "parcel," and "piece or parcel" of land 109.12 means any contiguous quantity of land in the possession of, 109.13 owned by, or recorded as the property of, the same claimant or 109.14 person. 109.15 (b) Notwithstanding paragraph (a), property that is owned 109.16 by a utility, leased for residential or recreational uses for 109.17 terms of 20 years or longer, and separately valued by the 109.18 assessor, will be treated for property tax purposes as separate 109.19 parcels. 109.20 Sec. 7. Minnesota Statutes 1998, section 273.11, 109.21 subdivision 1a, is amended to read: 109.22 Subd. 1a. [LIMITED MARKET VALUE.] In the case of all 109.23 property classified as agricultural homestead or nonhomestead, 109.24 residential homestead or nonhomestead, or noncommercial seasonal 109.25 recreational residential, the assessor shall compare the value 109.26 with that determined in the preceding assessment. The amount of 109.27 the increase entered in the current assessment shall not exceed 109.28 the greater of (1)tenseven percent of the value in the 109.29 preceding assessment, or (2)one-fourth15 percent of the 109.30 difference between the current assessment and the preceding 109.31 assessment. This limitation shall not apply to increases in 109.32 value due to improvements. For purposes of this subdivision, 109.33 the term "assessment" means the value prior to any exclusion 109.34 under subdivision 16. 109.35 The provisions of this subdivision shall be in effect only 109.36 for assessment years 1993 through 2001. 110.1 For purposes of the assessment/sales ratio study conducted 110.2 under section 127A.48, and the computation of state aids paid 110.3 under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 110.4 477A, market values and net tax capacities determined under this 110.5 subdivision and subdivision 16, shall be used. 110.6 Sec. 8. Minnesota Statutes 1998, section 273.11, 110.7 subdivision 16, is amended to read: 110.8 Subd. 16. [VALUATION EXCLUSION FOR CERTAIN IMPROVEMENTS.] 110.9 Improvements to homestead property made before January 2, 2003, 110.10 shall be fully or partially excluded from the value of the 110.11 property for assessment purposes provided that (1) the house is 110.12 at least3545 years old at the time of the improvement and (2) 110.13either110.14(a)the assessor's estimated market value of the house on 110.15 January 2 of the current year is equal to or less than$150,000,110.16or$300,000. 110.17(b) if the estimated market value of the house is over110.18$150,000 market value but is less than $300,000 on January 2 of110.19the current year, the property qualifies if110.20(i) it is located in a city or town in which 50 percent or110.21more of the owner-occupied housing units were constructed before110.221960 based upon the 1990 federal census, and110.23(ii) the city or town's median family income based upon the110.241990 federal census is less than the statewide median family110.25income based upon the 1990 federal census, or110.26(c) if the estimated market value of the house is $300,000110.27or more on January 2 of the current year, the property qualifies110.28if110.29(i) it is located in a city or town in which 45 percent or110.30more of the homes were constructed before 1940 based upon the110.311990 federal census, and110.32(ii) it is located in a city or town in which 45 percent or110.33more of the housing units were rental based upon the 1990110.34federal census, and110.35(iii) the city or town's median value of owner-occupied110.36housing units based upon the 1990 federal census is less than111.1the statewide median value of owner-occupied housing units based111.2upon the 1990 federal census.111.3 For purposes of determining this eligibility, "house" means 111.4 land and buildings. 111.5 The age of a residence is the number of years since the 111.6 original year of its construction. In the case of a residence 111.7 that is relocated, the relocation must be from a location within 111.8 the state and the only improvements eligible for exclusion under 111.9 this subdivision are (1) those for which building permits were 111.10 issued to the homeowner after the residence was relocated to its 111.11 present site, and (2) those undertaken during or after the year 111.12 the residence is initially occupied by the homeowner, excluding 111.13 any market value increase relating to basic improvements that 111.14 are necessary to install the residence on its foundation and 111.15 connect it to utilities at its present site. In the case of an 111.16 owner-occupied duplex or triplex, the improvement is eligible 111.17 regardless of which portion of the property was improved. 111.18 If the property lies in a jurisdiction which is subject to 111.19 a building permit process, a building permit must have been 111.20 issued prior to commencement of the improvement.Any111.21improvementThe improvements for a single project or in any one 111.22 year must add at least$1,000$5,000 to the value of the 111.23 property to be eligible for exclusion under this subdivision. 111.24 Only improvements to the structure which is the residence of the 111.25 qualifying homesteader or construction of or improvements to no 111.26 more than one two-car garage per residence qualify for the 111.27 provisions of this subdivision. If an improvement was begun 111.28 between January 2, 1992, and January 2, 1993, any value added 111.29 from that improvement for the January 1994 and subsequent 111.30 assessments shall qualify for exclusion under this subdivision 111.31 provided that a building permit was obtained for the improvement 111.32 between January 2, 1992, and January 2, 1993. Whenever a 111.33 building permit is issued for property currently classified as 111.34 homestead, the issuing jurisdiction shall notify the property 111.35 owner of the possibility of valuation exclusion under this 111.36 subdivision. The assessor shall require an application, 112.1 including documentation of the age of the house from the owner, 112.2 if unknown by the assessor. The application may be filed 112.3 subsequent to the date of the building permit provided that the 112.4 application must be filed within three years of the date the 112.5 building permit was issued for the improvement. If the property 112.6 lies in a jurisdiction which is not subject to a building permit 112.7 process, the application must be filed within three years of the 112.8 date the improvement was made. The assessor may require proof 112.9 from the taxpayer of the date the improvement was made. 112.10 Applications must be received prior to July 1 of any year in 112.11 order to be effective for taxes payable in the following year. 112.12 No exclusion for an improvement may be grantedfor an112.13improvementby a local board of review or county board of 112.14 equalization, and no abatement of the taxes for qualifying 112.15 improvements may be granted by the county board unless (1) a 112.16 building permit was issued prior to the commencement of the 112.17 improvement if the jurisdiction requires a building permit, and 112.18 (2) an application was completed. 112.19 The assessor shall note the qualifying value of each 112.20 improvement on the property's record, and the sum of those 112.21 amounts shall be subtracted from the value of the property in 112.22 each year for ten years after the improvement has been made, at112.23which time an amount equal to 20 percent of the qualifying value112.24shall be added back in each of the five subsequent assessment112.25years. After ten years the amount of the qualifying value shall 112.26 be added back as follows: 112.27 (1) 50 percent in the two subsequent assessment years if 112.28 the qualifying value is equal to or less than $10,000 market 112.29 value; or 112.30 (2) 20 percent in the five subsequent assessment years if 112.31 the qualifying value is greater than $10,000 market value. 112.32 If an application is filed after the first assessment date at 112.33 which an improvement could have been subject to the valuation 112.34 exclusion under this subdivision, the ten-year period during 112.35 which the value is subject to exclusion is reduced by the number 112.36 of years that have elapsed since the property would have 113.1 qualified initially. The valuation exclusion shall terminate 113.2 whenever (1) the property is sold, or (2) the property is 113.3 reclassified to a class which does not qualify for treatment 113.4 under this subdivision. Improvements made by an occupant who is 113.5 the purchaser of the property under a conditional purchase 113.6 contract do not qualify under this subdivision unless the seller 113.7 of the property is a governmental entity. The qualifying value 113.8 of the property shall be computed based upon the increase from 113.9 that structure's market value as of January 2 preceding the 113.10 acquisition of the property by the governmental entity. 113.11 The total qualifying value for a homestead may not exceed 113.12 $50,000. The total qualifying value for a homestead with a 113.13 house that is less than 70 years old may not exceed $25,000. 113.14 The term "qualifying value" means the increase in estimated 113.15 market value resulting from the improvement if the improvement 113.16 occurs when the house is at least 70 years old, or one-half of 113.17 the increase in estimated market value resulting from the 113.18 improvement otherwise. The $25,000 and $50,000 maximum 113.19 qualifying value under this subdivision may result fromup to113.20three separatemultiple improvements to the homestead.The113.21application shall state, in clear language, that If more than113.22three improvements are made to the qualifying property, a113.23taxpayer may choose which three improvements are eligible,113.24provided that after the taxpayer has made the choice and any113.25valuation attributable to those improvements has been excluded113.26from taxation, no further changes can be made by the taxpayer.113.27 If 50 percent or more of the square footage of a structure 113.28 is voluntarily razed or removed, the valuation increase 113.29 attributable to any subsequent improvements to the remaining 113.30 structure does not qualify for the exclusion under this 113.31 subdivision. If a structure is unintentionally or accidentally 113.32 destroyed by a natural disaster, the property is eligible for an 113.33 exclusion under this subdivision provided that the structure was 113.34 not completely destroyed. The qualifying value on property 113.35 destroyed by a natural disaster shall be computed based upon the 113.36 increase from that structure's market value as determined on 114.1 January 2 of the year in which the disaster occurred. A 114.2 property receiving benefits under the homestead disaster 114.3 provisions under section 273.123 is not disqualified from 114.4 receiving an exclusion under this subdivision. If any 114.5 combination of improvements made to a structure after January 1, 114.6 1993, increases the size of the structure by 100 percent or 114.7 more, the valuation increase attributable to the portion of the 114.8 improvement that causes the structure's size to exceed 100 114.9 percent does not qualify for exclusion under this subdivision. 114.10 Sec. 9. Minnesota Statutes 1998, section 273.111, is 114.11 amended by adding a subdivision to read: 114.12 Subd. 15. [DISSECTED PARCELS; CONTINUED DEFERMENT.] Real 114.13 estate consisting of more than ten, but less than 15, acres 114.14 which has: 114.15 (1) been owned by the applicant or the applicant's parents 114.16 for at least 70 years; 114.17 (2) been dissected by two or more major parkways or 114.18 interstate highways; and 114.19 (3) qualified for the agricultural valuation and tax 114.20 deferment under this section through assessment year 1996, taxes 114.21 payable in 1997, shall continue to qualify for treatment under 114.22 this section until the applicant's death or transfer or sale by 114.23 the applicant of the applicant's interest in the real estate. 114.24 Sec. 10. Minnesota Statutes 1998, section 273.124, 114.25 subdivision 1, is amended to read: 114.26 Subdivision 1. [GENERAL RULE.] (a) Residential real estate 114.27 that is occupied and used for the purposes of a homestead by its 114.28 owner, who must be a Minnesota resident, is a residential 114.29 homestead. 114.30 Agricultural land, as defined in section 273.13, 114.31 subdivision 23, that is occupied and used as a homestead by its 114.32 owner, who must be a Minnesota resident, is an agricultural 114.33 homestead. 114.34 Dates for establishment of a homestead and homestead 114.35 treatment provided to particular types of property are as 114.36 provided in this section. 115.1 Property of a trustee, beneficiary, or grantor of a trust 115.2 is not disqualified from receiving homestead benefits if the 115.3 homestead requirements under this chapter are satisfied. 115.4 The assessor shall require proof, as provided in 115.5 subdivision 13, of the facts upon which classification as a 115.6 homestead may be determined. Notwithstanding any other law, the 115.7 assessor may at any time require a homestead application to be 115.8 filed in order to verify that any property classified as a 115.9 homestead continues to be eligible for homestead status. 115.10 Notwithstanding any other law to the contrary, the department of 115.11 revenue may, upon request from an assessor, verify whether an 115.12 individual who is requesting or receiving homestead 115.13 classification has filed a Minnesota income tax return as a 115.14 resident for the most recent taxable year for which the 115.15 information is available. 115.16 When there is a name change or a transfer of homestead 115.17 property, the assessor may reclassify the property in the next 115.18 assessment unless a homestead application is filed to verify 115.19 that the property continues to qualify for homestead 115.20 classification. 115.21 (b) For purposes of this section, homestead property shall 115.22 include property which is used for purposes of the homestead but 115.23 is separated from the homestead by a road, street, lot, 115.24 waterway, or other similar intervening property. The term "used 115.25 for purposes of the homestead" shall include but not be limited 115.26 to uses for gardens, garages, or other outbuildings commonly 115.27 associated with a homestead, but shall not include vacant land 115.28 held primarily for future development. In order to receive 115.29 homestead treatment for the noncontiguous property, the owner 115.30 must use the property for the purposes of the homestead, and 115.31 must apply to the assessor, both by the deadlines given in 115.32 subdivision 9. After initial qualification for the homestead 115.33 treatment, additional applications for subsequent years are not 115.34 required. 115.35 (c) Residential real estate that is occupied and used for 115.36 purposes of a homestead by a relative of the owner is a 116.1 homestead but only to the extent of the homestead treatment that 116.2 would be provided if the related owner occupied the property. 116.3 For purposes of this paragraph and paragraph (g), "relative" 116.4 means a parent, stepparent, child, stepchild, grandparent, 116.5 grandchild, brother, sister, uncle, or aunt. This relationship 116.6 may be by blood or marriage. Property that has been classified 116.7 as seasonal recreational residential property at any time during 116.8 which it has been owned by the current owner or spouse of the 116.9 current owner will not be reclassified as a homestead unless it 116.10 is occupied as a homestead by the owner; this prohibition also 116.11 applies to property that, in the absence of this paragraph, 116.12 would have been classified as seasonal recreational residential 116.13 property at the time when the residence was constructed. 116.14 Neither the related occupant nor the owner of the property may 116.15 claim a property tax refund under chapter 290A for a homestead 116.16 occupied by a relative. In the case of a residence located on 116.17 agricultural land, only the house, garage, and immediately 116.18 surrounding one acre of land shall be classified as a homestead 116.19 under this paragraph, except as provided in paragraph (d). 116.20 (d) Agricultural property that is occupied and used for 116.21 purposes of a homestead by a relative of the owner, is a 116.22 homestead, only to the extent of the homestead treatment that 116.23 would be provided if the related owner occupied the property, 116.24 and only if all of the following criteria are met: 116.25 (1) the relative who is occupying the agricultural property 116.26 is a son, daughter, father, or mother of the owner of the 116.27 agricultural property or a son or daughter of the spouse of the 116.28 owner of the agricultural property, 116.29 (2) notwithstanding the residency requirement in paragraph 116.30 (a), the owner of the agricultural propertymustneed not be a 116.31 Minnesota resident, 116.32 (3) the relative occupying the agricultural property is 116.33 actively farming the property and is a Minnesota resident, 116.34 (4) the owner of the agricultural property must not receive 116.35 homestead treatment on any other agricultural property in 116.36 Minnesota, and 117.1(4)(5) the owner of the agricultural property is limited 117.2 to only one agricultural homestead per family under this 117.3 paragraph. 117.4 Neither the related occupant nor the owner of the property 117.5 may claim a property tax refund under chapter 290A for a 117.6 homestead occupied by a relative qualifying under this 117.7 paragraph. For purposes of this paragraph, "agricultural 117.8 property" means the house, garage, other farm buildings and 117.9 structures, and agricultural land. 117.10 Application must be made to the assessor by the owner of 117.11 the agricultural property to receive homestead benefits under 117.12 this paragraph. The assessor may require the necessary proof 117.13 that the requirements under this paragraph have been met. 117.14 (e) In the case of property owned by a property owner who 117.15 is married, the assessor must not deny homestead treatment in 117.16 whole or in part if only one of the spouses occupies the 117.17 property and the other spouse is absent due to: (1) marriage 117.18 dissolution proceedings, (2) legal separation, (3) employment or 117.19 self-employment in another location, or (4) other personal 117.20 circumstances causing the spouses to live separately, not 117.21 including an intent to obtain two homestead classifications for 117.22 property tax purposes. To qualify under clause (3), the 117.23 spouse's place of employment or self-employment must be at least 117.24 50 miles distant from the other spouse's place of employment, 117.25 and the homesteads must be at least 50 miles distant from each 117.26 other. Homestead treatment, in whole or in part, shall not be 117.27 denied to the owner's spouse who previously occupied the 117.28 residence with the owner if the absence of the owner is due to 117.29 one of the exceptions provided in this paragraph. 117.30 (f) The assessor must not deny homestead treatment in whole 117.31 or in part if: 117.32 (1) in the case of a property owner who is not married, the 117.33 owner is absent due to residence in a nursing home or boarding 117.34 care facility and the property is not otherwise occupied; or 117.35 (2) in the case of a property owner who is married, the 117.36 owner or the owner's spouse or both are absent due to residence 118.1 in a nursing home or boarding care facility and the property is 118.2 not occupied or is occupied only by the owner's spouse. 118.3 (g) If an individual is purchasing property with the intent 118.4 of claiming it as a homestead and is required by the terms of 118.5 the financing agreement to have a relative shown on the deed as 118.6 a coowner, the assessor shall allow a full homestead 118.7 classification. This provision only applies to first-time 118.8 purchasers, whether married or single, or to a person who had 118.9 previously been married and is purchasing as a single individual 118.10 for the first time. The application for homestead benefits must 118.11 be on a form prescribed by the commissioner and must contain the 118.12 data necessary for the assessor to determine if full homestead 118.13 benefits are warranted. 118.14 Sec. 11. Minnesota Statutes 1998, section 273.124, 118.15 subdivision 7, is amended to read: 118.16 Subd. 7. [LEASED BUILDINGS OR LAND.] For purposes of class 118.17 1 determinations, homesteads include: 118.18 (a) buildings and appurtenances owned and used by the 118.19 occupant as a permanent residence which are located upon land 118.20 the title to which is vested in a person or entity other than 118.21 the occupant; 118.22 (b) all buildings and appurtenances located upon land owned 118.23 by the occupant and used for the purposes of a homestead 118.24 together with the land upon which they are located, if all of 118.25 the following criteria are met: 118.26 (1) the occupant is using the property as a permanent 118.27 residence; 118.28 (2) the occupant is paying the property taxes and any 118.29 special assessments levied against the property; 118.30 (3) the occupant has signed a lease which has an option to 118.31 purchase the buildings and appurtenances; 118.32 (4) the term of the lease is at least five years; and 118.33 (5) the occupant has made a down payment of at least $5,000 118.34 in cash if the property was purchased by means of a contract for 118.35 deed or subject to a mortgage. 118.36 (c) all buildings and appurtenances and the land upon which 119.1 they are located that are used for purposes of a homestead, if 119.2 all of the following criteria are met: 119.3 (1) the land is owned by a utility, which maintains 119.4 ownership of the land in order to facilitate compliance with the 119.5 terms of its hydroelectric project license from the federal 119.6 energy regulatory commission; 119.7 (2) the land is leased for a term of 20 years or more; 119.8 (3) the occupant is using the property as a permanent 119.9 residence; and 119.10 (4) the occupant is paying the property taxes and any 119.11 special assessments levied against the property. 119.12 Any taxpayer meeting all the requirements of this paragraph 119.13 must notify the county assessor, or the assessor who has the 119.14 powers of the county assessor pursuant to section 273.063, in 119.15 writing, as soon as possible after signing the lease agreement 119.16 and occupying the buildings as a homestead. 119.17 Sec. 12. Minnesota Statutes 1998, section 273.124, 119.18 subdivision 8, is amended to read: 119.19 Subd. 8. [HOMESTEAD OWNED BY FAMILY FARM CORPORATION OR 119.20 PARTNERSHIP OR LEASED TO FAMILY FARM CORPORATION.] (a) Each 119.21 family farm corporation and each partnership operating a family 119.22 farm is entitled to class 1b under section 273.13, subdivision 119.23 22, paragraph (b), or class 2a assessment for one homestead 119.24 occupied by a shareholder or partner thereof who is residing on 119.25 the land and actively engaged in farming of the land owned by 119.26 the corporation or partnership. Homestead treatment applies 119.27 even if legal title to the property is in the name of the 119.28 corporation or partnership and not in the name of the person 119.29 residing on it. "Family farm corporation" and "family farm" 119.30 have the meanings given in section 500.24, except that the 119.31 number of allowable shareholders or partners under this 119.32 subdivision shall not exceed 12. 119.33 (b) In addition to property specified in paragraph (a), any 119.34 other residences owned by corporations or partnerships described 119.35 in paragraph (a) which are located on agricultural land and 119.36 occupied as homesteads by shareholders or partners who are 120.1 actively engaged in farming on behalf of the corporation or 120.2 partnership must also be assessed as class 2a property or as 120.3 class 1b property under section 273.13, subdivision 22, 120.4 paragraph (b), but the property eligible is limited to the 120.5 residence itself and as much of the land surrounding the 120.6 homestead, not exceeding one acre, as is reasonably necessary 120.7 for the use of the dwelling as a home, and does not include any 120.8 other structures that may be located on it. 120.9 (c) Agricultural property owned by a shareholder of a 120.10 family farm corporation, as defined in paragraph (a), and leased 120.11 to the family farm corporation by the shareholder, is entitled 120.12 to class 1b under section 273.13, subdivision 22, paragraph (b), 120.13 or class 2a under section 273.13, subdivision 23, paragraph (a), 120.14 if the owner is actually residing on the property and is 120.15 actually engaged in farming the land on behalf of the 120.16 corporation. This paragraph applies without regard to any legal 120.17 possession rights of the family farm corporation under the lease. 120.18 Sec. 13. Minnesota Statutes 1998, section 273.124, 120.19 subdivision 13, is amended to read: 120.20 Subd. 13. [HOMESTEAD APPLICATION.] (a) A person who meets 120.21 the homestead requirements under subdivision 1 must file a 120.22 homestead application with the county assessor to initially 120.23 obtain homestead classification. 120.24 (b) On or before January 2, 1993, each county assessor 120.25 shall mail a homestead application to the owner of each parcel 120.26 of property within the county which was classified as homestead 120.27 for the 1992 assessment year. The format and contents of a 120.28 uniform homestead application shall be prescribed by the 120.29 commissioner of revenue. The commissioner shall consult with 120.30 the chairs of the house and senate tax committees on the 120.31 contents of the homestead application form. The application 120.32 must clearly inform the taxpayer that this application must be 120.33 signed by all owners who occupy the property or by the 120.34 qualifying relative and returned to the county assessor in order 120.35 for the property to continue receiving homestead treatment. The 120.36 envelope containing the homestead application shall clearly 121.1 identify its contents and alert the taxpayer of its necessary 121.2 immediate response. 121.3 (c) Every property owner applying for homestead 121.4 classification must furnish to the county assessor the social 121.5 security number of each occupant who is listed as an owner of 121.6 the property on the deed of record, the name and address of each 121.7 owner who does not occupy the property, and the name and social 121.8 security number of each owner's spouse who occupies the 121.9 property. The application must be signed by each owner who 121.10 occupies the property and by each owner's spouse who occupies 121.11 the property, or, in the case of property that qualifies as a 121.12 homestead under subdivision 1, paragraph (c), by the qualifying 121.13 relative. 121.14 If a property owner occupies a homestead, the property 121.15 owner's spouse may not claim another property as a homestead 121.16 unless the property owner and the property owner's spouse file 121.17 with the assessor an affidavit or other proof required by the 121.18 assessor stating that the property qualifies as a homestead 121.19 under subdivision 1, paragraph (e). 121.20 Owners or spouses occupying residences owned by their 121.21 spouses and previously occupied with the other spouse, either of 121.22 whom fail to include the other spouse's name and social security 121.23 number on the homestead application or provide the affidavits or 121.24 other proof requested, will be deemed to have elected to receive 121.25 only partial homestead treatment of their residence. The 121.26 remainder of the residence will be classified as nonhomestead 121.27 residential. When an owner or spouse's name and social security 121.28 number appear on homestead applications for two separate 121.29 residences and only one application is signed, the owner or 121.30 spouse will be deemed to have elected to homestead the residence 121.31 for which the application was signed. 121.32 The social security numbers or affidavits or other proofs 121.33 of the property owners and spouses are private data on 121.34 individuals as defined by section 13.02, subdivision 12, but, 121.35 notwithstanding that section, the private data may be disclosed 121.36 to the commissioner of revenue, or, for purposes of proceeding 122.1 under the Revenue Recapture Act to recover personal property 122.2 taxes owing, to the county treasurer. 122.3 (d) If residential real estate is occupied and used for 122.4 purposes of a homestead by a relative of the owner and qualifies 122.5 for a homestead under subdivision 1, paragraph (c), in order for 122.6 the property to receive homestead status, a homestead 122.7 application must be filed with the assessor. The social 122.8 security number of each relative occupying the property and the 122.9 social security number of each owner who is related to an 122.10 occupant of the property shall be required on the homestead 122.11 application filed under this subdivision. If a different 122.12 relative of the owner subsequently occupies the property, the 122.13 owner of the property must notify the assessor within 30 days of 122.14 the change in occupancy. The social security number of a 122.15 relative occupying the property is private data on individuals 122.16 as defined by section 13.02, subdivision 12, but may be 122.17 disclosed to the commissioner of revenue. 122.18 (e) The homestead application shall also notify the 122.19 property owners that the application filed under this section 122.20 will not be mailed annually and that if the property is granted 122.21 homestead status for the 1993 assessment, or any assessment year 122.22 thereafter, that same property shall remain classified as 122.23 homestead until the property is sold or transferred to another 122.24 person, or the owners, the spouse of the owner, or the relatives 122.25 no longer use the property as their homestead. Upon the sale or 122.26 transfer of the homestead property, a certificate of value must 122.27 be timely filed with the county auditor as provided under 122.28 section 272.115. Failure to notify the assessor within 30 days 122.29 that the property has been sold, transferred, or that the owner, 122.30 the spouse of the owner, or the relative is no longer occupying 122.31 the property as a homestead, shall result in the penalty 122.32 provided under this subdivision and the property will lose its 122.33 current homestead status. 122.34 (f) If the homestead application is not returned within 30 122.35 days, the county will send a second application to the present 122.36 owners of record. The notice of proposed property taxes 123.1 prepared under section 275.065, subdivision 3, shall reflect the 123.2 property's classification. Beginning with assessment year 1993 123.3 for all properties, if a homestead application has not been 123.4 filed with the county by December 15, the assessor shall 123.5 classify the property as nonhomestead for the current assessment 123.6 year for taxes payable in the following year, provided that the 123.7 owner may be entitled to receive the homestead classification by 123.8 proper application under section 375.192. 123.9 (g) At the request of the commissioner, each county must 123.10 give the commissioner a list that includes the name and social 123.11 security number of each property owner and the property owner's 123.12 spouse occupying the property, or relative of a property owner, 123.13 applying for homestead classification under this subdivision. 123.14 The commissioner shall use the information provided on the lists 123.15 as appropriate under the law, including for the detection of 123.16 improper claims by owners, or relatives of owners, under chapter 123.17 290A. 123.18 (h) If the commissioner finds that a property owner may be 123.19 claiming a fraudulent homestead, the commissioner shall notify 123.20 the appropriate counties. Within 90 days of the notification, 123.21 the county assessor shall investigate to determine if the 123.22 homestead classification was properly claimed. If the property 123.23 owner does not qualify, the county assessor shall notify the 123.24 county auditor who will determine the amount of homestead 123.25 benefits that had been improperly allowed. For the purpose of 123.26 this section, "homestead benefits" means the tax reduction 123.27 resulting from the classification as a homestead under section 123.28 273.13, the taconite homestead credit under section 273.135, and 123.29 the supplemental homestead credit under section 273.1391. 123.30 The county auditor shall send a notice to the person who 123.31 owned the affected property at the time the homestead 123.32 application related to the improper homestead was filed, 123.33 demanding reimbursement of the homestead benefits plus a penalty 123.34 equal to 100 percent of the homestead benefits. The person 123.35 notified may appeal the county's determination by serving copies 123.36 of a petition for review with county officials as provided in 124.1 section 278.01 and filing proof of service as provided in 124.2 section 278.01 with the Minnesota tax court within 60 days of 124.3 the date of the notice from the county. Procedurally, the 124.4 appeal is governed by the provisions in chapter 271 which apply 124.5 to the appeal of a property tax assessment or levy, but without 124.6 requiring any prepayment of the amount in controversy. If the 124.7 amount of homestead benefits and penalty is not paid within 60 124.8 days, and if no appeal has been filed, the county auditor shall 124.9 certify the amount of taxes and penalty to the county 124.10 treasurer. The county treasurer will add interest to the unpaid 124.11 homestead benefits and penalty amounts at the rate provided in 124.12 section 279.03 for real property taxes becoming delinquent in 124.13 the calendar year during which the amount remains unpaid. 124.14 Interest may be assessed for the period beginning 60 days after 124.15 demand for payment was made. 124.16 If the person notified is the current owner of the 124.17 property, the treasurer may add the total amount of benefits, 124.18 penalty, interest, and costs to the ad valorem taxes otherwise 124.19 payable on the property by including the amounts on the property 124.20 tax statements under section 276.04, subdivision 3. The amounts 124.21 added under this paragraph to the ad valorem taxes shall include 124.22 interest accrued through December 31 of the year preceding the 124.23 taxes payable year for which the amounts are first added. These 124.24 amounts, when added to the property tax statement, become 124.25 subject to all the laws for the enforcement of real or personal 124.26 property taxes for that year, and for any subsequent year. 124.27 If the person notified is not the current owner of the 124.28 property, the treasurer may collect the amounts due under the 124.29 Revenue Recapture Act in chapter 270A, or use any of the powers 124.30 granted in sections 277.20 and 277.21 without exclusion, to 124.31 enforce payment of the benefits, penalty, interest, and costs, 124.32 as if those amounts were delinquent tax obligations of the 124.33 person who owned the property at the time the application 124.34 related to the improperly allowed homestead was filed. The 124.35 treasurer may relieve a prior owner of personal liability for 124.36 the benefits, penalty, interest, and costs, and instead extend 125.1 those amounts on the tax lists against the property as provided 125.2 in this paragraph to the extent that the current owner agrees in 125.3 writing. On all demands, billings, property tax statements, and 125.4 related correspondence, the county must list and state 125.5 separately the amounts of homestead benefits, penalty, interest 125.6 and costs being demanded, billed or assessed. 125.7 (i) Any amount of homestead benefits recovered by the 125.8 county from the property owner shall be distributed to the 125.9 county, city or town, and school district where the property is 125.10 located in the same proportion that each taxing district's levy 125.11 was to the total of the three taxing districts' levy for the 125.12 current year. Any amount recovered attributable to taconite 125.13 homestead credit shall be transmitted to the St. Louis county 125.14 auditor to be deposited in the taconite property tax relief 125.15 account. Any amount recovered that is attributable to 125.16 supplemental homestead credit is to be transmitted to the 125.17 commissioner of revenue for deposit in the general fund of the 125.18 state treasury. The total amount of penalty collected must be 125.19 deposited in the county general fund. 125.20 (j) If a property owner has applied for more than one 125.21 homestead and the county assessors cannot determine which 125.22 property should be classified as homestead, the county assessors 125.23 will refer the information to the commissioner. The 125.24 commissioner shall make the determination and notify the 125.25 counties within 60 days. 125.26 (k) In addition to lists of homestead properties, the 125.27 commissioner may ask the counties to furnish lists of all 125.28 properties and the record owners. The social security numbers 125.29 and federal identification numbers that are maintained by a 125.30 county or city assessor for property tax administration 125.31 purposes, and that may appear on the lists retain their 125.32 classification as private or nonpublic data; but may be viewed, 125.33 accessed, and used by the county auditor or treasurer of the 125.34 same county for the limited purpose of assisting the 125.35 commissioner in the preparation of microdata samples under 125.36 section 270.0681. 126.1 Sec. 14. Minnesota Statutes 1998, section 273.124, 126.2 subdivision 14, is amended to read: 126.3 Subd. 14. [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 126.4 (a) Real estate of less than ten acres that is the homestead of 126.5 its owner must be classified as class 2a under section 273.13, 126.6 subdivision 23, paragraph (a), if: 126.7 (1) the parcel on which the house is located is contiguous 126.8 on at least two sides to (i) agricultural land, (ii) land owned 126.9 or administered by the United States Fish and Wildlife Service, 126.10 or (iii) land administered by the department of natural 126.11 resources on which in lieu taxes are paid under sections 477A.11 126.12 to 477A.14; 126.13 (2) its owner also owns a noncontiguous parcel of 126.14 agricultural land that is at least 20 acres; 126.15 (3) the noncontiguous land is located not farther than four 126.16 townships or cities, or a combination of townships or cities 126.17 from the homestead; and 126.18 (4) the agricultural use value of the noncontiguous land 126.19 and farm buildings is equal to at least 50 percent of the market 126.20 value of the house, garage, and one acre of land. 126.21 Homesteads initially classified as class 2a under the 126.22 provisions of this paragraph shall remain classified as class 126.23 2a, irrespective of subsequent changes in the use of adjoining 126.24 properties, as long as the homestead remains under the same 126.25 ownership, the owner owns a noncontiguous parcel of agricultural 126.26 land that is at least 20 acres, and the agricultural use value 126.27 qualifies under clause (4). Homestead classification under this 126.28 paragraph is limited to property that qualified under this 126.29 paragraph for the 1998 assessment. 126.30 (b) Agricultural property consisting of at least 40 acres 126.31 shall be classified homestead, to the same extent as other 126.32 agricultural homestead property, if all of the following 126.33 criteria are met: 126.34 (1) the owner is actively farming the agricultural 126.35 property; 126.36 (2) the owner of the agricultural property is a Minnesota 127.1 resident; 127.2 (3) neither the owner nor the spouse of the agricultural 127.3 property claims another agricultural homestead in Minnesota; and 127.4 (4) the owner does not live farther than four townships or 127.5 cities, or a combination of four townships or cities, from the 127.6 agricultural property. 127.7(b)(c) Except as provided in paragraph(d)(e), 127.8 noncontiguous land shall be included as part of a homestead 127.9 under section 273.13, subdivision 23, paragraph (a), only if the 127.10 homestead is classified as class 2a and the detached land is 127.11 located in the same township or city, or not farther than four 127.12 townships or cities or combination thereof from the homestead. 127.13 Any taxpayer of these noncontiguous lands must notify the county 127.14 assessor that the noncontiguous land is part of the taxpayer's 127.15 homestead, and, if the homestead is located in another county, 127.16 the taxpayer must also notify the assessor of the other county. 127.17(c)(d) Agricultural land used for purposes of a homestead 127.18 and actively farmed by a person holding a vested remainder 127.19 interest in it must be classified as a homestead under section 127.20 273.13, subdivision 23, paragraph (a). If agricultural land is 127.21 classified class 2a, any other dwellings on the land used for 127.22 purposes of a homestead by persons holding vested remainder 127.23 interests who are actively engaged in farming the property, and 127.24 up to one acre of the land surrounding each homestead and 127.25 reasonably necessary for the use of the dwelling as a home, must 127.26 also be assessed class 2a. 127.27(d)(e) Agricultural land and buildings that were class 2a 127.28 homestead property under section 273.13, subdivision 23, 127.29 paragraph (a), for the 1997 assessment shall remain classified 127.30 as agricultural homesteads for subsequent assessments if: 127.31 (1) the property owner abandoned the homestead dwelling 127.32 located on the agricultural homestead as a result of the April 127.33 1997 floods; 127.34 (2) the property is located in the county of Polk, Clay, 127.35 Kittson, Marshall, Norman, or Wilkin; 127.36 (3) the agricultural land and buildings remain under the 128.1 same ownership for the current assessment year as existed for 128.2 the 1997 assessment year and continue to be used for 128.3 agricultural purposes; 128.4 (4) the dwelling occupied by the owner is located in 128.5 Minnesota and is within 30 miles of one of the parcels of 128.6 agricultural land that is owned by the taxpayer; and 128.7 (5) the owner notifies the county assessor that the 128.8 relocation was due to the 1997 floods, and the owner furnishes 128.9 the assessor any information deemed necessary by the assessor in 128.10 verifying the change in dwelling. Further notifications to the 128.11 assessor are not required if the property continues to meet all 128.12 the requirements in this paragraph and any dwellings on the 128.13 agricultural land remain uninhabited. 128.14(e)(f) Agricultural land and buildings that were class 2a 128.15 homestead property under section 273.13, subdivision 23, 128.16 paragraph (a), for the 1998 assessment shall remain classified 128.17 agricultural homesteads for subsequent assessments if: 128.18 (1) the property owner abandoned the homestead dwelling 128.19 located on the agricultural homestead as a result of damage 128.20 caused by a March 29, 1998, tornado; 128.21 (2) the property is located in the county of Blue Earth, 128.22 Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice; 128.23 (3) the agricultural land and buildings remain under the 128.24 same ownership for the current assessment year as existed for 128.25 the 1998 assessment year; 128.26 (4) the dwelling occupied by the owner is located in this 128.27 state and is within 50 miles of one of the parcels of 128.28 agricultural land that is owned by the taxpayer; and 128.29 (5) the owner notifies the county assessor that the 128.30 relocation was due to a March 29, 1998, tornado, and the owner 128.31 furnishes the assessor any information deemed necessary by the 128.32 assessor in verifying the change in homestead dwelling. For 128.33 taxes payable in 1999, the owner must notify the assessor by 128.34 December 1, 1998. Further notifications to the assessor are not 128.35 required if the property continues to meet all the requirements 128.36 in this paragraph and any dwellings on the agricultural land 129.1 remain uninhabited. 129.2 Sec. 15. Minnesota Statutes 1998, section 273.124, is 129.3 amended by adding a subdivision to read: 129.4 Subd. 20. [ADDITIONAL REQUIREMENTS PROHIBITED.] No 129.5 political subdivision may impose any requirements not contained 129.6 in this chapter or chapter 272 to disqualify property from being 129.7 classified as a homestead if the property otherwise meets the 129.8 requirements for homestead treatment under this chapter and 129.9 chapter 272. 129.10 Sec. 16. Minnesota Statutes 1998, section 273.13, 129.11 subdivision 22, is amended to read: 129.12 Subd. 22. [CLASS 1.] (a) Except as provided in subdivision 129.13 23, real estate which is residential and used for homestead 129.14 purposes is class 1. The market value of class 1a property must 129.15 be determined based upon the value of the house, garage, and 129.16 land. 129.17 The first$75,000$78,000 of market value of class 1a 129.18 property has a net class rate of one percent of its market 129.19 value; and the market value of class 1a property that 129.20 exceeds$75,000$78,000 has a class rate of1.71.6 percent of 129.21 its market value. 129.22 (b) Class 1b property includes homestead real estate or 129.23 homestead manufactured homes used for the purposes of a 129.24 homestead by 129.25 (1) any blind person, or the blind person and the blind 129.26 person's spouse; or 129.27 (2) any person, hereinafter referred to as "veteran," who: 129.28 (i) served in the active military or naval service of the 129.29 United States; and 129.30 (ii) is entitled to compensation under the laws and 129.31 regulations of the United States for permanent and total 129.32 service-connected disability due to the loss, or loss of use, by 129.33 reason of amputation, ankylosis, progressive muscular 129.34 dystrophies, or paralysis, of both lower extremities, such as to 129.35 preclude motion without the aid of braces, crutches, canes, or a 129.36 wheelchair; and 130.1 (iii) has acquired a special housing unit with special 130.2 fixtures or movable facilities made necessary by the nature of 130.3 the veteran's disability, or the surviving spouse of the 130.4 deceased veteran for as long as the surviving spouse retains the 130.5 special housing unit as a homestead; or 130.6 (3) any person who: 130.7 (i) is permanently and totally disabled and 130.8 (ii) receives 90 percent or more of total household income, 130.9 as defined in section 290A.03, subdivision 5, from 130.10 (A) aid from any state as a result of that disability; or 130.11 (B) supplemental security income for the disabled; or 130.12 (C) workers' compensation based on a finding of total and 130.13 permanent disability; or 130.14 (D) social security disability, including the amount of a 130.15 disability insurance benefit which is converted to an old age 130.16 insurance benefit and any subsequent cost of living increases; 130.17 or 130.18 (E) aid under the federal Railroad Retirement Act of 1937, 130.19 United States Code Annotated, title 45, section 228b(a)5; or 130.20 (F) a pension from any local government retirement fund 130.21 located in the state of Minnesota as a result of that 130.22 disability; or 130.23 (G) pension, annuity, or other income paid as a result of 130.24 that disability from a private pension or disability plan, 130.25 including employer, employee, union, and insurance plans and 130.26 (iii) has household income as defined in section 290A.03, 130.27 subdivision 5, of $50,000 or less; or 130.28 (4) any person who is permanently and totally disabled and 130.29 whose household income as defined in section 290A.03, 130.30 subdivision 5, is 275 percent or less of the federal poverty 130.31 level. 130.32 Property is classified and assessed under clause (4) only 130.33 if the government agency or income-providing source certifies, 130.34 upon the request of the homestead occupant, that the homestead 130.35 occupant satisfies the disability requirements of this paragraph. 130.36 Property is classified and assessed pursuant to clause (1) 131.1 only if the commissioner of economic security certifies to the 131.2 assessor that the homestead occupant satisfies the requirements 131.3 of this paragraph. 131.4 Permanently and totally disabled for the purpose of this 131.5 subdivision means a condition which is permanent in nature and 131.6 totally incapacitates the person from working at an occupation 131.7 which brings the person an income. The first $32,000 market 131.8 value of class 1b property has a net class rate of .45 percent 131.9 of its market value. The remaining market value of class 1b 131.10 property has a net class rate using the rates for class 1 or 131.11 class 2a property, whichever is appropriate, of similar market 131.12 value. 131.13 (c) Class 1c property is commercial use real property that 131.14 abuts a lakeshore line and is devoted to temporary and seasonal 131.15 residential occupancy for recreational purposes but not devoted 131.16 to commercial purposes for more than 250 days in the year 131.17 preceding the year of assessment, and that includes a portion 131.18 used as a homestead by the owner, which includes a dwelling 131.19 occupied as a homestead by a shareholder of a corporation that 131.20 owns the resort or a partner in a partnership that owns the 131.21 resort, even if the title to the homestead is held by the 131.22 corporation or partnership. For purposes of this clause, 131.23 property is devoted to a commercial purpose on a specific day if 131.24 any portion of the property, excluding the portion used 131.25 exclusively as a homestead, is used for residential occupancy 131.26 and a fee is charged for residential occupancy. Class 1c 131.27 property has a class rate of one percent of total market value 131.28 with the following limitation: the area of the property must 131.29 not exceed 100 feet of lakeshore footage for each cabin or 131.30 campsite located on the property up to a total of 800 feet and 131.31 500 feet in depth, measured away from the lakeshore. If any 131.32 portion of the class 1c resort property is classified as class 131.33 4c under subdivision 25, the entire property must meet the 131.34 requirements of subdivision 25, paragraph (d), clause (1), to 131.35 qualify for class 1c treatment under this paragraph. 131.36 (d) Class 1d property includes structures that meet all of 132.1 the following criteria: 132.2 (1) the structure is located on property that is classified 132.3 as agricultural property under section 273.13, subdivision 23; 132.4 (2) the structure is occupied exclusively by seasonal farm 132.5 workers during the time when they work on that farm, and the 132.6 occupants are not charged rent for the privilege of occupying 132.7 the property, provided that use of the structure for storage of 132.8 farm equipment and produce does not disqualify the property from 132.9 classification under this paragraph; 132.10 (3) the structure meets all applicable health and safety 132.11 requirements for the appropriate season; and 132.12 (4) the structure is not salable as residential property 132.13 because it does not comply with local ordinances relating to 132.14 location in relation to streets or roads. 132.15 The market value of class 1d property has the same class 132.16 rates as class 1a property under paragraph (a). 132.17 Sec. 17. Minnesota Statutes 1998, section 273.13, 132.18 subdivision 23, is amended to read: 132.19 Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural 132.20 land including any improvements that is homesteaded. The market 132.21 value of the house and garage and immediately surrounding one 132.22 acre of land has the same class rates as class 1a property under 132.23 subdivision 22. The value of the remaining land including 132.24 improvements up to $115,000 has a net class rate of0.350.33 132.25 percent of market value. The remaining value of class 2a 132.26 property over $115,000 of market value that does not exceed 320 132.27 acres has a net class rate of0.80.75 percent of market value. 132.28 The remaining property over $115,000 market value in excess of 132.29 320 acres has a class rate of1.251.15 percent of market value. 132.30 (b) Class 2b property is (1) real estate, rural in 132.31 character and used exclusively for growing trees for timber, 132.32 lumber, and wood and wood products; (2) real estate that is not 132.33 improved with a structure and is used exclusively for growing 132.34 trees for timber, lumber, and wood and wood products, if the 132.35 owner has participated or is participating in a cost-sharing 132.36 program for afforestation, reforestation, or timber stand 133.1 improvement on that particular property, administered or 133.2 coordinated by the commissioner of natural resources; (3) real 133.3 estate that is nonhomestead agricultural land; or (4) a landing 133.4 area or public access area of a privately owned public use 133.5 airport. Class 2b property has a net class rate of1.251.15 133.6 percent of market value. 133.7 (c) Agricultural land as used in this section means 133.8 contiguous acreage of ten acres or more, used during the 133.9 preceding year for agricultural purposes. "Agricultural 133.10 purposes" as used in this section means the raising or 133.11 cultivation of agricultural products or enrollment in the 133.12 Reinvest in Minnesota program under sections 103F.501 to 133.13 103F.535 or the federal Conservation Reserve Program as 133.14 contained in Public Law Number 99-198. Contiguous acreage on 133.15 the same parcel, or contiguous acreage on an immediately 133.16 adjacent parcel under the same ownership, may also qualify as 133.17 agricultural land, but only if it is pasture, timber, waste, 133.18 unusable wild land, or land included in state or federal farm 133.19 programs. Agricultural classification for property shall be 133.20 determined excluding the house, garage, and immediately 133.21 surrounding one acre of land, and shall not be based upon the 133.22 market value of any residential structures on the parcel or 133.23 contiguous parcels under the same ownership. 133.24 (d) Real estate, excluding the house, garage, and 133.25 immediately surrounding one acre of land, of less than ten acres 133.26 which is exclusively and intensively used for raising or 133.27 cultivating agricultural products, shall be considered as 133.28 agricultural land. 133.29 Land shall be classified as agricultural even if all or a 133.30 portion of the agricultural use of that property is the leasing 133.31 to, or use by another person for agricultural purposes. 133.32 Classification under this subdivision is not determinative 133.33 for qualifying under section 273.111. 133.34 The property classification under this section supersedes, 133.35 for property tax purposes only, any locally administered 133.36 agricultural policies or land use restrictions that define 134.1 minimum or maximum farm acreage. 134.2 (e) The term "agricultural products" as used in this 134.3 subdivision includes production for sale of: 134.4 (1) livestock, dairy animals, dairy products, poultry and 134.5 poultry products, fur-bearing animals, horticultural and nursery 134.6 stock described in sections 18.44 to 18.61, fruit of all kinds, 134.7 vegetables, forage, grains, bees, and apiary products by the 134.8 owner; 134.9 (2) fish bred for sale and consumption if the fish breeding 134.10 occurs on land zoned for agricultural use; 134.11 (3) the commercial boarding of horses if the boarding is 134.12 done in conjunction with raising or cultivating agricultural 134.13 products as defined in clause (1); 134.14 (4) property which is owned and operated by nonprofit 134.15 organizations used for equestrian activities, excluding racing; 134.16and134.17 (5) game birds and waterfowl bred and raised for use on a 134.18 shooting preserve licensed under section 97A.115; and 134.19 (6) insects primarily bred to be used as food for animals. 134.20 (f) If a parcel used for agricultural purposes is also used 134.21 for commercial or industrial purposes, including but not limited 134.22 to: 134.23 (1) wholesale and retail sales; 134.24 (2) processing of raw agricultural products or other goods; 134.25 (3) warehousing or storage of processed goods; and 134.26 (4) office facilities for the support of the activities 134.27 enumerated in clauses (1), (2), and (3), 134.28 the assessor shall classify the part of the parcel used for 134.29 agricultural purposes as class 1b, 2a, or 2b, whichever is 134.30 appropriate, and the remainder in the class appropriate to its 134.31 use. The grading, sorting, and packaging of raw agricultural 134.32 products for first sale is considered an agricultural purpose. 134.33 A greenhouse or other building where horticultural or nursery 134.34 products are grown that is also used for the conduct of retail 134.35 sales must be classified as agricultural if it is primarily used 134.36 for the growing of horticultural or nursery products from seed, 135.1 cuttings, or roots and occasionally as a showroom for the retail 135.2 sale of those products. Use of a greenhouse or building only 135.3 for the display of already grown horticultural or nursery 135.4 products does not qualify as an agricultural purpose. 135.5 The assessor shall determine and list separately on the 135.6 records the market value of the homestead dwelling and the one 135.7 acre of land on which that dwelling is located. If any farm 135.8 buildings or structures are located on this homesteaded acre of 135.9 land, their market value shall not be included in this separate 135.10 determination. 135.11 (g) To qualify for classification under paragraph (b), 135.12 clause (4), a privately owned public use airport must be 135.13 licensed as a public airport under section 360.018. For 135.14 purposes of paragraph (b), clause (4), "landing area" means that 135.15 part of a privately owned public use airport properly cleared, 135.16 regularly maintained, and made available to the public for use 135.17 by aircraft and includes runways, taxiways, aprons, and sites 135.18 upon which are situated landing or navigational aids. A landing 135.19 area also includes land underlying both the primary surface and 135.20 the approach surfaces that comply with all of the following: 135.21 (i) the land is properly cleared and regularly maintained 135.22 for the primary purposes of the landing, taking off, and taxiing 135.23 of aircraft; but that portion of the land that contains 135.24 facilities for servicing, repair, or maintenance of aircraft is 135.25 not included as a landing area; 135.26 (ii) the land is part of the airport property; and 135.27 (iii) the land is not used for commercial or residential 135.28 purposes. 135.29 The land contained in a landing area under paragraph (b), clause 135.30 (4), must be described and certified by the commissioner of 135.31 transportation. The certification is effective until it is 135.32 modified, or until the airport or landing area no longer meets 135.33 the requirements of paragraph (b), clause (4). For purposes of 135.34 paragraph (b), clause (4), "public access area" means property 135.35 used as an aircraft parking ramp, apron, or storage hangar, or 135.36 an arrival and departure building in connection with the airport. 136.1 Sec. 18. Minnesota Statutes 1998, section 273.13, 136.2 subdivision 24, is amended to read: 136.3 Subd. 24. [CLASS 3.] (a) Commercial and industrial 136.4 property and utility real and personal property, except class 5136.5property as identified in subdivision 31, clause (1),is class 136.6 3a. Each parcel of real property has a class rate of2.452.25 136.7 percent of the first tier of market value, and3.53.25 percent 136.8 of the remaining market value, except that in the case of 136.9 contiguous parcels ofcommercial and industrialproperty owned 136.10 by the same person or entity, only the value equal to the 136.11 first-tier value of the contiguous parcels qualifies for the 136.12 reduced class rate. For the purposes of this subdivision, the 136.13 first tier means the first $150,000 of market value.In the136.14case of utility property owned by one person or entity, only one136.15parcel in each county has a reduced class rate on the first tier136.16of market value.Real property owned in fee by a utility for 136.17 transmission line right-of-way shall be classified at the class 136.18 rate for the higher tier. All personal property shall be 136.19 classified at the class rate for the higher tier. For purposes 136.20 of this subdivision "personal property" means tools, implements, 136.21 and machinery of an electric generating, transmission, or 136.22 distribution system, or a pipeline system transporting or 136.23 distributing water, gas, crude oil, or petroleum products or 136.24 mains and pipes used in the distribution of steam or hot or 136.25 chilled water for heating or cooling buildings, which are 136.26 fixtures. 136.27 For purposes of this paragraph, parcels are considered to 136.28 be contiguous even if they are separated from each other by a 136.29 road, street, vacant lot, waterway, or other similar intervening 136.30 type of property. 136.31 (b) Employment property defined in section 469.166, during 136.32 the period provided in section 469.170, shall constitute class 136.33 3band has a class rate of 2.3 percent of the first $50,000 of136.34market value and 3.5 percent of the remainder, except that for136.35employment property located in a border city enterprise zone136.36designated pursuant to section 469.168, subdivision 4, paragraph137.1(c),. The classrate of the first tier of market value and the137.2class rate of the remainder isrates for class 3b property are 137.3 determined under paragraph (a), unless the governing body of the 137.4 city designated as an enterprise zone determines that a specific 137.5 parcel shall be assessed pursuant to the first clause of this 137.6 sentence. The governing body may provide for assessment under 137.7 the first clause of the preceding sentence only for property 137.8 which is located in an area which has been designated by the 137.9 governing body for the receipt of tax reductions authorized by 137.10 section 469.171, subdivision 1. 137.11 (c)(1) Subject to the limitations of clause (2), structures 137.12 which are (i) located on property classified as class 3a, (ii) 137.13 constructed under an initial building permit issued after 137.14 January 2, 1996, (iii) located in a transit zone as defined 137.15 under section 473.3915, subdivision 3, (iv) located within the 137.16 boundaries of a school district, and (v) not primarily used for 137.17 retail or transient lodging purposes, shall have a class rate 137.18 equalto 85 percent ofto the lesser of 2.975 percent or the 137.19 class rate of the second tier of the commercial property rate 137.20 under paragraph (a) on any portion of the market value that does 137.21 not qualify for the first tier class rate under paragraph (a). 137.22 As used in item (v), a structure is primarily used for retail or 137.23 transient lodging purposes if over 50 percent of its square 137.24 footage is used for those purposes. A class rate equal to85137.25percent ofthe lesser of 2.975 percent or the class rate of the 137.26 second tier of the commercial property class rate under 137.27 paragraph (a) shall also apply to improvements to existing 137.28 structures that meet the requirements of items (i) to (v) if the 137.29 improvements are constructed under an initial building permit 137.30 issued after January 2, 1996, even if the remainder of the 137.31 structure was constructed prior to January 2, 1996. For the 137.32 purposes of this paragraph, a structure shall be considered to 137.33 be located in a transit zone if any portion of the structure 137.34 lies within the zone. If any property once eligible for 137.35 treatment under this paragraph ceases to remain eligible due to 137.36 revisions in transit zone boundaries, the property shall 138.1 continue to receive treatment under this paragraph for a period 138.2 of three years. 138.3 (2) This clause applies to any structure qualifying for the 138.4 transit zone reduced class rate under clause (1) on January 2, 138.5 1999, or any structure meeting any of the qualification criteria 138.6 in item (i) and otherwise qualifying for the transit zone 138.7 reduced class rate under clause (1). Such a structure continues 138.8 to receive the transit zone reduced class rate until the 138.9 occurrence of one of the events in item (ii). 138.10 (i) A structure qualifies for the rate in this clause if it 138.11 is: 138.12 (A) property for which a building permit was issued before 138.13 December 31, 1998; or 138.14 (B) property for which a building permit was issued before 138.15 June 30, 2001, if: 138.16 (I) at least 50 percent of the land on which the structure 138.17 is to be built has been acquired or is the subject of signed 138.18 purchase agreements or signed options as of March 15, 1998, by 138.19 the entity that proposes construction of the project or an 138.20 affiliate of the entity; 138.21 (II) signed agreements have been entered into with one 138.22 entity or with affiliated entities to lease for the account of 138.23 the entity or affiliated entities at least 50 percent of the 138.24 square footage of the structure or the owner of the structure 138.25 will occupy at least 50 percent of the square footage of the 138.26 structure; and 138.27 (III) one of the following requirements is met: 138.28 the project proposer has submitted the completed data 138.29 portions of an environmental assessment worksheet by December 138.30 31, 1998; or 138.31 a notice of determination of adequacy of an environmental 138.32 impact statement has been published by April 1, 1999; or 138.33 an alternative urban areawide review has been completed by 138.34 April 1, 1999; or 138.35 (C) property for which a building permit is issued before 138.36 July 30, 1999, if: 139.1 (I) at least 50 percent of the land on which the structure 139.2 is to be built has been acquired or is the subject of signed 139.3 purchase agreements as of March 31, 1998, by the entity that 139.4 proposes construction of the project or an affiliate of the 139.5 entity; 139.6 (II) a signed agreement has been entered into between the 139.7 building developer and a tenant to lease for its own account at 139.8 least 200,000 square feet of space in the building; 139.9 (III) a signed letter of intent is entered into by July 1, 139.10 1998, between the building developer and the tenant to lease the 139.11 space for its own account; and 139.12 (IV) the environmental review process required by state law 139.13 was commenced by December 31, 1998. 139.14 (ii) A structure specified by this clause shall continue to 139.15 receive the transit zone reduced class rate until the occurrence 139.16 of one of the following events: 139.17 (A) if the structure upon initial occupancy will be owner 139.18 occupied by the entity initially constructing the structure or 139.19 an affiliated entity, the structure receives the reduced class 139.20 rate until the structure ceases to be at least 50 percent 139.21 occupied by the entity or an affiliated entity, provided, if the 139.22 portion of the structure occupied by that entity or an affiliate 139.23 of the entity is less than 85 percent, the transit zone class 139.24 rate reduction for the portion of structure not so occupied 139.25 terminates upon the leasing of such space to any nonaffiliated 139.26 entity; or 139.27 (B) if the structure is leased by a single entity or 139.28 affiliated entity at the time of initial occupancy, the 139.29 structure shall receive the reduced class rate until the 139.30 structure ceases to be at least 50 percent occupied by the 139.31 entity or an affiliated entity, provided, if the portion of the 139.32 structure occupied by that entity or an affiliate of the entity 139.33 is less than 85 percent, the transit zone class rate reduction 139.34 for the portion of structure not so occupied shall terminate 139.35 upon the leasing of such space to any nonaffiliated entity; or 139.36 (C) if the structure meets the criteria in item (i)(C), the 140.1 structure shall receive the reduced class rate until the 140.2 expiration of the initial lease term of the applicable tenants. 140.3 Percentages occupied or leased shall be determined based 140.4 upon net leasable square footage in the structure. The assessor 140.5 shall allocate the value of the structure in the same fashion as 140.6 provided in the general law for portions of any structure 140.7 receiving and not receiving the transit tax class reduction as a 140.8 result of this clause. 140.9 Sec. 19. Minnesota Statutes 1998, section 273.13, is 140.10 amended by adding a subdivision to read: 140.11 Subd. 24a. [TRANSIT ZONE PROPERTIES; PERSONAL PROPERTY 140.12 TAX.] (a) Notwithstanding the provisions of section 272.02 or 140.13 any other law to the contrary, a personal property tax is 140.14 imposed on the leasehold of a tenant of a structure described in 140.15 subdivision 24, paragraph (c), clause (2), item (i)(C). 140.16 (b) The tax equals the amount obtained by multiplying the 140.17 sum of the local tax rates by: 140.18 (1) the estimated market value of the structure multiplied 140.19 by 140.20 (2) the square footage of the structure under lease that 140.21 qualifies under subdivision 24, clause (c)(1), divided by 140.22 (3) the total square footage of the structure that 140.23 qualifies under subdivision 24, clause (c)(1), multiplied by 140.24 (4) the difference between the class rate under subdivision 140.25 24, paragraph (a), for the second tier and the class rate under 140.26 subdivision 24, paragraph (c), for the second tier for the 140.27 qualifying parts of a structure. 140.28 (c) The tax under this subdivision does not apply to a 140.29 lease that: 140.30 (1) was executed before May 1, 1999; 140.31 (2) was entered according to a binding written agreement 140.32 executed before May 1, 1999; or 140.33 (3) is a lease entered under an expansion option contained 140.34 in a lease or binding written agreement qualifying under clause 140.35 (1) or (2). 140.36 (d) The tax imposed under this subdivision is a personal 141.1 property tax and is imposed on the lessee or tenant and not on 141.2 the structure or the real property. The tax is an obligation of 141.3 the lessee or tenant and must be collected in the manner 141.4 provided for personal property taxes. 141.5 (e) The personal property tax applies only to a year in 141.6 which the leased structure qualifies for the transit zone class 141.7 rate. 141.8 Sec. 20. Minnesota Statutes 1998, section 273.13, 141.9 subdivision 25, is amended to read: 141.10 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 141.11 estate containing four or more units and used or held for use by 141.12 the owner or by the tenants or lessees of the owner as a 141.13 residence for rental periods of 30 days or more. Class 4a also 141.14 includes hospitals licensed under sections 144.50 to 144.56, 141.15 other than hospitals exempt under section 272.02, and contiguous 141.16 property used for hospital purposes, without regard to whether 141.17 the property has been platted or subdivided. Class 4a property 141.18 in a city with a population of 5,000 or less, that is (1) 141.19 located outside of the metropolitan area, as defined in section 141.20 473.121, subdivision 2, or outside any county contiguous to the 141.21 metropolitan area, and (2) whose city boundary is at least 15 141.22 miles from the boundary of any city with a population greater 141.23 than 5,000 has a class rate of 2.15 percent of market value. 141.24 All other class 4a property has a class rate of2.52.25 percent 141.25 of market value. For purposes of this paragraph, population has 141.26 the same meaning given in section 477A.011, subdivision 3. 141.27 (b) Class 4b includes: 141.28 (1) residential real estate containing less than four units 141.29 that does not qualify as class 4bb, other than seasonal 141.30 residential, and recreational; 141.31 (2) manufactured homes not classified under any other 141.32 provision; 141.33 (3) a dwelling, garage, and surrounding one acre of 141.34 property on a nonhomestead farm classified under subdivision 23, 141.35 paragraph (b) containing two or three units; 141.36 (4) unimproved property that is classified residential as 142.1 determined under subdivision 33. 142.2 Class 4b property has a class rate of1.71.6 percent of 142.3 market value. 142.4 (c) Class 4bb includes: 142.5 (1) nonhomestead residential real estate containing one 142.6 unit, other than seasonal residential, and recreational; and 142.7 (2) a single family dwelling, garage, and surrounding one 142.8 acre of property on a nonhomestead farm classified under 142.9 subdivision 23, paragraph (b). 142.10 Class 4bb has a class rate of1.251.15 percent on the 142.11 first$75,000$78,000 of market value and a class rate of1.7142.12 1.6 percent of its market value that exceeds$75,000$78,000. 142.13 Property that has been classified as seasonal recreational 142.14 residential property at any time during which it has been owned 142.15 by the current owner or spouse of the current owner does not 142.16 qualify for class 4bb. 142.17 (d) Class 4c property includes: 142.18 (1) except as provided in subdivision 22, paragraph (c), 142.19 real property devoted to temporary and seasonal residential 142.20 occupancy for recreation purposes, including real property 142.21 devoted to temporary and seasonal residential occupancy for 142.22 recreation purposes and not devoted to commercial purposes for 142.23 more than 250 days in the year preceding the year of 142.24 assessment. For purposes of this clause, property is devoted to 142.25 a commercial purpose on a specific day if any portion of the 142.26 property is used for residential occupancy, and a fee is charged 142.27 for residential occupancy. In order for a property to be 142.28 classified as class 4c, seasonal recreational residential for 142.29 commercial purposes, at least 40 percent of the annual gross 142.30 lodging receipts related to the property must be from business 142.31 conducted during 90 consecutive days and either (i) at least 60 142.32 percent of all paid bookings by lodging guests during the year 142.33 must be for periods of at least two consecutive nights; or (ii) 142.34 at least 20 percent of the annual gross receipts must be from 142.35 charges for rental of fish houses, boats and motors, 142.36 snowmobiles, downhill or cross-country ski equipment, or charges 143.1 for marina services, launch services, and guide services, or the 143.2 sale of bait and fishing tackle. For purposes of this 143.3 determination, a paid booking of five or more nights shall be 143.4 counted as two bookings. Class 4c also includes commercial use 143.5 real property used exclusively for recreational purposes in 143.6 conjunction with class 4c property devoted to temporary and 143.7 seasonal residential occupancy for recreational purposes, up to 143.8 a total of two acres, provided the property is not devoted to 143.9 commercial recreational use for more than 250 days in the year 143.10 preceding the year of assessment and is located within two miles 143.11 of the class 4c property with which it is used. Class 4c 143.12 property classified in this clause also includes the remainder 143.13 of class 1c resorts provided that the entire property including 143.14 that portion of the property classified as class 1c also meets 143.15 the requirements for class 4c under this clause; otherwise the 143.16 entire property is classified as class 3. Owners of real 143.17 property devoted to temporary and seasonal residential occupancy 143.18 for recreation purposes and all or a portion of which was 143.19 devoted to commercial purposes for not more than 250 days in the 143.20 year preceding the year of assessment desiring classification as 143.21 class 1c or 4c, must submit a declaration to the assessor 143.22 designating the cabins or units occupied for 250 days or less in 143.23 the year preceding the year of assessment by January 15 of the 143.24 assessment year. Those cabins or units and a proportionate 143.25 share of the land on which they are located will be designated 143.26 class 1c or 4c as otherwise provided. The remainder of the 143.27 cabins or units and a proportionate share of the land on which 143.28 they are located will be designated as class 3a. The owner of 143.29 property desiring designation as class 1c or 4c property must 143.30 provide guest registers or other records demonstrating that the 143.31 units for which class 1c or 4c designation is sought were not 143.32 occupied for more than 250 days in the year preceding the 143.33 assessment if so requested. The portion of a property operated 143.34 as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 143.35 nonresidential facility operated on a commercial basis not 143.36 directly related to temporary and seasonal residential occupancy 144.1 for recreation purposes shall not qualify for class 1c or 4c; 144.2 (2) qualified property used as a golf course if: 144.3 (i) it is open to the public on a daily fee basis. It may 144.4 charge membership fees or dues, but a membership fee may not be 144.5 required in order to use the property for golfing, and its green 144.6 fees for golfing must be comparable to green fees typically 144.7 charged by municipal courses; and 144.8 (ii) it meets the requirements of section 273.112, 144.9 subdivision 3, paragraph (d). 144.10 A structure used as a clubhouse, restaurant, or place of 144.11 refreshment in conjunction with the golf course is classified as 144.12 class 3a property. 144.13 (3) real property up to a maximum of one acre of land owned 144.14 by a nonprofit community service oriented organization; provided 144.15 that the property is not used for a revenue-producing activity 144.16 for more than six days in the calendar year preceding the year 144.17 of assessment and the property is not used for residential 144.18 purposes on either a temporary or permanent basis. For purposes 144.19 of this clause, a "nonprofit community service oriented 144.20 organization" means any corporation, society, association, 144.21 foundation, or institution organized and operated exclusively 144.22 for charitable, religious, fraternal, civic, or educational 144.23 purposes, and which is exempt from federal income taxation 144.24 pursuant to section 501(c)(3), (10), or (19) of the Internal 144.25 Revenue Code of 1986, as amended through December 31, 1990. For 144.26 purposes of this clause, "revenue-producing activities" shall 144.27 include but not be limited to property or that portion of the 144.28 property that is used as an on-sale intoxicating liquor or 3.2 144.29 percent malt liquor establishment licensed under chapter 340A, a 144.30 restaurant open to the public, bowling alley, a retail store, 144.31 gambling conducted by organizations licensed under chapter 349, 144.32 an insurance business, or office or other space leased or rented 144.33 to a lessee who conducts a for-profit enterprise on the 144.34 premises. Any portion of the property which is used for 144.35 revenue-producing activities for more than six days in the 144.36 calendar year preceding the year of assessment shall be assessed 145.1 as class 3a. The use of the property for social events open 145.2 exclusively to members and their guests for periods of less than 145.3 24 hours, when an admission is not charged nor any revenues are 145.4 received by the organization shall not be considered a 145.5 revenue-producing activity; 145.6 (4) post-secondary student housing of not more than one 145.7 acre of land that is owned by a nonprofit corporation organized 145.8 under chapter 317A and is used exclusively by a student 145.9 cooperative, sorority, or fraternity for on-campus housing or 145.10 housing located within two miles of the border of a college 145.11 campus; 145.12 (5) manufactured home parks as defined in section 327.14, 145.13 subdivision 3; and 145.14 (6) real property that is actively and exclusively devoted 145.15 to indoor fitness, health, social, recreational, and related 145.16 uses, is owned and operated by a not-for-profit corporation, and 145.17 is located within the metropolitan area as defined in section 145.18 473.121, subdivision 2. 145.19 Class 4c property has a class rate of1.81.6 percent of 145.20 market value, except that (i)foreach parcel of seasonal 145.21 residential recreational property not used for commercial 145.22 purposesthe first $75,000 of market value has a class rate of145.231.25 percent, and the market value that exceeds $75,000 has a145.24class rate of 2.2 percenthas the same class rates as class 4bb 145.25 property, (ii) manufactured home parks assessed under clause (5) 145.26 haveathe same class rateof two percentas class 4b property, 145.27 and (iii) property described in paragraph (d), clause (4), has 145.28 the same class rate as the rate applicable to the first tier of 145.29 class 4bb nonhomestead residential real estate under paragraph 145.30 (c). 145.31 (e) Class 4d property is qualifying low-income rental 145.32 housing certified to the assessor by the housing finance agency 145.33 under sections 273.126 and 462A.071. Class 4d includes land in 145.34 proportion to the total market value of the building that is 145.35 qualifying low-income rental housing. For all properties 145.36 qualifying as class 4d, the market value determined by the 146.1 assessor must be based on the normal approach to value using 146.2 normal unrestricted rents. 146.3 Class 4d property has a class rate of one percent of market 146.4 value. 146.5(f) Class 4e property consists of the residential portion146.6of any structure located within a city that was converted from146.7nonresidential use to residential use, provided that:146.8(1) the structure had formerly been used as a warehouse;146.9(2) the structure was originally constructed prior to 1940;146.10(3) the conversion was done after December 31, 1995, but146.11before January 1, 2003; and146.12(4) the conversion involved an investment of at least146.13$25,000 per residential unit.146.14Class 4e property has a class rate of 2.3 percent, provided146.15that a structure is eligible for class 4e classification only in146.16the 12 assessment years immediately following the conversion.146.17 (f) Class 4f property consists of any parcel, portion of a 146.18 parcel, or contiguous parcels of unimproved real estate, 146.19 excluding agricultural land classified under subdivision 23 that 146.20 meets the requirements in clauses (1) to (4): 146.21 (1) the property consists of at least 300 contiguous feet 146.22 of unimproved real estate that borders a meandered lake as 146.23 contained in section 103G.005, subdivisions 11 and 15, clause 146.24 (3); 146.25 (2) the unimproved real estate is located within 400 feet 146.26 from the ordinary high water elevation of the meandered lake. 146.27 For purposes of this clause, "unimproved" means that the 146.28 property qualifying under this paragraph has: 146.29 (i) no structures; 146.30 (ii) no docks or landings on its shoreline; 146.31 (iii) undisturbed natural terrain and vegetation; and 146.32 (iv) no on-site sewage disposal on the property; 146.33 (3) the owner files an application with the county assessor 146.34 by July 1 for classification under this paragraph for the 146.35 subsequent assessment year; and 146.36 (4) the owner of the property signs a covenant agreement 147.1 and files a copy of the covenant with the county assessor and 147.2 files for record the original covenant agreement with the county 147.3 recorder or registrar in the county where the property is 147.4 located. The commissioner of revenue shall prepare a 147.5 standardized covenant agreement form for use under this 147.6 classification and make copies available to each county. The 147.7 covenant agreement must include all of the following: 147.8 (i) a legal description of the area to which the covenant 147.9 applies; 147.10 (ii) the name and address of the owner; 147.11 (iii) a statement that the land described in the covenant 147.12 must be kept as undeveloped land for the duration of the 147.13 covenant; 147.14 (iv) a statement that the landowner may initiate expiration 147.15 of the covenant agreement by notifying the county assessor and 147.16 filing a notice for record with the county recorder or 147.17 registrar, in writing, with the date of expiration which must be 147.18 at least ten years from the date of the expiration notice; 147.19 (v) a statement that the covenant is binding on the owner 147.20 or owner's successor or assignee and runs with the land; and 147.21 (vi) a witnessed signature of the owner covenanting to keep 147.22 the land in its undeveloped state as it existed on the date the 147.23 covenant was signed. 147.24 Upon expiration of a covenant agreement in clause (4), the 147.25 property which is sold is subject to additional taxes. The 147.26 amount of additional taxes due on the property equals the 147.27 difference between the taxes actually levied and the taxes that 147.28 would have been imposed if the property had been valued and 147.29 classified if class 4f did not apply. The additional taxes must 147.30 be extended against the property on the tax list for the current 147.31 year. No interest or penalties may be levied on the additional 147.32 taxes if timely paid, and the additional taxes must be levied 147.33 only with respect to the last ten years that the property was 147.34 valued and assessed as class 4f property. 147.35 The tax imposed under this paragraph is a lien on the 147.36 property assessed to the same extent and for the same duration 148.1 as other real property taxes. The tax must be extended by the 148.2 county auditor and, when payable, be collected and distributed 148.3 in the same manner provided by law for the collection and 148.4 distribution of other property taxes. 148.5 Class 4f has a class rate of 1.0 percent of market value. 148.6 Sec. 21. Minnesota Statutes 1998, section 273.13, 148.7 subdivision 31, is amended to read: 148.8 Subd. 31. [CLASS 5.] Class 5 property includes: 148.9 (1)tools, implements, and machinery of an electric148.10generating, transmission, or distribution system or a pipeline148.11system transporting or distributing water, gas, crude oil, or148.12petroleum products or mains and pipes used in the distribution148.13of steam or hot or chilled water for heating or cooling148.14buildings, which are fixtures;148.15(2)unmined iron ore and low-grade iron-bearing formations 148.16 as defined in section 273.14; and 148.17(3)(2) all other property not otherwise classified. 148.18 Class 5 property has a class rate of3.53.25 percent of 148.19 market value. 148.20 Sec. 22. Minnesota Statutes 1998, section 273.1382, is 148.21 amended to read: 148.22 273.1382 [EDUCATION HOMESTEAD CREDIT; EDUCATION 148.23 AGRICULTURAL CREDIT.] 148.24 Subdivision 1. [EDUCATIONHOMESTEADCREDIT TAX RATE.] Each 148.25 year, the respective county auditors shall determine the initial 148.26 tax rate for each school district for the general education levy 148.27 certified under section 126C.13, subdivision 2 or 3. That rate 148.28 plus the school district's education homestead credit tax rate 148.29 adjustment under section 275.08, subdivision 1e, shall be the 148.30 general educationhomesteadcreditlocaltax rate for the 148.31 district.The148.32 Subd. 1a. [EDUCATION HOMESTEAD CREDIT.] Each county 148.33 auditor shallthendetermine a general education homestead 148.34 credit for each homestead within the county equal to6866.2 148.35 percent for taxes payable in 1999 and6996 percent for taxes 148.36 payable in 2000 and thereafter of thegeneraleducation 149.1homesteadcreditlocaltax rate times the net tax capacity of 149.2 the homestead for the taxes payable year. The amount of general 149.3 education homestead credit for a homestead may not exceed $320 149.4 for taxes payable in 1999 and$335$450 for taxes payable in 149.5 2000 and thereafter. In the case of an agricultural homestead, 149.6 only the net tax capacity of the house, garage, and surrounding 149.7 one acre of land shall be used in determining the property's 149.8 education homestead credit. 149.9Subd. 1a. [CREDIT PERCENTAGE REDUCTION.] If the general149.10education levy target for fiscal year 2000 or 2001 is increased149.11by another law enacted prior to the 1999 legislative session,149.12the commissioner of revenue shall adjust the percentage rates of149.13the education homestead credit for the corresponding taxes149.14payable year by multiplying the percentage rate by the ratio of149.15the prior general education levy target to the current general149.16education levy target. If an adjustment is made under this149.17section for fiscal year 2001, the adjusted rate shall remain in149.18effect for future years until amended by subsequent legislation.149.19 Subd. 1b. [EDUCATION AGRICULTURAL CREDIT.] Property 149.20 classified as class 2a agricultural homestead or class 2b 149.21 agricultural nonhomestead is eligible for education agricultural 149.22 credit. The credit is equal to 50 percent, in the case of 149.23 agricultural homestead property, or 40 percent, in the case of 149.24 agricultural nonhomestead property, of the property's net tax 149.25 capacity times the education credit tax rate determined in 149.26 subdivision 1. The net tax capacity of class 2a property 149.27 attributable to the house, garage, and surrounding one acre of 149.28 land is not eligible for the credit under this subdivision. 149.29 Subd. 2. [CREDIT REIMBURSEMENTS.] (a) The commissioner of 149.30 revenue shall determine the tax reductions allowed under this 149.31 section for each taxes payable year, and for each school 149.32 district based upon a review of the abstracts of tax lists 149.33 submitted by the county auditors under section 275.29, and from 149.34 any other information which the commissioner deems relevant. 149.35 The commissioner of revenue shall generally compute the tax 149.36 reductions at the unique taxing jurisdiction level, however the 150.1 commissioner may compute the tax reductions at a higher 150.2 geographic level if that would have a negligible impact, or if 150.3 changes in the composition of unique taxing jurisdictions do not 150.4 permit computation at the unique taxing jurisdiction level. The 150.5 commissioner's determinations under this paragraph are not rules. 150.6 (b) The commissioner of revenue shall certify the total of 150.7 the tax reductions granted under this section for each taxes 150.8 payable year within each school district to the commissioner of 150.9 children, families, and learning after July 1 and on or before 150.10 August 1 of the taxes payable year. The commissioner of 150.11 children, families, and learning shall reimburse each affected 150.12 school district for the amount of the property tax reductions 150.13 allowed under this section as provided in section 273.1392. The 150.14 commissioner of children, families, and learning shall treat the 150.15 reimbursement payments as entitlements for the same state fiscal 150.16 year as certified, including with each district's initial 150.17 payment all amounts that would have been paid up to that date, 150.18 computed as if 90 percent of the annual reimbursement amount for 150.19 the district were being paid one-twelfth in each month of the 150.20 fiscal year. 150.21 Subd. 3. [APPROPRIATION.] An amount sufficient to make the 150.22 payments required by this section is annually appropriated from 150.23 the general fund to the commissioner of children, families, and 150.24 learning. 150.25 Sec. 23. Minnesota Statutes 1998, section 273.1398, 150.26 subdivision 8, is amended to read: 150.27 Subd. 8. [APPROPRIATION.] (a) An amount sufficient to pay 150.28 the aids and credits provided under this section for school 150.29 districts, intermediate school districts, or any group of school 150.30 districts levying as a single taxing entity, is annually 150.31 appropriated from the general fund to the commissioner of 150.32 children, families, and learning. An amount sufficient to pay 150.33 the aids and credits provided under this section for counties, 150.34 cities, towns, and special taxing districts is annually 150.35 appropriated from the general fund to the commissioner of 150.36 revenue. A jurisdiction's aid amount may be increased or 151.1 decreased based on any prior year adjustments for homestead 151.2 credit or other property tax credit or aid programs. 151.3 (b) The commissioner of finance shall bill the commissioner 151.4 of revenue for the cost of preparation of local impact notes as 151.5 required by section 3.987 only to the extent to which those 151.6 costs exceed those costs incurred in fiscal year 1997 and for 151.7 any other new costs attributable to the local impact note 151.8 function required by section 3.987, not to exceed $100,000 in a 151.9 fiscal year1998 and $200,000 in fiscal year 1999 and thereafter. 151.10 The commissioner of revenue shall deduct the amount billed 151.11 under this paragraph from aid payments to be made to cities and 151.12 counties under subdivision 2 on a pro rata basis. The amount 151.13 deducted under this paragraph is appropriated to the 151.14 commissioner of finance for the preparation of local impact 151.15 notes. 151.16 Sec. 24. Minnesota Statutes 1998, section 273.20, is 151.17 amended to read: 151.18 273.20 [ASSESSOR MAY ENTER DWELLINGS, BUILDINGS, OR 151.19 STRUCTURES.] 151.20 Any officer authorized by law to assess property for 151.21 taxation may, when necessary to the proper performance of 151.22 duties, enter any dwelling-house, building, or structure, and 151.23 view the same and the property therein. 151.24 Any officer authorized by law to assess property for ad 151.25 valorem tax purposes shall have reasonable access to land and 151.26 structures as necessary for the proper performance of their 151.27 duties. A property owner may refuse to allow an assessor to 151.28 inspect their property. This refusal by the property owner must 151.29 be either verbal or expressly stated in a letter to the county 151.30 assessor. If the assessor is denied access to view a property, 151.31 the assessor is authorized to estimate the property's estimated 151.32 market value by making assumptions believed appropriate 151.33 concerning the property's finish and condition. 151.34 Sec. 25. Minnesota Statutes 1998, section 274.01, 151.35 subdivision 1, is amended to read: 151.36 Subdivision 1. [ORDINARY BOARD; MEETINGS, DEADLINES, 152.1 GRIEVANCES.] (a) The town board of a town, or the council or 152.2 other governing body of a city, is the board of review except 152.3 (1) in cities whose charters provide for a board of equalization 152.4 or (2) in any city or town that has transferred its local board 152.5 of review power and duties to the county board as provided in 152.6 subdivision 3. The county assessor shall fix a day and time 152.7 when the board or the board of equalization shall meet in the 152.8 assessment districts of the county. On or before February 15 of 152.9 each year the assessor shall give written notice of the time to 152.10 the city or town clerk. Notwithstanding the provisions of any 152.11 charter to the contrary, the meetings must be held between April 152.12 1 and May 31 each year. The clerk shall give published and 152.13 posted notice of the meeting at least ten days before the date 152.14 of the meeting. 152.15 If in any county, at least 25 percent of the total net tax 152.16 capacity of a city or town is noncommercial seasonal residential 152.17 recreational property classified under section 273.13, 152.18 subdivision 25, the county must hold two countywide 152.19 informational meetings on Saturdays. The meetings will allow 152.20 noncommercial seasonal residential recreational taxpayers to 152.21 discuss their property valuation with the appropriate assessment 152.22 staff. These Saturday informational meetings must be scheduled 152.23 to allow the owner of the noncommercial seasonal residential 152.24 recreational property the opportunity to attend one of the 152.25 meetings prior to the scheduled board of review for their city 152.26 or town. The Saturday meeting dates must be contained on the 152.27 notice of valuation of real property under section 273.121. 152.28 The board shall meet at the office of the clerk to review 152.29 the assessment and classification of property in the town or 152.30 city. No changes in valuation or classification which are 152.31 intended to correct errors in judgment by the county assessor 152.32 may be made by the county assessor after the board of review has 152.33 adjourned in those cities or towns that hold a local board of 152.34 review; however, corrections of errors that are merely clerical 152.35 in nature or changes that extend homestead treatment to property 152.36 are permitted after adjournment until the tax extension date for 153.1 that assessment year. The changes must be fully documented and 153.2 maintained in the assessor's office and must be available for 153.3 review by any person. A copy of the changes made during this 153.4 period in those cities or towns that hold a local board of 153.5 review must be sent to the county board no later than December 153.6 31 of the assessment year. 153.7 (b) The board shall determine whether the taxable property 153.8 in the town or city has been properly placed on the list and 153.9 properly valued by the assessor. If real or personal property 153.10 has been omitted, the board shall place it on the list with its 153.11 market value, and correct the assessment so that each tract or 153.12 lot of real property, and each article, parcel, or class of 153.13 personal property, is entered on the assessment list at its 153.14 market value. No assessment of the property of any person may 153.15 be raised unless the person has been duly notified of the intent 153.16 of the board to do so. On application of any person feeling 153.17 aggrieved, the board shall review the assessment or 153.18 classification, or both, and correct it as appears just. The 153.19 board may not make an individual market value adjustment or 153.20 classification change that would benefit the property in cases 153.21 where the owner or other person having control over the property 153.22 will not permit the assessor to inspect the property and the 153.23 interior of any buildings or structures. 153.24 (c) A local board of review may reduce assessments upon 153.25 petition of the taxpayer but the total reductions must not 153.26 reduce the aggregate assessment made by the county assessor by 153.27 more than one percent. If the total reductions would lower the 153.28 aggregate assessments made by the county assessor by more than 153.29 one percent, none of the adjustments may be made. The assessor 153.30 shall correct any clerical errors or double assessments 153.31 discovered by the board of review without regard to the one 153.32 percent limitation. 153.33 (d) A majority of the members may act at the meeting, and 153.34 adjourn from day to day until they finish hearing the cases 153.35 presented. The assessor shall attend, with the assessment books 153.36 and papers, and take part in the proceedings, but must not 154.1 vote. The county assessor, or an assistant delegated by the 154.2 county assessor shall attend the meetings. The board shall list 154.3 separately, on a form appended to the assessment book, all 154.4 omitted property added to the list by the board and all items of 154.5 property increased or decreased, with the market value of each 154.6 item of property, added or changed by the board, placed opposite 154.7 the item. The county assessor shall enter all changes made by 154.8 the board in the assessment book. 154.9 (e) Except as provided in subdivision 3, if a person fails 154.10 to appear in person, by counsel, or by written communication 154.11 before the board after being duly notified of the board's intent 154.12 to raise the assessment of the property, or if a person feeling 154.13 aggrieved by an assessment or classification fails to apply for 154.14 a review of the assessment or classification, the person may not 154.15 appear before the county board of equalization for a review of 154.16 the assessment or classification. This paragraph does not apply 154.17 if an assessment was made after the board meeting, as provided 154.18 in section 273.01, or if the person can establish not having 154.19 received notice of market value at least five days before the 154.20 local board of review meeting. 154.21 (f) The board of review or the board of equalization must 154.22 complete its work and adjourn within 20 days from the time of 154.23 convening stated in the notice of the clerk, unless a longer 154.24 period is approved by the commissioner of revenue. No action 154.25 taken after that date is valid. All complaints about an 154.26 assessment or classification made after the meeting of the board 154.27 must be heard and determined by the county board of 154.28 equalization. A nonresident may, at any time, before the 154.29 meeting of the board of review file written objections to an 154.30 assessment or classification with the county assessor. The 154.31 objections must be presented to the board of review at its 154.32 meeting by the county assessor for its consideration. 154.33 Sec. 26. Minnesota Statutes 1998, section 276.131, is 154.34 amended to read: 154.35 276.131 [DISTRIBUTION OF PENALTIES, INTEREST, AND COSTS.] 154.36 The penalties, interest, and costs collected on special 155.1 assessments and real and personal property taxes must be 155.2 distributed as follows: 155.3 (1) all penalties and interest collected on special 155.4 assessments against real or personal property must be 155.5 distributed to the taxing jurisdiction that levied the 155.6 assessment; 155.7 (2) (i) 50 percent of all penalties and interest collected 155.8 on real and personal property taxes must be distributed to the 155.9county in which the property is locatedschool districts within 155.10 the county, and 155.11 (ii) theotherremaining 50 percent must be distributedto155.12the school districts within the countyas follows: 155.13 (A) the county shall receive the monies from penalties; 155.14 (B) the city or town where the property is located shall 155.15 receive a share of the amount of interest equal to the 155.16 proportion that the city's or town's local tax rate for the year 155.17 that the interest was collected, is to the sum of the city's or 155.18 town's local tax rate and the county's local tax rate for the 155.19 year that the interest was collected; and 155.20 (C) the balance must be distributed to the county. 155.21 The distribution to the school district must be in 155.22 accordance with the provisions of section 127A.34; and 155.23 (3) all costs collected by the county on special 155.24 assessments and on delinquent real and personal property taxes 155.25 must be distributed to the county in which the property is 155.26 located. 155.27 Sec. 27. Minnesota Statutes 1998, section 290B.03, 155.28 subdivision 1, is amended to read: 155.29 Subdivision 1. [PROGRAM QUALIFICATIONS.] The 155.30 qualifications for the senior citizens' property tax deferral 155.31 program are as follows: 155.32 (1) the property must be owned and occupied as a homestead 155.33 by a person 65 years of age or older. In the case of a married 155.34 couple, both of the spouses must be at least 65 years old at the 155.35 time the first property tax deferral is granted, regardless of 155.36 whether the property is titled in the name of one spouse or both 156.1 spouses, or titled in another way that permits the property to 156.2 have homestead status; 156.3 (2) the total household income of the qualifying 156.4 homeowners, as defined in section 290A.03, subdivision 5, for 156.5 the calendar year preceding the year of the initial application 156.6 may not exceed$30,000$60,000; 156.7 (3) the homestead must have been owned and occupied as the 156.8 homestead of at least one of the qualifying homeowners for at 156.9 least 15 years prior to the year the initial application is 156.10 filed; 156.11 (4) there are no delinquent property taxes, penalties, or 156.12 interest on the homesteaded property; 156.13 (5) there are no delinquent special assessments on the 156.14 homesteaded property; 156.15 (6) there are no state or federal tax liens or judgment 156.16 liens on the homesteaded property; 156.17 (7) there are no mortgages or other liens on the property 156.18 that secure future advances, except for those subject to credit 156.19 limits that result in compliance with clause (8); and 156.20 (8) the total unpaid balances of debts secured by mortgages 156.21 and other liens on the property, including unpaid special 156.22 assessments, but not including property taxes payable during the 156.23 year, does not exceed 30 percent of the assessor's estimated 156.24 market value for the year. 156.25 Sec. 28. Minnesota Statutes 1998, section 290B.04, 156.26 subdivision 3, is amended to read: 156.27 Subd. 3. [EXCESS-INCOME CERTIFICATION BY TAXPAYER.] A 156.28 taxpayer whose initial application has been approved under 156.29 subdivision 2 shall notify the commissioner of revenue in 156.30 writing by July 1 if the taxpayer's household income for the 156.31 preceding calendar year exceeded$30,000$60,000. The 156.32 certification must state the homeowner's total household income 156.33 for the previous calendar year. No property taxes may be 156.34 deferred under this chapter in any year following the year in 156.35 which a program participant filed or should have filed an 156.36 excess-income certification under this subdivision, unless the 157.1 participant has filed a resumption of eligibility certification 157.2 as described in subdivision 4. 157.3 Sec. 29. Minnesota Statutes 1998, section 290B.04, 157.4 subdivision 4, is amended to read: 157.5 Subd. 4. [RESUMPTION OF ELIGIBILITY CERTIFICATION BY 157.6 TAXPAYER.] A taxpayer who has previously filed an excess-income 157.7 certification under subdivision 3 may resume program 157.8 participation if the taxpayer's household income for a 157.9 subsequent year is$30,000$60,000 or less. If the taxpayer 157.10 chooses to resume program participation, the taxpayer must 157.11 notify the commissioner of revenue in writing by July 1 of the 157.12 year following a calendar year in which the taxpayer's household 157.13 income is$30,000$60,000 or less. The certification must state 157.14 the taxpayer's total household income for the previous calendar 157.15 year. Once a taxpayer resumes participation in the program 157.16 under this subdivision, participation will continue until the 157.17 taxpayer files a subsequent excess-income certification under 157.18 subdivision 3 or until participation is terminated under section 157.19 290B.08, subdivision 1. 157.20 Sec. 30. Minnesota Statutes 1998, section 290B.05, 157.21 subdivision 1, is amended to read: 157.22 Subdivision 1. [DETERMINATION BY COMMISSIONER.] The 157.23 commissioner shall determine each qualifying homeowner's "annual 157.24 maximum property tax amount" following approval of the 157.25 homeowner's initial application and following the receipt of a 157.26 resumption of eligibility certification. The "annual maximum 157.27 property tax amount" equalsfivethree percent of the 157.28 homeowner's total household income for the year preceding either 157.29 the initial application or the resumption of eligibility 157.30 certification, whichever is applicable. Following approval of 157.31 the initial application, the commissioner shall determine the 157.32 qualifying homeowner's "maximum allowable deferral." No tax may 157.33 be deferred relative to the appropriate assessment year for any 157.34 homeowner whose total household income for the previous year 157.35 exceeds$30,000$60,000. No tax shall be deferred in any year 157.36 in which the homeowner does not meet the program qualifications 158.1 in section 290B.03. The maximum allowable total deferral is 158.2 equal to 75 percent of the assessor's estimated market value for 158.3 the year, less the balance of any mortgage loans and other 158.4 amounts secured by liens against the property at the time of 158.5 application, including any unpaid special assessments but not 158.6 including property taxes payable during the year. 158.7 Sec. 31. [473.3985] [LIGHT RAIL TRANSIT; PROPERTY TAXES 158.8 PROHIBITED.] 158.9 Notwithstanding any other law to the contrary, a political 158.10 subdivision or a public corporation is prohibited from levying a 158.11 property tax for light rail transit, including, but not limited 158.12 to, any property tax levy for the planning or design of the 158.13 system, acquisition of property, construction and equipping of 158.14 the system, relocation of persons or property, or operation or 158.15 maintenance of the system, including any costs for management 158.16 contracts. A political subdivision or public corporation may 158.17 not transfer funds from any accounts, reserves, or funds 158.18 containing property tax revenues for any of the purposes for 158.19 which a property tax levy is prohibited under this section. 158.20 This prohibition also applies to a property tax levy to pay 158.21 bonds or other debt used to finance any costs or expenditures 158.22 enumerated in the section. 158.23 Nothing in this section prohibits a political subdivision 158.24 or public corporation from receiving and using federal or state 158.25 funds specifically designated for light rail transit purposes, 158.26 or from using fare or other operating revenues from a light rail 158.27 transit system. 158.28 Sec. 32. Laws 1997, First Special Session chapter 3, 158.29 section 27, is amended to read: 158.30 Sec. 27. [TAXPAYER'S PERSONAL INFORMATION; DISCLOSURE.] 158.31 (a) An owner of property in Washington or Ramsey county 158.32 that is subject to property taxation must be informed in a clear 158.33 and conspicuous manner in writing on a form sent to property 158.34 taxpayers that the property owner's name, address, and other 158.35 information may be used, rented, or sold for business purposes, 158.36 including surveys, marketing, and solicitation. 159.1 (b) If the property owner so requests on the form provided, 159.2 then any such list generated by the county and sold for business 159.3 purposes must exclude the owner's name and address if the 159.4 business purpose is conducting surveys, marketing, or 159.5 solicitation. 159.6 (c) This section expires August 1,19992001. 159.7 Sec. 33. Laws 1998, chapter 389, article 1, section 1, is 159.8 amended to read: 159.9 Section 1. [1998 PROPERTY TAX REBATE.] 159.10 (a) A credit is allowed against the tax imposed under 159.11 Minnesota Statutes, chapter 290, to an individual, other than a 159.12 dependent, as defined in sections 151 and 152 of the Internal 159.13 Revenue Code, disregarding section 152(b)(3) of the Internal 159.14 Revenue Code, equal to 20 percent of the qualified property tax 159.15 paid before January 1, 1999, for taxes assessed in 1997. The 159.16 maximum amount of qualifying tax to which the credit applies is 159.17 $7,500. 159.18 (b) For property owned and occupied by the taxpayer during 159.19 1998, qualified property tax means property taxes payable as 159.20 defined in Minnesota Statutes, section 290A.03, subdivision 13, 159.21 assessed in 1997 and payable in 1998, and deductible by the 159.22 individual under section 164 of the Internal Revenue Code of 159.23 1986, as amended through December 31, 1997, except the 159.24 requirement in Minnesota Statutes, section 290A.03, subdivision 159.25 13, that the taxpayer own and occupy the property on January 2, 159.26 1998, does not apply. In the case of agricultural land assessed 159.27 as part of a homestead pursuant to Minnesota Statutes, section 159.28 273.13, subdivision 23, the owner is allowed to calculate the 159.29 credit on all property taxes on the homestead, except to the 159.30 extent the owner is required to furnish a rent certificate under 159.31 Minnesota Statutes, section 290A.19, to a tenant leasing a part 159.32 of the farm homestead. 159.33 (c) For a renter, the qualified property tax means the 159.34 amount of rent constituting property taxes under Minnesota 159.35 Statutes, section 290A.03, subdivision 11, based on rent paid in 159.36 1998 except as provided in this clause. If two or more renters 160.1 could be claimants under Minnesota Statutes, chapter 290A, with 160.2 regard to the rent constituting property taxes, the rules under 160.3 Minnesota Statutes, section 290A.03, subdivision 8, paragraph 160.4 (f), apply to determine the amount of the credit for the 160.5 individual. In the case of agricultural land and buildings that 160.6 are leased, the renter is allowed to calculate the credit on the 160.7 property taxes on the house, garage, other improvements, and on 160.8 up to 320 acres of land that is leased by the renter, provided 160.9 that (i) it is the renter's principal residence, (ii) the renter 160.10 is actively engaged in farming that property, and (iii) the 160.11 owner of the property does not claim a credit based on that 160.12 property. 160.13 (d) For an individual who both owned and rented principal 160.14 residences in calendar year 1998, qualified taxes are the sum of 160.15 the amounts under paragraphs (b) and (c). 160.16 (e) If the amount of the credit under this section exceeds 160.17 the taxpayer's tax liability under Minnesota Statutes, chapter 160.18 290, the commissioner shall refund the excess. 160.19 (f) To claim a credit under this section, the taxpayer must 160.20 attach a copy of the property tax statement and certificate of 160.21 rent paid, as applicable, and provide any additional information 160.22 the commissioner requires. 160.23 (g) This credit applies to taxable years beginning after 160.24 December 31, 1997, and before January 1, 1999. 160.25 (h) Payment of the credit under this section is subject to 160.26 Minnesota Statutes, chapter 270A, and any other provision 160.27 applicable to refunds under Minnesota Statutes, chapter 290. 160.28 (i) An amount sufficient to pay refunds under this section 160.29 is appropriated to the commissioner of revenue from the general 160.30 fund. 160.31 Sec. 34. [ABATEMENT OF TAXES; LAKE COUNTY.] 160.32 Subdivision 1. [PROPERTY DEFINED.] As used in this section 160.33 and section 2, "property" means property located in Lake county 160.34 that meets the following description: 160.35 All that part of Government Lot Two (2) of Section One (1) 160.36 in Township Fifty-two (52) North, Range Eleven (11) West of the 161.1 Fourth Principal Meridian, lying within the following described 161.2 lines: 161.3 Commencing at a point on the North-South quarter line of 161.4 said Section 1 which is 20 feet south of the center of said 161.5 Section 1 measured along said North-South quarter line; 161.6 thence easterly at a right angle to said North-South 161.7 quarter line a distance of 5 feet to the point of Beginning; 161.8 thence continuing in an easterly direction at a right angle 161.9 to said North-South quarter line a distance of 335 feet; 161.10 thence southerly at a right angle to the last described 161.11 line a distance of 80 feet; 161.12 thence easterly at a right angle to the last described line 161.13 a distance of 210 feet; 161.14 thence southerly at a right angle to the last described 161.15 line a distance of 255 feet; 161.16 thence southeasterly at an angle of 102 degrees to the last 161.17 described line to the ordinary low-water mark of Agate Bay; 161.18 thence easterly along said ordinary low-water mark to the 161.19 East boundary line of said Government Lot 2; 161.20 thence in a northerly direction along said East boundary 161.21 line to a point on said East boundary line which is 75 feet 161.22 distant in a northerly direction from the East-West quarter line 161.23 of said Section 1, extended, as measured along said East 161.24 boundary line; 161.25 thence in a northwesterly direction to a point which is 190 161.26 feet easterly measured at a right angle to the North-South 161.27 quarter line of said Section 1 from a point on the North-South 161.28 quarter line, which point is 725 feet northerly of the center of 161.29 said Section 1 when measured along said North-South quarter 161.30 line; 161.31 thence in a westerly direction at a right angle to said 161.32 North-South quarter line a distance of 185 feet; 161.33 thence southerly along a line parallel to and 5 feet 161.34 distant easterly from said North-South quarter line a distance 161.35 of 230 feet; 161.36 thence easterly at a right angle to the last described line 162.1 a distance of 130 feet; 162.2 thence southerly at a right angle to the last described 162.3 line a distance of 119.27 feet; 162.4 thence westerly at a right angle to the last described line 162.5 a distance of 130 feet; 162.6 thence southerly along a line parallel to and 5 feet 162.7 distant easterly from said North-South quarter line a distance 162.8 of 395.73 feet to the point of beginning. 162.9 Subd. 2. [AUTHORIZATION.] Upon a majority vote of its 162.10 members, the governing bodies of each of Lake county, the city 162.11 of Two Harbors, and Lake Superior independent school district 162.12 No. 381, may abate the taxes levied on the property described in 162.13 subdivision 1 in 1979 to 1990, payable in 1980 to 1991. 162.14 Sec. 35. [RECORDING OF CONVEYANCE AUTHORIZED; LAKE 162.15 COUNTY.] 162.16 Notwithstanding Minnesota Statutes, section 272.12, or any 162.17 other law to the contrary, if the governing bodies of Lake 162.18 county, the city of Two Harbors, and Lake Superior independent 162.19 school district No. 381 have all abated the taxes as provided in 162.20 section 1, subdivision 2, the county auditor may record the 162.21 conveyance of the property described in section 1, subdivision 1. 162.22 Sec. 36. [STUDY OF AGRICULTURAL AND OPEN SPACE PROPERTY 162.23 TAXATION.] 162.24 Subdivision 1. [ESTABLISHMENT OF TASK FORCE; ISSUES.] An 162.25 advisory task force is established to study the taxation of 162.26 property used for agricultural purposes and open space 162.27 property. The task force shall examine the implementation and 162.28 effects of current law governing the classification of 162.29 agricultural property, the Minnesota Agricultural Property Tax 162.30 Law, the Minnesota Open Space Property Tax Law, the Minnesota 162.31 Agricultural Preserves Law, and other laws relating to those 162.32 issues. The task force shall also analyze and make 162.33 recommendations on proposals for new tax provisions intended to 162.34 encourage preservation of open space and agricultural property. 162.35 Subd. 2. [MEMBERSHIP.] The task force consists of 11 162.36 members, appointed as follows: 163.1 (1) three members of the senate, at least one of whom is a 163.2 member of the minority caucus, appointed by the committee on 163.3 committees; 163.4 (2) three members of the house of representatives, at least 163.5 one of whom is a member of the minority caucus, appointed by the 163.6 speaker; 163.7 (3) the commissioner of revenue and the commissioner of 163.8 agriculture; and 163.9 (4) three assessors appointed by the commissioner of 163.10 revenue from recommendations submitted by a statewide 163.11 organization of assessing officers, one from a metropolitan 163.12 county as defined in Minnesota Statutes, section 473.121, 163.13 subdivision 4, that contains a city of the first class, one from 163.14 a metropolitan county that does not contain a city of the first 163.15 class, and one from a county outside the metropolitan area as 163.16 defined in Minnesota Statutes, section 473.121, subdivision 2. 163.17 Subd. 3. [REPORT.] The advisory task force shall report to 163.18 the chairs of the committees on taxes of the senate and the 163.19 house of representatives by January 15, 2000, on their 163.20 recommendations for new or modified laws applicable to the 163.21 taxation of agricultural and open space land. 163.22 Subd. 4. [EXPIRATION.] This section expires March 1, 2000. 163.23 Sec. 37. [AGRICULTURAL PRODUCTION VALUE STUDY.] 163.24 The commissioner of revenue, in consultation with the 163.25 commissioner of agriculture, shall study the feasibility and the 163.26 desirability of incorporating the concept of valuation based on 163.27 production value in determining the value of agricultural 163.28 property for the purposes of property taxation as an alternative 163.29 to the education agricultural credit as provided in section 163.30 273.1382, subdivision 1b. The study must: 163.31 (1) assess whether the current method of determining 163.32 agricultural value based on sales of property in the market 163.33 place may overstate its value due to market imperfections 163.34 including infrequent sales, the effect of nonagricultural 163.35 factors on sale prices, and others; 163.36 (2) prescribe how a production-value system could be 164.1 implemented for the state of Minnesota; 164.2 (3) analyze whether production value would reduce the 164.3 volatility in agricultural market values, while still providing 164.4 an accurate measure of market values over the long run; and 164.5 (4) examine the possibility of partial adoption of a 164.6 production-value system, wherein production values would be used 164.7 solely with regard to state equalization programs. 164.8 The commissioner shall complete and submit the study to the 164.9 tax committees of the house of representatives and the senate by 164.10 November 30, 2000. 164.11 Sec. 38. [PROPERTY TAX ABATEMENT; PROPERTY DAMAGED BY 164.12 TORNADO.] 164.13 Subdivision 1. [ABATEMENT AMOUNT.] The county auditor 164.14 shall grant an abatement for taxes payable in 1999 to any 164.15 property in a qualifying county, as defined in Laws 1998, 164.16 chapter 383, section 20, that contains a structure that has been 164.17 determined by the assessor to have lost over 50 percent of its 164.18 estimated market value due to wind damage sustained on March 29, 164.19 1998, excluding residential homestead property and the portion 164.20 of agricultural homestead property consisting of the house, 164.21 garage, and surrounding one acre of land. The abatement is 164.22 equal to 75 percent of the amount by which the net tax capacity 164.23 of the structure was reduced by the wind damage, multiplied by 164.24 the payable 1999 total local net tax capacity tax rate, plus 75 164.25 percent of the amount by which the referendum market value of 164.26 the structure was reduced by the wind damage, multiplied by the 164.27 payable 1999 total market value tax rate. If the amount of the 164.28 abatement exceeds the remaining tax due on the property for 164.29 taxes payable in 1999, a refund shall be issued to the taxpayer 164.30 by the county treasurer by June 30, 1999. 164.31 Subd. 2. [CERTIFICATION.] The amount of abatements granted 164.32 under this section shall be reported to the commissioner of 164.33 revenue by the county auditor by June 30, 1999, in a form 164.34 prescribed by the commissioner. The commissioner may require 164.35 the county to provide other information necessary to verify the 164.36 accuracy of the abatement amounts submitted. 165.1 Subd. 3. [PAYMENT.] The commissioner shall make payments 165.2 equal to the amount of abatements granted to each county by 165.3 August 30, 1999. The county treasurer shall distribute the 165.4 payments to the affected taxing jurisdictions equal to the 165.5 amount of the tax that was abated as part of the October 1999 165.6 regular settlement as provided in Minnesota Statutes, section 165.7 276.111. 165.8 Subd. 4. [APPROPRIATION.] The amount necessary to fund the 165.9 payments required under this section is appropriated from the 165.10 general fund to the commissioner of revenue in fiscal year 2000. 165.11 Sec. 39. [FUNDS TRANSFER.] 165.12 The sum of $112,491,000, less the amount equal to the state 165.13 revenue loss under article 3, section 13, and less the amount of 165.14 money to fund the provisions of section 33, is transferred from 165.15 the general fund to the property tax reform account on June 30, 165.16 2001. Amounts deposited in the property tax reform account as a 165.17 result of this article are appropriated for education homestead 165.18 credit payments in fiscal years 2002 and 2003. 165.19 Sec. 40. [REPEALER.] 165.20 (a) Minnesota Statutes 1998, section 273.11, subdivision 165.21 10, is repealed. 165.22 (b) Laws 1998, chapter 389, article 3, section 45, is 165.23 repealed. 165.24 Sec. 41. [EFFECTIVE DATES.] 165.25 Sections 2 and 3 are effective for petitions filed on or 165.26 after the day following final enactment. 165.27 Sections 4, 5, 6, 11, 12, 16, 17, 18, paragraphs (a) and 165.28 (b), 20, except for paragraph (f), 21, 22, and 25, are effective 165.29 for taxes levied in 1999, payable in 2000, and thereafter. 165.30 Section 7 is effective for assessment years 1999 through 165.31 2001. 165.32 Section 8 is effective for improvements made on or after 165.33 January 1, 2000. 165.34 Section 9 is effective retroactively for property taxes 165.35 payable in 1998 and thereafter. 165.36 Sections 10 and 14 are effective beginning with the 1999 166.1 assessment, taxes payable in 2000 and thereafter. For 166.2 eligibility for the 1999 assessment year under sections 10 and 166.3 14, paragraph (b), the owner or the person who is actively 166.4 farming the property must notify the county assessor by July 1, 166.5 1999, and furnish to the assessor the information required by 166.6 the assessor to determine whether the qualifying criteria in 166.7 section 10 or 14 have been met for the 1999 assessment on the 166.8 agricultural property. 166.9 Sections 13, 15, 24, 31, 36, 37, 38, and 40, paragraph (a), 166.10 are effective the day following final enactment. 166.11 Sections 18, paragraph (c), 19, and 40, paragraph (b), are 166.12 effective for taxes levied in 2000, payable in 2001 and 166.13 thereafter. 166.14 Section 20, paragraph (f), is effective for the 2000 166.15 assessment and thereafter, for taxes payable in 2001 and 166.16 thereafter, except that for taxes payable in 2001, the date for 166.17 filing an application with the county assessor under section 20, 166.18 paragraph (f), clause (3), is September 1, 1999. 166.19 Section 26 is effective for penalties and interest on 166.20 property taxes collected after June 30, 1999. 166.21 Sections 27 to 30 are effective for deferrals of property 166.22 taxes payable in 2000 and thereafter. The changes in the annual 166.23 tax amount percentage and the maximum annual household income in 166.24 sections 27 to 30 apply to all homeowners and all property taxes 166.25 deferred beginning in payable 2000, including those homeowners 166.26 who initially qualified under this program for taxes payable in 166.27 1999. 166.28 Section 32 applies to Washington county only and is 166.29 effective the day after the chief clerical officer of Washington 166.30 county files a certificate of approval that complies with 166.31 Minnesota Statutes, section 645.021, subdivision 3. 166.32 Section 33 is effective the day following final enactment. 166.33 Sections 34 and 35 are effective the day following final 166.34 enactment, upon approval by and compliance with Minnesota 166.35 Statutes, section 645.021, subdivision 3, by the governing 166.36 bodies of Lake county, the city of Two Harbors, and Lake 167.1 Superior independent school district No. 381. 167.2 ARTICLE 7 167.3 LEVY LIMITS 167.4 Section 1. Minnesota Statutes 1998, section 275.71, 167.5 subdivision 2, is amended to read: 167.6 Subd. 2. [LEVY LIMIT BASE.] (a) The levy limit base for a 167.7 local governmental unit for taxes levied in 1997 shall be equal 167.8 to the sum of: 167.9 (1) the amount the local governmental unit levied in 1996, 167.10 less any amount levied for debt, as reported to the department 167.11 of revenue under section 275.62, subdivision 1, clause (1), and 167.12 less any tax levied in 1996 against market value as provided for 167.13 in section 275.61; 167.14 (2) the amount of aids the local governmental unit was 167.15 certified to receive in calendar year 1997 under sections 167.16 477A.011 to 477A.03 before any reductions for state tax 167.17 increment financing aid under section 273.1399, subdivision 5; 167.18 (3) the amount of homestead and agricultural credit aid the 167.19 local governmental unit was certified to receive under section 167.20 273.1398 in calendar year 1997 before any reductions for tax 167.21 increment financing aid under section 273.1399, subdivision 5; 167.22 (4) the amount of local performance aid the local 167.23 governmental unit was certified to receive in calendar year 1997 167.24 under section 477A.05; and 167.25 (5) the amount of any payments certified to the local 167.26 government unit in 1997 under sections 298.28 and 298.282. 167.27 If a governmental unit was not required to report under 167.28 section 275.62 for taxes levied in 1997, the commissioner shall 167.29 request information on levies used for debt from the local 167.30 governmental unit and adjust its levy limit base accordingly. 167.31 (b) The levy limit base for a local governmental unit for 167.32 taxes levied in 1998 is equal to its adjusted levy limit base in 167.33 the previous year, subject to any adjustments under section 167.34 275.72 and multiplied by the increase that would have occurred 167.35 under subdivision 3, clause (3), if that clause had been in 167.36 effect for taxes levied in 1997. 168.1 (c) The levy limit base for a city with a population 168.2 greater than 2,500 for taxes levied in 1999 and 2000 is limited 168.3 to its adjusted levy limit base in the previous year, subject to 168.4 adjustments under section 275.72. 168.5 (d) The levy limit base for a county for taxes levied in 168.6 1999 and 2000 is limited to the difference between (1) its 168.7 adjusted levy limit base in the previous year subject to 168.8 adjustments under section 275.72, and (2) one-half of the 168.9 county's share of the net cost to the state for assumption of 168.10 district court costs, as reported by the supreme court to the 168.11 commissioner of revenue under article 9, section 3, paragraph 168.12 (a). 168.13 Sec. 2. Minnesota Statutes 1998, section 275.71, 168.14 subdivision 3, is amended to read: 168.15 Subd. 3. [ADJUSTED LEVY LIMIT BASE.] For taxes levied in 168.16 1998, 1999, and 2000, the adjusted levy limit is equal to the 168.17 levy limit base computed under subdivision 2 or section 275.72, 168.18 multiplied by: 168.19 (1) one plus a percentage equal to the percentage growth in 168.20 the implicit price deflator; and 168.21 (2) for all cities and for counties outside of the 168.22 seven-county metropolitan area, one plus a percentage equal to 168.23 the percentage increase in number of households, if any, for the 168.24 most recent 12-month period for which data is available; and for 168.25 counties located in the seven-county metropolitan area, one plus 168.26 a percentage equal to the greater of the percentage increase in 168.27 the number of households in the county or the percentage 168.28 increase in the number of households in the entire seven-county 168.29 metropolitan area for the most recent 12-month period for which 168.30 data is available; and168.31(3) one plus a percentage equal to the percentage increase168.32in the taxable market value of the jurisdiction due to new168.33construction of class 3 and class 5 property, as defined in168.34section 273.13, subdivisions 24 and 31, for the most recent year168.35for which data are available. 168.36 Sec. 3. Minnesota Statutes 1998, section 275.71, 169.1 subdivision 4, is amended to read: 169.2 Subd. 4. [PROPERTY TAX LEVY LIMIT.] For taxes levied in 169.3 1998, 1999, and 2000, the property tax levy limit for a local 169.4 governmental unit is equal to its adjusted levy limit base 169.5 determined under subdivision 3 plus any additional levy 169.6 authorized under section 275.73, which is levied against net tax 169.7 capacity, reduced by the sum of (1) the total amount of aids 169.8 that the local governmental unit is certified to receive under 169.9 sections 477A.011 to 477A.014, (2) homestead and agricultural 169.10 aids it is certified to receive under section 273.1398, (3) 169.11 local performance aid it is certified to receive under section 169.12 477A.05, (4) taconite aids under sections 298.28 and 298.282 169.13 including any aid which was required to be placed in a special 169.14 fund for expenditure in the next succeeding year, (5) flood loss 169.15 aid under section 273.1383, and (6) low-income housing aid under 169.16 sections 477A.06 and 477A.065. 169.17 Sec. 4. Minnesota Statutes 1998, section 465.82, is 169.18 amended by adding a subdivision to read: 169.19 Subd. 4. [DIFFERENTIAL TAXATION.] The plan for cooperation 169.20 and combination adopted in accordance with subdivision 1 may 169.21 establish that the tax rate of the local government unit with 169.22 the lesser tax rate prior to the effective date of combination 169.23 shall be increased in substantially equal proportions over not 169.24 more than six years to equality with the tax rate on the 169.25 property already within the borders of the local unit of 169.26 government with the higher tax rate. The appropriate period of 169.27 time, if any, for transition to the higher tax rate shall be 169.28 based on the time reasonably required to effectively provide 169.29 equal municipal services to the residents of the local unit of 169.30 government with the lower tax rate. 169.31 Sec. 5. Minnesota Statutes 1998, section 473.249, 169.32 subdivision 1, is amended to read: 169.33 Subdivision 1. [INDEXED LIMIT.] (a) The metropolitan 169.34 council may levy a tax on all taxable property in the 169.35 metropolitan area defined in section 473.121 to provide funds 169.36 for the purposes of sections 473.121 to 473.249 and for the 170.1 purpose of carrying out other responsibilities of the council as 170.2 provided by law. This tax for general purposes shall be levied 170.3 and collected in the manner provided by section 473.13. 170.4 (b) The metropolitan council's property taxlevied by the170.5metropolitan councillevy limit for general purposes for taxes 170.6 payable in 2000 and thereafter shall not exceedthe product of:170.7(1) the metropolitan council's property tax levy limitation for170.8general purposes for the previous year determined under this170.9subdivision multiplied by (2) the lesser of170.10(i) an index for market valuation changes equal to the170.11total market valuation of all taxable property located within170.12the metropolitan area for the current taxes payable year divided170.13by the total market valuation of all taxable property located170.14within the metropolitan area for the previous taxes payable170.15year;170.16(ii) an index equal to the implicit price deflator for170.17government consumption expenditures and gross investment for170.18state and local governments for the most recent month for which170.19data are available divided by the same implicit price deflator170.20for the same month of the previous year; or170.21(iii) 103 percent.170.22(c) For the purpose of determining the metropolitan170.23council's property tax levy limitation for general purposes,170.24"total market valuation" means the total market valuation of all170.25taxable property within the metropolitan area without valuation170.26adjustments for fiscal disparities (chapter 473F), tax increment170.27financing (sections 469.174 to 469.179), and high voltage170.28transmission lines (section 273.425)90 percent of the 170.29 metropolitan council's property tax levy limit for general 170.30 purposes for taxes payable in 1999. 170.31 Sec. 6. Minnesota Statutes 1998, section 473.252, 170.32 subdivision 2, is amended to read: 170.33 Subd. 2. [SOURCES OF FUNDS.] The council shall credit to 170.34 the tax base revitalization account within the fundthe amount,170.35if any, provided for under subdivision 4, andthe amount, if 170.36 any, distributed to the council under section 473F.08, 171.1 subdivision 3b. 171.2 Sec. 7. Minnesota Statutes 1998, section 473.253, 171.3 subdivision 1, is amended to read: 171.4 Subdivision 1. [SOURCES OF FUNDS.] The council shall 171.5 credit to the livable communities demonstration account the 171.6 revenues provided in this subdivision. This tax shall be levied 171.7 and collected in the manner provided by section 473.13. The 171.8 levy for taxes payable in 2000 and thereafter shall not exceed 171.9 thefollowing amount for the years specified:171.10(a)(1) for taxes payable in 1996, 50 percent of (i) the171.11metropolitan mosquito control commission's property tax levy for171.12taxes payable in 1995 multiplied by (ii) an index for market171.13valuation changes equal to the total market valuation of all171.14taxable property located within the metropolitan area for the171.15current taxes payable year divided by the total market valuation171.16of all taxable property located in the metropolitan area for the171.17previous taxes payable year; and171.18(2) for taxes payable in 1997 and subsequent years, the171.19product of (i) the property tax levy limit under this171.20subdivision for the previous year multiplied by (ii) an index171.21for market valuation changes equal to the total market valuation171.22of all taxable property located within the metropolitan area for171.23the current taxes payable year divided by the total market171.24valuation of all taxable property located in the metropolitan171.25area for the previous taxes payable year.171.26For the purposes of this subdivision, "total market171.27valuation" means the total market valuation of all taxable171.28property within the metropolitan area without valuation171.29adjustments for fiscal disparities under chapter 473F, tax171.30increment financing under sections 469.174 to 469.179, and high171.31voltage transmission lines under section 273.425levy limit for 171.32 the livable communities demonstration account for taxes payable 171.33 in 1999. 171.34 (b) The metropolitan council, for the purposes of the fund, 171.35 is considered a unique taxing jurisdiction for purposes of 171.36 receiving aid pursuant to section 273.1398.For aid to be172.1received in 1996, the fund's homestead and agricultural credit172.2base shall equal 50 percent of the metropolitan mosquito control172.3commission's certified homestead and agricultural credit aid for172.41995, determined under section 273.1398, subdivision 2, less any172.5permanent aid reduction under section 477A.0132.For aid to be 172.6 received under section 273.1398 in 1997 and subsequent years, 172.7 the fund's homestead and agricultural credit base shall be 172.8 determined in accordance with section 273.1398, subdivision 1. 172.9 Sec. 8. Laws 1988, chapter 645, section 3, is amended to 172.10 read: 172.11 Sec. 3. [TAX; PAYMENT OF EXPENSES.] 172.12 (a) The tax levied by the hospital district under Minnesota 172.13 Statutes, section 447.34, must not be levied at a rate that 172.14 exceeds2 mills.0063 percent of taxable market value.The172.15proceeds172.16 (b) .0048 percent of taxable market value ofthattax in 172.17 paragraph (a) may be used only for acquisition, betterment, and 172.18 maintenance of the district's hospital and nursing home 172.19 facilities and equipment, and not for administrative or salary 172.20 expenses. 172.21 (c) .0015 percent of taxable market value of the tax in 172.22 paragraph (a) may be used solely for the purpose of capital 172.23 expenditures as it relates to ambulance acquisitions for the 172.24 Cook ambulance service and the Orr ambulance service and not for 172.25 administrative or salary expenses. 172.26 The part of the levy referred to in paragraph (c) must be 172.27 administered by the Cook Hospital and passed on directly to the 172.28 Cook area ambulance service board and the city of Orr to be held 172.29 in trust until funding for a new ambulance is needed by either 172.30 the Cook ambulance service or the Orr ambulance service. 172.31 Sec. 9. Laws 1997, chapter 231, article 3, section 9, is 172.32 amended to read: 172.33 Sec. 9. [EFFECTIVE DATE.] 172.34 Sections 1 and 3 to 7, as amended by Laws 1998, chapter 172.35 389, article 4, sections 1 to 6, are effective for taxes levied 172.36 in 1997and 1998through 2000, payable in 1998and 1999through 173.1 2001. 173.2 Upon compliance with Minnesota Statutes, section 645.021, 173.3 subdivision 3, by the governing body of Faribault county or the 173.4 city of Blue Earth, section 8 is effective for taxes levied in 173.5 1997and 1998through 2000 in the county or city that approves 173.6 it. 173.7 Sec. 10. [CEMETERY LEVY FOR SAWYER BY CARLTON COUNTY.] 173.8 Subdivision 1. [LEVY AUTHORIZED.] Notwithstanding other 173.9 law to the contrary, the Carlton county board of commissioners 173.10 may levy in and for the unorganized township of Sawyer an amount 173.11 up to $1,000 annually for cemetery purposes, beginning with 173.12 taxes payable in 2000 and ending with taxes payable in 2009. 173.13 Subd. 2. [EFFECTIVE DATE.] This section is effective June 173.14 1, 1999, without local approval. 173.15 Sec. 11. [COUNTY OF GOODHUE; LEVY LIMITS AND AID 173.16 ADJUSTMENTS.] 173.17 Subdivision 1. [LEVY LIMIT BASE.] The levy limit base of 173.18 the county of Goodhue for taxes levied in 1999 under Minnesota 173.19 Statutes, section 275.71, subdivision 2, is increased by 173.20 $422,324. 173.21 Subd. 2. [TEMPORARY COUNTY AGRICULTURAL AND HOMESTEAD 173.22 CREDIT AID ADJUSTMENTS.] For aids paid in calendar year 1999 173.23 only, the county of Goodhue shall receive an additional aid 173.24 payment of $422,324 under the provisions of Minnesota Statutes, 173.25 section 273.1398. For aids paid in calendar years 2000 and 173.26 2001, the aid paid to the county of Goodhue under section 173.27 273.1398, subdivision 2, shall be reduced by $211,162. The 173.28 additional aid paid in 1999 shall not be included in calculating 173.29 any limitation on levies or expenditures in calendar year 1999 173.30 but the reductions in calendar years 2000 and 2001 shall be 173.31 included in calculating any limitation on levies or expenditures. 173.32 Subd. 3. [APPROPRIATION.] $422,324 is appropriated in 173.33 fiscal year 2000 to the commissioner of revenue from the general 173.34 fund to make the payment under subdivision 2. 173.35 Subd. 4. [EFFECTIVE DATE.] Subdivision 1 is effective for 173.36 taxes levied in 1999 upon compliance with the governing body of 174.1 the county of Goodhue with Minnesota Statutes, section 645.021, 174.2 subdivision 3. Subdivision 2 is effective for aids payable in 174.3 calendar years 1999 to 2001. 174.4 Sec. 12. [CITY OF GRANT; LEVY LIMITS.] 174.5 Subdivision 1. [LEVY LIMIT BASE INCREASE.] The levy limit 174.6 base for the city of Grant for taxes levied in 1999 under 174.7 Minnesota Statutes, section 275.71, subdivision 2, is increased 174.8 by an amount equal to the difference between (1) the amount the 174.9 city would have raised if it had imposed a tax rate equal to 174.10 one-third of the statewide average city tax effort rate for 174.11 taxes payable in 1999, as defined in Minnesota Statutes, section 174.12 477A.011, subdivision 35, on its net tax capacity for taxes 174.13 payable in 1999, as defined in Minnesota Statutes, section 174.14 477A.011, subdivision 20; and (2) the amount it levied for taxes 174.15 payable in 1999. 174.16 Subd. 2. [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 174.17 effective upon compliance by the governing body of the city of 174.18 Grant with Minnesota Statutes, section 645.021, subdivision 3, 174.19 for taxes levied in 1999, payable in 2000. 174.20 Sec. 13. [NORTH FORK CROW RIVER WATERSHED DISTRICT.] 174.21 Subdivision 1. [LEVY AUTHORIZED.] Notwithstanding 174.22 Minnesota Statutes, section 103D.905, subdivision 3, the North 174.23 Fork Crow River watershed district may annually levy up to 174.24 .04836 percent of taxable market value, or $140,000, whichever 174.25 is less, for its administrative fund. 174.26 Subd. 2. [REVERSE REFERENDUM.] If the watershed district 174.27 intends to exercise the authority provided by this section, it 174.28 shall pass a resolution stating the fact before July 1, 1999. 174.29 The resolution must be published in a newspaper of general 174.30 circulation in the district, together with a notice fixing a 174.31 date for a public hearing on the matter. The hearing must be 174.32 held at least two weeks but not more than four weeks after the 174.33 publication of the resolution. Following the public hearing, 174.34 the district may determine to take no further action or adopt a 174.35 resolution confirming its intention to exercise the authority. 174.36 That resolution must also be published in a newspaper of general 175.1 circulation in the district. If within 30 days after 175.2 publication of the resolution a petition signed by voters equal 175.3 in number to five percent of the registered voters in the 175.4 district requesting a vote on the proposed resolution is filed 175.5 with the county auditors of the counties contained in the 175.6 district, the resolution is not effective until it has been 175.7 submitted to the voters at a general or special election and a 175.8 majority of votes cast on the question of approving the 175.9 resolution are in the affirmative. The commissioner of revenue 175.10 shall prepare a suggested form of question to be presented at 175.11 the election. The referendum must be held at a special or 175.12 general election before December 1, 1999. 175.13 Subd. 3. [EFFECTIVE DATE.] This section is effective 175.14 beginning with taxes levied in 1999, payable in 2000. 175.15 Sec. 14. [SAUK RIVER WATERSHED DISTRICT.] 175.16 Subdivision 1. [LEVY AUTHORIZED.] Notwithstanding 175.17 Minnesota Statutes, section 103D.905, subdivision 3, the Sauk 175.18 river watershed district may annually levy up to $200,000 for 175.19 its administrative fund for taxes payable in 2000, 2001, 2002, 175.20 2003, and 2004. 175.21 Subd. 2. [REVERSE REFERENDUM.] If the watershed district 175.22 intends to exercise the authority provided by this section, it 175.23 shall pass a resolution stating the fact before July 1, 1999. 175.24 The resolution must be published in a newspaper of general 175.25 circulation in the district, together with a notice fixing a 175.26 date for a public hearing on the matter. The hearing must be 175.27 held at least two weeks but not more than four weeks after the 175.28 publication of the resolution. Following the public hearing, 175.29 the district may determine to take no further action or adopt a 175.30 resolution confirming its intention to exercise the authority. 175.31 That resolution must also be published in a newspaper of general 175.32 circulation in the district. If within 30 days after 175.33 publication of the resolution a petition signed by voters equal 175.34 in number to five percent of the registered voters in the 175.35 district requesting a vote on the proposed resolution is filed 175.36 with the county auditors in the counties contained in the 176.1 district, the resolution is not effective until it has been 176.2 submitted to the voters at a general or special election and a 176.3 majority of votes cast on the question of approving the 176.4 resolution are in the affirmative. The commissioner of revenue 176.5 shall prepare a suggested form of question to be presented at 176.6 the election. The referendum must be held at a special or 176.7 general election before December 1, 1999. 176.8 Subd. 3. [EFFECTIVE DATE.] This section is effective the 176.9 day following final enactment. 176.10 Sec. 15. [SPLITTING EXISTING DEBT LEVY; CITY OF 176.11 STILLWATER.] 176.12 Notwithstanding Minnesota Statutes, section 272.67, 176.13 subdivisions 2 and 5, the city of Stillwater, in order to carry 176.14 out an orderly annexation agreement entered into for the 176.15 annexation of a part or all of Stillwater township may divide 176.16 its area into urban service districts and rural service 176.17 districts constituting separate taxing districts for the purpose 176.18 of municipal property taxes, including those levied for the 176.19 payment of bonds and judgment, and associated interest, incurred 176.20 prior to the annexation agreement. 176.21 Sec. 16. [REPEALER.] 176.22 Minnesota Statutes 1998, section 473.252, subdivisions 4 176.23 and 5, are repealed. 176.24 Sec. 17. [EFFECTIVE DATE.] 176.25 Sections 1 to 3 and 9 are effective for taxes levied in 176.26 1999 and 2000, and payable in 2000 and 2001. Section 4 is 176.27 effective the day following final enactment for taxes levied in 176.28 1999 and thereafter. Section 5 to 7 and 16 are effective for 176.29 taxes levied in 1999, payable in 2000, and thereafter. 176.30 The .0015 percent of taxable market value levy described in 176.31 section 8, paragraph (c), is effective for the cities of Cook 176.32 and Orr and the counties of St. Louis and Koochiching for 176.33 affected parts of those counties on January 1, 2000, to be 176.34 requested in the year 2000, with the first payment to be 176.35 received in 2001. 176.36 ARTICLE 8 177.1 TRUTH IN TAXATION; REVERSE REFERENDA 177.2 Section 1. Minnesota Statutes 1998, section 275.065, 177.3 subdivision 3, is amended to read: 177.4 Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 177.5 county auditor shall prepare and the county treasurer shall 177.6 deliver after November 10 and on or before November2417 each 177.7 year, by first class mail to each taxpayer at the address listed 177.8 on the county's current year's assessment roll, a notice of 177.9 proposed property taxes. 177.10 (b) The commissioner of revenue shall prescribe the form of 177.11 the notice. 177.12 (c) The notice must inform taxpayers that it contains the 177.13 amount of property taxes each taxing authority proposes to 177.14 collect for taxes payable the following year. In the case of a 177.15 town, or in the case of the state determined portion of the 177.16 school district levy, the final tax amount will be its proposed 177.17 tax. The notice must clearly state that each taxing authority, 177.18 including regional library districts established under section 177.19 134.201, and including the metropolitan taxing districts as 177.20 defined in paragraph (i), but excluding all other special taxing 177.21 districts, cities of 500 population or less, and towns,will177.22 must hold a public meeting to receive public testimony on the 177.23 proposed budget and proposed or final property tax levy, or, in 177.24 case of a school district, on the current budget and proposed 177.25 property tax levy.ItIn the case of a county or a city over 177.26 500 population, a public hearing is not required if the county's 177.27 or city's proposed property tax levy has not increased over the 177.28 levy amount certified by the county or city under section 177.29 275.07, subdivision 1, for the previous year. The notice must 177.30 clearly state the time and place of each taxing authority's 177.31 meetingandif one is to be held. It must also state an address 177.32 where comments will be received by mail, whether or not a public 177.33 hearing is held. 177.34 (d) The notice must state for each parcel: 177.35 (1) the market value of the property as determined under 177.36 section 273.11, and used for computing property taxes payable in 178.1 the following year and for taxes payable in the current year as 178.2 each appears in the records of the county assessor on November 1 178.3 of the current year; and, in the case of residential property, 178.4 whether the property is classified as homestead or 178.5 nonhomestead. The notice must clearly inform taxpayers of the 178.6 years to which the market values apply and that the values are 178.7 final values; 178.8 (2) the items listed below, shown separately by county, 178.9 city or town, state determined school tax net of the education 178.10 homestead credit under section 273.1382, voter approved school 178.11 levy, other local school levy, and the sum of the special taxing 178.12 districts, and as a total of all taxing authorities: 178.13 (i) the actual tax for taxes payable in the current year; 178.14 (ii) the tax change due to spending factors, defined as the 178.15 proposed tax minus the constant spending tax amount; 178.16 (iii) the tax change due to other factors, defined as the 178.17 constant spending tax amount minus the actual current year tax; 178.18 and 178.19 (iv) the proposed tax amount. 178.20 In the case of a town or the state determined school tax, 178.21 the final tax shall also be its proposed tax unless the town 178.22 changes its levy at a special town meeting under section 178.23 365.52. If a school district has certified under section 178.24 126C.17, subdivision 9, that a referendum will be held in the 178.25 school district at the November general election, the county 178.26 auditor must note next to the school district's proposed amount 178.27 that a referendum is pending and that, if approved by the 178.28 voters, the tax amount may be higher than shown on the notice. 178.29 In the case of the city of Minneapolis, the levy for the 178.30 Minneapolis library board and the levy for Minneapolis park and 178.31 recreation shall be listed separately from the remaining amount 178.32 of the city's levy. In the case of a parcel where tax increment 178.33 or the fiscal disparities areawide tax under chapter 276A or 178.34 473F applies, the proposed tax levy on the captured value or the 178.35 proposed tax levy on the tax capacity subject to the areawide 178.36 tax must each be stated separately and not included in the sum 179.1 of the special taxing districts; and 179.2 (3) the increase or decrease between the total taxes 179.3 payable in the current year and the total proposed taxes, 179.4 expressed as a percentage. 179.5 For purposes of this section, the amount of the tax on 179.6 homesteads qualifying under the senior citizens' property tax 179.7 deferral program under chapter 290B is the total amount of 179.8 property tax before subtraction of the deferred property tax 179.9 amount. 179.10 (e) The notice must clearly state that the proposed or 179.11 final taxes do not include the following: 179.12 (1) special assessments; 179.13 (2) levies approved by the voters after the date the 179.14 proposed taxes are certified, including bond referenda, school 179.15 district levy referenda, and levy limit increase referenda; 179.16 (3) amounts necessary to pay cleanup or other costs due to 179.17 a natural disaster occurring after the date the proposed taxes 179.18 are certified; 179.19 (4) amounts necessary to pay tort judgments against the 179.20 taxing authority that become final after the date the proposed 179.21 taxes are certified; and 179.22 (5) the contamination tax imposed on properties which 179.23 received market value reductions for contamination. 179.24 (f) Except as provided in subdivision 7, failure of the 179.25 county auditor to prepare or the county treasurer to deliver the 179.26 notice as required in this section does not invalidate the 179.27 proposed or final tax levy or the taxes payable pursuant to the 179.28 tax levy. 179.29 (g) If the notice the taxpayer receives under this section 179.30 lists the property as nonhomestead, and satisfactory 179.31 documentation is provided to the county assessor by the 179.32 applicable deadline, and the property qualifies for the 179.33 homestead classification in that assessment year, the assessor 179.34 shall reclassify the property to homestead for taxes payable in 179.35 the following year. 179.36 (h) In the case of class 4 residential property used as a 180.1 residence for lease or rental periods of 30 days or more, the 180.2 taxpayer must either: 180.3 (1) mail or deliver a copy of the notice of proposed 180.4 property taxes to each tenant, renter, or lessee; or 180.5 (2) post a copy of the notice in a conspicuous place on the 180.6 premises of the property. 180.7 The notice must be mailed or posted by the taxpayer by 180.8 November2720 or within three days of receipt of the notice, 180.9 whichever is later. A taxpayer may notify the county treasurer 180.10 of the address of the taxpayer, agent, caretaker, or manager of 180.11 the premises to which the notice must be mailed in order to 180.12 fulfill the requirements of this paragraph. 180.13 (i) For purposes of this subdivision, subdivisions 5a and 180.14 6, "metropolitan special taxing districts" means the following 180.15 taxing districts in the seven-county metropolitan area that levy 180.16 a property tax for any of the specified purposes listed below: 180.17 (1) metropolitan council under section 473.132, 473.167, 180.18 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 180.19 (2) metropolitan airports commission under section 473.667, 180.20 473.671, or 473.672; and 180.21 (3) metropolitan mosquito control commission under section 180.22 473.711. 180.23 For purposes of this section, any levies made by the 180.24 regional rail authorities in the county of Anoka, Carver, 180.25 Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 180.26 398A shall be included with the appropriate county's levy and 180.27 shall be discussed at that county's public hearing, if held. 180.28 (j) If a statutory or home rule charter city or a town has 180.29 exercised the local levy option provided by section 473.388, 180.30 subdivision 7, it may include in the notice of its proposed 180.31 taxes the amount of its proposed taxes attributable to its 180.32 exercise of the option. In the first year of the city or town's 180.33 exercise of this option, the statement shall include an estimate 180.34 of the reduction of the metropolitan council's tax on the parcel 180.35 due to exercise of that option. The metropolitan council's levy 180.36 shall be adjusted accordingly. 181.1 Sec. 2. Minnesota Statutes 1998, section 275.065, 181.2 subdivision 5a, is amended to read: 181.3 Subd. 5a. [PUBLIC ADVERTISEMENT.] (a) A city that has a 181.4 population of more than 2,500, county, a metropolitan special 181.5 taxing district as defined in subdivision 3, paragraph (i), a 181.6 regional library district established under section 134.201, or 181.7 school district shall advertise in a newspaper a notice of its 181.8 intent to adopt a budget and property tax levy or, in the case 181.9 of a school district, to review its current budget and proposed 181.10 property taxes payable in the following year, at a public 181.11 hearing. In the case of a county or a city that has a 181.12 population over 2,500, if its proposed property tax levy has not 181.13 increased over its levy amount certified under section 275.07, 181.14 subdivision 1, for the previous year, no public hearing is 181.15 required. The notice must be published not less than two 181.16 business days nor more than six business days before the 181.17 hearing, if required due to a levy increase. Even if a hearing 181.18 is not required, counties and cities must continue to place an 181.19 advertisement in the newspaper informing taxpayers of the 181.20 proposed budget and levy amounts. 181.21 The advertisement must be at least one-eighth page in size 181.22 of a standard-size or a tabloid-size newspaper. The 181.23 advertisement must not be placed in the part of the newspaper 181.24 where legal notices and classified advertisements appear. The 181.25 advertisement must be published in an official newspaper of 181.26 general circulation in the taxing authority. The newspaper 181.27 selected must be one of general interest and readership in the 181.28 community, and not one of limited subject matter. The 181.29 advertisement must appear in a newspaper that is published at 181.30 least once per week. 181.31 For purposes of this section, the metropolitan special 181.32 taxing district's advertisement must only be published in the 181.33 Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 181.34 (b) The advertisement for school districts, metropolitan 181.35 special taxing districts, and regional library districts must be 181.36 in the following form, except that the notice for a school 182.1 district may include references to the current budget in regard 182.2 to proposed property taxes. 182.3 "NOTICE OF 182.4 PROPOSED PROPERTY TAXES 182.5 (School District/Metropolitan 182.6 Special Taxing District/Regional 182.7 Library District) of ......... 182.8 The governing body of ........ will soon hold budget hearings 182.9 and vote on the property taxes for (metropolitan special taxing 182.10 district/regional library district services that will be 182.11 provided in (year)/school district services that will be 182.12 provided in (year) and (year)). 182.13 NOTICE OF PUBLIC HEARING: 182.14 All concerned citizens are invited to attend a public hearing 182.15 and express their opinions on the proposed (school 182.16 district/metropolitan special taxing district/regional library 182.17 district) budget and property taxes, or in the case of a school 182.18 district, its current budget and proposed property taxes, 182.19 payable in the following year. The hearing will be held on 182.20 (Month/Day/Year) at (Time) at (Location, Address)." 182.21 (c)(i) If the city or county's proposed property tax levy 182.22 has increased over its previous year's certified levy, the 182.23 advertisementfor cities and countiesmust be in the following 182.24 form. 182.25 "NOTICE OF PROPOSED 182.26 TOTAL BUDGET AND PROPERTY TAXES 182.27 The (city/county) governing body or board of commissioners will 182.28 hold a public hearing to discuss the budget and to vote on the 182.29 amount of property taxes to collect for services the 182.30 (city/county) will provide in (year). 182.31 182.32 SPENDING: The total budget amounts below compare 182.33 (city's/county's) (year) total actual budget with the amount the 182.34 (city/county) proposes to spend in (year). 182.35 182.36 (Year) Total Proposed (Year) Change from 183.1 Actual Budget Budget (Year)-(Year) 183.2 183.3 $....... $....... ...% 183.4 183.5 TAXES: The property tax amounts below compare that portion of 183.6 the current budget levied in property taxes in (city/county) for 183.7 (year) with the property taxes the (city/county) proposes to 183.8 collect in (year). 183.9 183.10 (Year) Property Proposed (Year) Change from 183.11 Taxes Property Taxes (Year)-(Year) 183.12 183.13 $....... $....... ...% 183.14 183.15 ATTEND THE PUBLIC HEARING 183.16 All (city/county) residents are invited to attend the public 183.17 hearing of the (city/county) to express your opinions on the 183.18 budget and the proposed amount of (year) property taxes. The 183.19 hearing will be held on: 183.20 (Month/Day/Year/Time) 183.21 (Location/Address) 183.22 If the discussion of the budget cannot be completed, a time and 183.23 place for continuing the discussion will be announced at the 183.24 hearing. You are also invited to send your written comments to: 183.25 (City/County) 183.26 (Location/Address)" 183.27 (ii) If no hearing is required under this section for the 183.28 city or county, its advertisement must be in the following 183.29 form. The advertisement must clearly state that because the 183.30 proposed property tax levy amount is equal to or less than the 183.31 taxing authority's previous year's actual property tax levy, no 183.32 public hearing is required by law. 183.33 "NOTICE OF PROPOSED 183.34 TOTAL BUDGET AND PROPERTY TAXES 183.35 Although no public hearing will be held, the (city/county) 183.36 governing body or board of commissioners is planning to adopt 184.1 the following budget and property tax levy. 184.2 184.3 SPENDING: The total budget amounts below compare 184.4 (city's/county's) (year) total actual budget with the amount the 184.5 (city/county) proposes to spend in (year). 184.6 184.7 (Year) Total Proposed (Year) Change from 184.8 Actual Budget Budget (Year)-(Year) 184.9 184.10 $....... $....... ...% 184.11 184.12 TAXES: The property tax amounts below compare that portion of 184.13 the current budget levied in property taxes in (city/county) for 184.14 (year) with the property taxes the (city/county) proposes to 184.15 collect in (year). 184.16 184.17 (Year) Property Proposed (Year) Change from 184.18 Taxes Property Taxes (Year)-(Year) 184.19 184.20 $....... $....... ...% 184.21 Although no public hearing will be held, you are invited to 184.22 send any written comments to: 184.23 (City/County) 184.24 (Location/Address)" 184.25 (iii) If the city's governing body or county board of 184.26 commissioners decide to hold a public hearing on the proposed 184.27 budget and levy, even though the proposed levy is equal to or 184.28 less than the previous year's certified levy amount, the 184.29 advertisement format in clause (i) must be used. 184.30 (d) For purposes of this subdivision, the budget amounts 184.31 listed on the advertisement mean: 184.32 (1) for cities, the total government fund expenditures, as 184.33 defined by the state auditor under section 471.6965, less any 184.34 expenditures for improvements or services that are specially 184.35 assessed or charged under chapter 429, 430, 435, or the 184.36 provisions of any other law or charter; and 185.1 (2) for counties, the total government fund expenditures, 185.2 as defined by the state auditor under section 375.169, less any 185.3 expenditures for direct payments to recipients or providers for 185.4 the human service aids listed below: 185.5 (1) aid to families with dependent children under sections 185.6 256.82, subdivision 1, and 256.935, subdivision 1; 185.7 (2) medical assistance under sections 256B.041, subdivision 185.8 5, and 256B.19, subdivision 1; 185.9 (3) general assistance medical care under section 256D.03, 185.10 subdivision 6; 185.11 (4) general assistance under section 256D.03, subdivision 185.12 2; 185.13 (5) emergency assistance under section 256.871, subdivision 185.14 6; 185.15 (6) Minnesota supplemental aid under section 256D.36, 185.16 subdivision 1; 185.17 (7) preadmission screening under section 256B.0911, and 185.18 alternative care grants under section 256B.0913; 185.19 (8) general assistance medical care claims processing, 185.20 medical transportation and related costs under section 256D.03, 185.21 subdivision 4; 185.22 (9) medical transportation and related costs under section 185.23 256B.0625, subdivisions 17 to 18a; 185.24 (10) group residential housing under 256I.05, subdivision 185.25 8, transferred from programs in clauses (4) and (6); or 185.26 (11) any successor programs to those listed in clauses (1) 185.27 to (10). 185.28 (e) A city with a population of over 500 but not more than 185.29 2,500 must advertise by posted notice as defined in section 185.30 645.12, subdivision 1. The advertisement must be posted at the 185.31 time provided in paragraph (a). It must be in the form required 185.32 in paragraph (b). 185.33 (f) For purposes of this subdivision, the population of a 185.34 city is the most recent population as determined by the state 185.35 demographer under section 4A.02. 185.36 (g) The commissioner of revenue, subject to the approval of 186.1 the chairs of the house and senate tax committees, shall 186.2 prescribe the form and format of the advertisement. 186.3 Sec. 3. Minnesota Statutes 1998, section 275.065, 186.4 subdivision 6, is amended to read: 186.5 Subd. 6. [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 186.6 (a) For purposes of this section, the following terms shall have 186.7 the meanings given: 186.8 (1) "Initial hearing" means the first and primary hearing 186.9 held to discuss the taxing authority's proposed budget and 186.10 proposed property tax levy for taxes payable in the following 186.11 year, or, for school districts, the current budget and the 186.12 proposed property tax levy for taxes payable in the following 186.13 year. 186.14 (2) "Continuation hearing" means a hearing held to complete 186.15 the initial hearing, if the initial hearing is not completed on 186.16 its scheduled date. 186.17 (3) "Subsequent hearing" means the hearing held to adopt 186.18 the taxing authority's final property tax levy, and, in the case 186.19 of taxing authorities other than school districts, the final 186.20 budget, for taxes payable in the following year. 186.21 (b) Except as provided in paragraph (g), between 186.22 November2919 and December2010, the governing bodies of a 186.23 city that has a population over 500, county, metropolitan 186.24 special taxing districts as defined in subdivision 3, paragraph 186.25 (i), and regional library districts shall each hold an initial 186.26 public hearing to discuss and seek public comment on its final 186.27 budget and property tax levy for taxes payable in the following 186.28 year, and the governing body of the school district shall hold 186.29 an initial public hearing to review its current budget and 186.30 proposed property tax levy for taxes payable in the following 186.31 year. The metropolitan special taxing districts shall be 186.32 required to hold only a single joint initial public hearing, the 186.33 location of which will be determined by the affected 186.34 metropolitan agencies. 186.35 (c) The initial hearing must be held after 5:00 p.m. if 186.36 scheduled on a day other than Saturday. No initial hearing may 187.1 be held on a Sunday. 187.2 (d) At the initial hearing under this subdivision, the 187.3 percentage increase in property taxes proposed by the taxing 187.4 authority, if any, and the specific purposes for which property 187.5 tax revenues are being increased must be discussed. During the 187.6 discussion, the governing body shall hear comments regarding a 187.7 proposed increase and explain the reasons for the proposed 187.8 increase. The public shall be allowed to speak and to ask 187.9 questions. At the public hearing, the school district must also 187.10 provide and discuss information on the distribution of its 187.11 revenues by revenue source, and the distribution of its spending 187.12 by program area. 187.13 (e) If the initial hearing is not completed on its 187.14 scheduled date, the taxing authority must announce, prior to 187.15 adjournment of the hearing, the date, time, and place for the 187.16 continuation of the hearing. The continuation hearing must be 187.17 held at leastfivethree business days but no more than14seven 187.18 business days after the initial hearing. A continuation hearing 187.19 may not be held later than December2010 except as provided in 187.20 paragraphs (f) and (g). A continuation hearing must be held 187.21 after 5:00 p.m. if scheduled on a day other than Saturday. No 187.22 continuation hearing may be held on a Sunday. 187.23 (f) The governing body of a county shall hold its initial 187.24 hearing on thefirst Thursdaythird Tuesday inDecemberNovember 187.25 each year, and may hold additional initial hearings on other 187.26 dates before December2010 if necessary for the convenience of 187.27 county residents. If the county needs a continuation of its 187.28 hearing, the continuation hearing shall be held on thethird187.29Tuesdayfirst Thursday in December.If the third Tuesday in187.30December falls on December 21, the county's continuation hearing187.31shall be held on Monday, December 20.187.32 (g) The metropolitan special taxing districts shall hold a 187.33 joint initial public hearing on the first Wednesday of 187.34 December. A continuation hearing, if necessary, shall be held 187.35 on the second Wednesday of December even if that second 187.36 Wednesday is after December 10. 188.1 (h) The county auditor shall provide for the coordination 188.2 of initial and continuation hearing dates for all school 188.3 districts and cities within the county to prevent conflicts 188.4 under clauses (i) and (j). 188.5 (i) By August 10, each school board and the board of the 188.6 regional library district shall certify to the county auditors 188.7 of the counties in which the school district or regional library 188.8 district is located the dates on which it elects to hold its 188.9 initial hearing and any continuation hearing. If a school board 188.10 or regional library district does not certify these dates by 188.11 August 10, the auditor will assign the initial and continuation 188.12 hearing dates. The dates elected or assigned must not conflict 188.13 with the initial and continuation hearing dates of the county or 188.14 the metropolitan special taxing districts. 188.15 (j) By August 20, the county auditor shall notify the 188.16 clerks of the cities within the county of the dates on which 188.17 school districts and regional library districts have elected to 188.18 hold their initial and continuation hearings. At the time a 188.19 city certifies its proposed levy under subdivision 1 it shall 188.20 certify the dates on which it elects to hold its initial hearing 188.21 and any continuation hearing. Until September 15, thefirst and188.22second Mondaysfourth Monday of November and the first Monday of 188.23 December are reserved for the use of the cities. If a city does 188.24 not certify its hearing dates by September 15, the auditor shall 188.25 assign the initial and continuation hearing dates. The dates 188.26 elected or assigned for the initial hearing must not conflict 188.27 with the initial hearing dates of the county, metropolitan 188.28 special taxing districts, regional library districts, or school 188.29 districts within which the city is located. To the extent 188.30 possible, the dates of the city's continuation hearing should 188.31 not conflict with the continuation hearing dates of the county, 188.32 metropolitan special taxing districts, regional library 188.33 districts, or school districts within which the city is 188.34 located. This paragraph does not apply to cities of 500 188.35 population or less. 188.36 (k) The county initial hearing date and the city, 189.1 metropolitan special taxing district, regional library district, 189.2 and school district initial hearing dates must be designated on 189.3 the notices required under subdivision 3. The continuation 189.4 hearing dates need not be stated on the notices. 189.5 (l) At a subsequent hearing, each county, school district, 189.6 city over 500 population, and metropolitan special taxing 189.7 district may amend its proposed property tax levy and must adopt 189.8 a final property tax levy. Each county, city over 500 189.9 population, and metropolitan special taxing district may also 189.10 amend its proposed budget and must adopt a final budget at the 189.11 subsequent hearing. The final property tax levy must be adopted 189.12 prior to adopting the final budget. A school district is not 189.13 required to adopt its final budget at the subsequent hearing. 189.14 The subsequent hearing of a taxing authority must be held on a 189.15 date subsequent to the date of the taxing authority's initial 189.16 public hearing. If a continuation hearing is held, the 189.17 subsequent hearing must be held either immediately following the 189.18 continuation hearing or on a date subsequent to the continuation 189.19 hearing. The subsequent hearing may be held at a regularly 189.20 scheduled board or council meeting or at a special meeting 189.21 scheduled for the purposes of the subsequent hearing. The 189.22 subsequent hearing of a taxing authority does not have to be 189.23 coordinated by the county auditor to prevent a conflict with an 189.24 initial hearing, a continuation hearing, or a subsequent hearing 189.25 of any other taxing authority. All subsequent hearings must be 189.26 held prior to five working days after December 20 of the levy 189.27 year. The date, time, and place of the subsequent hearing must 189.28 be announced at the initial public hearing or at the 189.29 continuation hearing. 189.30 (m) The property tax levy certified under section 275.07 by 189.31 a city of any population, county, metropolitan special taxing 189.32 district, regional library district, or school district must not 189.33 exceed the proposed levy determined under subdivision 1, except 189.34 by an amount up to the sum of the following amounts: 189.35 (1) the amount of a school district levy whose voters 189.36 approved a referendum to increase taxes under section 123B.63, 190.1 subdivision 3, or 126C.17, subdivision 9, after the proposed 190.2 levy was certified; 190.3 (2) the amount of a city or county levy approved by the 190.4 voters after the proposed levy was certified; 190.5 (3) the amount of a levy to pay principal and interest on 190.6 bonds approved by the voters under section 475.58 after the 190.7 proposed levy was certified; 190.8 (4) the amount of a levy to pay costs due to a natural 190.9 disaster occurring after the proposed levy was certified, if 190.10 that amount is approved by the commissioner of revenue under 190.11 subdivision 6a; 190.12 (5) the amount of a levy to pay tort judgments against a 190.13 taxing authority that become final after the proposed levy was 190.14 certified, if the amount is approved by the commissioner of 190.15 revenue under subdivision 6a; 190.16 (6) the amount of an increase in levy limits certified to 190.17 the taxing authority by the commissioner of children, families, 190.18 and learning or the commissioner of revenue after the proposed 190.19 levy was certified; and 190.20 (7) the amount required under section 126C.55. 190.21 (n) This subdivision does not apply to townsand, special 190.22 taxing districts other than regional library districts and 190.23 metropolitan special taxing districts, cities under 500 190.24 population, and any counties or cities over 500 population whose 190.25 proposed property tax levy is less than or equal to its levy 190.26 certified under section 275.07, subdivision 1, for the previous 190.27 year. 190.28 (o) Notwithstanding the requirements of this section, the 190.29 employer is required to meet and negotiate over employee 190.30 compensation as provided for in chapter 179A. 190.31 Sec. 4. Minnesota Statutes 1998, section 275.065, 190.32 subdivision 8, is amended to read: 190.33 Subd. 8. [HEARING.] Notwithstanding any other provision of 190.34 law, Ramsey county, the city of St. Paul, and independent school 190.35 district No. 625 are authorized to and shall hold their initial 190.36 public hearing jointly. The hearing must be held on thesecond191.1 fourth Tuesday ofDecemberNovember each year. The 191.2 advertisement required in subdivision 5a may be a joint 191.3 advertisement. The hearing is otherwise subject to the 191.4 requirements of this section. 191.5 Ramsey county is authorized to hold an additional initial 191.6 hearing or hearings as provided under this section, provided 191.7 that any additional hearings must not conflict with the initial 191.8 or continuation hearing dates of the other taxing districts. 191.9 However, if Ramsey county elects not to hold such additional 191.10 initial hearing or hearings, the joint initial hearing required 191.11 by this subdivision must be held in a St. Paul location 191.12 convenient to residents of Ramsey county. 191.13 Sec. 5. Minnesota Statutes 1998, section 275.065, is 191.14 amended by adding a subdivision to read: 191.15 Subd. 9. [REVERSE REFERENDUM.] (a) The reverse referendum 191.16 procedure in this subdivision applies only in the case of a 191.17 county, or a city that has a population of more than 2,500, that 191.18 has adopted a property tax levy increase over the levy amount 191.19 certified under section 275.07, subdivision 1, for the previous 191.20 year that exceeds the greater of (1) two percent, or (2) a 191.21 percentage increase equal to the sum of the percentage increase 191.22 in the implicit price deflator and the percentage increase in 191.23 the number of households for that county or city, as calculated 191.24 under section 275.71, subdivision 3, clauses (1) and (2), for 191.25 taxes levied in the current year. By September 1 the 191.26 commissioner of revenue shall certify to the county the 191.27 percentage increase allowed for each local government located in 191.28 the county that is subject to this subdivision. 191.29 (b) If within 14 calendar days after the public hearing and 191.30 adoption of a levy under subdivision 6, a petition signed by 191.31 voters equal in number to ten percent of the registered voters 191.32 in the county or city in the last general election requesting a 191.33 referendum on the levy increase is filed with the county 191.34 auditor, or the city clerk, the levy increase shall not be 191.35 effective until it has been submitted to the voters at a special 191.36 election to be held on the last Tuesday in January, and a 192.1 majority of votes cast on the question of approving the levy 192.2 increase are in the affirmative. The commissioner of revenue 192.3 shall prepare the form of the question to be presented at the 192.4 referendum, which shall reference only the amount of the 192.5 property tax levy increase over the previous year. 192.6 (c) The county or city shall notify the county auditor of 192.7 the results of the referendum. If the majority of the votes 192.8 cast on the question are in the affirmative, the levy adopted 192.9 under subdivision 6 shall be certified to the county auditor 192.10 under section 275.07, subdivision 1. If the majority of the 192.11 votes cast on the question are in the negative, an amount equal 192.12 to the preceding year's levy multiplied by one plus the 192.13 percentage increase allowed under paragraph (a) shall be 192.14 certified to the county auditor for purposes of section 275.07, 192.15 subdivision 1. 192.16 (d) For purposes of this subdivision, "property tax levy" 192.17 does not include a levy to pay general obligation bonds, as 192.18 certified to the county under section 475.61. 192.19 Sec. 6. Minnesota Statutes 1998, section 275.07, 192.20 subdivision 1, is amended to read: 192.21 Subdivision 1. [CERTIFICATION OF LEVY.] Except as 192.22 otherwise provided in this subdivision, the taxes voted by 192.23 cities, counties, school districts, and special districts shall 192.24 be certified by the proper authorities to the county auditor on 192.25 or before five working days after December 20 in each year. A 192.26 county or city to which the reverse referendum provisions under 192.27 section 275.065, subdivision 9, apply shall certify the taxes to 192.28 the county auditor by January 5, except that any county or city 192.29 for which a petition has been filed under section 275.065, 192.30 subdivision 9, must certify the day immediately following the 192.31 election under that section. A town must certify the levy 192.32 adopted by the town board to the county auditor by September 15 192.33 each year. If the town board modifies the levy at a special 192.34 town meeting after September 15, the town board must recertify 192.35 its levy to the county auditor on or before five working days 192.36 after December 20. The taxes certified shall not be reduced by 193.1 the county auditor by the aid received under section 273.1398, 193.2 subdivision 2, but shall be reduced by the county auditor by the 193.3 aid received under section 273.1398, subdivision 3. If a city, 193.4 town, county, school district, or special district fails to 193.5 certify its levy by that date, its levy shall be the amount 193.6 levied by it for the preceding year. 193.7 Sec. 7. [275.078] [AUTHORIZATION; TAX RATE INCREASE.] 193.8 On or before October 1, 1999, and each subsequent year, the 193.9 county auditor shall certify to the governing body of each home 193.10 rule charter or statutory city in the county and to the county 193.11 board, the following information for the taxing jurisdiction: 193.12 (1) the taxing jurisdiction's certified levy under section 193.13 275.08 for the previous year, taxes payable in the current year; 193.14 (2) the taxing jurisdiction's net tax capacity for the 193.15 current assessment year, for taxes payable in the following 193.16 year; and 193.17 (3) the local tax rate, obtained by dividing the amount in 193.18 clause (1) by the amount in clause (2), rounded to the nearest 193.19 hundredth percent. 193.20 In order to impose a tax rate for taxes payable in the following 193.21 year higher than the tax rate certified by the county auditor 193.22 under clause (3), the governing body of the city or the county 193.23 board must adopt a resolution, after holding a public hearing, 193.24 authorizing a higher tax rate and file a copy of the resolution 193.25 with the county auditor on or before October 20, 1999, and each 193.26 year thereafter. A county auditor is prohibited from fixing a 193.27 tax rate under section 275.08 for that taxing jurisdiction for 193.28 taxes payable in the following year that is higher than the rate 193.29 certified under clause (3) if a resolution has not been filed. 193.30 For purposes of this section, "public hearing" includes, but is 193.31 not limited to, regularly scheduled city council hearings and 193.32 county board meetings. 193.33 Sec. 8. [EFFECTIVE DATE.] 193.34 Sections 1, 3, and 4 are effective for notices prepared in 193.35 1999 and thereafter. Section 2 is effective for newspaper 193.36 advertisements in 1999 and thereafter. Sections 5 and 6 are 194.1 effective for taxes levied in 1999 and thereafter, for taxes 194.2 payable in 2000 and thereafter. 194.3 ARTICLE 9 194.4 STATE FUNDING OF DISTRICT COURTS 194.5 TRANSFER OF FINES, FEES, AND OTHER MONEY TO STATE 194.6 Section 1. Minnesota Statutes 1998, section 97A.065, 194.7 subdivision 2, is amended to read: 194.8 Subd. 2. [FINES AND FORFEITED BAIL.] (a) Fines and 194.9 forfeited bail collected from prosecutions of violations of: 194.10 the game and fish laws; sections 84.091 to 84.15; sections 84.81 194.11 to 84.91; section 169.121, when the violation involved an 194.12 off-road recreational vehicle as defined in section 169.01, 194.13 subdivision 86; chapter 348; and any other law relating to wild 194.14 animals or aquatic vegetation, must be paid to the treasurer of 194.15 the county where the violation is prosecuted. The county 194.16 treasurer shall submit one-half of the receipts to the 194.17 commissioner and credit the balance to the county general 194.18 revenue fund except as provided in paragraphs (b), (c), and 194.19 (d). In a county in a judicial district under section 480.181, 194.20 subdivision 1, paragraph (b), as added in 1999 S.F. No. 2221, 194.21 article 7, section 26, the share that would otherwise go to the 194.22 county under this paragraph must be submitted to the state 194.23 treasurer for deposit in the state treasury and credited to the 194.24 general fund. 194.25 (b) The commissioner must reimburse a county, from the game 194.26 and fish fund, for the cost of keeping prisoners prosecuted for 194.27 violations under this section if the county board, by 194.28 resolution, directs: (1) the county treasurer to submit all 194.29 fines and forfeited bail to the commissioner; and (2) the county 194.30 auditor to certify and submit monthly itemized statements to the 194.31 commissioner. 194.32 (c) The county treasurer shall submit one-half of the 194.33 receipts collected under paragraph (a) from prosecutions of 194.34 violations of sections 84.81 to 84.91, and 169.121, except 194.35 receipts that are surcharges imposed under section 357.021, 194.36 subdivision 6, to the state treasurer and credit the balance to 195.1 the county general fund. The state treasurer shall credit these 195.2 receipts to the snowmobile trails and enforcement account in the 195.3 natural resources fund. 195.4 (d) The county treasurer shall indicate the amount of the 195.5 receipts that are surcharges imposed under section 357.021, 195.6 subdivision 6, and shall submit all of those receipts to the 195.7 state treasurer. 195.8 Sec. 2. Minnesota Statutes 1998, section 273.1398, 195.9 subdivision 2, is amended to read: 195.10 Subd. 2. [HOMESTEAD AND AGRICULTURAL CREDIT AID.] 195.11 Homestead and agricultural credit aid for each unique taxing 195.12 jurisdiction equals the product of (1) the homestead and 195.13 agricultural credit aid base, and (2) the growth adjustment 195.14 factor, plus the net tax capacity adjustment and the fiscal 195.15 disparity adjustment.For aid payable in 2000, each county195.16shall have its homestead and agricultural credit aid permanently195.17reduced by an amount equal to one-third of the additional amount195.18received by the county under section 477A.03, subdivision 2,195.19paragraph (c), clause (ii).195.20 Sec. 3. Minnesota Statutes 1998, section 273.1398, is 195.21 amended by adding a subdivision to read: 195.22 Subd. 4a. [AID OFFSET FOR COURT COSTS.] (a) By July 15, 195.23 1999, the supreme court shall determine and certify to the 195.24 commissioner of revenue for each county, other than counties 195.25 located in the eighth judicial district, the county's share of 195.26 the costs assumed under 1999 S.F. No. 2221, article 7, during 195.27 the fiscal year beginning July 1, 2000, less an amount equal to 195.28 the county's share of transferred fines collected by the 195.29 district courts in the county during calendar year 1998. 195.30 (b) Payments to a county under subdivision 2 or section 195.31 273.166 for calendar year 2000 must be permanently reduced by an 195.32 amount equal to 75 percent of the net cost to the state for 195.33 assumption of district court costs as certified in paragraph (a). 195.34 (c) Payments to a county under subdivision 2 or section 195.35 273.166 for calendar year 2001 must be permanently reduced by an 195.36 amount equal to 25 percent of the net cost to the state for 196.1 assumption of district court costs as certified in paragraph (a). 196.2 Sec. 4. Minnesota Statutes 1998, section 299D.03, 196.3 subdivision 5, is amended to read: 196.4 Subd. 5. [FINES AND FORFEITED BAIL MONEY.] (a) All fines 196.5 and forfeited bail money, from traffic and motor vehicle law 196.6 violations, collected from persons apprehended or arrested by 196.7 officers of the state patrol, shall be paid by the person or 196.8 officer collecting the fines, forfeited bail money or 196.9 installments thereof, on or before the tenth day after the last 196.10 day of the month in which these moneys were collected, to the 196.11 county treasurer of the county where the violation occurred. 196.12 Three-eighths of these receipts shall be credited to the general 196.13 revenue fund of the county, except that in a county in a 196.14 judicial district under section 480.181, subdivision 1, 196.15 paragraph (b), as added in 1999 S.F. No. 2221, article 7, 196.16 section 26, this three-eighths share must be transmitted to the 196.17 state treasurer for deposit in the state treasury and credited 196.18 to the general fund. The other five-eighths of these receipts 196.19 shall be transmitted by that officer to the state treasurer and 196.20 shall be credited as follows: 196.21 (1) In the fiscal year ending June 30, 1991, the first 196.22 $275,000 in money received by the state treasurer after June 4, 196.23 1991, must be credited to the transportation services fund, and 196.24 the remainder in the fiscal year credited to the trunk highway 196.25 fund. 196.26 (2) In fiscal year 1992, the first $215,000 in money 196.27 received by the state treasurer in the fiscal year must be 196.28 credited to the transportation services fund, and the remainder 196.29 credited to the trunk highway fund. 196.30 (3) In fiscal years 1993 and subsequent years, the entire 196.31 amount received by the state treasurer must be credited to the 196.32 trunk highway fund. If, however, the violation occurs within a 196.33 municipality and the city attorney prosecutes the offense, and a 196.34 plea of not guilty is entered, one-third of the receipts shall 196.35 be credited to the general revenue fund of the county, one-third 196.36 of the receipts shall be paid to the municipality prosecuting 197.1 the offense, and one-third shall be transmitted to the state 197.2 treasurer as provided in this subdivision. All costs of 197.3 participation in a nationwide police communication system 197.4 chargeable to the state of Minnesota shall be paid from 197.5 appropriations for that purpose. 197.6 (b) Notwithstanding any other provisions of law, all fines 197.7 and forfeited bail money from violations of statutes governing 197.8 the maximum weight of motor vehicles, collected from persons 197.9 apprehended or arrested by employees of the state of Minnesota, 197.10 by means of stationary or portable scales operated by these 197.11 employees, shall be paid by the person or officer collecting the 197.12 fines or forfeited bail money, on or before the tenth day after 197.13 the last day of the month in which the collections were made, to 197.14 the county treasurer of the county where the violation 197.15 occurred. Five-eighths of these receipts shall be transmitted 197.16 by that officer to the state treasurer and shall be credited to 197.17 the highway user tax distribution fund. Three-eighths of these 197.18 receipts shall be credited to the general revenue fund of the 197.19 county, except that in a county in a judicial district under 197.20 section 480.181, subdivision 1, paragraph (b), as added in 1999 197.21 S.F. No. 2221, article 7, section 26, this three-eighths share 197.22 must be transmitted to the state treasurer for deposit in the 197.23 state treasury and credited to the general fund. 197.24 Sec. 5. Minnesota Statutes 1998, section 357.021, 197.25 subdivision 1a, is amended to read: 197.26 Subd. 1a. [TRANSMITTAL OF FEES TO STATE TREASURER.] (a) 197.27 Every person, including the state of Minnesota and all bodies 197.28 politic and corporate, who shall transact any business in the 197.29 district court, shall pay to the court administrator of said 197.30 court the sundry fees prescribed in subdivision 2. Except as 197.31 provided in paragraph (d), the court administrator shall 197.32 transmit the fees monthly to the state treasurer for deposit in 197.33 the state treasury and credit to the general fund. 197.34 (b) In a county which has a screener-collector position, 197.35 fees paid by a county pursuant to this subdivision shall be 197.36 transmitted monthly to the county treasurer, who shall apply the 198.1 fees first to reimburse the county for the amount of the salary 198.2 paid for the screener-collector position. The balance of the 198.3 fees collected shall then be forwarded to the state treasurer 198.4 for deposit in the state treasury and credited to the general 198.5 fund. In a county inthe eightha judicial district under 198.6 section 480.181, subdivision 1, paragraph (b), as added in 1999 198.7 S.F. No. 2221, article 7, section 26, which has a 198.8 screener-collector position, the fees paid by a county shall be 198.9 transmitted monthly to the state treasurer for deposit in the 198.10 state treasury and credited to the general fund. A 198.11 screener-collector position for purposes of this paragraph is an 198.12 employee whose function is to increase the collection of fines 198.13 and to review the incomes of potential clients of the public 198.14 defender, in order to verify eligibility for that service. 198.15 (c) No fee is required under this section from the public 198.16 authority or the party the public authority represents in an 198.17 action for: 198.18 (1) child support enforcement or modification, medical 198.19 assistance enforcement, or establishment of parentage in the 198.20 district court, or child or medical support enforcement 198.21 conducted by an administrative law judge in an administrative 198.22 hearing under section 518.5511; 198.23 (2) civil commitment under chapter 253B; 198.24 (3) the appointment of a public conservator or public 198.25 guardian or any other action under chapters 252A and 525; 198.26 (4) wrongfully obtaining public assistance under section 198.27 256.98 or 256D.07, or recovery of overpayments of public 198.28 assistance; 198.29 (5) court relief under chapter 260; 198.30 (6) forfeiture of property under sections 169.1217 and 198.31 609.531 to 609.5317; 198.32 (7) recovery of amounts issued by political subdivisions or 198.33 public institutions under sections 246.52, 252.27, 256.045, 198.34 256.25, 256.87, 256B.042, 256B.14, 256B.15, 256B.37, and 198.35 260.251, or other sections referring to other forms of public 198.36 assistance; 199.1 (8) restitution under section 611A.04; or 199.2 (9) actions seeking monetary relief in favor of the state 199.3 pursuant to section 16D.14, subdivision 5. 199.4 (d) The fees collected for child support modifications 199.5 under subdivision 2, clause (13), must be transmitted to the 199.6 county treasurer for deposit in the county general fund. The 199.7 fees must be used by the county to pay for child support 199.8 enforcement efforts by county attorneys. 199.9 Sec. 6. Minnesota Statutes 1998, section 477A.03, 199.10 subdivision 2, is amended to read: 199.11 Subd. 2. [ANNUAL APPROPRIATION.] (a) A sum sufficient to 199.12 discharge the duties imposed by sections 477A.011 to 477A.014 is 199.13 annually appropriated from the general fund to the commissioner 199.14 of revenue. 199.15 (b) Aid payments to counties under section 477A.0121 are 199.16 limited to $20,265,000 in 1996. Aid payments to counties under 199.17 section 477A.0121 are limited to $27,571,625 in 1997. For aid 199.18 payable in 1998 and thereafter, the total aids paid under 199.19 section 477A.0121 are the amounts certified to be paid in the 199.20 previous year, adjusted for inflation as provided under 199.21 subdivision 3. 199.22 (c)(i) For aids payable in 1998 and thereafter, the total 199.23 aids paid to counties under section 477A.0122 are the amounts 199.24 certified to be paid in the previous year, adjusted for 199.25 inflation as provided under subdivision 3. 199.26 (ii) Aid payments to counties under section 477A.0122 in 199.27 2000 are further increased by an 199.28 additional$30,000,000$20,000,000 in 2000. 199.29 (d) Aid payments to cities in 1999 under section 477A.013, 199.30 subdivision 9, are limited to $380,565,489. For aids payable in 199.31 2000 and 2001, the total aids paid under section 477A.013, 199.32 subdivision 9, are the amounts certified to be paid in the 199.33 previous year, adjusted for inflation as provided under 199.34 subdivision 3. For aids payable in 2002, the total aids paid 199.35 under section 477A.013, subdivision 9, are the amounts certified 199.36 to be paid in the previous year, adjusted for inflation as 200.1 provided under subdivision 3, and increased by the amount 200.2 certified to be paid in 2001 under section 477A.06. For aids 200.3 payable in 2003 and thereafter, the total aids paid under 200.4 section 477A.013, subdivision 9, are the amounts certified to be 200.5 paid in the previous year, adjusted for inflation as provided 200.6 under subdivision 3. The additional amount authorized under 200.7 subdivision 4 is not included when calculating the appropriation 200.8 limits under this paragraph. 200.9 Sec. 7. Minnesota Statutes 1998, section 485.018, 200.10 subdivision 5, is amended to read: 200.11 Subd. 5. [COLLECTION OF FEES.] The court administrator of 200.12 district court shall charge and collect all fees as prescribed 200.13 by law and all such fees collected by the court administrator as 200.14 court administrator of district court shall be paid to the 200.15 county treasurer. Except for those portions of forfeited bail 200.16 paid to victims pursuant to existing law, the county treasurer 200.17 shall forward all revenue from fees and forfeited bail collected 200.18 under chapters 357, 487, and 574 to the state treasurer for 200.19 deposit in the state treasury and credit to the general fund, 200.20 unless otherwise provided in chapter 611A or other law, in the 200.21 manner and at the times prescribed by the state treasurer, but 200.22 not less often than once each month. If the defendant or 200.23 probationer is located after forfeited bail proceeds have been 200.24 forwarded to the state treasurer, the state treasurer shall 200.25 reimburse the county, on request, for actual costs expended for 200.26 extradition, transportation, or other costs necessary to return 200.27 the defendant or probationer to the jurisdiction where the bail 200.28 was posted, in an amount not more than the amount of forfeited 200.29 bail.All other money must be deposited in the county general200.30fund unless otherwise provided by law.The court administrator 200.31 of district court shall not retain any additional compensation, 200.32 per diem or other emolument for services as court administrator 200.33 of district court, but may receive and retain mileage and 200.34 expense allowances as prescribed by law. 200.35 Sec. 8. Minnesota Statutes 1998, section 487.02, 200.36 subdivision 2, is amended to read: 201.1 Subd. 2. Except as provided in this subdivision, the 201.2 county board shall levy taxes annually against the taxable 201.3 property within the county as necessary for the establishment, 201.4 operation and maintenance of the county court or courts within 201.5 the county. Any county in a judicial district under section 201.6 480.181, subdivision 1, paragraph (b), as added by 1999 S.F. No. 201.7 2221, article 7, section 26, is prohibited from levying property 201.8 taxes for these purposes, except for any amounts necessary to 201.9 pay the costs incurred in the first six months of calendar year 201.10 2000 with respect to counties in the fifth, seventh, and ninth 201.11 judicial districts. 201.12 Sec. 9. Minnesota Statutes 1998, section 487.32, 201.13 subdivision 3, is amended to read: 201.14 Subd. 3. A judge of a county court may order any sums 201.15 forfeited to be reinstated and thecountystate treasurer shall 201.16 then refund accordingly. Thecountystate treasurer shall 201.17 reimburse the court administrator if the court administrator 201.18 refunds the deposit upon a judge's order and obtains a receipt 201.19 to be used as a voucher. 201.20 Sec. 10. Minnesota Statutes 1998, section 487.33, 201.21 subdivision 5, is amended to read: 201.22 Subd. 5. [ALLOCATION.] The court administrator shall 201.23 provide the county treasurer with the name of the municipality 201.24 or other subdivision of government where the offense was 201.25 committed which employed or provided by contract the arresting 201.26 or apprehending officer and the name of the municipality or 201.27 other subdivision of government which employed the prosecuting 201.28 attorney or otherwise provided for prosecution of the offense 201.29 for each fine or penalty and the total amount of fines or 201.30 penalties collected for each municipality or other subdivision 201.31 of government. On or before the last day of each month, the 201.32 county treasurer shall pay over to the treasurer of each 201.33 municipality or subdivision of government within the county all 201.34 fines or penalties for parking violations for which complaints 201.35 and warrants have not been issued and one-third of all fines or 201.36 penalties collected during the previous month for offenses 202.1 committed within the municipality or subdivision of government 202.2 from persons arrested or issued citations by officers employed 202.3 by the municipality or subdivision or provided by the 202.4 municipality or subdivision by contract. An additional 202.5 one-third of all fines or penalties shall be paid to the 202.6 municipality or subdivision of government providing prosecution 202.7 of offenses of the type for which the fine or penalty is 202.8 collected occurring within the municipality or subdivision, 202.9 imposed for violations of state statute or of an ordinance, 202.10 charter provision, rule or regulation of a city whether or not a 202.11 guilty plea is entered or bail is forfeited. Except as provided 202.12 in section 299D.03, subdivision 5, or as otherwise provided by 202.13 law, all other fines and forfeitures and all fees and statutory 202.14 court costs collected by the court administrator shall be paid 202.15 to the county treasurer of the county in which the funds were 202.16 collected who shall dispense them as provided by law. In a 202.17 county in a judicial district under section 480.181, subdivision 202.18 1, paragraph (b), as added in 1999 S.F. No. 2221, article 7, 202.19 section 26, all other fines, forfeitures, fees, and statutory 202.20 court costs must be paid to the state treasurer for deposit in 202.21 the state treasury and credited to the general fund. 202.22 Sec. 11. Minnesota Statutes 1998, section 574.34, 202.23 subdivision 1, is amended to read: 202.24 Subdivision 1. [GENERAL.] Fines and forfeitures not 202.25 specially granted or appropriated by law shall be paid into the 202.26 treasury of the county where they are incurred, except in a 202.27 county in a judicial district under section 480.181, subdivision 202.28 1, paragraph (b), as added in 1999 S.F. No. 2221, article 7, 202.29 section 26, the fines and forfeitures must be deposited in the 202.30 state treasury and credited to the general fund. 202.31 Sec. 12. [APPROPRIATION.] 202.32 $18,848,866 is appropriated for fiscal year 2001 from the 202.33 general fund to the district courts for purposes of funding the 202.34 district court expenses under this article. 202.35 Sec. 13. [EFFECTIVE DATES; CONTINGENCY.] 202.36 (a) Sections 2 and 6 are effective for aids payable in 203.1 2000. The other provisions of this article providing for the 203.2 transfer of fees and fines to the state are effective January 1, 203.3 2000, with respect to counties in the eighth judicial district, 203.4 and July 1, 2000, with respect to counties in the fifth, 203.5 seventh, and ninth judicial districts. 203.6 (b) Notwithstanding paragraph (a), this article does not 203.7 take effect unless the state assumes the district court costs 203.8 under 1999 S.F. No. 2221, article 7. 203.9 ARTICLE 10 203.10 TAX INCREMENT FINANCING 203.11 Section 1. Minnesota Statutes 1998, section 273.1399, 203.12 subdivision 6, is amended to read: 203.13 Subd. 6. [EXEMPT DISTRICTS.] (a) The provisions of this 203.14 section do not apply to exempt tax increment financing districts 203.15 as specified by this subdivision. 203.16 (b) A tax increment financing district for an ethanol 203.17 production facility that satisfies all of the following 203.18 requirements is exempt: 203.19 (1) The district is an economic development district, that 203.20 qualifies under section 469.176, subdivision 4c, paragraph (a), 203.21 clause (1). 203.22 (2) The facility is certified by the commissioner of 203.23 agriculture to qualify for state payments for ethanol 203.24 development under section 41A.09 to the extent funds are 203.25 available. 203.26 (3) Increments from the district are used only to finance 203.27 the qualifying ethanol development project located in the 203.28 district or to pay for administrative costs of the district. 203.29 (4) The district is located outside of the seven-county 203.30 metropolitan area, as defined in section 473.121. 203.31 (5) The tax increment financing plan was approved by a 203.32 resolution of the county board. 203.33 (6) The exemption provided by this paragraph applies until 203.34 the first year after the total amount of increment for the 203.35 district exceeds $1,500,000. The county auditor shall notify 203.36 the commissioner of revenue of the expiration of the exemption 204.1 by June 1 of the year in which the auditor projects the revenues 204.2 from increments will exceed $1,500,000. On or before the 204.3 expiration of the exemption, the municipality may elect to make 204.4 a qualifying local contribution under paragraph (d) in lieu of 204.5 the state aid reduction. 204.6 (c) A qualified housing district is exempt. 204.7 (d)(1) A district is exempt if the municipality elects at 204.8 the time of approving the tax increment financing plan for the 204.9 district to make a qualifying local contribution. To qualify 204.10 for the exemption in each year, the authority or the 204.11 municipality must make a qualifying local contribution equal to 204.12 the listed percentages of increment from the district or 204.13 subdistrict: 204.14 (A) for an economic development district, a housing204.15district,or a renewal and renovation district, ten percent; 204.16 (B) for a redevelopment district, a housing district, a 204.17 mined underground space district, a hazardous substance 204.18 subdistrict, or a soils condition district, five percent. 204.19 (2) If the municipality elects to make a qualifying 204.20 contribution and fails to make the required contribution for a 204.21 year, the state aid reduction applies for the year. The state 204.22 aid reduction equals the greater of (A) the required local 204.23 contribution or (B) the amount of the aid reduction that applies 204.24 under subdivision 3. For a district exempt under paragraph (b), 204.25 no qualifying local contribution is required for years in which 204.26 the district is exempt. 204.27 (3)(A) If the sum of required local contributions for all 204.28 districts in the municipality exceeds two percent of city net 204.29 tax capacity as defined in section 477A.011, subdivision 20, for 204.30 a year, the municipality's total required local contribution for 204.31 that year is limited to two percent of net tax capacity to 204.32 qualify for the exemption under this subdivision. The 204.33 municipality may allocate the contribution among the districts 204.34 on which it has made elections as it determines appropriate. 204.35 (B) If a municipality makes an election under this 204.36 subdivision for a district in a year in which item (A) applies, 205.1 a minimum annual qualifying contribution must be made for the 205.2 district equal to the lesser of 0.25 percent of city net tax 205.3 capacity or three percent of increment revenues. This minimum 205.4 contribution applies for the life of the district for each year 205.5 that the restriction in item (A) applies and is in addition to 205.6 the contribution required by item (A). 205.7 (4) The amount of the local contribution must be made out 205.8 of unrestricted money of the authority or municipality, such as 205.9 the general fund, a property tax levy, or a federal or a state 205.10 grant-in-aid which may be spent for general government 205.11 purposes. The local contribution may not be made, directly or 205.12 indirectly, with tax increments or developer payments as defined 205.13 under section 469.1766. The local contribution must be used to 205.14 pay project costs and cannot be used for general government 205.15 purposes or for improvements or costs that the authority or 205.16 municipality planned to incur absent the project. The authority 205.17 or municipality may request contributions from other local 205.18 government entities that will benefit from the district's 205.19 activities. These contributions reduce the local contribution 205.20 required of the municipality or authority by this paragraph. 205.21 Cities, counties, towns, and schools may contribute to paying 205.22 these costs, notwithstanding any other law to the contrary. 205.23 (5) The municipality may make a local contribution in 205.24 excess of the required contribution for a year. If it does so, 205.25 the municipality may credit the excess to a local contribution 205.26 account for the district. The balance in the account may be 205.27 used to meet the requirements for qualifying local contributions 205.28 for later years. No interest or investment earnings may be 205.29 credited or imputed to the account, except those (A) actually 205.30 paid by the municipality out of its unrestricted funds or by 205.31 another person or entity, other than a developer as used in 205.32 section 469.1766, and (B) used as required for a qualifying 205.33 local contribution. 205.34 (6) If the state contributes to the project costs through a 205.35 direct grant or similar incentive, the required local 205.36 contribution is reduced by one-half of the dollar amount of the 206.1 state grant or other similar incentive. 206.2 Sec. 2. Minnesota Statutes 1998, section 469.176, 206.3 subdivision 4g, is amended to read: 206.4 Subd. 4g. [GENERAL GOVERNMENT USE PROHIBITED.] (a) These 206.5 revenues shall not be used to circumvent existing levy limit 206.6 law. No revenues derived from tax increment from any district, 206.7 whether certified before or after August 1, 1979, shall be used 206.8 for the acquisition, construction, renovation, operation, or 206.9 maintenance of a building to be used primarily and regularly for 206.10 conducting the business of a municipality, county, school 206.11 district, or any other local unit of government or the state or 206.12 federal government or for a commons area used as a public park, 206.13 or a facility used for social, recreational, or conference 206.14 purposes. This provision shall not prohibit the use of revenues 206.15 derived from tax increments for the construction or renovation 206.16 of a parking structure, a commons area used as a public park, or206.17a facility used for social, recreational, or conference purposes206.18and not primarily for conducting the business of the206.19municipality. 206.20 (b) If any publicly owned facility used for social, 206.21 recreational, or conference purposes and financed in whole or in 206.22 part from revenues derived from a district is operated or 206.23 managed by an entity other than the authority, the operating and 206.24 management policies of the facility must be approved by the 206.25 governing body of the authority. 206.26 (c) Tax increments may not be used to pay for the cost of 206.27 public improvements, equipment, or other items, if: 206.28 (1) the improvements, equipment, or other items are located 206.29 outside of the area of the tax increment financing district from 206.30 which the increments were collected; and 206.31 (2) the improvements, equipment, or items that (i) 206.32 primarily serve a decorative or aesthetic purpose, or (ii) serve 206.33 a functional purpose, but their cost is increased by more than 206.34 100 percent as a result of the selection of materials, design, 206.35 or type as compared with more commonly used materials, designs, 206.36 or types for similar improvements, equipment, or items. 207.1 Sec. 3. Minnesota Statutes 1998, section 469.1763, is 207.2 amended by adding a subdivision to read: 207.3 Subd. 6. [POOLING PERMITTED FOR DEFICITS.] (a) This 207.4 subdivision applies only to districts for which the request for 207.5 certification was made before June 2, 1997. 207.6 (b) The municipality for the district may transfer 207.7 available increments from another tax increment financing 207.8 district located in the municipality, if the transfer is 207.9 necessary to eliminate a deficit in the district to which the 207.10 increments are transferred. A deficit in the district for 207.11 purposes of this subdivision means the lesser of the following 207.12 two amounts: 207.13 (1)(i) the amount due during the calendar year to pay 207.14 preexisting obligations of the district; minus 207.15 (ii) the total increments to be collected from properties 207.16 located within the district that are available for the calendar 207.17 year, plus 207.18 (iii) total increments from properties located in other 207.19 districts in the municipality that are available to be used to 207.20 meet the district's obligations under this section, excluding 207.21 this subdivision, or other provisions of law (but excluding a 207.22 special tax under section 469.1791 and the grant program under 207.23 Laws 1997, chapter 231, article 1, section 19); or 207.24 (2) the reduction in increments collected from properties 207.25 located in the district for the calendar year as a result of the 207.26 changes in class rates in Laws 1997, chapter 231, article 1, and 207.27 Laws 1998, chapter 389, article 2. 207.28 (c) A pre-existing obligation means bonds issued and sold 207.29 before June 2, 1997, to the extent that the bonds are secured by 207.30 a pledge of increments from the tax increment financing district. 207.31 For purposes of this subdivision, bonds exclude an obligation to 207.32 reimburse or pay a developer or owner of property located in the 207.33 district for amounts incurred or paid by the developer or owner. 207.34 (d) The municipality may require a development authority, 207.35 other than a seaway port authority, to transfer available 207.36 increments for any of its tax increment financing districts in 208.1 the municipality to make up an insufficiency in another district 208.2 in the municipality, regardless of whether the district was 208.3 established by the development authority or another development 208.4 authority. This authority applies notwithstanding any law to 208.5 the contrary, but applies only to a development authority that: 208.6 (1) was established by the municipality; or 208.7 (2) the governing body of which is appointed, in whole or 208.8 part, by the municipality or an officer of the municipality or 208.9 which consists, in whole or part, of members of the governing 208.10 body of the municipality. 208.11 (e) The authority under this subdivision to spend tax 208.12 increments outside of the area of the district from which the 208.13 tax increments were collected: 208.14 (1) may only be exercised after obtaining approval of the 208.15 use of the increments, in writing, by the commissioner of 208.16 revenue; 208.17 (2) is an exception to the restrictions under the other 208.18 provisions of this section and the percentage restrictions under 208.19 subdivision 2 must be calculated after deducting increments 208.20 spent under this subdivision from the total increments for the 208.21 district; and 208.22 (3) applies notwithstanding the provisions of the tax 208.23 increment financing act in effect for districts for which the 208.24 request for certification was made before June 30, 1982, or any 208.25 other law to the contrary. 208.26 Sec. 4. [469.1764] [PRE-1982 DISTRICTS; POOLING RULES.] 208.27 Subdivision 1. [SCOPE; APPLICATION.] (a) This section 208.28 applies to a tax increment financing district or area added to a 208.29 district, if the request for certification of the district or 208.30 the area added to the district was made after July 31, 1979, and 208.31 before July 1, 1982. 208.32 (b) This section, section 469.1763, subdivision 6, and any 208.33 special law applying to the district enacted before the 208.34 effective date of this section are the exclusive authority to 208.35 spend tax increments on activities located outside of the 208.36 geographic area of a tax increment financing district that is 209.1 subject to this section. 209.2 Subd. 2. [STATE AUDITOR NOTIFICATION.] By August 1, 1999, 209.3 the state auditor shall notify in writing each authority for 209.4 which the auditor has records that the authority has a district 209.5 subject to this section. 209.6 Subd. 3. [RATIFICATION OF PAST SPENDING.] (a) The 209.7 following expenditures of increments on activities located 209.8 outside of the geographic area of a district subject to this 209.9 section are permitted: 209.10 (1) expenditures made before the earlier of (i) 209.11 notification by the state auditor or (ii) December 31, 1999; and 209.12 (2) expenditures to pay pre-existing outside-district 209.13 obligations. 209.14 Subd. 4. [DECERTIFICATION REQUIRED.] (a) The provisions of 209.15 this subdivision apply to any tax increment financing district 209.16 subject to this section, if increments from the district were 209.17 used on activities located outside of the geographic area of the 209.18 district. 209.19 (b) After December 31, 1999, any tax increments received by 209.20 the authority from a district subject to this subdivision may be 209.21 expended only to pay: 209.22 (1) pre-existing in-district obligations; 209.23 (2) pre-existing outside-district obligations; and 209.24 (3) administrative expenses. 209.25 After all pre-existing obligations have been paid or 209.26 defeased, the district must be decertified and any remaining 209.27 increments distributed as excess increments under section 209.28 469.176, subdivision 2. 209.29 Subd. 5. [DEFINITIONS.] (a) "Notification by the state 209.30 auditor" means the receipt by the authority or the municipality 209.31 of a written notification from the state auditor that its 209.32 expenditures of increments from the district on activities 209.33 located outside of the geographic area of the district were not 209.34 in compliance with state law. 209.35 (b) "Pre-existing outside district obligations" mean: 209.36 (1) bonds secured by increments from a district subject to 210.1 this section and used to finance activities outside the 210.2 geographic area of the district, if the bonds were issued and 210.3 the pledge of increment was made before the earlier of (i) 210.4 notification by the state auditor or (ii) April 1, 1999; 210.5 (2) bonds issued to refund bonds qualifying under clause 210.6 (1), if the refunding bonds do not increase the total amount of 210.7 tax increments required to pay the refunded bonds; and 210.8 (3) binding written agreements secured by the increments 210.9 from the district subject to this section and used to finance 210.10 activities outside the geographic area of the district, if the 210.11 agreement was entered before the earlier of (i) notification by 210.12 the state auditor or (ii) May 1, 1999. 210.13 (c) "Pre-existing in-district obligations" mean: 210.14 (1) bonds secured by increments from a district subject to 210.15 this section and not used to finance activities outside of the 210.16 geographic area of the district, if the bonds were issued and 210.17 the pledge of increments was made before April 1, 1999; 210.18 (2) bonds issued to refund bonds qualifying under clause 210.19 (1), if the refunding bonds do not increase the total amount of 210.20 tax increments required to pay the refunded bonds; and 210.21 (3) binding written agreements secured by increments from a 210.22 district subject to this section and not used to finance 210.23 activities outside of the geographic area of the district, if 210.24 the agreements were entered into and the pledge of increments 210.25 was made before May 1, 1999. 210.26 Sec. 5. Minnesota Statutes 1998, section 469.1771, 210.27 subdivision 1, is amended to read: 210.28 Subdivision 1. [ENFORCEMENT.] (a) The owner of taxable 210.29 property located in the city, town, school district, or county 210.30 in which the tax increment financing district is located may 210.31 bring suit for equitable relief or for damages, as provided in 210.32 subdivisions 3 and 4, arising out of a failure of a municipality 210.33 or authority to comply with the provisions of sections 469.174 210.34 to 469.179, or related provisions of this chapter. The 210.35 prevailing party in a suit filed under the preceding sentence is 210.36 entitled to costs, including reasonable attorney fees. 211.1 (b) The state auditor may examine and audit political 211.2 subdivisions' use of tax increment financing. Without previous 211.3 notice, the state auditor may examine or audit accounts and 211.4 records on a random basis as the auditor deems to be in the 211.5 public interest. If the state auditor finds evidence that an 211.6 authority or municipality has violated a provision of the law 211.7 for which a remedy is provided under this section, the state 211.8 auditor shall forward the relevant information to the county 211.9 attorney. The county attorney may bring an action to enforce 211.10 the provisions of sections 469.174 to 469.179 or related 211.11 provisions of this chapter, for matters referred by the state 211.12 auditor or on behalf of the county. If the county attorney 211.13 determines not to bring an action or if the county attorney has 211.14 not brought an action within 12 months after receipt of the 211.15 initial notification by the state auditor of the violation, the 211.16 county attorney shall notify the state auditor in writing. 211.17 (c) If the state auditor finds an authority is not in 211.18 compliance with sections 469.174 to 469.179 or related 211.19 provisions of law, the auditor shall notify the governing body 211.20 of the municipality that approved the tax increment financing 211.21 district of its findings. The governing body of the 211.22 municipality must respond in writing to the state auditor within 211.23 60 days after receiving the notification. Its written response 211.24 must state whether the municipality accepts, in whole or part, 211.25 the auditor's findings. If the municipality does not accept the 211.26 findings, the statement must indicate the basis for its 211.27 disagreement. The state auditor shall annually summarize the 211.28 responses it receives under this section and send the summary 211.29 and copies of the responses to the chairs of the committees of 211.30 the legislature with jurisdiction over tax increment financing. 211.31 (d) The state auditor shall notify the commissioner of 211.32 revenue in writing and provide supporting materials for a 211.33 violation found by the auditor, if the: 211.34 (1) auditor receives notification from the county attorney 211.35 under paragraph (b); and 211.36 (2) municipality or development authority have not 212.1 eliminated or resolved the violation to the satisfaction of the 212.2 state auditor. 212.3 The auditor shall provide the municipality and development 212.4 authority a copy of the notification sent to the commissioner of 212.5 revenue. 212.6 Sec. 6. Minnesota Statutes 1998, section 469.1771, is 212.7 amended by adding a subdivision to read: 212.8 Subd. 2b. [SUSPENSION OF TIF AUTHORITY.] (a) Upon receipt 212.9 of a notification from the state auditor under subdivision 1, 212.10 paragraph (d), the commissioner of revenue shall review the 212.11 materials submitted by the auditor and the municipality and 212.12 development authority. For a period of 30 days after the 212.13 referral of the matter by the state auditor, the municipality or 212.14 development authority may submit materials to the commissioner 212.15 on the matter. If the commissioner finds that the municipality 212.16 or development authority violated a provision of the law 212.17 enumerated in subdivision 1 and that the violation was 212.18 substantial, the commissioner shall suspend the authority of the 212.19 municipality and development authority to exercise tax increment 212.20 financing powers. The commissioner shall set the period of the 212.21 suspension relative to the substantiality of the violation. The 212.22 period of suspension may not exceed five years. 212.23 (b) For purposes of this subdivision, the exercise of tax 212.24 increment financing powers means: 212.25 (1) the authority to request certification of a new tax 212.26 increment financing district or the addition of area to an 212.27 existing tax increment financing district; 212.28 (2) the authority to issue bonds under section 469.178; 212.29 (3) the authority to amend a tax increment financing plan 212.30 to authorize new activities or expenditures. 212.31 (c) If an order is issued under this subdivision and no 212.32 action has been filed under subdivision 1 before the effective 212.33 date of the order, no action may be brought under subdivision 1 212.34 for the violation that is the subject of the order. 212.35 Sec. 7. Minnesota Statutes 1998, section 469.1791, 212.36 subdivision 3, is amended to read: 213.1 Subd. 3. [PRECONDITIONS TO ESTABLISH DISTRICT.] (a) A city 213.2 may establish a special taxing district within a tax increment 213.3 financing district under this section only if the conditions 213.4 under paragraphs (b) and (c) are met or if the city elects to 213.5 exercise the authority under paragraph (d). 213.6 (b) The city has determined that: 213.7 (1) total tax increments from the district, including 213.8 unspent increments from previous years and increments 213.9 transferred under paragraph (c), will be insufficient to pay the 213.10 amounts due in a year on preexisting obligations; and 213.11 (2) this insufficiency of increments resulted from the 213.12 reduction in property tax class rates enacted in the 1997 and 213.13 1998 legislative sessions. 213.14 (c) The city has agreed to transfer any available 213.15 increments from other tax increment financing districts in the 213.16 city to pay the preexisting obligations of the district under 213.17 section 469.1763, subdivision 6. This requirement does not 213.18 apply to any available increments of a qualified housing 213.19 district, as defined in section 273.1399, subdivision 213.20 1.Notwithstanding any law to the contrary, the city may213.21require a development authority to transfer available increments213.22for any of its tax increment financing districts in the city to213.23make up an insufficiency in another district in the city,213.24regardless of whether the district was established by the213.25development authority or another development authority.213.26Notwithstanding any law to the contrary, increments transferred213.27under this authority must be spent to pay preexisting213.28obligations. "Development authority" for this purpose means any213.29authority as defined in section 469.174, subdivision 2.213.30 (d) If a tax increment financing district does not qualify 213.31 under paragraphs (b) and (c), the governing body may elect to 213.32 establish a special taxing district under this section. If the 213.33 city elects to exercise this authority, increments from the tax 213.34 increment financing district and the proceeds of the tax imposed 213.35 under this section may only be used to pay preexisting 213.36 obligations and reasonable administrative expenses of the 214.1 authority for the tax increment financing district. The tax 214.2 increment financing district must be decertified when all 214.3 preexisting obligations have been paid. 214.4 Sec. 8. Minnesota Statutes 1998, section 469.1813, 214.5 subdivision 1, is amended to read: 214.6 Subdivision 1. [AUTHORITY.] The governing body of a 214.7 political subdivision may grant an abatement of the taxes 214.8 imposed by the political subdivision on a parcel of property, if: 214.9 (a) it expects the benefits to the political subdivision of 214.10 the proposed abatement agreement to at least equal the costs to 214.11 the political subdivision of the proposed agreement; and 214.12 (b) it finds that doing so is in the public interest 214.13 because it will: 214.14 (1) increase or preserve tax base; 214.15 (2) provide employment opportunities in the political 214.16 subdivision; 214.17 (3) provide or help acquire or construct public facilities; 214.18 (4) help redevelop or renew blighted areas;or214.19 (5) help provide access to services for residents of the 214.20 political subdivision; or 214.21 (6) finance or provide public infrastructure. 214.22 Sec. 9. Minnesota Statutes 1998, section 469.1813, 214.23 subdivision 2, is amended to read: 214.24 Subd. 2. [ABATEMENT RESOLUTION.] The governing body of a 214.25 political subdivision may grant an abatement only by adopting an 214.26 abatement resolution, specifying the terms of the abatement. In 214.27 the case of a town, the board of supervisors may approve the 214.28 abatement resolution. The resolution must also include a 214.29 specific statement as to the nature and extent of the public 214.30 benefits which the governing body expects to result from the 214.31 agreement. The resolution may provide that the political 214.32 subdivision will retain or transfer to another political 214.33 subdivision the abatement to pay for all or part of the cost of 214.34 acquisition or improvement of public infrastructure, whether or 214.35 not located on or adjacent to the parcel for which the tax is 214.36 abated. The abatement may reduce all or part of the property 215.1 taxlevied byamount for the political subdivision on the 215.2 parcel. A political subdivision's maximum annual amount for a 215.3 parcel equals its total local tax rate multiplied by the total 215.4 net tax capacity of the parcel. The political subdivision may 215.5 limit the abatement: 215.6 (1) to a specific dollar amount per year or in total; 215.7 (2) to the increase in property taxes resulting from 215.8 improvement of the property; 215.9 (3) to the increases in property taxes resulting from 215.10 increases in the market value or tax capacity of the property; 215.11 or 215.12 (4) in any other manner the governing body of the 215.13 subdivision determines is appropriate. 215.14 The political subdivision may not abate tax attributable tothe215.15value of the land orthe areawide tax under chapter 276A or 215.16 473F, except as provided in this subdivision. 215.17 Sec. 10. Minnesota Statutes 1998, section 469.1813, 215.18 subdivision 3, is amended to read: 215.19 Subd. 3. [SCHOOL DISTRICTABATEMENT PROCEDUREABATEMENTS.] 215.20Notwithstanding the amounts in subdivision 2, a school district215.21that grants an abatement under this section must limit the215.22abatement for any property to not more than an amount equal to215.23the product of: (1) the property's net tax capacity, and (2)215.24the difference between the district's total tax rate for that215.25year and one-half of the general education tax rate for that215.26year.An abatement granted under this section is not an 215.27 abatement for purposes of state aid or local levy under sections 215.28 127A.40 to 127A.51. 215.29 Sec. 11. Minnesota Statutes 1998, section 469.1813, 215.30 subdivision 6, is amended to read: 215.31 Subd. 6. [DURATION LIMIT.](a)A political subdivision 215.32other than a school districtmay grant an abatement for a period 215.33 no longer than ten years. The subdivision may specify in the 215.34 abatement resolution a shorter duration. If the resolution does 215.35 not specify a period of time, the abatement is for eight years. 215.36 If an abatement has been granted to a parcel of property and the 216.1 period of the abatement has expired, the political subdivision 216.2 that granted the abatement may not grant another abatement for 216.3 eight years after the expiration of the first abatement. This 216.4 prohibition does not apply to improvements added after and not 216.5 subject to the first abatement. 216.6(b) A school district may grant an abatement for only one216.7year at a time. Once a school district has authorized an216.8abatement for a property, it may reauthorize the abatement in216.9any subsequent year for the next seven years, or nine years if216.10provided in the original abatement agreement. This prohibition216.11does not apply to improvements added after and not subject to216.12the original abatement agreement.216.13 Sec. 12. Minnesota Statutes 1998, section 469.1813, is 216.14 amended by adding a subdivision to read: 216.15 Subd. 9. [CONSENT OF PROPERTY OWNER NOT REQUIRED.] A 216.16 political subdivision may abate the taxes on a parcel under 216.17 sections 469.1812 to 469.1815 without obtaining the consent of 216.18 the property owner. 216.19 Sec. 13. Minnesota Statutes 1998, section 469.1815, 216.20 subdivision 2, is amended to read: 216.21 Subd. 2. [PROPERTY TAXES; ABATEMENT PAYMENT.] The total 216.22 property taxes shall be levied on the property and shall be due 216.23 and payable to the county at the times provided under section 216.24 279.01. The political subdivision will pay the abatement to the 216.25 property owner, lessee, or a representative of the 216.26 bondholders or will retain the abatement to pay public 216.27 infrastructure costs, as provided by the abatement resolution. 216.28 Sec. 14. Laws 1997, chapter 231, article 1, section 19, 216.29 subdivision 1, is amended to read: 216.30 Subdivision 1. [TIF GRANTS.] (a) The commissioner of 216.31 revenue shall pay grants to municipalities for deficits in tax 216.32 increment financing districts caused by the changes in class 216.33 rates under this act. Municipalities must submit applications 216.34 for the grants in a form prescribed by the commissioner by no 216.35 later thanMarchAugust 1 for grants payable during the calendar 216.36 year. The maximum grant equals the lesser of: 217.1 (1) for taxes payable in the year before the grant is paid, 217.2 the reduction in the tax increment financing district's revenues 217.3 derived from increment resulting from the class rate changes in 217.4 this article, Laws 1998, chapter 389, article 2, and those 217.5 enacted in the 1999 regular legislative session; or 217.6 (2) the municipality's total tax increments, including 217.7 unspent increments from previous years, less the amount due 217.8 during the calendar year to pay (i) bonds issued and sold before 217.9 the day following final enactment of this act and (ii) binding 217.10 contracts entered into before the day following final enactment 217.11 of this act. 217.12 (b) The commissioner of revenue may require applicants for 217.13 grantsor pooling authorityunder this section to provide any 217.14 information the commissioner deems appropriate. The 217.15 commissioner shall calculate the amount under paragraph (a), 217.16 clause (2), based on the reports for the tax increment financing 217.17 district or districts filed with the state auditor on or before 217.18 July 1 of the year before the year in which the grant is to be 217.19 paid. 217.20 (c) This subdivision applies only to deficits in tax 217.21 increment financing districts for which: 217.22 (1) the request for certification was made before the 217.23 enactment date of this act; and 217.24 (2) all timely reports have been filed with the state 217.25 auditor, as required by Minnesota Statutes, section 469.175. 217.26 (d) The commissioner shall pay the grants under this 217.27 subdivision by December 26 of the year. 217.28 (e) $2,000,000 is appropriated to the commissioner of 217.29 revenue to make grants under this section. This appropriation 217.30 is available until expended or this section expires under 217.31 subdivision 3, whichever is earlier. If the amount of grant 217.32 entitlements for a year exceed the appropriation, the 217.33 commissioner shall reduce each grant proportionately so the 217.34 total equals the amount available. 217.35 Sec. 15. Laws 1997, chapter 231, article 1, section 19, 217.36 subdivision 3, is amended to read: 218.1 Subd. 3. [EXPIRATION.] This section expires on January 1, 218.220012002. 218.3 Sec. 16. [CITY OF ONAMIA; USE OF TAX INCREMENT FINANCING.] 218.4 Subdivision 1. [APPLICATION OF TIME LIMIT.] For tax 218.5 increment financing district no. 1-1, established April 14, 218.6 1993, by the city of Onamia, Minnesota Statutes, section 218.7 469.1763, subdivision 3, applies to the district by permitting a 218.8 period ending three years after the enactment of this section. 218.9 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 218.10 approval by the governing body of the city of Onamia and 218.11 compliance with Minnesota Statutes, section 645.021, subdivision 218.12 3. 218.13 Sec. 17. [ST. CLOUD HOUSING AND REDEVELOPMENT AUTHORITY.] 218.14 Subdivision 1. [TAX INCREMENT POOLING.] Notwithstanding 218.15 the provisions of Minnesota Statutes, section 469.1763, 218.16 subdivision 2, and the provisions of the tax increment financing 218.17 act in effect for districts established by the St. Cloud housing 218.18 and redevelopment authority for which the request for 218.19 certification was made after August 1, 1979, and before June 30, 218.20 1982, revenue derived from tax increments paid by properties in 218.21 the districts may be expended through a development fund or 218.22 otherwise within other tax increment districts established by 218.23 the authority or to finance the redevelopment of commercial 218.24 properties outside of tax increment financing districts which 218.25 were destroyed or impacted in a natural gas explosion on 218.26 December 11, 1998. 218.27 Subd. 2. [EFFECTIVE DATE.] This section is effective the 218.28 day after compliance with Minnesota Statutes, section 645.021, 218.29 subdivision 3. 218.30 Sec. 18. [CITY OF ST. PAUL.] 218.31 Subdivision 1. [DELAY OF DEEMED COMMENCEMENT OF TAX 218.32 INCREMENT FINANCING DISTRICT.] Notwithstanding Minnesota 218.33 Statutes, section 469.176, or any other law to the contrary, the 218.34 duration limit of the Williams Hill tax increment district in 218.35 the city of St. Paul is determined as if the date of receipt of 218.36 the first tax increment by the authority occurs when the 219.1 aggregate of all tax increments received from the district 219.2 reaches $2,000. In no case may the duration limit of the 219.3 district be extended by more than two years. 219.4 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 219.5 approval by and compliance with Minnesota Statutes, sections 219.6 469.1782, subdivision 2, and 645.021, subdivision 3, by the 219.7 governing body of the city of St. Paul. 219.8 Sec. 19. [CITY OF JACKSON; TAX INCREMENT FINANCING 219.9 DISTRICT.] 219.10 Subdivision 1. [DISTRICT EXTENSION.] (a) Notwithstanding 219.11 the provisions of Minnesota Statutes, section 469.176, 219.12 subdivision 1c, full tax increments from U.S. 71/I-90 tax 219.13 increment financing district in the city of Jackson must be paid 219.14 to and may be retained by the city of Jackson through taxes 219.15 payable in 2002. The amount to be retained by the city is 219.16 limited to $170,000. Any increments received during the 219.17 extension in excess of $170,000 must be returned as excess 219.18 increments under Minnesota Statutes, section 469.176, 219.19 subdivision 2. 219.20 Subd. 2. [EFFECTIVE DATE.] This section is effective the 219.21 day after compliance with Minnesota Statutes, sections 469.1782, 219.22 subdivision 2, and 645.021, subdivision 3. 219.23 Sec. 20. [CITY OF MINNEOTA; TAX INCREMENT FINANCING.] 219.24 Subdivision 1. [ACTIONS RATIFIED.] The expenditure of tax 219.25 increments on administrative expenses and public utility or 219.26 other improvements by the city of Minneota for its tax increment 219.27 financing district, adopted by city resolution 4-15-85A, are 219.28 ratified and deemed to be authorized by the tax increment 219.29 financing plan for the district. 219.30 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 219.31 compliance by the governing body of the city of Minneota with 219.32 Minnesota Statutes, section 645.021, subdivision 3. 219.33 Sec. 21. [STEARNS COUNTY; TAX INCREMENT FINANCING.] 219.34 Subdivision 1. [RATIFICATION OF HOUSING AND REDEVELOPMENT 219.35 AUTHORITY TAX INCREMENT FINANCING ACTIONS.] Except as provided 219.36 in subdivision 2, all tax increments from tax increment 220.1 financing districts numbers 15, 22, 58, and 68 established by 220.2 the Stearns county housing and redevelopment authority expended 220.3 before April 1, 1997, on any activity or program provided for in 220.4 the tax increment financing plans, as amended through April 24, 220.5 1998, are ratified and approved and are conclusively deemed to 220.6 be spent in compliance with applicable law. Any funds remaining 220.7 in tax increment financing districts numbers 15 and 22 must be 220.8 distributed as excess increments under Minnesota Statutes, 220.9 section 469.176, subdivision 2. This section does not ratify 220.10 expenditures of tax increments where the authority has concurred 220.11 in the findings of violations by the state auditor and has 220.12 returned the tax increments as excess increments before the 220.13 enactment date of this section. 220.14 Subd. 2. [CONDITIONS.] The ratification under subdivision 220.15 1 is valid only if: 220.16 (1) the Stearns county housing and redevelopment authority 220.17 decertifies tax increment financing districts numbers 58 and 68 220.18 as soon as all costs authorized by the tax increment financing 220.19 plans are paid; 220.20 (2) any payments to the Stearns county housing and 220.21 redevelopment authority associated with litigation, court 220.22 action, or other settlement action relating to tax increment 220.23 financing districts numbers 15, 22, 58, and 68, less any related 220.24 legal fees and expenses, must be distributed as excess 220.25 increments under Minnesota Statutes, section 469.176, 220.26 subdivision 2; and 220.27 (3) the Stearns county housing and redevelopment authority 220.28 repays the amount of all undocumented administrative expenses 220.29 for the districts and these amounts are redistributed as excess 220.30 increments under Minnesota Statutes, section 469.176, 220.31 subdivision 2. 220.32 Subd. 3. [EFFECTIVE DATE.] This section is effective upon 220.33 compliance by the governing body of Stearns county with 220.34 Minnesota Statutes, section 645.021, subdivision 3. 220.35 Sec. 22. [CITY OF FRIDLEY, TAX INCREMENT FINANCING 220.36 DISTRICT.] 221.1 Subdivision 1. [EXTENSION OF TIME.] (a) Notwithstanding 221.2 the provisions of Minnesota Statutes, section 469.176, 221.3 subdivision 1b, upon approval of the governing body of the city 221.4 of Fridley, the Fridley housing and redevelopment authority may, 221.5 by resolution, extend the duration of tax increment financing 221.6 district no. 6 located in the city of Fridley. The housing and 221.7 redevelopment authority may not extend the duration beyond 221.8 December 31, 2020. 221.9 (b) The provisions of Minnesota Statutes, sections 221.10 273.1399, subdivision 8, and 469.1782, subdivision 1, apply to 221.11 this district if extended, except that the maximum state aid 221.12 reduction for a year may not exceed the least of the following 221.13 amounts: 221.14 (1) the amount under Minnesota Statutes, section 469.1782, 221.15 subdivision 1; or 221.16 (2) $200,000, plus one-half of (the amount under Minnesota 221.17 Statutes, section 469.1782, subdivision 1, minus $200,000); or 221.18 (3) 2.5 percent of the net tax capacity of the city. 221.19 (c) Notwithstanding any law to the contrary, effective upon 221.20 approval of this section, no increments may be spent on 221.21 activities located outside of the area of the district, other 221.22 than for administrative expenses. 221.23 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 221.24 compliance with the requirements of Minnesota Statutes, sections 221.25 469.1782, subdivision 2, and 645.021. 221.26 Sec. 23. [CITY OF CHANHASSEN; TAX INCREMENT DISTRICT.] 221.27 Subdivision 1. [DISTRICT EXTENSION.] (a) Notwithstanding 221.28 the provisions of Minnesota Statutes, section 469.176, 221.29 subdivision 1c, full tax increments from the city of 221.30 Chanhassen's Downtown Redevelopment Tax Increment Financing 221.31 District Number 1 must be paid to and may be retained by the 221.32 city of Chanhassen for property taxes payable in 2001, 2002, and 221.33 2003. 221.34 (b) Increments permitted to be paid to and retained by the 221.35 city under paragraph (a) may only be used to pay or defease 221.36 bonds issued or other obligations incurred prior to September 2, 222.1 1998, the proceeds of which were used to fund public 222.2 redevelopment costs within the redevelopment project or bonds 222.3 issued to refund the bonds. 222.4 (c) The maximum amount of increments allowed to be retained 222.5 under this section is limited to the amount that would qualify 222.6 for a grant under Laws 1997, chapter 231, article 1, section 19, 222.7 as amended. 222.8 Subd. 2. [EFFECTIVE DATE.] This section is effective the 222.9 day after compliance with Minnesota Statutes, sections 469.1782, 222.10 subdivision 2, and 645.021, subdivision 3. 222.11 Sec. 24. [APPROPRIATION; TIF GRANTS.] 222.12 $1,000,000 is appropriated to the commissioner of revenue 222.13 for purposes of grants under Laws 1997, chapter 231, article 1, 222.14 section 19, to municipalities to offset deficits in tax 222.15 increment financing districts. 222.16 Sec. 25. [REPEALER.] 222.17 Laws 1997, chapter 231, article 1, section 19, subdivision 222.18 2, is repealed. 222.19 Sec. 26. [EFFECTIVE DATE.] 222.20 Section 1 is effective for requests for certification of a 222.21 new district or for the addition of geographic area to a 222.22 district made after June 30, 1999. 222.23 Section 2 is effective for all tax increment financing 222.24 districts, regardless of when the request for certification was 222.25 made, but does not apply to expenditures made or binding 222.26 contracts entered into before July 1, 1999. 222.27 Section 3 is effective for all districts for which the 222.28 request for certification was made before June 2, 1997. 222.29 Section 4 is effective the day following final enactment 222.30 and applies to districts for which the request for certification 222.31 was made after July 31, 1979, and before July 1, 1982. 222.32 Sections 5 and 6 apply to all districts for which the 222.33 request for certification was made after August 1, 1979, but is 222.34 limited to findings of violations made by the state auditor 222.35 after December 31, 1999. 222.36 Sections 7 to 15, and 25 are effective the day following 223.1 final enactment. 223.2 ARTICLE 11 223.3 TAX FORFEITURE AND DELINQUENCY PROCEDURES 223.4 Section 1. Minnesota Statutes 1998, section 92.51, is 223.5 amended to read: 223.6 92.51 [TAXATION; REDEMPTION; SPECIAL CERTIFICATE.] 223.7 State lands sold by the director become taxable. A 223.8 description of the tract sold, with the name of the purchaser, 223.9 must be transmitted to the proper county auditor. The auditor 223.10 must extend the land for taxation like other land. Only the 223.11 interest in the land vested by the land sale certificate in its 223.12 holder may be sold for delinquent taxes.Upon production to the223.13county treasurer of the tax certificate given upon tax sale, in223.14case the lands have not been redeemed, the tax purchaser has the223.15right to pay the principal and interest then in default upon the223.16land sale certificate as its assignee. To redeem from a tax223.17sale, the person redeeming must pay the county treasurer, for223.18the holder and owner of the tax sale certificate, in addition to223.19all sums required to be paid in other cases, all amounts paid by223.20the holder and owner for interest and principal upon the land223.21sale certificate, with interest at 12 percent per year. When223.22the director receives the tax certificate with the county223.23auditor's certificate of the expiration of the time for223.24redemption, and the county treasurer's receipt for all223.25delinquent interest and penalty on the land sale certificate,223.26the director shall issue the holder and owner of the tax223.27certificate a special certificate with the same terms and the223.28same effect as the original land sale certificate.223.29 Sec. 2. Minnesota Statutes 1998, section 279.37, 223.30 subdivision 1, is amended to read: 223.31 Subdivision 1. [COMPOSITION INTO ONE ITEM.] Delinquent 223.32 taxes upon any parcel of real estate may be composed into one 223.33 item or amount by confession of judgment at any time prior to 223.34 the forfeiture of the parcel of land to the state for taxes, for 223.35 the aggregate amount of all the taxes, costs, penalties, and 223.36 interest accrued against the parcel, ashereinafterprovided in 224.1 this section. Taxes upon property which, for the previous 224.2 year's assessment, was classified as mineral property, 224.3 employment property, or commercial or industrial propertyshall224.4 are onlybeeligible to be composed into any confession of 224.5 judgment under this section as provided in subdivision 224.6 1a. Delinquent taxes for property which has been reclassified 224.7 from 4bb to 4b under section 273.1319 are not eligible to be 224.8 composed into any confession of judgment pursuant to this 224.9 subdivision. Delinquent taxes on unimproved land are eligible 224.10 to be composed into a confession of judgment only if the land is 224.11 classified as homestead, agricultural, or timberland in the 224.12 previous year or is eligible for installment payment under 224.13 subdivision 1a. The entire parcel is eligible for the ten-year 224.14 installment plan as provided in subdivision 2 if 25 percent or 224.15 more of the market value of the parcel is eligible for 224.16 confession of judgment under this subdivision. 224.17 Sec. 3. Minnesota Statutes 1998, section 279.37, 224.18 subdivision 1a, is amended to read: 224.19 Subd. 1a. [CLASS 3A PROPERTY.] (a) The delinquent taxes 224.20 upon a parcel of property which was classified class 3a, for the 224.21 previous year's assessment and had a total market value ofless224.22than$200,000 or less for that same assessment shall be eligible 224.23 to be composed into a confession of judgment. Property 224.24 qualifying under this subdivision shall be subject to the same 224.25 provisions as provided in this section except ashereinprovided 224.26 in paragraphs (b) to (d). 224.27(a)(b) Current year taxes and penalty due at the time the 224.28 confession of judgment is entered must be paid. 224.29 (c) The down paymentshallmust include all special 224.30 assessments due in the current tax year, all delinquent special 224.31 assessments, and 20 percent of the ad valorem tax, penalties, 224.32 and interest accrued against the parcel. The balance 224.33 remainingshall beis payable in four equal annual installments; 224.34 and 224.35(b)(d) The amounts entered in judgmentshallbear interest 224.36 at the rate provided in section 279.03, subdivision 1a, 225.1 commencing with the date the judgment is entered. The interest 225.2 rate is subject to change each year on the unpaid balance in the 225.3 manner provided in section 279.03, subdivision 1a. 225.4 Sec. 4. Minnesota Statutes 1998, section 279.37, 225.5 subdivision 2, is amended to read: 225.6 Subd. 2. [INSTALLMENT PAYMENTS.] The owner of any such 225.7 parcel, or any person to whom the right to pay taxes has been 225.8 given by statute, mortgage, or other agreement, may make and 225.9 file with the county auditor of the countywhereinin which the 225.10 parcel is located a written offer to pay the current taxes each 225.11 year before they become delinquent, or to contest the taxes 225.12 under Minnesota Statutes 1941, sections 278.01 to 278.13, and 225.13 agree to confess judgment for the amounthereinbeforeprovided, 225.14 as determined by the county auditor, and shall thereby waive. 225.15 By filing the offer, the owner waives all irregularities in 225.16 connection with the tax proceedings affecting the parcel and any 225.17 defense or objection which the owner may have to the 225.18 proceedings, andshall thereby waivealso waives the 225.19 requirements of any notice of default in the payment of any 225.20 installment or interest to become due pursuant to the composite 225.21 judgment to be so entered, and shall tender therewith. With the 225.22 offer, the owner shall tender one-tenth of the amount of the 225.23 delinquent taxes, costs, penalty, and interest, and shall tender 225.24 all current year taxes and penalty due at the time the 225.25 confession of judgment is entered. In the offer, the owner 225.26 shall agreethereinto pay the balance in nine equal 225.27 installments, with interest as provided in section 279.03, 225.28 payable annually on installments remaining unpaid from time to 225.29 time, on or before December 31 of each year following the year 225.30 in which judgment was confessed, which. The offershallmust be 225.31 substantially as follows: 225.32 "To the court administrator of the district court of 225.33 ........... county, I, ....................., am the owner of 225.34 the following described parcel of real estatesituatelocated in 225.35 .................... county, Minnesota, to-wit: 225.36 .............................. Uponwhichthat real estate there 226.1 are delinquent taxes for the year ........., and prior years, as 226.2 follows: (here insert year of delinquency and the total amount 226.3 of delinquent taxes, costs, interest, and penalty)do hereby. 226.4 By signing this document I offer to confess judgment in the sum 226.5 of $...... andherebywaive all irregularities in the tax 226.6 proceedings affectingsuchthese taxes and any defense or 226.7 objection which I may havetheretoto them, and direct judgment 226.8 to be entered for theamount hereby confessedamount stated 226.9 above,lessminus the sum of $............,hereby tenderedto 226.10 be paid with this document,beingwhich is one-tenth of the 226.11 amount ofsaidthe taxes, costs, penalty, and interest;stated 226.12 above. I agree to pay the balance ofsaidthe judgment in nine 226.13 equal, annual installments, with interest as provided in section 226.14 279.03, payable annually, on the installments remaining 226.15 unpaidfrom time to time, said. I agree to pay the installments 226.16 and interestto be paidon or before December 31 of each year 226.17 following the year in which this judgment is confessed and 226.18 current taxes each year before they become delinquent, or within 226.19 30 days after the entry of final judgment in proceedings to 226.20 contestsuchthe taxes under Minnesota Statutes1941, sections 226.21 278.01 to 278.13. 226.22 Datedthis.............., ......." 226.23 Sec. 5. Minnesota Statutes 1998, section 281.23, 226.24 subdivision 2, is amended to read: 226.25 Subd. 2. [MAY COVER PARCELS BID IN AT SAME TAX SALEFORM.] 226.26All parcels of land bid in at the same tax judgment sale and226.27having the same period of redemption shall be covered by a226.28single posted notice, but a separate notice may be posted for226.29any parcel which may be omitted. SuchThe notice of expiration 226.30 of redemption must contain the tax parcel identification numbers 226.31 and legal descriptions of parcels subject to notice of 226.32 expiration of redemption provisions prescribed under subdivision 226.33 1. The notice must also indicate the names of taxpayers and fee 226.34 owners of record in the office of the county auditor at the time 226.35 the notice is prepared and names of those parties who have filed 226.36 their addresses according to section 276.041 and the amount of 227.1 payment necessary to redeem as of the date of the notice. At 227.2 the option of the county auditor, the current filed addresses of 227.3 affected persons may be included on the notice. The notice 227.4shall beis sufficient if substantially in the following form: 227.5 "NOTICE OF EXPIRATION OF REDEMPTION 227.6 Office of the County Auditor 227.7 County of ......................., State of Minnesota. 227.8 To all personsinterestedhaving an interest inthelands 227.9hereinafterdescribed in this notice: 227.10 You areherebynotified that the parcels of land 227.11hereinafterdescribed, situatedin this notice and located in 227.12 the county of ................................, state of 227.13 Minnesota,were bid in for the state on the227.14......................... day of .......................,227.15......., at the tax judgment sale of land for delinquent taxes227.16for the year .......; that the legal descriptions and tax parcel227.17identification numbers of such parcels and names of the227.18taxpayers and fee owners and in addition those parties who have227.19filed their addresses pursuant to section 276.041, and the227.20amount necessary to redeem as of the date hereof and, at the227.21election of the county auditor, the current filed addresses of227.22any such persons, are as follows:are subject to forfeiture to 227.23 the state of Minnesota because of nonpayment of delinquent 227.24 property taxes, special assessments, and/or penalty, interest, 227.25 and costs levied on those parcels. The time for redemption from 227.26 forfeiture expires if a redemption is not made by the later of 227.27 (1) 60 days after service of this notice on all persons having 227.28 an interest in the lands of record at the office of the county 227.29 recorder or registrar of titles, or (2) by the second Monday in 227.30 May. The redemption must be made in my office. 227.31 Names (and 227.32 Current Filed 227.33 Addresses) for 227.34 the Taxpayers 227.35 and Fee Owners 227.36 andin Addition228.1 Those Parties 228.2 Who Have Filed Amount 228.3 Their Addresses Tax Necessary to 228.4 Pursuant to Legal Parcel Redeem as of 228.5 section 276.041 Description Number DateHereof228.6 of Notice 228.7 ................ ........... ...... ............ 228.8 ................ ........... ...... ............ 228.9That the time for redemption of such lands from such sale228.10will expire 60 days after service of notice and the filing of228.11proof thereof in my office, as provided by law. The redemption228.12must be made in my office.228.13 FAILURE TO REDEEMSUCHTHE LANDS PRIOR TO THE EXPIRATION 228.14 OF REDEMPTION WILL RESULT IN THE LOSS OF THE LAND AND 228.15 FORFEITUREOF SAID LANDTO THE STATE OF MINNESOTA. 228.16 Inquiries as tothethese proceedingsset forth abovecan 228.17 be made to the County Auditor forthe............... Countyof228.18..............., whose address is set forth below. 228.19 Witness my hand and official seal this 228.20 ............................ day of ................, ....... 228.21 ......................... 228.22 County Auditor 228.23 (OFFICIAL SEAL) 228.24 ......................... 228.25 (Address) 228.26 ......................... 228.27 (Telephone)." 228.28SuchThe noticeshallmust be posted by the auditor in the 228.29 auditor's office, subject to public inspection, andshallmust 228.30 remain so posted until at least one week after the date of the 228.31 last publication of notice, ashereinafterprovided in this 228.32 section. Proof ofsuchpostingshallmust be made by the 228.33 certificate of the auditor, filed in the auditor's office. 228.34 Sec. 6. Minnesota Statutes 1998, section 281.23, 228.35 subdivision 4, is amended to read: 228.36 Subd. 4. [PROOF OF PUBLICATION.] An affidavit establishing 229.1 proof of publication ofsuchthe notice affidavit, as provided 229.2 by law,shallmust be filed in the office of the county 229.3 auditor. A single published noticeshall be sufficient for all229.4 may include parcels of land bid in atthe samedifferent tax 229.5 judgmentsalesales,having the same periodbut included parcels 229.6 must have a common year for expiration of redemption, and229.7covered by a notice or notices kept posted during the time of229.8the publication, as hereinbefore provided. 229.9 Sec. 7. Minnesota Statutes 1998, section 281.23, 229.10 subdivision 6, is amended to read: 229.11 Subd. 6. [SERVICE OF NOTICE.] (a)ForthwithImmediately 229.12 after the commencement ofsuchpublication or mailing the county 229.13 auditor shall deliver to the sheriff of the county or any other 229.14 person not less than 18 years of age a sufficient number of 229.15 copies ofsuchthe notice of expiration of redemption for 229.16 serviceuponon the persons in possession of all parcels of such 229.17 landas areactually occupied, and documentation if the 229.18 certified mail notice was returned as undeliverable or the 229.19 notice was not mailed to the address associated with the 229.20 property. Within 30 days after receiptthereofof the notice, 229.21 the sheriff or other person serving the notice shallmake such229.22investigationinvestigate asmay benecessary to ascertain 229.23 whether or not the parcels covered bysuchthe notice are 229.24 actually occupied parcels, and shall serve a copy ofsuchthe 229.25 notice of expiration of redemption upon the person in possession 229.26 of each parcel found to be an occupied parcel, in the manner 229.27 prescribed for serving summons in a civil action. If the 229.28 sheriff or another person serving the notice has made at least 229.29 two attempts to serve the notice of expiration of redemption, 229.30 one between the weekday hours of 8:00 a.m. and 5:00 p.m. and the 229.31 other on a different day and different time period, the sheriff 229.32 or another person serving the notice may accomplish this service 229.33 by posting a copy of the notice of expiration of redemption on a 229.34 conspicuous location on the parcel. The sheriff or other person 229.35 serving the notice shall make prompt return to the auditor as to 229.36 all notices so served and as to all parcels found vacant and 230.1 unoccupied and parcels served by posting.SuchThe returnshall230.2 must be madeuponon a copy ofsuchthe notice andshall be230.3 is prima facie evidence of the factsthereinstated in it. 230.4 If the notice is served by the sheriff, the sheriff shall 230.5 receive from the county, in addition to other compensation 230.6 prescribed by law,suchfees and mileage for service on persons 230.7 in possession asareprescribed by law for such service in other 230.8 cases, and shall also receivesuchcompensation for making 230.9 investigation and return as to vacant and unoccupied lands as 230.10 the county board may fix, subject to appeal to the district 230.11 court as in case of other claims against the county. As to 230.12 either service upon persons in possession or return as to vacant 230.13 lands, the sheriff shall charge mileage only for one trip if the 230.14 occupants of more than two tracts are served simultaneously, and 230.15 in such case mileageshallmust be prorated and charged 230.16 equitably against all such owners. 230.17 (b) The secretary of state shall receive sheriff's service 230.18 for all out-of-state interests. 230.19 Sec. 8. Minnesota Statutes 1998, section 282.01, 230.20 subdivision 1, is amended to read: 230.21 Subdivision 1. [CLASSIFICATION AS CONSERVATION OR 230.22 NONCONSERVATION.] It is the general policy of this state to 230.23 encourage the best use of tax-forfeited lands, recognizing that 230.24 some lands in public ownership should be retained and managed 230.25 for public benefits while other lands should be returned to 230.26 private ownership. Parcels of land becoming the property of the 230.27 state in trust under law declaring the forfeiture of lands to 230.28 the state for taxesshallmust be classified by the county board 230.29 of the county in which the parcels lie as conservation or 230.30 nonconservation. In making the classification the board shall 230.31 consider the present use of adjacent lands, the productivity of 230.32 the soil, the character of forest or other growth, accessibility 230.33 of lands to established roads, schools, and other public 230.34 services, their peculiar suitability or desirability for 230.35 particular uses and the suitability of the forest resources on 230.36 the land for multiple use, sustained yield management. The 231.1 classification, furthermore, must encourage and foster a mode of 231.2 land utilization that will facilitate the economical and 231.3 adequate provision of transportation, roads, water supply, 231.4 drainage, sanitation, education, and recreation; facilitate 231.5 reduction of governmental expenditures; conserve and develop the 231.6 natural resources; and foster and develop agriculture and other 231.7 industries in the districts and places best suited to them. 231.8 In making the classification the county board may use 231.9 information made available by any office or department of the 231.10 federal, state, or local governments, or by any other person or 231.11 agency possessing pertinent information at the time the 231.12 classification is made. The lands may be reclassified from time 231.13 to time as the county boardmay considerconsiders necessary or 231.14 desirable, except for conservation lands held by the state free 231.15 from any trust in favor of any taxing district. 231.16 If the lands are located within the boundaries of an 231.17 organized town, with taxable valuation in excess of $20,000, or 231.18 incorporated municipality, the classification or 231.19 reclassification and sale must first be approved by the town 231.20 board of the town or the governing body of the municipality in 231.21 which the lands are located. The town board of the town or the 231.22 governing body of the municipality is considered to have 231.23 approved the classification or reclassification and sale if the 231.24 county board is not notified of the disapproval of the 231.25 classification or reclassification and sale within9060 days of 231.26 the date the request for approval was transmitted to the town 231.27 board of the town or governing body of the municipality. If the 231.28 town board or governing body desires to acquire any parcel lying 231.29 in the town or municipality by procedures authorized in this 231.30 section, it must file a written application with the county 231.31 board to withhold the parcel from public sale. The application 231.32 must be filed within9060 days of the request for 231.33 classification or reclassification and sale. The county board 231.34 shall then withhold the parcel from public sale forone yearsix 231.35 months. A municipality or governmental subdivision shall pay 231.36 maintenance costs incurred by the county during the six-month 232.1 period while the property is withheld from public sale, provided 232.2 the property is not offered for public sale after the six-month 232.3 period. A clerical error made by county officials does not 232.4 serve to eliminate the request of the town board or governing 232.5 body if the board or governing body has forwarded the 232.6 application to the county auditor. 232.7 Sec. 9. Minnesota Statutes 1998, section 282.01, 232.8 subdivision 4, is amended to read: 232.9 Subd. 4. [SALE: METHOD, REQUIREMENTS, EFFECTS.] The sale 232.10shallmust be conducted by the county auditor at the county seat 232.11 of the county in which the parcels lie,providedexcept that,in 232.12 St. Louis and Koochiching counties, the sale may be conducted in 232.13 any county facility within the county, and. The parcelsshall232.14 must be sold for cash only and at not less than the appraised 232.15 value, unless the county board of the countyshall havehas 232.16 adopted a resolution providing for their sale on terms, in which 232.17 event the resolutionshall controlcontrols with respectthereto232.18 to the sale. When the sale is made on terms other than for cash 232.19 only (1) a payment of at least ten percent of the purchase price 232.20 must be made at the time of purchase,thereuponand the balance 232.21shallmust be paid in no more than ten equal annual 232.22 installments, or (2) the payments must be made in accordance 232.23 with county board policy, but in no event may the board require 232.24 more than 12 installments annually, and the contract term must 232.25 not be for more than ten years.NoStanding timber or timber 232.26 productsshallmust not be removed from these lands until an 232.27 amount equal to the appraised value of all standing timber or 232.28 timber products on the lands at the time of purchase has been 232.29 paid by the purchaser; provided, that in case any. If a parcel 232.30 of land bearing standing timber or timber products is sold at 232.31 public auction for more than the appraised value, the amount bid 232.32 in excess of the appraised valueshallmust be allocated between 232.33 the land and the timber in proportion tothetheir respective 232.34 appraised valuesthereof, and no. In that case, standing timber 232.35 or timber productsshallmust not be removed from the land until 232.36 the amount of the excess bid allocated to timber or timber 233.1 products has been paid in addition to the appraised 233.2 valuethereofof the land. The purchaser is entitled to 233.3 immediate possession, subject to the provisions of any existing 233.4 valid lease made in behalf of the state. 233.5 For sales occurring on or after July 1, 1982, the unpaid 233.6 balance of the purchase price is subject to interest at the rate 233.7 determined pursuant to section 549.09. The unpaid balance of 233.8 the purchase price for sales occurring after December 31, 1990, 233.9 is subject to interest at the rate determined in section 279.03, 233.10 subdivision 1a. The interest rate is subject to change each 233.11 year on the unpaid balance in the manner provided for rate 233.12 changes in section 549.09 or 279.03, subdivision 1a, whichever, 233.13 is applicable. Interest on the unpaid contract balance on sales 233.14 occurring before July 1, 1982, is payable at the rate applicable 233.15 to the sale at the time that the sale occurred. 233.16 Sec. 10. Minnesota Statutes 1998, section 282.01, 233.17 subdivision 7, is amended to read: 233.18 Subd. 7. [COUNTY SALES; NOTICE, PURCHASE PRICE, 233.19 DISPOSITION.] The saleherein provided for shallmust commence 233.20 atsuchthe timeasdetermined by the county board of the county 233.21wherein suchin which the parcelslie, shall directare 233.22 located. The county auditor shall offer the parcels of land in 233.23 order in which they appear in the notice of sale, and shall sell 233.24 them to the highest bidder, but not for alesssum less than the 233.25 appraised value, until all of the parcels of landshallhave 233.26 been offered, and thereafter. Then the county auditor shall 233.27 sell any remaining parcels to anyone offering to pay the 233.28 appraised valuethereof, except that if the person could have 233.29 repurchased a parcel of property under section 282.012 or 233.30 282.241, that personshall not be allowed tomay not purchase 233.31 that same parcel of property at the sale under this subdivision 233.32 for a purchase price less than the sum of alldelinquenttaxes 233.33and, assessments, penalties, interest, and costs due at the time 233.34 of forfeiture computed under section 282.251,together with233.35penalties, interest, and costs that accrued or would have233.36accrued if the parcel had not forfeited to the stateand any 234.1 special assessments for improvements certified as of the date of 234.2 sale.SaidThe saleshallmust continue until allsuch234.3 the parcels are sold or until the county boardshall order234.4 orders a reappraisal orshall withdrawwithdraws any or allsuch234.5 of the parcels from sale.SuchThe list of lands may be added 234.6 to and the added lands may be sold at any time by publishing the 234.7 descriptions and appraised valuesof such. The added lands must 234.8 be: (1) parcels of landas shallthat have become forfeited and 234.9 classified as nonconservation since the commencement of any 234.10 prior saleor such; (2) parcelsas shallthat have been 234.11 reappraised, or such; (3) parcelsas shallthat have been 234.12 reclassified as nonconservation; orsuch(4) other parcelsas234.13 that are subject to sale but were omitted from the existing list 234.14 for any reason. The descriptions and appraised values must be 234.15 published in the same manner ashereinafterprovided for the 234.16 publication of the original list, provided that any. Parcels 234.17 added tosuchthe listshallmust first be offered for sale to 234.18 the highest bidder before they are sold at appraised value. All 234.19 parcels of land not offered for immediate sale, as well as 234.20 parcelsof such lands asthat are offered and not immediately 234.21 soldshall, continue to be held in trust by the state for the 234.22 taxing districts interested in each ofsaidthe parcels, under 234.23 the supervision of the county board, and such. Those parcels 234.24 may be used for public purposes until sold, as directed by the 234.25 county boardmay direct. 234.26 Sec. 11. Minnesota Statutes 1998, section 282.04, 234.27 subdivision 2, is amended to read: 234.28 Subd. 2. [RIGHTS BEFORE SALE; IMPROVEMENTS, INSURANCE, 234.29 DEMOLITION.] Until after the sale of a parcel of forfeited land 234.30 the county auditor may, with the approval of the county board of 234.31 commissioners, provide for the repair and improvement of any 234.32 building or structure located uponsuchthe parcel, and may 234.33 provide for maintenance of tax-forfeited lands, if it is 234.34 determined by the county board that such repairsor, 234.35 improvements, or maintenance are necessary for the operation, 234.36 use, preservation and safetythereof; and,of the building or 235.1 structure. If so authorized by the county board, the county 235.2 auditor may insureany suchthe building or structure against 235.3 loss or damage resulting from fire or windstorm, may purchase 235.4 workers' compensation insurance to insure the county against 235.5 claims for injury to the personsthereinemployed in the 235.6 building or structure by the county, and may insure the county, 235.7 its officers and employees against claims for injuries to 235.8 persons or property because of the management, use or operation 235.9 ofsuchthe building or structure.SuchThe county auditor may, 235.10 with the approval of the county board, provide for the 235.11 demolition ofany suchthe building or structure, which has been 235.12 determined by the county board to be within the purview of 235.13 section 299F.10, and for the sale of salvaged 235.14 materialstherefromfrom the building or structure.SuchThe 235.15 county auditor, with the approval of the county board, may 235.16 provide for the sale of abandoned personal property under either 235.17 chapter 345 or 566, as appropriate. The net proceeds from any 235.18 sale ofsuchthe personal property, salvaged materials,of235.19 timber or other products, or leases made under this lawshall235.20 must be deposited in the forfeited tax sale fund andshallmust 235.21 be distributed in the same manner as if the parcel had been sold. 235.22SuchThe county auditor, with the approval of the county 235.23 board, may provide for the demolition of any structureor235.24structureson tax-forfeited lands, if in the opinion of the 235.25 county board, the county auditor, and the land commissioner, if 235.26 therebeis one, the sale ofsuchthe land withsuchthe 235.27 structureor structures thereonon it, or the continued 235.28 existence ofsuchthe structureor structuresby reason of age, 235.29 dilapidated condition or excessive size as compared with nearby 235.30 structures, will result in a material lessening of net tax 235.31 capacities of real estate in the vicinity ofsuchthe 235.32 tax-forfeited lands, or if the demolition ofsuchthe structure 235.33 or structures will aid in disposing ofsuchthe tax-forfeited 235.34 property. 235.35 Before the sale of a parcel of forfeited land located in an 235.36 urban area, the county auditor may with the approval of the 236.1 county board provide for the gradingthereofof the land by 236.2 filling or the removal of any surplus materialtherefrom, and236.3wherefrom it. If the physical condition of forfeited lands is 236.4 such that a reasonable gradingthereofof the lands is necessary 236.5 for the protection and preservation of the property of any 236.6 adjoining owner,suchthe adjoining property owner or owners may 236.7make applicationapply to the county board to havesuchthe 236.8 grading done. If, after consideringsaidthe application, the 236.9 county board believes thatsuchthe grading will enhance the 236.10 value ofsuchthe forfeited lands commensurate with the cost 236.11 involved, it may approvethe sameit, andany suchthe work 236.12shallmust be performed under the supervision of the county or 236.13 city engineer, as the case may be, and the expensethereofpaid 236.14 from the forfeited tax sale fund. 236.15 Sec. 12. Minnesota Statutes 1998, section 282.05, is 236.16 amended to read: 236.17 282.05 [PROCEEDS APPORTIONED.] 236.18 The net proceeds received from the sale or rental of 236.19 forfeited lands shall be apportioned to the general funds of the 236.20 state or municipal subdivision thereof, in the manner 236.21 hereinafter provided, andshallmust befirstused by the 236.22 municipal subdivisionto retire any indebtedness then existing236.23 as provided in section 282.08. 236.24 Sec. 13. Minnesota Statutes 1998, section 282.08, is 236.25 amended to read: 236.26 282.08 [APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.] 236.27 The net proceeds from the sale or rental of any parcel of 236.28 forfeited land, or from the sale ofanyproductstherefromfrom 236.29 the forfeited land,shallmust be apportioned by the county 236.30 auditor to the taxing districts interestedthereinin the land, 236.31 as follows: 236.32 (1)Suchthe portionas may berequired to pay any amounts 236.33 included in the appraised value under section 282.01, 236.34 subdivision 3, as representing increased value due to any public 236.35 improvement made after forfeiture ofsuchthe parcel to the 236.36 state, but not exceeding the amount certified by the clerk of 237.1 the municipality, shallmust be apportioned to the municipal 237.2 subdivision entitledtheretoto it; 237.3 (2)Suchthe portionas may berequired to pay any amount 237.4 included in the appraised value under section 282.019, 237.5 subdivision 5, representing increased value due to response 237.6 actions taken after forfeiture ofsuchthe parcel to the state, 237.7 but not exceeding the amount of expenses certified by the 237.8 pollution control agency or the commissioner of 237.9 agriculture,shallmust be apportioned to the agency or the 237.10 commissioner of agriculture and deposited in the fund from which 237.11 the expenses were paid; 237.12 (3)Suchthe portion of the remainderas may berequired to 237.13 discharge any special assessment chargeable againstsuchthe 237.14 parcel for drainage or other purpose whether due or deferred at 237.15 the time of forfeiture,shallmust be apportioned to the 237.16 municipal subdivision entitledtheretoto it; and 237.17 (4) any balanceshallmust be apportioned as follows: 237.18(a) Any(i) The county board may annually by resolution set 237.19 aside no more than 30 percent of the receipts remaining to be 237.20 used for timber development on tax-forfeited land and dedicated 237.21 memorial forests, to be expended under the supervision of the 237.22 county board. Itshallmust be expended only on projects 237.23 approved by the commissioner of natural resources. 237.24(b) Any(ii) The county board may annually by resolution 237.25 set aside no more than 20 percent of the receipts remaining to 237.26 be used for the acquisition and maintenance of county parks or 237.27 recreational areas as defined in sections 398.31 to 398.36, to 237.28 be expended under the supervision of the county board. 237.29(c) If the board does not avail itself of the authority237.30under paragraph (a) or (b)(iii) Any balance remainingshall237.31 must be apportioned as follows: county, 40 percent; town or 237.32 city, 20 percent; and school district, 40 percent,and if the237.33board avails itself of the authority under paragraph (a) or (b)237.34the balance remaining shall be apportioned among the county,237.35town or city, and school district in the proportions in this237.36paragraph above stated,provided, however, that in unorganized 238.1 territory that portion whichshouldwould have accrued to the 238.2 townshipshallmust be administered by the county board of 238.3 commissioners. 238.4 Sec. 14. Minnesota Statutes 1998, section 282.09, is 238.5 amended to read: 238.6 282.09 [FORFEITED TAX SALE FUND.] 238.7 Subdivision 1. [MONEY PLACED IN FUND; FEES AND 238.8 DISBURSEMENTS.] The county auditor and county treasurer shall 238.9 place all money received through the operation of sections 238.10 282.01 to 282.13 in a fund to be known as the forfeited tax sale 238.11 fund, and all disbursements and costsshallmust be charged 238.12 against that fund, when allowed by the county board. Members of 238.13 the county board may be paid a per diem pursuant to section 238.14 375.055, subdivision 1, and reimbursed for their necessary 238.15 expenses, and may receive mileage as fixed by law. The amount 238.16 of compensation of a land commissioner and assistants, if a land 238.17 commissioner is appointed,shallmust bein the amount238.18 determined by the county board. The county auditorshallmust 238.19 receive 50 cents for each certificate of sale, each contract for 238.20 deed and each lease executed by the auditor, and, in counties 238.21 where no land commissioner is appointed, additional annual 238.22 compensation, not exceeding $300, as fixed by the county board. 238.23 The amount of compensation of any other clerical helpthat may238.24beneeded by the county auditor or land commissionershallmust 238.25 bein the amountdetermined by the county board. All 238.26 compensation provided forherein shall bein this subdivision is 238.27 in addition to other compensation allowed by law. Fees so 238.28 charged in addition to the fee imposed in section 282.014shall238.29 must be included in the annual settlement by the county auditor 238.30 as hereinafter provided. On or before February 1 each year, the 238.31 commissioner of revenue shall certify to the commissioner of 238.32 finance, by counties, the total number of state deeds issued and 238.33 reissued during the preceding calendar year for which such fees 238.34 are charged and the total amountthereofof fees. On or before 238.35 March 1 each year, each county shall remit to the commissioner 238.36 of revenue, from the forfeited tax sale fund, the aggregate 239.1 amount of the fees imposed by section 282.014 in the preceding 239.2 calendar year. The commissioner of revenue shall deposit the 239.3 amounts received in the state treasury to the credit of the 239.4 general fund. When disbursements are made from the fund for 239.5 repairs, refunds, expenses of actions to quiet title, or any 239.6 other purpose which particularly affects specific parcels of 239.7 forfeited lands, the amount ofsuchthe disbursementsshallmust 239.8 be charged to theaccount of the taxing districts interested in239.9such parcelsforfeited tax sale fund. The county auditor shall 239.10 make an annual settlement of the net proceeds received from 239.11 sales and rentals by the operation of sections 282.01 to 282.13, 239.12 on the settlement day determined in section 276.09, for the 239.13 preceding calendar year. 239.14 Subd. 2. [EXPENDITURES.] In all counties,from said239.15"Forfeited Tax Sale Fund,"the authoritiesduly charged with the239.16execution ofresponsible for carrying out the duties imposed by 239.17 sections 282.01 to 282.13, at their discretion, may expend 239.18 moneysin repairingfrom the forfeited tax sale fund to repair 239.19 any sewer or water main either inside or outside of any curb 239.20 line situated along any property forfeited to the state for 239.21 nonpayment of taxes, to acquire and maintain equipment used 239.22 exclusively for the maintenance and improvement of tax-forfeited 239.23 lands,andto cut down, otherwise destroy or eradicate noxious 239.24 weeds on all tax-forfeited lands. In any year, the money to be239.25expended for the cutting down, destruction or eradication of239.26noxious weeds shall not exceed in amount more than ten percent239.27of the net proceeds of said "Forfeited Tax Sale Fund" during the239.28preceding calendar year, or $10,000, whichever is the lesser239.29sum, and to maintain tax-forfeited lands. 239.30 Sec. 15. Minnesota Statutes 1998, section 282.241, is 239.31 amended to read: 239.32 282.241 [REPURCHASE AFTER FORFEITURE.] 239.33 The owner at the time of forfeiture, or the owner's heirs, 239.34 devisees, or representatives, or any person to whom the right to 239.35 pay taxes was given by statute, mortgage, or other agreement, 239.36 may repurchase any parcel of land claimed by the state to be 240.1 forfeited to the state for taxes unless before the time 240.2 repurchase is made the parcel is sold under installment 240.3 payments, or otherwise, by the state as provided by law, or is 240.4 under mineral prospecting permit or lease, or proceedings have 240.5 been commenced by the state or any of its political subdivisions 240.6 or by the United States to condemnsuchthe parcel of land. The 240.7 parcel of land may be repurchased for the sum of all delinquent 240.8 taxes and assessments computed under section 282.251, together 240.9 with penalties, interest, and costs, that accrued or would have 240.10 accrued if the parcel of land had not forfeited to the state. 240.11 Except for property which was homesteaded on the date of 240.12 forfeiture,suchrepurchaseshall beis permitted during one 240.13 year only from the date of forfeiture, and in any case only 240.14 after the adoption of a resolution by the board of county 240.15 commissioners determining thattherebyby repurchase undue 240.16 hardship or injustice resulting from the forfeiture will be 240.17 corrected, or that permittingsuchthe repurchase will promote 240.18 the use ofsuchthe lands that will best serve the public 240.19 interest. If the county board has good cause to believe that a 240.20 repurchase installment payment plan for a particular parcel is 240.21 unnecessary and not in the public interest, the county board may 240.22 require as a condition of repurchase that the entire repurchase 240.23 price be paid at the time of repurchase. A repurchaseshall240.24beis subject to any easement, lease, or other encumbrance 240.25 granted by the stateprior theretobefore the repurchase, and if 240.26saidthe land is located within a restricted area established by 240.27 any county under Laws 1939, chapter 340,suchthe repurchase 240.28shallmust not be permitted unlesssaidthe resolutionwith240.29respect theretoapproving the repurchase is adopted by the 240.30 unanimous vote of the board of county commissioners. 240.31 The person seeking to repurchase under this section shall 240.32 pay all maintenance costs incurred by the county auditor during 240.33 the time the property was tax-forfeited. 240.34 Sec. 16. Minnesota Statutes 1998, section 282.261, 240.35 subdivision 4, is amended to read: 240.36 Subd. 4. [SERVICE FEE.] The county auditor may collect a 241.1 service fee to cover administrative costs as set by the county 241.2 board for each repurchasecontract approvedapplication received 241.3 after July 1, 1985. The feeshallmust be paid at the time of 241.4repurchaseapplication andshallmust be credited to the county 241.5 general revenue fund. 241.6 Sec. 17. Minnesota Statutes 1998, section 282.261, is 241.7 amended by adding a subdivision to read: 241.8 Subd. 5. [COUNTY MAY IMPOSE CONDITIONS OF REPURCHASE.] The 241.9 county auditor, after receiving county board approval, may 241.10 impose conditions on repurchase of tax-forfeited lands limiting 241.11 the use of the parcel subject to the repurchase, including, but 241.12 not limited to: environmental remediation action plan 241.13 restrictions or covenants; easements for lines or equipment for 241.14 telephone, telegraph, electric power, or telecommunications. 241.15 Sec. 18. Minnesota Statutes 1998, section 283.10, is 241.16 amended to read: 241.17 283.10 [APPLICATION MUST BE MADE WITHIN TWO YEARS.] 241.18 Nosuch refundmentrefund shall be granted unless an 241.19 applicationtherefor shall be dulyfor refund is approved and 241.20 presented to the commissioner of revenue within two years from 241.21 the date ofsuch tax certificate orthe state assignment 241.22 certificate. 241.23 Sec. 19. Minnesota Statutes 1998, section 375.192, 241.24 subdivision 2, is amended to read: 241.25 Subd. 2. [PROCEDURE, CONDITIONS.] Upon written application 241.26 by the owner of any property, the county board may grant the 241.27 reduction or abatement of estimated market valuation or taxes 241.28 and of any costs, penalties, or interest on them as the board 241.29 deems just and equitable and order the refund in whole or part 241.30 of any taxes, costs, penalties, or interest which have been 241.31 erroneously or unjustly paid. Except as provided in sections 241.32 469.1812 to 469.1815, no reduction or abatement may be granted 241.33 on the basis of providing an incentive for economic development 241.34 or redevelopment. Except as provided in section 375.194, the 241.35 county boardis authorized tomay consider and grant reductions 241.36 or abatements on applications only as they relate to taxes 242.1 payable in the current year and the two prior years; provided 242.2 that reductions or abatements for the two prior years shall be 242.3 considered or granted only for (i) clerical errors, or (ii) when 242.4 the taxpayer fails to file for a reduction or an adjustment due 242.5 to hardship, as determined by the county board. The application 242.6 must include the social security number of the applicant. The 242.7 social security number is private data on individuals as defined 242.8 by section 13.02, subdivision 12. All applications must be 242.9 approved by the county assessor, or, if the property is located 242.10 in a city of the first or second class having a city assessor, 242.11 by the city assessor, and by the county auditor before 242.12 consideration by the county board, except that the part of the 242.13 application which is for the abatement of penalty or interest 242.14 must be approved by the county treasurer and county auditor. 242.15 Approval by the county or city assessor is not required for 242.16 abatements of penalty or interest. No reduction, abatement, or 242.17 refund of any special assessments made or levied by any 242.18 municipality for local improvements shall be made unless it is 242.19 also approved by the board of review or similar taxing authority 242.20 of the municipality.Before taking actionOn any reduction or 242.21 abatementwherewhen the reduction of taxes, costs, penalties, 242.22 and interest exceed $10,000, the county board shall give20242.23days'notice within 20 days to the school board and the 242.24 municipality in which the property is located. The notice must 242.25 describe the property involved, the actual amount of the 242.26 reduction being sought, and the reason for the reduction.If242.27the school board or the municipality object to the granting of242.28the reduction or abatement, the county board must refer the242.29abatement or reduction to the commissioner of revenue with its242.30recommendation. The commissioner shall consider the abatement242.31or reduction under section 270.07, subdivision 1.242.32 An appeal may not be taken to the tax court from any order 242.33 of the county board made in the exercise of the discretionary 242.34 authority granted in this section. 242.35 The county auditor shall notify the commissioner of revenue 242.36 of all abatements resulting from the erroneous classification of 243.1 real property, for tax purposes, as nonhomestead property. For 243.2 the abatements relating to the current year's tax processed 243.3 through June 30, the auditor shall notify the commissioner on or 243.4 before July 31 of that same year of all abatement applications 243.5 granted. For the abatements relating to the current year's tax 243.6 processed after June 30 through the balance of the year, the 243.7 auditor shall notify the commissioner on or before the following 243.8 January 31 of all applications granted. The county auditor 243.9 shall submit a form containing the social security number of the 243.10 applicant and such other information the commissioner prescribes. 243.11 Sec. 20. Minnesota Statutes 1998, section 383C.482, 243.12 subdivision 1, is amended to read: 243.13 Subdivision 1. [AUDITOR TO SEARCH RECORDS; CERTIFICATES.] 243.14 The St. Louis county auditor, upon written application of any 243.15 person, shallmakesearchofthe records of the auditor's office 243.16 and the county treasurer's office, and ascertain the amount of 243.17 current tax against any lot or parcel of land described in the 243.18 application and the existence of all tax liens and tax sales as 243.19 tosuchthe lot or parcel of land, and certify the result of 243.20suchthe search under the seal of office, giving the description 243.21 of the lot or parcel of land, the amount of the current tax, if 243.22 any, and all tax liens and tax sales shown by such records, and 243.23 the amountthereofof liens and tax sales, the year of tax 243.24 covered bysuchthe lien, and the date of tax sale, and the name243.25of the purchaser at such tax sale. For the purpose of 243.26 ascertaining the current tax againstsucha lot or parcel of 243.27 land, the county auditor has the right of access to the records 243.28 of current taxes in the office of the county treasurer. 243.29 Sec. 21. [REPEALER.] 243.30 Minnesota Statutes 1998, sections 92.22; 280.27; 281.13; 243.31 281.38; 284.01; 284.02; 284.03; 284.04; 284.05; and 284.06, are 243.32 repealed. 243.33 Sec. 22. [EFFECTIVE DATES.] 243.34 This article is effective September 1, 1999, except that 243.35 sections 11, and 13 to 15 are effective beginning January 1, 243.36 2000, and except that section 12 is effective for net proceeds 244.1 received after the date of final enactment of this act. 244.2 ARTICLE 12 244.3 WATER AND SANITARY SEWER DISTRICTS 244.4 Section 1. [CEDAR LAKE AREA WATER AND SANITARY SEWER 244.5 DISTRICT; DEFINITIONS.] 244.6 Subdivision 1. [APPLICATION.] In sections 1 to 19, the 244.7 definitions in this section apply. 244.8 Subd. 2. [DISTRICT.] "Cedar lake area water and sanitary 244.9 sewer district" and "district" mean the area over which the 244.10 Cedar lake area water and sanitary sewer board has jurisdiction, 244.11 which includes the area within the city of New Prague and Helena 244.12 and Cedar Lake townships in Scott county. The district shall 244.13 precisely describe the area over which it has jurisdiction by a 244.14 metes and bounds description in the comprehensive plan adopted 244.15 pursuant to section 5. The territory may not be larger than the 244.16 area encompassed by the Cedar Lake improvement district, but it 244.17 may be smaller and the area may include a route along public 244.18 rights-of-way from Cedar Lake to the city of New Prague along 244.19 which the sewer main is laid. 244.20 Subd. 3. [BOARD.] "Water and sanitary sewer board" or 244.21 "board" means the Cedar lake area water and sanitary sewer board 244.22 established for the district as provided in subdivision 2. 244.23 Subd. 4. [PERSON.] "Person" means an individual, 244.24 partnership, corporation, limited liability company, 244.25 cooperative, or other organization or entity, public or private. 244.26 Subd. 5. [LOCAL GOVERNMENTAL UNITS.] "Local governmental 244.27 units" or "governmental units" means Scott county, the city of 244.28 New Prague, and Helena and Cedar Lake Townships in Scott county. 244.29 Subd. 6. [ACQUISITION; BETTERMENT.] "Acquisition" and 244.30 "betterment" have the meanings given in Minnesota Statutes, 244.31 section 475.51. 244.32 Subd. 7. [AGENCY.] "Agency" means the Minnesota pollution 244.33 control agency created in Minnesota Statutes, section 116.02. 244.34 Subd. 8. [SEWAGE.] "Sewage" means all liquid or 244.35 water-carried waste products from whatever sources derived, 244.36 together with any groundwater infiltration and surface water as 245.1 may be present. 245.2 Subd. 9. [POLLUTION OF WATER; SEWER SYSTEM.] "Pollution of 245.3 water" and "sewer system" have the meanings given in Minnesota 245.4 Statutes, section 115.01. 245.5 Subd. 10. [TREATMENT WORKS; DISPOSAL SYSTEM.] "Treatment 245.6 works" and "disposal system" have the meanings given in 245.7 Minnesota Statutes, section 115.01. 245.8 Subd. 11. [INTERCEPTOR.] "Interceptor" means a sewer and 245.9 its necessary appurtenances, including but not limited to mains, 245.10 pumping stations, and sewage flow-regulating and -measuring 245.11 stations, that is: 245.12 (1) designed for or used to conduct sewage originating in 245.13 more than one local governmental unit; 245.14 (2) designed or used to conduct all or substantially all 245.15 the sewage originating in a single local governmental unit from 245.16 a point of collection in that unit to an interceptor or 245.17 treatment works outside that unit; or 245.18 (3) determined by the board to be a major collector of 245.19 sewage used or designed to serve a substantial area in the 245.20 district. 245.21 Subd. 12. [DISTRICT DISPOSAL SYSTEM.] "District disposal 245.22 system" means any and all interceptors or treatment works owned, 245.23 constructed, or operated by the board unless designated by the 245.24 board as local water and sanitary sewer facilities. 245.25 Subd. 13. [MUNICIPALITY.] "Municipality" means any town or 245.26 home rule charter or statutory city. 245.27 Subd. 14. [TOTAL COSTS.] "Total costs of acquisition and 245.28 betterment" and "costs of acquisition and betterment" mean all 245.29 acquisition and betterment expenses permitted to be financed out 245.30 of stopped bond proceeds issued in accordance with section 13, 245.31 whether or not the expenses are in fact financed out of the bond 245.32 proceeds. 245.33 Subd. 15. [CURRENT COSTS.] "Current costs of acquisition, 245.34 betterment, and debt service" means interest and principal 245.35 estimated to be due during the budget year on bonds issued to 245.36 finance said acquisition and betterment and all other costs of 246.1 acquisition and betterment estimated to be paid during the year 246.2 from funds other than bond proceeds and federal or state grants. 246.3 Subd. 16. [RESIDENT.] "Resident" means the owner of a 246.4 dwelling located in the district and receiving water or sewer 246.5 service. 246.6 Sec. 2. [WATER AND SANITARY SEWER BOARD.] 246.7 Subdivision 1. [ESTABLISHMENT.] A water and sanitary sewer 246.8 district is established in Helena and Cedar Lake townships and 246.9 the city of New Prague in Scott county, to be known as the Cedar 246.10 lake area water and sanitary sewer district. The water and 246.11 sewer district is under the control and management of the Cedar 246.12 lake area water and sanitary sewer board. The board is 246.13 established as a public corporation and political subdivision of 246.14 the state with perpetual succession and all the rights, powers, 246.15 privileges, immunities, and duties granted to or imposed upon a 246.16 municipal corporation, as provided in sections 1 to 19. 246.17 Subd. 2. [MEMBERS AND SELECTION.] The board is composed of 246.18 seven members selected as provided in this subdivision. Each of 246.19 the town boards of the townships shall meet to appoint two 246.20 residents to the water and sanitary sewer board. The township 246.21 appointees must live on Cedar lake and must be served by the 246.22 system. One member must be selected by the city of New Prague. 246.23 Two members must be selected by the Scott county board of 246.24 commissioners. Each member has one vote. The first terms are 246.25 as follows: two for one year, two for two years, and three for 246.26 three years, fixed by lot at the district's first meeting. 246.27 Thereafter, all terms are for three years. 246.28 Subd. 3. [TIME LIMITS FOR SELECTION.] The board members 246.29 must be selected as provided in subdivision 2 within 60 days 246.30 after sections 1 to 19 are effective. The successor to each 246.31 board member must be selected at any time within 60 days before 246.32 the expiration of the member's term in the same manner as the 246.33 predecessor was selected. A vacancy on the board must be filled 246.34 within 60 days after it occurs. 246.35 Subd. 4. [VACANCIES.] If the office of a board member 246.36 becomes vacant, the vacancy must be filled for the unexpired 247.1 term in the manner provided for selection of the member who 247.2 vacated the office. The office is deemed vacant under the 247.3 conditions specified in Minnesota Statutes, section 351.02. 247.4 Subd. 5. [REMOVAL.] A board member may be removed by the 247.5 unanimous vote of the governing body appointing the member, with 247.6 or without cause, or for malfeasance or nonfeasance in the 247.7 performance of official duties as provided by Minnesota 247.8 Statutes, sections 351.14 to 351.23. 247.9 Subd. 6. [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A 247.10 certificate of selection of every board member selected under 247.11 subdivision 2 stating the term for which selected, must be made 247.12 by the respective town clerks. The certificates, with the 247.13 approval appended by other authority, if required, must be filed 247.14 with the secretary of state. Counterparts thereof must be 247.15 furnished to the board member and the secretary of the board. 247.16 Each member shall qualify by taking and subscribing the oath of 247.17 office prescribed by the Minnesota Constitution, article 5, 247.18 section 8. The oath, duly certified by the official 247.19 administering the same, must be filed with the secretary of 247.20 state and the secretary of the board. 247.21 Subd. 7. [BOARD MEMBERS' COMPENSATION.] Each board member, 247.22 except the chair, must be paid a per diem compensation of $35 247.23 for meetings and for other services as are specifically 247.24 authorized by the board, not to exceed $1,000 in any one year. 247.25 The chair may be paid a per diem compensation of $45 for 247.26 meetings and for other services specifically authorized by the 247.27 board, not to exceed $1,500 in any one year. All members of the 247.28 board must be reimbursed for all reasonable and necessary 247.29 expenses actually incurred in the performance of duties. 247.30 Sec. 3. [GENERAL PROVISIONS FOR ORGANIZATION AND OPERATION 247.31 OF BOARD.] 247.32 Subdivision 1. [ORGANIZATION; OFFICERS; MEETINGS; 247.33 SEAL.] After the selection and qualification of all board 247.34 members, the board must meet to organize the board at the call 247.35 of any two board members, upon seven days' notice by registered 247.36 mail to the remaining board members, at a time and place within 248.1 the district specified in the notice. A majority of the members 248.2 is a quorum at that meeting and all other meetings of the board, 248.3 but a lesser number may meet and adjourn from time to time and 248.4 compel the attendance of absent members. At the first meeting 248.5 the board shall select its officers and conduct other 248.6 organizational business as may be necessary. Thereafter the 248.7 board shall meet regularly at the time and place that the board 248.8 designates by resolution. Special meetings may be held at any 248.9 time upon call of the chair or any two members, upon written 248.10 notice sent by mail to each member at least three days before 248.11 the meeting, or upon other notice as the board by resolution may 248.12 provide, or without notice if each member is present or files 248.13 with the secretary a written consent to the meeting either 248.14 before or after the meeting. Except as otherwise provided in 248.15 sections 1 to 19, any action within the authority of the board 248.16 may be taken by the affirmative vote of a majority of the board 248.17 and may be taken by regular or adjourned regular meeting or at a 248.18 duly held special meeting, but in any case only if a quorum is 248.19 present. Meetings of the board must be open to the public. The 248.20 board may adopt a seal, which must be officially and judicially 248.21 noticed, to authenticate instruments executed by its authority, 248.22 but omission of the seal does not affect the validity of any 248.23 instrument. 248.24 Subd. 2. [CHAIR.] The board shall elect a chair from its 248.25 membership. The term of the first chair of the board expires on 248.26 January 1, 2001, and the terms of successor chairs expire on 248.27 January 1 of each succeeding year. The chair shall preside at 248.28 all meetings of the board, if present, and shall perform all 248.29 other duties and functions usually incumbent upon such an 248.30 officer, and all administrative functions assigned to the chair 248.31 by the board. The board shall elect a vice-chair from its 248.32 membership to act for the chair during temporary absence or 248.33 disability. 248.34 Subd. 3. [SECRETARY AND TREASURER.] The board shall select 248.35 persons who may, but need not be, members of the board, to act 248.36 as its secretary and treasurer. The two offices may be combined. 249.1 The secretary and treasurer shall hold office at the pleasure of 249.2 the board, subject to the terms of any contract of employment 249.3 that the board may enter into with the secretary or treasurer. 249.4 The secretary shall record the minutes of all meetings of the 249.5 board, and be the custodian of all books and records of the 249.6 board except those that the board entrusts to the custody of a 249.7 designated employee. The treasurer is the custodian of all 249.8 money received by the board except as the board otherwise 249.9 entrusts to the custody of a designated employee. The board may 249.10 appoint a deputy to perform any and all functions of either the 249.11 secretary or the treasurer. A secretary or treasurer who is not 249.12 a member of the board or a deputy of either does not have the 249.13 right to vote. 249.14 Subd. 4. [PUBLIC EMPLOYEES.] The executive director and 249.15 other persons employed by the district are public employees and 249.16 have all the rights and duties conferred on public employees 249.17 under Minnesota Statutes, sections 179A.01 to 179A.25. The 249.18 board may elect to have employees become members of either the 249.19 public employees retirement association or the Minnesota state 249.20 retirement system. The compensation and conditions of 249.21 employment of the employees must be governed by rules applicable 249.22 to state employees in the classified service and to the 249.23 provisions of Minnesota Statutes, chapter 15A. 249.24 Subd. 5. [PROCEDURES.] The board shall adopt resolutions 249.25 or bylaws establishing procedures for board action, personnel 249.26 administration, keeping records, approving claims, authorizing 249.27 or making disbursements, safekeeping funds, and auditing all 249.28 financial operations of the board. 249.29 Subd. 6. [SURETY BONDS AND INSURANCE.] The board may 249.30 procure surety bonds for its officers and employees, in amounts 249.31 deemed necessary to ensure proper performance of their duties 249.32 and proper accounting for funds in their custody. It may 249.33 procure insurance against risks to property and liability of the 249.34 board and its officers, agents, and employees for personal 249.35 injuries or death and property damage and destruction, in 249.36 amounts deemed necessary or desirable, with the force and effect 250.1 stated in Minnesota Statutes, chapter 466. 250.2 Sec. 4. [GENERAL POWERS OF BOARD.] 250.3 Subdivision 1. [SCOPE.] The board has all powers necessary 250.4 or convenient to discharge the duties imposed upon it by law. 250.5 The powers include those specified in this section, but the 250.6 express grant or enumeration of powers does not limit the 250.7 generality or scope of the grant of powers contained in this 250.8 subdivision. 250.9 Subd. 2. [SUIT.] The board may sue or be sued. 250.10 Subd. 3. [CONTRACT.] The board may enter into any contract 250.11 necessary or proper for the exercise of its powers or the 250.12 accomplishment of its purposes. 250.13 Subd. 4. [GIFTS, GRANTS, LOANS.] The board may accept 250.14 gifts, apply for and accept grants or loans of money or other 250.15 property from the United States, the state, or any person for 250.16 any of its purposes, enter into any agreement required in 250.17 connection with them, and hold, use, and dispose of the money or 250.18 property in accordance with the terms of the gift, grant, loan, 250.19 or agreement relating to it. With respect to loans or grants of 250.20 funds or real or personal property or other assistance from any 250.21 state or federal government or its agency or instrumentality, 250.22 the board may contract to do and perform all acts and things 250.23 required as a condition or consideration for the gift, grant, or 250.24 loan pursuant to state or federal law or regulations, whether or 250.25 not included among the powers expressly granted to the board in 250.26 sections 1 to 19. 250.27 Subd. 5. [COOPERATIVE ACTION.] The board may act under 250.28 Minnesota Statutes, section 471.59, or any other appropriate law 250.29 providing for joint or cooperative action between governmental 250.30 units. 250.31 Subd. 6. [STUDIES AND INVESTIGATIONS.] The board may 250.32 conduct research studies and programs, collect and analyze data, 250.33 prepare reports, maps, charts, and tables, and conduct all 250.34 necessary hearings and investigations in connection with the 250.35 design, construction, and operation of the district disposal 250.36 system. 251.1 Subd. 7. [EMPLOYEES, TERMS.] The board may employ on terms 251.2 it deems advisable, persons or firms performing engineering, 251.3 legal, or other services of a professional nature; require any 251.4 employee to obtain and file with it an individual bond or 251.5 fidelity insurance policy; and procure insurance in amounts it 251.6 deems necessary against liability of the board or its officers 251.7 or both, for personal injury or death and property damage or 251.8 destruction, with the force and effect stated in Minnesota 251.9 Statutes, chapter 466, and against risks of damage to or 251.10 destruction of any of its facilities, equipment, or other 251.11 property as it deems necessary. 251.12 Subd. 8. [PROPERTY RIGHTS, POWERS.] The board may acquire 251.13 by purchase, lease, condemnation, gift, or grant, any real or 251.14 personal property including positive and negative easements and 251.15 water and air rights, and it may construct, enlarge, improve, 251.16 replace, repair, maintain, and operate any interceptor, 251.17 treatment works, or water facility determined to be necessary or 251.18 convenient for the collection and disposal of sewage in the 251.19 district. Any local governmental unit and the commissioners of 251.20 transportation and natural resources are authorized to convey to 251.21 or permit the use of any of the above-mentioned facilities owned 251.22 or controlled by it, by the board, subject to the rights of the 251.23 holders of any bonds issued with respect to those facilities, 251.24 with or without compensation, without an election or approval by 251.25 any other governmental unit or agency. All powers conferred by 251.26 this subdivision may be exercised both within or without the 251.27 district as may be necessary for the exercise by the board of 251.28 its powers or the accomplishment of its purposes. The board may 251.29 hold, lease, convey, or otherwise dispose of the above-mentioned 251.30 property for its purposes upon the terms and in the manner it 251.31 deems advisable. Unless otherwise provided, the right to 251.32 acquire lands and property rights by condemnation may be 251.33 exercised only in accordance with Minnesota Statutes, sections 251.34 117.011 to 117.232, and applies to any property or interest in 251.35 the property owned by any local governmental unit. Property 251.36 devoted to an actual public use at the time, or held to be 252.1 devoted to such a use within a reasonable time, must not be so 252.2 acquired unless a court of competent jurisdiction determines 252.3 that the use proposed by the board is paramount to the existing 252.4 use. Except in the case of property in actual public use, the 252.5 board may take possession of any property on which condemnation 252.6 proceedings have been commenced at any time after the issuance 252.7 of a court order appointing commissioners for its condemnation. 252.8 Subd. 9. [RELATIONSHIP TO OTHER PROPERTIES.] The board may 252.9 construct or maintain its systems or facilities in, along, on, 252.10 under, over, or through public waters, streets, bridges, 252.11 viaducts, and other public rights-of-way without first obtaining 252.12 a franchise from a county or municipality having jurisdiction 252.13 over them. However, the facilities must be constructed and 252.14 maintained in accordance with the ordinances and resolutions of 252.15 the county or municipality relating to constructing, installing, 252.16 and maintaining similar facilities on public properties and must 252.17 not unnecessarily obstruct the public use of those rights-of-way. 252.18 Subd. 10. [DISPOSAL OF PROPERTY.] The board may sell, 252.19 lease, or otherwise dispose of any real or personal property 252.20 acquired by it which is no longer required for accomplishment of 252.21 its purposes. The property may be sold in the manner provided 252.22 by Minnesota Statutes, section 469.065, insofar as practical. 252.23 The board may give notice of sale as it deems appropriate. When 252.24 the board determines that any property or any part of the 252.25 district disposal system acquired from a local governmental unit 252.26 without compensation is no longer required but is required as a 252.27 local facility by the governmental unit from which it was 252.28 acquired, the board may by resolution transfer it to that 252.29 governmental unit. 252.30 Subd. 11. [AGREEMENTS WITH OTHER GOVERNMENTAL UNITS.] The 252.31 board may contract with the United States or any agency thereof, 252.32 any state or agency thereof, or any regional public planning 252.33 body in the state with jurisdiction over any part of the 252.34 district, or any other municipal or public corporation, or 252.35 governmental subdivision or agency or political subdivision in 252.36 any state, for the joint use of any facility owned by the board 253.1 or such entity, for the operation by that entity of any system 253.2 or facility of the board, or for the performance on the board's 253.3 behalf of any service, including but not limited to planning, on 253.4 terms as may be agreed upon by the contracting parties. Unless 253.5 designated by the board as a local water and sanitary sewer 253.6 facility, any treatment works or interceptor jointly used, or 253.7 operated on behalf of the board, as provided in this 253.8 subdivision, is deemed to be operated by the board for purposes 253.9 of including those facilities in the district disposal system. 253.10 Sec. 5. [COMPREHENSIVE PLAN.] 253.11 Subdivision 1. [BOARD PLAN AND PROGRAM.] The board shall 253.12 adopt a comprehensive plan for the collection, treatment, and 253.13 disposal of sewage in the district for a designated period the 253.14 board deems proper and reasonable. The board shall prepare and 253.15 adopt subsequent comprehensive plans for the collection, 253.16 treatment, and disposal of sewage in the district for each 253.17 succeeding designated period as the board deems proper and 253.18 reasonable. All comprehensive plans of the district shall be 253.19 subject to the planning and zoning authority of Scott county and 253.20 in conformance with all planning and zoning ordinances of Scott 253.21 county. The first plan, as modified by the board, and any 253.22 subsequent plan shall take into account the preservation and 253.23 best and most economic use of water and other natural resources 253.24 in the area; the preservation, use, and potential for use of 253.25 lands adjoining waters of the state to be used for the disposal 253.26 of sewage; and the impact the disposal system will have on 253.27 present and future land use in the area affected. In no case 253.28 shall the comprehensive plan provide for more than 325 253.29 connections to the disposal system. All connections must be 253.30 charged a full assessment. Connections made after the initial 253.31 assessment period ends must be charged an amount equal to the 253.32 initial assessment plus an adjustment for inflation and plus any 253.33 other charges determined to be reasonable and necessary by the 253.34 board. Deferred assessments may be permitted, as provided for 253.35 in Minnesota Statutes, chapter 429. The plans shall include the 253.36 general location of needed interceptors and treatment works, a 254.1 description of the area that is to be served by the various 254.2 interceptors and treatment works, a long-range capital 254.3 improvements program, and any other details as the board deems 254.4 appropriate. In developing the plans, the board shall consult 254.5 with persons designated for the purpose by governing bodies of 254.6 any governmental unit within the district to represent the 254.7 entities and shall consider the data, resources, and input 254.8 offered to the board by the entities and any planning agency 254.9 acting on behalf of one or more of the entities. Each plan, 254.10 when adopted, must be followed in the district and may be 254.11 revised as often as the board deems necessary. 254.12 Subd. 2. [COMPREHENSIVE PLANS; HEARING.] Before adopting 254.13 any subsequent comprehensive plan, the board shall hold a public 254.14 hearing on the proposed plan at a time and place in the district 254.15 that it selects. The hearing may be continued from time to 254.16 time. Not less than 45 days before the hearing, the board shall 254.17 publish notice of the hearing in a newspaper having general 254.18 circulation in the district, stating the date, time, and place 254.19 of the hearing, and the place where the proposed plan may be 254.20 examined by any interested person. At the hearing, all 254.21 interested persons must be permitted to present their views on 254.22 the plan. 254.23 Sec. 6. [POWERS TO ISSUE OBLIGATIONS AND IMPOSE SPECIAL 254.24 ASSESSMENTS.] 254.25 The Cedar lake area water and sanitary sewer board, in 254.26 order to implement the powers granted under sections 1 to 19 to 254.27 establish, maintain, and administer the Cedar lake area water 254.28 and sanitary sewer district, may issue obligations and impose 254.29 special assessments against benefited property within the limits 254.30 of the district benefited by facilities constructed under 254.31 sections 1 to 19 in the manner provided for local governments by 254.32 Minnesota Statutes, chapter 429. 254.33 Sec. 7. [SYSTEM EXPANSION; APPLICATION TO CITIES.] 254.34 The authority of the water and sanitary sewer board to 254.35 establish water or sewer or combined water and sewer systems 254.36 under this section extends to areas within the Cedar lake area 255.1 water and sanitary sewer district organized into cities when 255.2 requested by resolution of the governing body of the affected 255.3 city or when ordered by the Minnesota pollution control agency 255.4 after notice and hearing. For the purpose of any petition filed 255.5 or special assessment levied with respect to any system, the 255.6 entire area to be served within a city must be treated as if it 255.7 were owned by a single person, and the governing body shall 255.8 exercise all the rights and be subject to all the duties of an 255.9 owner of the area, and shall have power to provide for the 255.10 payment of all special assessments and other charges imposed 255.11 upon the area with respect to the system by the appropriation of 255.12 money, the collection of service charges, or the levy of taxes, 255.13 which shall be subject to no limitation of rate or amount. 255.14 Sec. 8. [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 255.15 Subdivision 1. [POWERS.] In addition to all other powers 255.16 conferred upon the board in sections 1 to 19, it has the powers 255.17 specified in this section. 255.18 Subd. 2. [DISCHARGE OF TREATED SEWAGE.] The board may 255.19 discharge the effluent from any treatment works operated by it 255.20 into any waters of the state, subject to approval of the agency 255.21 if required and in accordance with any effluent or water quality 255.22 standards lawfully adopted by the agency, any interstate agency, 255.23 or any federal agency having jurisdiction. 255.24 Subd. 3. [UTILIZATION OF DISTRICT SYSTEM.] The board may 255.25 require any person or local governmental unit to provide for the 255.26 discharge of any sewage, directly or indirectly, into the 255.27 district disposal system, or to connect any disposal system or a 255.28 part of it with the district disposal system wherever reasonable 255.29 opportunity for connection is provided; may regulate the manner 255.30 in which the connections are made; may require any person or 255.31 local governmental unit discharging sewage into the disposal 255.32 system to provide preliminary treatment for it; may prohibit the 255.33 discharge into the district disposal system of any substance 255.34 that it determines will or may be harmful to the system or any 255.35 persons operating it; and may require any local governmental 255.36 unit to discontinue the acquisition, betterment, or operation of 256.1 any facility for the unit's disposal system wherever and so far 256.2 as adequate service is or will be provided by the district 256.3 disposal system. 256.4 Subd. 4. [SYSTEM OF COST RECOVERY TO COMPLY WITH 256.5 APPLICABLE REGULATIONS.] Any charges, connection fees, or other 256.6 cost-recovery techniques imposed on persons discharging sewage 256.7 directly or indirectly into the district disposal system must 256.8 comply with applicable state and federal law, including state 256.9 and federal regulations governing grant applications. 256.10 Sec. 9. [BUDGET.] 256.11 (a) The board shall prepare and adopt, on or before October 256.12 1 in 2000 and each year thereafter, a budget showing for the 256.13 following calendar year or other fiscal year determined by the 256.14 board, sometimes referred to in sections 1 to 19 as the budget 256.15 year, estimated receipts of money from all sources, including 256.16 but not limited to payments by each local governmental unit, 256.17 federal or state grants, taxes on property, and funds on hand at 256.18 the beginning of the year, and estimated expenditures for: 256.19 (1) costs of operation, administration, and maintenance of 256.20 the district disposal system; 256.21 (2) cost of acquisition and betterment of the district 256.22 disposal system; and 256.23 (3) debt service, including principal and interest, on 256.24 general obligation bonds and certificates issued pursuant to 256.25 section 13, and any money judgments entered by a court of 256.26 competent jurisdiction. 256.27 (b) Expenditures within these general categories, and any 256.28 other categories as the board may from time to time determine, 256.29 must be itemized in detail as the board prescribes. The board 256.30 and its officers, agents, and employees must not spend money for 256.31 any purpose other than debt service without having set forth the 256.32 expense in the budget nor in excess of the amount set forth in 256.33 the budget for it. No obligation to make an expenditure of the 256.34 above-mentioned type is enforceable except as the obligation of 256.35 the person or persons incurring it. The board may amend the 256.36 budget at any time by transferring from one purpose to another 257.1 any sums except money for debt service and bond proceeds or by 257.2 increasing expenditures in any amount by which actual cash 257.3 receipts during the budget year exceed the total amounts 257.4 designated in the original budget. The creation of any 257.5 obligation under section 13, or the receipt of any federal or 257.6 state grant is a sufficient budget designation of the proceeds 257.7 for the purpose for which it is authorized, and of the tax or 257.8 other revenue pledged to pay the obligation and interest on it, 257.9 whether or not specifically included in any annual budget. 257.10 Sec. 10. [ALLOCATION OF COSTS.] 257.11 Subdivision 1. [DEFINITION OF CURRENT COSTS.] The 257.12 estimated cost of administration, operation, maintenance, and 257.13 debt service of the district disposal system to be paid by the 257.14 board in each fiscal year and the estimated costs of acquisition 257.15 and betterment of the system that are to be paid during the year 257.16 from funds other than state or federal grants and bond proceeds 257.17 and all other previously unallocated payments made by the board 257.18 pursuant to sections 1 to 19 to be allocated in the fiscal year 257.19 are referred to as current costs and must be allocated by the 257.20 board as provided in subdivision 2 in the budget for that year. 257.21 Subd. 2. [METHOD OF ALLOCATION OF CURRENT COSTS.] Current 257.22 costs must be allocated in the district on an equitable basis as 257.23 the board may determine by resolution to be in the best 257.24 interests of the district. The adoption or revision of any 257.25 method of allocation used by the board must be by the 257.26 affirmative vote of at least two-thirds of the members of the 257.27 board. 257.28 Sec. 11. [TAX LEVIES.] 257.29 To accomplish any duty imposed on it the board may, in 257.30 addition to the powers granted in sections 1 to 19 and in any 257.31 other law or charter, exercise the powers granted any 257.32 municipality by Minnesota Statutes, chapters 117, 412, 429, 475, 257.33 sections 115.46, 444.075, and 471.59, with respect to the area 257.34 in the district. The board may levy taxes upon all taxable 257.35 property in the district for all or a part of the amount payable 257.36 to the board, pursuant to section 10, to be assessed and 258.1 extended as a tax upon that taxable property by the county 258.2 auditor for the next calendar year, free from any limit of rate 258.3 or amount imposed by law or charter. The tax must be collected 258.4 and remitted in the same manner as other general taxes. 258.5 Sec. 12. [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 258.6 Subdivision 1. [PUBLIC HEARING REQUIREMENT ON SPECIFIC 258.7 PROJECT.] Before the board orders any project involving the 258.8 acquisition or betterment of any interceptor or treatment works, 258.9 all or a part of the cost of which will be allocated pursuant to 258.10 section 10 as current costs, the board must hold a public 258.11 hearing on the proposed project. The hearing must be held 258.12 following two publications in a newspaper having general 258.13 circulation in the district, stating the time and place of the 258.14 hearing, the general nature and location of the project, the 258.15 estimated total cost of acquisition and betterment, that portion 258.16 of costs estimated to be paid out of federal and state grants, 258.17 and that portion of costs estimated to be allocated. The 258.18 estimates must be best available at the time of the meeting and 258.19 if costs exceed the estimate, the project cannot proceed until 258.20 an additional public hearing is held, with notice as required at 258.21 the initial meeting. The two publications must be a week apart 258.22 and the hearing at least three days after the last publication. 258.23 Not less than 45 days before the hearing, notice of the hearing 258.24 must also be mailed to each clerk of all local governmental 258.25 units in the district, but failure to give mailed notice or any 258.26 defects in the notice does not invalidate the proceedings. The 258.27 project may include all or part of one or more interceptors or 258.28 treatment works. A hearing must not be held on a project unless 258.29 the project is within the area covered by the comprehensive plan 258.30 adopted by the board under section 5, except that the hearing 258.31 may be held simultaneously with a hearing on a comprehensive 258.32 plan. A hearing is not required with respect to a project, no 258.33 part of the costs of which are to be allocated as the current 258.34 costs of acquisition, betterment, and debt service. 258.35 Subd. 2. [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 258.36 board proposes to assess against benefited property within the 259.1 district all or any part of the allocable costs of the project 259.2 as provided in subdivision 5, the board shall, not less than two 259.3 weeks before the hearing provided for in subdivision 1, cause 259.4 mailed notice of the hearing to be given to the owner of each 259.5 parcel within the area proposed to be specially assessed and 259.6 shall also give two weeks' published notice of the hearing. The 259.7 notice of hearing must contain the same information provided in 259.8 the notice published by the board pursuant to subdivision 1, and 259.9 a description of the area proposed to be assessed. For the 259.10 purpose of giving mailed notice, owners are those shown to be on 259.11 the records of the county auditor or, in any county where tax 259.12 statements are mailed by the county treasurer, on the records of 259.13 the county treasurer; but other appropriate records may be used 259.14 for this purpose. For properties that are tax exempt or subject 259.15 to taxation on a gross earnings basis and not listed on the 259.16 records of the county auditor or the county treasurer, the 259.17 owners must be ascertained by any practicable means and mailed 259.18 notice given them as herein provided. Failure to give mailed 259.19 notice or any defects in the notice does not invalidate the 259.20 proceedings of the board. 259.21 Subd. 3. [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before 259.22 adoption of the resolution calling for a hearing under this 259.23 section, the board shall secure from the district engineer or 259.24 some other competent person of the board's selection a report 259.25 advising it in a preliminary way as to whether the proposed 259.26 project is feasible and whether it should be made as proposed or 259.27 in connection with some other project and the estimated costs of 259.28 the project as recommended. No error or omission in the report 259.29 invalidates the proceeding. The board may also take other steps 259.30 before the hearing, as will in its judgment provide helpful 259.31 information in determining the desirability and feasibility of 259.32 the project, including but not limited to preparation of plans 259.33 and specifications and advertisement for bids on them. The 259.34 hearing may be adjourned from time to time and a resolution 259.35 ordering the project may be adopted at any time within six 259.36 months after the date of hearing. In ordering the project the 260.1 board may reduce but not increase the extent of the project as 260.2 stated in the notice of hearing and shall find that the project 260.3 as ordered is in accordance with the comprehensive plan and 260.4 program adopted by the board pursuant to section 5. 260.5 Subd. 4. [EMERGENCY ACTION.] If the board by resolution 260.6 adopted by the affirmative vote of not less than two-thirds of 260.7 its members determines that an emergency exists requiring the 260.8 immediate purchase of materials or supplies or the making of 260.9 emergency repairs, it may order the purchase of those supplies 260.10 and materials and the making of the repairs before any hearing 260.11 required under this section. The board must set as early a date 260.12 as practicable for the hearing at the time it declares the 260.13 emergency. All other provisions of this section must be 260.14 followed in giving notice of and conducting the hearing. 260.15 Nothing in this subdivision prevents the board or its agents 260.16 from purchasing maintenance supplies or incurring maintenance 260.17 costs without regard to the requirements of this section. 260.18 Subd. 5. [POWER OF THE BOARD TO SPECIALLY ASSESS.] The 260.19 board may specially assess all or any part of the costs of 260.20 acquisition and betterment as provided in this subdivision, of 260.21 any project ordered under this section. The special assessments 260.22 must be levied in accordance with Minnesota Statutes, sections 260.23 429.051 to 429.081, except as otherwise provided in this 260.24 subdivision. No other provisions of Minnesota Statutes, chapter 260.25 429, apply. For purposes of levying the special assessments, 260.26 the hearing on the project required in subdivision 1 serves as 260.27 the hearing on the making of the original improvement provided 260.28 for by Minnesota Statutes, section 429.051. The area assessed 260.29 may be less than but may not exceed the area proposed to be 260.30 assessed as stated in the notice of hearing on the project 260.31 provided for in subdivision 2. 260.32 Sec. 13. [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 260.33 Subdivision 1. [BUDGET ANTICIPATION CERTIFICATES OF 260.34 INDEBTEDNESS.] At any time after adoption of its annual budget 260.35 and in anticipation of the collection of tax and other revenues 260.36 estimated and set forth by the board in the budget, except in 261.1 the case of deficiency taxes levied under this subdivision and 261.2 taxes levied for the payment of certificates issued under 261.3 subdivision 2, the board may, by resolution, authorize the 261.4 issuance, negotiation, and sale, in accordance with subdivision 261.5 4 in the form and manner and upon terms it determines, of its 261.6 negotiable general obligation certificates of indebtedness in 261.7 aggregate principal amounts not exceeding 50 percent of the 261.8 total amount of tax collections and other revenues, and maturing 261.9 not later than three months after the close of the budget year 261.10 in which issued. The proceeds of the sale of the certificates 261.11 must be used solely for the purposes for which the tax 261.12 collections and other revenues are to be expended under the 261.13 budget. 261.14 All the tax collections and other revenues included in the 261.15 budget for the budget year, after the expenditure of the tax 261.16 collections and other revenues in accordance with the budget, 261.17 must be irrevocably pledged and appropriated to a special fund 261.18 to pay the principal and interest on the certificates when due. 261.19 If for any reason the tax collections and other revenues are 261.20 insufficient to pay the certificates and interest when due, the 261.21 board shall levy a tax in the amount of the deficiency on all 261.22 taxable property in the district and shall appropriate this 261.23 amount when received to the special fund. 261.24 Subd. 2. [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 261.25 any budget year the receipts of tax and other revenues should 261.26 for some unforeseen cause become insufficient to pay the board's 261.27 current expenses, or if any public emergency should subject it 261.28 to the necessity of making extraordinary expenditures, the board 261.29 may by resolution authorize the issuance, negotiation, and sale, 261.30 in accordance with subdivision 4 in the form and manner and upon 261.31 the terms and conditions it determines, of its negotiable 261.32 general obligation certificates of indebtedness in an amount 261.33 sufficient to meet the deficiency. The board shall levy on all 261.34 taxable property in the district a tax sufficient to pay the 261.35 certificates and interest on the certificates and shall 261.36 appropriate all collections of the tax to a special fund created 262.1 for the payment of the certificates and the interest on them. 262.2 Certificates issued under this subdivision mature not later than 262.3 April 1 in the year following the year in which the tax is 262.4 collectible. 262.5 Subd. 3. [GENERAL OBLIGATION BONDS.] The board may by 262.6 resolution authorize the issuance of general obligation bonds 262.7 for the acquisition or betterment of any part of the district 262.8 disposal system, including but without limitation the payment of 262.9 interest during construction and for a reasonable period 262.10 thereafter, or for the refunding of outstanding bonds, 262.11 certificates of indebtedness, or judgments. The board shall 262.12 pledge its full faith and credit and taxing power for the 262.13 payment of the bonds and shall provide for the issuance and sale 262.14 and for the security of the bonds in the manner provided in 262.15 Minnesota Statutes, chapter 475. The board has the same powers 262.16 and duties as a municipality issuing bonds under that law, 262.17 except that no election is required and the debt limitations of 262.18 Minnesota Statutes, chapter 475, do not apply to the bonds. The 262.19 board may also pledge for the payment of the bonds and deduct 262.20 from the amount of any tax levy required under Minnesota 262.21 Statutes, section 475.61, subdivision 1, and any revenues 262.22 receivable under any state and federal grants anticipated by the 262.23 board and may covenant to refund the bonds if and when and to 262.24 the extent that for any reason the revenues, together with other 262.25 funds available and appropriated for that purpose, are not 262.26 sufficient to pay all principal and interest due or about to 262.27 become due, provided that the revenues have not been anticipated 262.28 by the issuance of certificates under subdivision 1. 262.29 Subd. 4. [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.] 262.30 Certificates issued under subdivisions 1 and 2 may be issued and 262.31 sold by negotiation, without public sale, and may be sold at a 262.32 price equal to the percentage of the par value of the 262.33 certificates, plus accrued interest, and bearing interest at the 262.34 rate determined by the board. An election is not required to 262.35 authorize the issuance of the certificates. The certificates 262.36 must bear the same rate of interest after maturity as before and 263.1 the full faith and credit and taxing power of the board must be 263.2 pledged to the payment of the certificates. 263.3 Sec. 14. [DEPOSITORIES.] 263.4 The board shall designate one or more national or state 263.5 banks, or trust companies authorized to do a banking business, 263.6 as official depositories for money of the board, and shall 263.7 require the treasurer to deposit all or a part of the money in 263.8 those institutions. The designation must be in writing and set 263.9 forth all the terms and conditions upon which the deposits are 263.10 made, and must be signed by the chair and treasurer and made a 263.11 part of the minutes of the board. 263.12 Sec. 15. [MONEY, ACCOUNTS, AND INVESTMENTS.] 263.13 Subdivision 1. [RECEIPT AND APPLICATION.] Money received 263.14 by the board must be deposited or invested by the treasurer and 263.15 disposed of as the board may direct in accordance with its 263.16 budget; provided that any money that has been pledged or 263.17 dedicated by the board to the payment of obligations or interest 263.18 on the obligations or expenses incident thereto, or for any 263.19 other specific purpose authorized by law, must be paid by the 263.20 treasurer into the fund to which it has been pledged. 263.21 Subd. 2. [FUNDS AND ACCOUNTS.] (a) The board's treasurer 263.22 shall establish funds and accounts as may be necessary or 263.23 convenient to handle the receipts and disbursements of the board 263.24 in an orderly fashion. 263.25 (b) The funds and accounts must be audited annually by a 263.26 certified public accountant at the expense of the district. 263.27 Subd. 3. [DEPOSIT AND INVESTMENT.] The money on hand in 263.28 those funds and accounts may be deposited in the official 263.29 depositories of the board or invested as provided in this 263.30 subdivision. Any amount not currently needed or required by law 263.31 to be kept in cash on deposit may be invested in obligations 263.32 authorized for the investment of municipal sinking funds by 263.33 Minnesota Statutes, section 475.66. The money may also be held 263.34 under certificates of deposit issued by any official depository 263.35 of the board. 263.36 Subd. 4. [BOND PROCEEDS.] The use of proceeds of all bonds 264.1 issued by the board for the acquisition and betterment of the 264.2 district disposal system, and the use, other than investment, of 264.3 all money on hand in any sinking fund or funds of the board, is 264.4 governed by the provisions of Minnesota Statutes, chapter 475, 264.5 the provisions of sections 1 to 19, and the provisions of 264.6 resolutions authorizing the issuance of the bonds. When 264.7 received, the bond proceeds must be transferred to the treasurer 264.8 of the board for safekeeping, investment, and payment of the 264.9 costs for which they were issued. 264.10 Subd. 5. [AUDIT.] The board shall provide for and pay the 264.11 cost of an independent annual audit of its official books and 264.12 records by the state auditor or a public accountant authorized 264.13 to perform that function under Minnesota Statutes, chapter 6. 264.14 Sec. 16. [SERVICE CONTRACTS WITH GOVERNMENTAL ENTITIES 264.15 OUTSIDE THE JURISDICTION OF THE BOARD.] 264.16 (a) The board may contract with the United States or any 264.17 agency of the federal government, any state or its agency, or 264.18 any municipal or public corporation, governmental subdivision or 264.19 agency or political subdivision in any state, outside the 264.20 jurisdiction of the board, for furnishing services to those 264.21 entities, including but not limited to planning for and the 264.22 acquisition, betterment, operation, administration, and 264.23 maintenance of any or all interceptors, treatment works, and 264.24 local water and sanitary sewer facilities. The board may 264.25 include as one of the terms of the contract that the entity must 264.26 pay to the board an amount agreed upon as a reasonable estimate 264.27 of the proportionate share properly allocable to the entity of 264.28 costs of acquisition, betterment, and debt service previously 264.29 allocated in the district. When payments are made by entities 264.30 to the board, they must be applied in reduction of the total 264.31 amount of costs thereafter allocated in the district, on an 264.32 equitable basis as the board deems to be in the best interests 264.33 of the district, applying so far as practicable and appropriate 264.34 the criteria set forth in section 10, subdivision 2. A 264.35 municipality in the state of Minnesota may enter into a contract 264.36 and perform all acts and things required as a condition or 265.1 consideration therefor consistent with the purposes of sections 265.2 1 to 19, whether or not included among the powers otherwise 265.3 granted to the municipality by law or charter. 265.4 (b) The board shall contract with a qualified entity to 265.5 make necessary inspections of the district facilities, and to 265.6 otherwise process or assist in processing any of the work of the 265.7 district. 265.8 Sec. 17. [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES, 265.9 AND EQUIPMENT.] 265.10 When the board orders a project involving the acquisition 265.11 or betterment of a part of the district disposal system, it 265.12 shall cause plans and specifications of the project to be made, 265.13 or if previously made, to be modified, if necessary, and to be 265.14 approved by the agency if required, and after any required 265.15 approval by the agency, one or more contracts for work and 265.16 materials called for by the plans and specification may be 265.17 awarded as provided in Minnesota Statutes, section 471.345. 265.18 Sec. 18. [PROPERTY EXEMPT FROM TAXATION.] 265.19 Any properties, real or personal, owned, leased, 265.20 controlled, used, or occupied by the water and sanitary sewer 265.21 board for any purpose under sections 1 to 19 are declared to be 265.22 acquired, owned, leased, controlled, used, and occupied for 265.23 public, governmental, and municipal purposes, and are exempt 265.24 from taxation by the state or any political subdivision of the 265.25 state. The properties are subject to special assessments levied 265.26 by a political subdivision for a local improvement in amounts 265.27 proportionate to and not exceeding the special benefit received 265.28 by the properties from the improvement. 265.29 Sec. 19. [RELATION TO EXISTING LAWS.] 265.30 Sections 1 to 19 must be given full effect notwithstanding 265.31 the provisions of any law or charter inconsistent with sections 265.32 1 to 19. The powers conferred on the board under sections 1 to 265.33 19 do not in any way diminish or supersede the powers conferred 265.34 on the agency by Minnesota Statutes, chapters 115 to 116. 265.35 Sec. 20. [BANNING JUNCTION AREA WATER AND SANITARY SEWER 265.36 DISTRICT; DEFINITIONS.] 266.1 Subdivision 1. [APPLICATION.] For the purposes of sections 266.2 20 to 38, the terms defined in this section have the meanings 266.3 given them. 266.4 Subd. 2. [DISTRICT.] "Banning Junction area water and 266.5 sanitary sewer district" and "district" mean the area over which 266.6 the Banning Junction area water and sanitary sewer board has 266.7 jurisdiction, including the town of Finlayson and the city of 266.8 Finlayson in Pine county and Banning state park, but only that 266.9 part of the township described in the comprehensive plan adopted 266.10 by the board pursuant to section 24. 266.11 Subd. 3. [BOARD.] "Water and sanitary sewer board" or 266.12 "board" means the Banning Junction area water and sanitary sewer 266.13 board established for the district as provided in subdivision 2. 266.14 Subd. 4. [PERSON.] "Person" means an individual, 266.15 partnership, corporation, limited liability company, 266.16 cooperative, or other organization or entity, public or private. 266.17 Subd. 5. [LOCAL GOVERNMENTAL UNITS.] "Local governmental 266.18 units" or "governmental units" means the town of Finlayson, the 266.19 department of natural resources, and the city of Finlayson. 266.20 Subd. 6. [ACQUISITION; BETTERMENT.] "Acquisition" and 266.21 "betterment" have the meanings given in Minnesota Statutes, 266.22 chapter 475. 266.23 Subd. 7. [AGENCY.] "Agency" means the Minnesota pollution 266.24 control agency created in Minnesota Statutes, chapter 116. 266.25 Subd. 8. [SEWAGE.] "Sewage" means all liquid or 266.26 water-carried waste products from whatever sources derived, 266.27 together with any groundwater infiltration and surface water as 266.28 may be present. 266.29 Subd. 9. [POLLUTION OF WATER; SEWER SYSTEM.] "Pollution of 266.30 water" and "sewer system" have the meanings given in Minnesota 266.31 Statutes, section 115.01. 266.32 Subd. 10. [TREATMENT WORKS; DISPOSAL SYSTEM.] "Treatment 266.33 works" and "disposal system" have the meanings given in 266.34 Minnesota Statutes, section 115.01. 266.35 Subd. 11. [INTERCEPTOR.] "Interceptor" means a sewer and 266.36 its necessary appurtenances, including but not limited to mains, 267.1 pumping stations, and sewage flow-regulating and -measuring 267.2 stations, that is: 267.3 (1) designed for or used to conduct sewage originating in 267.4 more than one local governmental unit; 267.5 (2) designed or used to conduct all or substantially all 267.6 the sewage originating in a single local governmental unit from 267.7 a point of collection in that unit to an interceptor or 267.8 treatment works outside that unit; or 267.9 (3) determined by the board to be a major collector of 267.10 sewage used or designed to serve a substantial area in the 267.11 district. 267.12 Subd. 12. [DISTRICT DISPOSAL SYSTEM.] "District disposal 267.13 system" means any and all interceptors or treatment works owned, 267.14 constructed, or operated by the board unless designated by the 267.15 board as local water and sanitary sewer facilities. 267.16 Subd. 13. [MUNICIPALITY.] "Municipality" means any home 267.17 rule charter or statutory city or town. 267.18 Subd. 14. [TOTAL COSTS.] "Total costs of acquisition and 267.19 betterment" and "costs of acquisition and betterment" mean all 267.20 acquisition and betterment expenses permitted to be financed out 267.21 of stopped bond proceeds issued in accordance with section 32, 267.22 whether or not the expenses are in fact financed out of the bond 267.23 proceeds. 267.24 Subd. 15. [CURRENT COSTS.] "Current costs of acquisition, 267.25 betterment, and debt service" means interest and principal 267.26 estimated to be due during the budget year on bonds issued to 267.27 finance said acquisition and betterment and all other costs of 267.28 acquisition and betterment estimated to be paid during the year 267.29 from funds other than bond proceeds and federal or state grants. 267.30 Subd. 16. [RESIDENT.] "Resident" means the owner of a 267.31 dwelling located in the district and receiving water or sewer 267.32 service. 267.33 Sec. 21. [WATER AND SANITARY SEWER BOARD.] 267.34 Subdivision 1. [ESTABLISHMENT.] A water and sanitary sewer 267.35 district is established for the town of Finlayson, for the 267.36 Banning state park, under the jurisdiction of the Minnesota 268.1 department of natural resources, and for the city of Finlayson 268.2 in Pine county, to be known as the Banning Junction area water 268.3 and sanitary sewer district. The water and sewer district is 268.4 under the control and management of the Banning Junction area 268.5 water and sanitary sewer board. The board is established as a 268.6 public corporation and political subdivision of the state with 268.7 perpetual succession and all the rights, powers, privileges, 268.8 immunities, and duties that may be validly granted to or imposed 268.9 upon a municipal corporation, as provided in sections 20 to 38. 268.10 Subd. 2. [MEMBERS AND SELECTION.] The board is composed of 268.11 five members selected as follows: the town board shall meet to 268.12 appoint three members, one of whom shall be an elected township 268.13 officer, and two of whom shall be persons served by the system, 268.14 the city shall appoint one member, and the department of natural 268.15 resources shall appoint one member to the water and sanitary 268.16 sewer board and each board member shall have one vote. The 268.17 first terms must be as follows: one for one year, two for two 268.18 years, and two for three years, fixed by lot at the district's 268.19 first meeting. Thereafter, all terms are for three years. 268.20 Subd. 3. [TIME LIMITS FOR SELECTION.] The board members 268.21 must be selected as provided in subdivision 2 within 60 days 268.22 after sections 20 to 38 become effective. The successor to each 268.23 board member must be selected at any time within 60 days before 268.24 the expiration of the member's term in the same manner as the 268.25 predecessor was selected. A vacancy on the board must be filled 268.26 within 60 days after it occurs. 268.27 Subd. 4. [VACANCIES.] If the office of a board member 268.28 becomes vacant, the vacancy must be filled for the unexpired 268.29 term in the manner provided for selection of the member who 268.30 vacated the office. The office is deemed vacant under the 268.31 conditions specified in Minnesota Statutes, section 351.02. 268.32 Subd. 5. [REMOVAL.] A board member may be removed by the 268.33 unanimous vote of the governing body appointing the member, with 268.34 or without cause, or for malfeasance or nonfeasance in the 268.35 performance of official duties as provided by Minnesota 268.36 Statutes, sections 351.14 to 351.23. 269.1 Subd. 6. [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A 269.2 certificate of selection of every board member selected under 269.3 subdivision 2 stating the term for which selected, must be made 269.4 by the respective town clerks, city administrator, and by the 269.5 commissioner of natural resources. The certificates, with the 269.6 approval appended by other authority, if required, must be filed 269.7 with the secretary of state. Counterparts thereof must be 269.8 furnished to the board member and the secretary of the board. 269.9 Each member shall qualify by taking and subscribing the oath of 269.10 office prescribed by the Minnesota Constitution, article V, 269.11 section 6. The oath, duly certified by the official 269.12 administering the same, must be filed with the secretary of 269.13 state and the secretary of the board. 269.14 Subd. 7. [BOARD MEMBERS' COMPENSATION.] Each board member, 269.15 except the chair, must be paid a per diem compensation of $35 269.16 for meetings and for other services as are specifically 269.17 authorized by the board, not to exceed $1,000 in any one year. 269.18 The chair must be paid a per diem compensation of $45 for 269.19 meetings and for other services specifically authorized by the 269.20 board, not to exceed $1,500 in any one year. All members of the 269.21 board must be reimbursed for all reasonable and necessary 269.22 expenses actually incurred in the performance of duties. 269.23 Sec. 22. [GENERAL PROVISIONS FOR ORGANIZATION AND 269.24 OPERATION OF BOARD.] 269.25 Subdivision 1. [ORGANIZATION; OFFICERS; MEETINGS; SEAL.] 269.26 After the selection and qualification of all board members, they 269.27 shall meet to organize the board at the call of any two board 269.28 members, upon seven days' notice by registered mail to the 269.29 remaining board members, at a time and place within the district 269.30 specified in the notice. A majority of the members shall 269.31 constitute a quorum at that meeting and all other meetings of 269.32 the board, but a lesser number may meet and adjourn from time to 269.33 time and compel the attendance of absent members. At the first 269.34 meeting the board shall select its officers and conduct other 269.35 organizational business as may be necessary. Thereafter the 269.36 board shall meet regularly at the time and place that the board 270.1 designates by resolution. Special meetings may be held at any 270.2 time upon call of the chair or any two members, upon written 270.3 notice sent by mail to each member at least three days before 270.4 the meeting, or upon other notice as the board by resolution may 270.5 provide, or without notice if each member is present or files 270.6 with the secretary a written consent to the meeting either 270.7 before or after the meeting. Except as otherwise provided in 270.8 sections 20 to 38, any action within the authority of the board 270.9 may be taken by the affirmative vote of a majority of the board 270.10 and may be taken by regular or adjourned regular meeting or at a 270.11 duly held special meeting, but in any case only if a quorum is 270.12 present. Meetings of the board must be open to the public. The 270.13 board may adopt a seal, which must be officially and judicially 270.14 noticed, to authenticate instruments executed by its authority, 270.15 but omission of the seal does not affect the validity of any 270.16 instrument. 270.17 Subd. 2. [CHAIR.] The board shall elect a chair from its 270.18 membership. The term of the first chair of the board shall 270.19 expire on January 1, 2001, and the terms of successor chairs 270.20 expire on January 1 of each succeeding year. The chair shall 270.21 preside at all meetings of the board, if present, and shall 270.22 perform all other duties and functions usually incumbent upon 270.23 such an officer, and all administrative functions assigned to 270.24 the chair by the board. The board shall elect a vice-chair from 270.25 its membership to act for the chair during temporary absence or 270.26 disability. 270.27 Subd. 3. [SECRETARY AND TREASURER.] The board shall select 270.28 a person or persons who may, but need not be, a member or 270.29 members of the board, to act as its secretary and treasurer. 270.30 The secretary and treasurer shall hold office at the pleasure of 270.31 the board, subject to the terms of any contract of employment 270.32 that the board may enter into with the secretary or treasurer. 270.33 The secretary shall record the minutes of all meetings of the 270.34 board, and be the custodian of all books and records of the 270.35 board except those that the board entrusts to the custody of a 270.36 designated employee. The treasurer is the custodian of all 271.1 money received by the board except as the board otherwise 271.2 entrusts to the custody of a designated employee. The board may 271.3 appoint a deputy to perform any and all functions of either the 271.4 secretary or the treasurer. A secretary or treasurer who is not 271.5 a member of the board or a deputy of either does not have the 271.6 right to vote. 271.7 Subd. 4. [EXECUTIVE DIRECTOR.] The board may appoint an 271.8 executive director, selected solely upon the basis of training, 271.9 experience, and other qualifications and who shall serve at the 271.10 pleasure of the board and at a compensation to be determined by 271.11 the board. The executive director need not be a resident of the 271.12 district. The executive director may also be selected by the 271.13 board to serve as either secretary or treasurer, or both, of the 271.14 board. The executive director shall attend all meetings of the 271.15 board, but shall not vote, and shall have the following powers 271.16 and duties: 271.17 (1) to see that all resolutions, rules, regulations, or 271.18 orders of the board are enforced; 271.19 (2) to appoint and remove, upon the basis of merit and 271.20 fitness, all subordinate officers and regular employees of the 271.21 board except the secretary and the treasurer and their deputies; 271.22 (3) to present to the board plans, studies, and other 271.23 reports prepared for board purposes and recommend to the board 271.24 for adoption the measures the executive director deems necessary 271.25 to enforce or carry out the powers and the duties of the board, 271.26 or the efficient administration of the affairs of the board; 271.27 (4) to keep the board fully advised as to its financial 271.28 condition, and to prepare and submit to the board and to the 271.29 governing bodies of the local governmental units, the board's 271.30 annual budget and other financial information the board may 271.31 request; 271.32 (5) to recommend to the board for adoption rules and 271.33 regulations the executive director deems necessary for the 271.34 efficient operation of the district disposal system; and 271.35 (6) to perform other duties prescribed by the board. 271.36 Subd. 5. [PUBLIC EMPLOYEES.] The executive director and 272.1 other persons employed by the district are public employees and 272.2 have all the rights and duties conferred on public employees 272.3 under Minnesota Statutes, sections 179A.01 to 179A.25. The 272.4 board may elect to have employees become members of either the 272.5 public employees retirement association or the Minnesota state 272.6 retirement system. The compensation and conditions of 272.7 employment of the employees must be governed by rules applicable 272.8 to state employees in the classified service and to the 272.9 provisions of Minnesota Statutes, chapter 15A. 272.10 Subd. 6. [PROCEDURES.] The board shall adopt resolutions 272.11 or bylaws establishing procedures for board action, personnel 272.12 administration, keeping records, approving claims, authorizing 272.13 or making disbursements, safekeeping funds, and auditing all 272.14 financial operations of the board. 272.15 Subd. 7. [SURETY BONDS AND INSURANCE.] The board may 272.16 procure surety bonds for its officers and employees, in amounts 272.17 deemed necessary to ensure proper performance of their duties 272.18 and proper accounting for funds in their custody. It may 272.19 procure insurance against risks to property and liability of the 272.20 board and its officers, agents, and employees for personal 272.21 injuries or death and property damage and destruction, in 272.22 amounts deemed necessary or desirable, with the force and effect 272.23 stated in Minnesota Statutes, chapter 466. 272.24 Sec. 23. [GENERAL POWERS OF BOARD.] 272.25 Subdivision 1. [SCOPE.] The board has all powers necessary 272.26 or convenient to discharge the duties imposed upon it by law. 272.27 The powers include those specified in this section, but the 272.28 express grant or enumeration of powers does not limit the 272.29 generality or scope of the grant of powers contained in this 272.30 subdivision. 272.31 Subd. 2. [SUIT.] The board may sue or be sued. 272.32 Subd. 3. [CONTRACT.] The board may enter into any contract 272.33 necessary or proper for the exercise of its powers or the 272.34 accomplishment of its purposes. 272.35 Subd. 4. [GIFTS, GRANTS, LOANS.] The board may accept 272.36 gifts, apply for and accept grants or loans of money or other 273.1 property from the United States, the state, or any person for 273.2 any of its purposes, enter into any agreement required in 273.3 connection with them, and hold, use, and dispose of the money or 273.4 property in accordance with the terms of the gift, grant, loan, 273.5 or agreement relating to it. With respect to loans or grants of 273.6 funds or real or personal property or other assistance from any 273.7 state or federal government or its agency or instrumentality, 273.8 the board may contract to do and perform all acts and things 273.9 required as a condition or consideration for the gift, grant, or 273.10 loan pursuant to state or federal law or regulations, whether or 273.11 not included among the powers expressly granted to the board in 273.12 sections 20 to 38. 273.13 Subd. 5. [COOPERATIVE ACTION.] The board may act under 273.14 Minnesota Statutes, section 471.59, or any other appropriate law 273.15 providing for joint or cooperative action between governmental 273.16 units. 273.17 Subd. 6. [STUDIES AND INVESTIGATIONS.] The board may 273.18 conduct research studies and programs, collect and analyze data, 273.19 prepare reports, maps, charts, and tables, and conduct all 273.20 necessary hearings and investigations in connection with the 273.21 design, construction, and operation of the district disposal 273.22 system. 273.23 Subd. 7. [EMPLOYEES, TERMS.] The board may employ on terms 273.24 it deems advisable, persons or firms performing engineering, 273.25 legal, or other services of a professional nature; require any 273.26 employee to obtain and file with it an individual bond or 273.27 fidelity insurance policy; and procure insurance in amounts it 273.28 deems necessary against liability of the board or its officers 273.29 or both, for personal injury or death and property damage or 273.30 destruction, with the force and effect stated in Minnesota 273.31 Statutes, chapter 466, and against risks of damage to or 273.32 destruction of any of its facilities, equipment, or other 273.33 property as it deems necessary. 273.34 Subd. 8. [PROPERTY RIGHTS, POWERS.] The board may acquire 273.35 by purchase, lease, condemnation, gift, or grant, any real or 273.36 personal property including positive and negative easements and 274.1 water and air rights, and it may construct, enlarge, improve, 274.2 replace, repair, maintain, and operate any interceptor, 274.3 treatment works, or water facility determined to be necessary or 274.4 convenient for the collection and disposal of sewage in the 274.5 district. Any local governmental unit and the commissioners of 274.6 transportation and natural resources are authorized to convey to 274.7 or permit the use of any of the above-mentioned facilities owned 274.8 or controlled by it, by the board, subject to the rights of the 274.9 holders of any bonds issued with respect to those facilities, 274.10 with or without compensation, without an election or approval by 274.11 any other governmental unit or agency. All powers conferred by 274.12 this subdivision may be exercised both within or without the 274.13 district as may be necessary for the exercise by the board of 274.14 its powers or the accomplishment of its purposes. The board may 274.15 hold, lease, convey, or otherwise dispose of the above-mentioned 274.16 property for its purposes upon the terms and in the manner it 274.17 deems advisable. Unless otherwise provided, the right to 274.18 acquire lands and property rights by condemnation may be 274.19 exercised only in accordance with Minnesota Statutes, sections 274.20 117.011 to 117.232, and shall apply to any property or interest 274.21 in the property owned by any local governmental unit. No 274.22 property devoted to an actual public use at the time, or held to 274.23 be devoted to such a use within a reasonable time, shall be so 274.24 acquired unless a court of competent jurisdiction determines 274.25 that the use proposed by the board is paramount to the existing 274.26 use. Except in the case of property in actual public use, the 274.27 board may take possession of any property on which condemnation 274.28 proceedings have been commenced at any time after the issuance 274.29 of a court order appointing commissioners for its condemnation. 274.30 Subd. 9. [RELATIONSHIP TO OTHER PROPERTIES.] The board may 274.31 construct or maintain its systems or facilities in, along, on, 274.32 under, over, or through public waters, streets, bridges, 274.33 viaducts, and other public rights-of-way without first obtaining 274.34 a franchise from a county or municipality having jurisdiction 274.35 over them. However, the facilities must be constructed and 274.36 maintained in accordance with the ordinances and resolutions of 275.1 the county or municipality relating to constructing, installing, 275.2 and maintaining similar facilities on public properties and must 275.3 not unnecessarily obstruct the public use of those rights-of-way. 275.4 Subd. 10. [DISPOSAL OF PROPERTY.] The board may sell, 275.5 lease, or otherwise dispose of any real or personal property 275.6 acquired by it which is no longer required for accomplishment of 275.7 its purposes. The property may be sold in the manner provided 275.8 by Minnesota Statutes, section 469.065, insofar as practical. 275.9 The board may give notice of sale as it deems appropriate. When 275.10 the board determines that any property or any part of the 275.11 district disposal system acquired from a local governmental unit 275.12 without compensation is no longer required but is required as a 275.13 local facility by the governmental unit from which it was 275.14 acquired, the board may by resolution transfer it to that 275.15 governmental unit. 275.16 Subd. 11. [AGREEMENTS WITH OTHER GOVERNMENTAL UNITS.] The 275.17 board may contract with the United States or any agency thereof, 275.18 any state or agency thereof, or any regional public planning 275.19 body in the state with jurisdiction over any part of the 275.20 district, or any other municipal or public corporation, or 275.21 governmental subdivision or agency or political subdivision in 275.22 any state, for the joint use of any facility owned by the board 275.23 or such entity, for the operation by that entity of any system 275.24 or facility of the board, or for the performance on the board's 275.25 behalf of any service, including but not limited to planning, on 275.26 terms as may be agreed upon by the contracting parties. Unless 275.27 designated by the board as a local water and sanitary sewer 275.28 facility, any treatment works or interceptor jointly used, or 275.29 operated on behalf of the board, as provided in this 275.30 subdivision, is deemed to be operated by the board for purposes 275.31 of including those facilities in the district disposal system. 275.32 Sec. 24. [COMPREHENSIVE PLAN.] 275.33 Subdivision 1. [BOARD PLAN AND PROGRAM.] The board shall 275.34 adopt a comprehensive plan for the collection, treatment, and 275.35 disposal of sewage in the district for a designated period the 275.36 board deems proper and reasonable. The board shall prepare and 276.1 adopt subsequent comprehensive plans for the collection, 276.2 treatment, and disposal of sewage in the district for each 276.3 succeeding designated period as the board deems proper and 276.4 reasonable. The first plan, as modified by the board, and any 276.5 subsequent plan shall take into account the preservation and 276.6 best and most economic use of water and other natural resources 276.7 in the area; the preservation, use, and potential for use of 276.8 lands adjoining waters of the state to be used for the disposal 276.9 of sewage; and the impact the disposal system will have on 276.10 present and future land use in the area affected. The plans 276.11 shall include the general location of needed interceptors and 276.12 treatment works, a description of the area that is to be served 276.13 by the various interceptors and treatment works, a long-range 276.14 capital improvements program, and any other details as the board 276.15 deems appropriate. In developing the plans, the board shall 276.16 consult with persons designated for the purpose by governing 276.17 bodies of any governmental unit within the district to represent 276.18 the entities and shall consider the data, resources, and input 276.19 offered to the board by the entities and any planning agency 276.20 acting on behalf of one or more of the entities. Each plan, 276.21 when adopted, must be followed in the district and may be 276.22 revised as often as the board deems necessary. 276.23 Subd. 2. [COMPREHENSIVE PLANS; HEARING.] Before adopting 276.24 any subsequent comprehensive plan, the board shall hold a public 276.25 hearing on the proposed plan at a time and place in the district 276.26 that it selects. The hearing may be continued from time to 276.27 time. Not less than 45 days before the hearing, the board shall 276.28 publish notice of the hearing in a newspaper having general 276.29 circulation in the district, stating the date, time, and place 276.30 of the hearing, and the place where the proposed plan may be 276.31 examined by any interested person. At the hearing, all 276.32 interested persons must be permitted to present their views on 276.33 the plan. 276.34 Subd. 3. [GOVERNMENTAL UNIT PLANS AND PROGRAMS; 276.35 COORDINATION WITH BOARD'S RESPONSIBILITIES.] Once the board's 276.36 plan is adopted, no construction project involving the 277.1 construction of new sewers or other disposal facilities may be 277.2 undertaken by the local governmental unit unless its governing 277.3 body shall first find the project to be in accordance with the 277.4 governmental unit's comprehensive plan and program as approved 277.5 by the board. Before approval by the board of the comprehensive 277.6 plan and program of any local governmental unit in the district, 277.7 no water and sanitary sewer construction project may be 277.8 undertaken by the governmental unit unless approval of the 277.9 project is first secured from the board as to those features of 277.10 the project affecting the board's responsibilities as determined 277.11 by the board. 277.12 Sec. 25. [POWERS TO ISSUE OBLIGATIONS AND IMPOSE SPECIAL 277.13 ASSESSMENTS.] 277.14 The Banning Junction area water and sanitary sewer board, 277.15 in order to implement the powers granted under sections 20 to 38 277.16 to establish, maintain, and administer the Banning Junction area 277.17 water and sanitary sewer district, may issue obligations and 277.18 impose special assessments against benefited property within the 277.19 limits of the district benefited by facilities constructed under 277.20 sections 20 to 38 in the manner provided for local governments 277.21 by Minnesota Statutes, chapter 429. 277.22 Sec. 26. [SYSTEM EXPANSION; APPLICATION TO CITIES.] 277.23 The authority of the water and sanitary sewer board to 277.24 establish water or sewer or combined water and sewer systems 277.25 under this section extends to areas within the Banning Junction 277.26 area water and sanitary sewer district organized into cities 277.27 when requested by resolution of the governing body of the 277.28 affected city or when ordered by the Minnesota pollution control 277.29 agency after notice and hearing. For the purpose of any 277.30 petition filed or special assessment levied with respect to any 277.31 system, the entire area to be served within a city must be 277.32 treated as if it were owned by a single person, and the 277.33 governing body shall exercise all the rights and be subject to 277.34 all the duties of an owner of the area, and shall have power to 277.35 provide for the payment of all special assessments and other 277.36 charges imposed upon the area with respect to the system by the 278.1 appropriation of money, the collection of service charges, or 278.2 the levy of taxes, which shall be subject to no limitation of 278.3 rate or amount. 278.4 Sec. 27. [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 278.5 Subdivision 1. [POWERS.] In addition to all other powers 278.6 conferred upon the board in sections 20 to 38, it has the powers 278.7 specified in this section. 278.8 Subd. 2. [DISCHARGE OF TREATED SEWAGE.] The board may 278.9 discharge the effluent from any treatment works operated by it 278.10 into any waters of the state, subject to approval of the agency 278.11 if required and in accordance with any effluent or water quality 278.12 standards lawfully adopted by the agency, any interstate agency, 278.13 or any federal agency having jurisdiction. 278.14 Subd. 3. [UTILIZATION OF DISTRICT SYSTEM.] The board may 278.15 require any person or local governmental unit to provide for the 278.16 discharge of any sewage, directly or indirectly, into the 278.17 district disposal system, or to connect any disposal system or a 278.18 part of it with the district disposal system wherever reasonable 278.19 opportunity for connection is provided; may regulate the manner 278.20 in which the connections are made; may require any person or 278.21 local governmental unit discharging sewage into the disposal 278.22 system to provide preliminary treatment for it; may prohibit the 278.23 discharge into the district disposal system of any substance 278.24 that it determines will or may be harmful to the system or any 278.25 persons operating it; and may require any local governmental 278.26 unit to discontinue the acquisition, betterment, or operation of 278.27 any facility for the unit's disposal system wherever and so far 278.28 as adequate service is or will be provided by the district 278.29 disposal system. 278.30 Subd. 4. [SYSTEM OF COST RECOVERY TO COMPLY WITH 278.31 APPLICABLE REGULATIONS.] Any charges, connection fees, or other 278.32 cost-recovery techniques imposed on persons discharging sewage 278.33 directly or indirectly into the district disposal system must 278.34 comply with applicable state and federal law, including state 278.35 and federal regulations governing grant applications. 278.36 Sec. 28. [BUDGET.] 279.1 The board shall prepare and adopt, on or before October 1 279.2 in 1999 and each year thereafter, a budget showing for the 279.3 following calendar year or other fiscal year determined by the 279.4 board, sometimes referred to in sections 20 to 38 as the budget 279.5 year, estimated receipts of money from all sources, including 279.6 but not limited to payments by each local governmental unit, 279.7 federal or state grants, taxes on property, and funds on hand at 279.8 the beginning of the year, and estimated expenditures for: 279.9 (1) costs of operation, administration, and maintenance of 279.10 the district disposal system; 279.11 (2) cost of acquisition and betterment of the district 279.12 disposal system; and 279.13 (3) debt service, including principal and interest, on 279.14 general obligation bonds and certificates issued pursuant to 279.15 section 32, and any money judgments entered by a court of 279.16 competent jurisdiction. Expenditures within these general 279.17 categories, and any other categories as the board may from time 279.18 to time determine, must be itemized in detail as the board 279.19 prescribes. The board and its officers, agents, and employees 279.20 shall not spend money for any purpose other than debt service 279.21 without having set forth the expense in the budget nor in excess 279.22 of the amount set forth in the budget for it. No obligation to 279.23 make an expenditure of the above-mentioned type is enforceable 279.24 except as the obligation of the person or persons incurring it. 279.25 The board may amend the budget at any time by transferring from 279.26 one purpose to another any sums except money for debt service 279.27 and bond proceeds or by increasing expenditures in any amount by 279.28 which actual cash receipts during the budget year exceed the 279.29 total amounts designated in the original budget. The creation 279.30 of any obligation under section 32 or the receipt of any federal 279.31 or state grant is a sufficient budget designation of the 279.32 proceeds for the purpose for which it is authorized, and of the 279.33 tax or other revenue pledged to pay the obligation and interest 279.34 on it, whether or not specifically included in any annual budget. 279.35 Sec. 29. [ALLOCATION OF COSTS.] 279.36 Subdivision 1. [DEFINITION OF CURRENT COSTS.] The 280.1 estimated cost of administration, operation, maintenance, and 280.2 debt service of the district disposal system to be paid by the 280.3 board in each fiscal year and the estimated costs of acquisition 280.4 and betterment of the system that are to be paid during the year 280.5 from funds other than state or federal grants and bond proceeds 280.6 and all other previously unallocated payments made by the board 280.7 pursuant to sections 20 to 38 to be allocated in the fiscal year 280.8 are referred to as current costs and must be allocated by the 280.9 board as provided in subdivision 2 in the budget for that year. 280.10 Subd. 2. [METHOD OF ALLOCATION OF CURRENT COSTS.] Current 280.11 costs must be allocated in the district on an equitable basis as 280.12 the board may determine by resolution to be in the best 280.13 interests of the district. The adoption or revision of any 280.14 method of allocation used by the board must be by the 280.15 affirmative vote of at least two-thirds of the members of the 280.16 board. 280.17 Sec. 30. [TAX LEVIES.] 280.18 To accomplish any duty imposed on it the board may, in 280.19 addition to the powers granted in sections 20 to 38 and in any 280.20 other law or charter, exercise the powers granted any 280.21 municipality by Minnesota Statutes, chapters 117, 412, 429, 475, 280.22 sections 115.46, 444.075, and 471.59, with respect to the area 280.23 in the district. The board may levy taxes upon all taxable 280.24 property in the district for all or a part of the amount payable 280.25 to the board, pursuant to section 29, to be assessed and 280.26 extended as a tax upon that taxable property by the county 280.27 auditor for the next calendar year, free from any limitation of 280.28 rate or amount imposed by law or charter. The tax must be 280.29 collected and remitted in the same manner as other general taxes. 280.30 Sec. 31. [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 280.31 Subdivision 1. [PUBLIC HEARING REQUIREMENT ON SPECIFIC 280.32 PROJECT.] Before the board orders any project involving the 280.33 acquisition or betterment of any interceptor or treatment works, 280.34 all or a part of the cost of which will be allocated pursuant to 280.35 section 29 as current costs, the board shall hold a public 280.36 hearing on the proposed project. The hearing must be held 281.1 following two publications in a newspaper having general 281.2 circulation in the district, stating the time and place of the 281.3 hearing, the general nature and location of the project, the 281.4 estimated total cost of acquisition and betterment, that portion 281.5 of costs estimated to be paid out of federal and state grants, 281.6 and that portion of costs estimated to be allocated. The 281.7 estimates must be best available at the time of the meeting and 281.8 if costs exceed the estimate, the project cannot proceed until 281.9 an additional public hearing is held, with notice as required at 281.10 the initial meeting. The two publications must be a week apart 281.11 and the hearing at least three days after the last publication. 281.12 Not less than 45 days before the hearing, notice of the hearing 281.13 must also be mailed to each clerk of all local governmental 281.14 units in the district, but failure to give mailed notice or any 281.15 defects in the notice does not invalidate the proceedings. The 281.16 project may include all or part of one or more interceptors or 281.17 treatment works. No hearing may be held on any project unless 281.18 the project is within the area covered by the comprehensive plan 281.19 adopted by the board pursuant to section 24 except that the 281.20 hearing may be held simultaneously with a hearing on a 281.21 comprehensive plan. A hearing is not required with respect to a 281.22 project, no part of the costs of which are to be allocated as 281.23 the current costs of acquisition, betterment, and debt service. 281.24 Subd. 2. [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 281.25 board proposes to assess against benefited property within the 281.26 district all or any part of the allocable costs of the project 281.27 as provided in subdivision 5, the board shall, not less than two 281.28 weeks before the hearing provided for in subdivision 1, cause 281.29 mailed notice of the hearing to be given to the owner of each 281.30 parcel within the area proposed to be specially assessed and 281.31 shall also give two weeks' published notice of the hearing. The 281.32 notice of hearing must contain the same information provided in 281.33 the notice published by the board pursuant to subdivision 1, and 281.34 a description of the area proposed to be assessed. For the 281.35 purpose of giving mailed notice, owners are those shown to be on 281.36 the records of the county auditor or, in any county where tax 282.1 statements are mailed by the county treasurer, on the records of 282.2 the county treasurer; but other appropriate records may be used 282.3 for this purpose. For properties that are tax exempt or subject 282.4 to taxation on a gross earnings basis and not listed on the 282.5 records of the county auditor or the county treasurer, the 282.6 owners must be ascertained by any practicable means and mailed 282.7 notice given them as herein provided. Failure to give mailed 282.8 notice or any defects in the notice does not invalidate the 282.9 proceedings of the board. 282.10 Subd. 3. [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before 282.11 adoption of the resolution calling for a hearing under this 282.12 section, the board shall secure from the district engineer or 282.13 some other competent person of the board's selection a report 282.14 advising it in a preliminary way as to whether the proposed 282.15 project is feasible and whether it should be made as proposed or 282.16 in connection with some other project and the estimated costs of 282.17 the project as recommended. No error or omission in the report 282.18 invalidates the proceeding. The board may also take other steps 282.19 before the hearing, as will in its judgment provide helpful 282.20 information in determining the desirability and feasibility of 282.21 the project, including but not limited to preparation of plans 282.22 and specifications and advertisement for bids on them. The 282.23 hearing may be adjourned from time to time and a resolution 282.24 ordering the project may be adopted at any time within six 282.25 months after the date of hearing. In ordering the project the 282.26 board may reduce but not increase the extent of the project as 282.27 stated in the notice of hearing and shall find that the project 282.28 as ordered is in accordance with the comprehensive plan and 282.29 program adopted by the board pursuant to section 24. 282.30 Subd. 4. [EMERGENCY ACTION.] If the board by resolution 282.31 adopted by the affirmative vote of not less than two-thirds of 282.32 its members determines that an emergency exists requiring the 282.33 immediate purchase of materials or supplies or the making of 282.34 emergency repairs, it may order the purchase of those supplies 282.35 and materials and the making of the repairs before any hearing 282.36 required under this section, provided that the board shall set 283.1 as early a date as practicable for the hearing at the time it 283.2 declares the emergency. All other provisions of this section 283.3 must be followed in giving notice of and conducting the 283.4 hearing. Nothing herein may be construed as preventing the 283.5 board or its agents from purchasing maintenance supplies or 283.6 incurring maintenance costs without regard to the requirements 283.7 of this section. 283.8 Subd. 5. [POWER OF THE BOARD TO SPECIALLY ASSESS.] The 283.9 board may specially assess all or any part of the costs of 283.10 acquisition and betterment as herein provided, of any project 283.11 ordered pursuant to this section. The special assessments must 283.12 be levied in accordance with the provisions of Minnesota 283.13 Statutes, sections 429.051 to 429.081, except as otherwise 283.14 provided in this subdivision. No other provisions of Minnesota 283.15 Statutes, chapter 429, apply. For purposes of levying the 283.16 special assessments, the hearing on the project required in 283.17 subdivision 1 serves as the hearing on the making of the 283.18 original improvement provided for by Minnesota Statutes, section 283.19 429.051. The area assessed may be less than but may not exceed 283.20 the area proposed to be assessed as stated in the notice of 283.21 hearing on the project provided for in subdivision 2. 283.22 Sec. 32. [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 283.23 Subdivision 1. [BUDGET ANTICIPATION CERTIFICATES OF 283.24 INDEBTEDNESS.] At any time after adoption of its annual budget 283.25 and in anticipation of the collection of tax and other revenues 283.26 estimated and set forth by the board in the budget, except in 283.27 the case of deficiency taxes levied under this subdivision and 283.28 taxes levied for the payment of certificates issued under 283.29 subdivision 2, the board may, by resolution, authorize the 283.30 issuance, negotiation, and sale, in accordance with subdivision 283.31 4 in the form and manner and upon terms it determines, of its 283.32 negotiable general obligation certificates of indebtedness in 283.33 aggregate principal amounts not exceeding 50 percent of the 283.34 total amount of tax collections and other revenues, and maturing 283.35 not later than three months after the close of the budget year 283.36 in which issued. The proceeds of the sale of the certificates 284.1 must be used solely for the purposes for which the tax 284.2 collections and other revenues are to be expended pursuant to 284.3 the budget. 284.4 All the tax collections and other revenues included in the 284.5 budget for the budget year, after the expenditure of the tax 284.6 collections and other revenues in accordance with the budget, 284.7 must be irrevocably pledged and appropriated to a special fund 284.8 to pay the principal and interest on the certificates when due. 284.9 If for any reason the tax collections and other revenues are 284.10 insufficient to pay the certificates and interest when due, the 284.11 board shall levy a tax in the amount of the deficiency on all 284.12 taxable property in the district and shall appropriate this 284.13 amount when received to the special fund. 284.14 Subd. 2. [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 284.15 any budget year the receipts of tax and other revenues should 284.16 for some unforeseen cause become insufficient to pay the board's 284.17 current expenses, or if any public emergency should subject it 284.18 to the necessity of making extraordinary expenditures, the board 284.19 may by resolution authorize the issuance, negotiation, and sale, 284.20 in accordance with subdivision 4 in the form and manner and upon 284.21 the terms and conditions it determines, of its negotiable 284.22 general obligation certificates of indebtedness in an amount 284.23 sufficient to meet the deficiency. The board shall levy on all 284.24 taxable property in the district a tax sufficient to pay the 284.25 certificates and interest on the certificates and shall 284.26 appropriate all collections of the tax to a special fund created 284.27 for the payment of the certificates and the interest on them. 284.28 Certificates issued under this subdivision mature not later than 284.29 April 1 in the year following the year in which the tax is 284.30 collectible. 284.31 Subd. 3. [GENERAL OBLIGATION BONDS.] The board may by 284.32 resolution authorize the issuance of general obligation bonds 284.33 for the acquisition or betterment of any part of the district 284.34 disposal system, including but without limitation the payment of 284.35 interest during construction and for a reasonable period 284.36 thereafter, or for the refunding of outstanding bonds, 285.1 certificates of indebtedness, or judgments. The board shall 285.2 pledge its full faith and credit and taxing power for the 285.3 payment of the bonds and shall provide for the issuance and sale 285.4 and for the security of the bonds in the manner provided in 285.5 Minnesota Statutes, chapter 475. The board has the same powers 285.6 and duties as a municipality issuing bonds under that law, 285.7 except that no election is required and the debt limitations of 285.8 Minnesota Statutes, chapter 475, do not apply to the bonds. The 285.9 board may also pledge for the payment of the bonds and deduct 285.10 from the amount of any tax levy required under Minnesota 285.11 Statutes, section 475.61, subdivision 1, and any revenues 285.12 receivable under any state and federal grants anticipated by the 285.13 board and may covenant to refund the bonds if and when and to 285.14 the extent that for any reason the revenues, together with other 285.15 funds available and appropriated for that purpose, are not 285.16 sufficient to pay all principal and interest due or about to 285.17 become due, provided that the revenues have not been anticipated 285.18 by the issuance of certificates under subdivision 1. 285.19 Subd. 4. [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.] 285.20 Certificates issued under subdivisions 1 and 2 may be issued and 285.21 sold by negotiation, without public sale, and may be sold at a 285.22 price equal to the percentage of the par value of the 285.23 certificates, plus accrued interest, and bearing interest at the 285.24 rate determined by the board. No election is required to 285.25 authorize the issuance of the certificates. The certificates 285.26 must bear the same rate of interest after maturity as before and 285.27 the full faith and credit and taxing power of the board must be 285.28 pledged to the payment of the certificates. 285.29 Sec. 33. [DEPOSITORIES.] 285.30 The board shall designate one or more national or state 285.31 banks, or trust companies authorized to do a banking business, 285.32 as official depositories for money of the board, and shall 285.33 require the treasurer to deposit all or a part of the money in 285.34 those institutions. The designation must be in writing and must 285.35 set forth all the terms and conditions upon which the deposits 285.36 are made, and must be signed by the chair and treasurer and made 286.1 a part of the minutes of the board. 286.2 Sec. 34. [MONEY, ACCOUNTS, AND INVESTMENTS.] 286.3 Subdivision 1. [RECEIPT AND APPLICATION.] Money received 286.4 by the board must be deposited or invested by the treasurer and 286.5 disposed of as the board may direct in accordance with its 286.6 budget; provided that any money that has been pledged or 286.7 dedicated by the board to the payment of obligations or interest 286.8 on the obligations or expenses incident thereto, or for any 286.9 other specific purpose authorized by law, must be paid by the 286.10 treasurer into the fund to which it has been pledged. 286.11 Subd. 2. [FUNDS AND ACCOUNTS.] (a) The board's treasurer 286.12 shall establish funds and accounts as may be necessary or 286.13 convenient to handle the receipts and disbursements of the board 286.14 in an orderly fashion. 286.15 (b) The funds and accounts must be audited annually by a 286.16 certified public accountant at the expense of the district. 286.17 Subd. 3. [DEPOSIT AND INVESTMENT.] The money on hand in 286.18 those funds and accounts may be deposited in the official 286.19 depositories of the board or invested as provided in this 286.20 subdivision. Any amount not currently needed or required by law 286.21 to be kept in cash on deposit may be invested in obligations 286.22 authorized for the investment of municipal sinking funds by 286.23 Minnesota Statutes, section 475.66. The money may also be held 286.24 under certificates of deposit issued by any official depository 286.25 of the board. 286.26 Subd. 4. [BOND PROCEEDS.] The use of proceeds of all bonds 286.27 issued by the board for the acquisition and betterment of the 286.28 district disposal system, and the use, other than investment, of 286.29 all money on hand in any sinking fund or funds of the board, is 286.30 governed by the provisions of Minnesota Statutes, chapter 475, 286.31 the provisions of sections 20 to 38, and the provisions of 286.32 resolutions authorizing the issuance of the bonds. When 286.33 received, the bond proceeds must be transferred to the treasurer 286.34 of the board for safekeeping, investment, and payment of the 286.35 costs for which they were issued. 286.36 Subd. 5. [AUDIT.] The board shall provide for and pay the 287.1 cost of an independent annual audit of its official books and 287.2 records by the state auditor or a public accountant authorized 287.3 to perform that function under Minnesota Statutes, chapter 6. 287.4 Sec. 35. [SERVICE CONTRACTS WITH GOVERNMENTAL ENTITIES 287.5 OUTSIDE THE JURISDICTION OF THE BOARD.] 287.6 (a) The board may contract with the United States or any 287.7 agency of the federal government, any state or its agency, or 287.8 any municipal or public corporation, governmental subdivision or 287.9 agency or political subdivision in any state, outside the 287.10 jurisdiction of the board, for furnishing services to those 287.11 entities, including but not limited to planning for and the 287.12 acquisition, betterment, operation, administration, and 287.13 maintenance of any or all interceptors, treatment works, and 287.14 local water and sanitary sewer facilities. The board may 287.15 include as one of the terms of the contract that the entity must 287.16 pay to the board an amount agreed upon as a reasonable estimate 287.17 of the proportionate share properly allocable to the entity of 287.18 costs of acquisition, betterment, and debt service previously 287.19 allocated in the district. When payments are made by entities 287.20 to the board, they must be applied in reduction of the total 287.21 amount of costs thereafter allocated in the district, on an 287.22 equitable basis as the board deems to be in the best interests 287.23 of the district, applying so far as practicable and appropriate 287.24 the criteria set forth in section 29, subdivision 2. A 287.25 municipality in the state of Minnesota may enter into a contract 287.26 and perform all acts and things required as a condition or 287.27 consideration therefor consistent with the purposes of sections 287.28 20 to 38, whether or not included among the powers otherwise 287.29 granted to the municipality by law or charter. 287.30 (b) The board shall contract with a qualified entity to 287.31 make necessary inspections on the district facilities, and to 287.32 otherwise process or assist in processing any of the work of the 287.33 district. 287.34 Sec. 36. [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES, 287.35 AND EQUIPMENT.] 287.36 When the board orders a project involving the acquisition 288.1 or betterment of a part of the district disposal system, it 288.2 shall cause plans and specifications of the project to be made, 288.3 or if previously made, to be modified, if necessary, and to be 288.4 approved by the agency if required, and after any required 288.5 approval by the agency, one or more contracts for work and 288.6 materials called for by the plans and specification may be 288.7 awarded as provided in Minnesota Statutes, section 471.345. 288.8 Sec. 37. [PROPERTY EXEMPT FROM TAXATION.] 288.9 Any properties, real or personal, owned, leased, 288.10 controlled, used, or occupied by the water and sanitary sewer 288.11 board for any purpose under sections 20 to 38 are declared to be 288.12 acquired, owned, leased, controlled, used, and occupied for 288.13 public, governmental, and municipal purposes, and are exempt 288.14 from taxation by the state or any political subdivision of the 288.15 state, provided that the properties are subject to special 288.16 assessments levied by a political subdivision for a local 288.17 improvement in amounts proportionate to and not exceeding the 288.18 special benefit received by the properties from the 288.19 improvement. No possible use of any properties in any manner 288.20 different from their use as part of a disposal system at the 288.21 time may be considered in determining the special benefit 288.22 received by the properties. All assessments are subject to 288.23 final approval by the board, whose determination of the benefits 288.24 is conclusive upon the political subdivision levying the 288.25 assessment. 288.26 Sec. 38. [RELATION TO EXISTING LAWS.] 288.27 The provisions of sections 20 to 38 must be given full 288.28 effect notwithstanding the provisions of any law or charter 288.29 inconsistent with sections 20 to 38. The powers conferred on 288.30 the board under sections 20 to 38 do not in any way diminish or 288.31 supersede the powers conferred on the agency by Minnesota 288.32 Statutes, chapters 115 to 116. 288.33 Sec. 39. [EFFECTIVE DATE; REVERSE REFERENDUM.] 288.34 Prior to approval by resolution by each of the local 288.35 governing bodies of the city of New Prague, and Helena and Cedar 288.36 Lake townships, under Minnesota Statutes, section 645.021, 289.1 subdivision 2, each city or township shall publish a notice of 289.2 its intention to establish the district in a newspaper of 289.3 general circulation in the city or township, together with a 289.4 date for a public hearing. The hearing must be held at least 289.5 two weeks but not more than four weeks after the publication of 289.6 the resolution. Following the public hearing, the city or 289.7 township may determine to take no further action or adopt a 289.8 resolution confirming its intention to establish the district. 289.9 That resolution must also be published in a newspaper of general 289.10 circulation in the district. If within 30 days after 289.11 publication of the resolution, a petition signed by at least 289.12 five percent of the registered voters in the city or township 289.13 requesting a vote on the proposed resolution is filed with the 289.14 county auditor, the resolution is not effective until it has 289.15 been submitted to the voters in the city or township at a 289.16 general or special election and a majority of votes cast on the 289.17 question of approving the resolution are in the affirmative. 289.18 The commissioner of revenue shall prepare a suggested form of 289.19 question to be presented at the election. If the majority of 289.20 the votes are cast in the affirmative or if no reverse referenda 289.21 are held, sections 1 to 19 are effective the day after a 289.22 certificate of approval under Minnesota Statutes, section 289.23 645.021, subdivision 3, is filed by the last of the four local 289.24 governmental units subject to sections 1 to 19. 289.25 Prior to approval by resolution by each of the local 289.26 governing bodies of the city and town of Finlayson, under 289.27 Minnesota Statutes, section 645.021, subdivision 2, the city or 289.28 town shall publish a notice of its intention to establish the 289.29 district in a newspaper of general circulation in the city or 289.30 town, together with a date for a public hearing. The hearing 289.31 must be held at least two weeks but not more than four weeks 289.32 after the publication of the resolution. Following the public 289.33 hearing, the city or town may determine to take no further 289.34 action or adopt a resolution confirming its intention to 289.35 establish the district. That resolution must also be published 289.36 in a newspaper of general circulation in the district. If 290.1 within 30 days after publication of the resolution, a petition 290.2 signed by at least five percent of the registered voters in the 290.3 city or town requesting a vote on the proposed resolution is 290.4 filed with the county auditor, the resolution is not effective 290.5 until it has been submitted to the voters in the city or town at 290.6 a general or special election and a majority of votes cast on 290.7 the question of approving the resolution are in the affirmative. 290.8 The commissioner of revenue shall prepare a suggested form of 290.9 question to be presented at the election. If the majority of 290.10 the votes are cast in the affirmative or if no reverse referenda 290.11 are held, sections 20 to 38 are effective as to the city and the 290.12 town of Finlayson separately the day after the certificate of 290.13 approval of the governing body of each is filed as provided in 290.14 Minnesota Statutes, section 645.021, subdivision 3. 290.15 ARTICLE 13 290.16 ALLOCATION OF FUTURE SURPLUSES 290.17 Section 1. Minnesota Statutes 1998, section 16A.152, 290.18 subdivision 2, is amended to read: 290.19 Subd. 2. [ADDITIONAL REVENUES; PRIORITY.] If on the basis 290.20 of a forecast of general fund revenues and expenditures after 290.21 November 1 in an odd-numbered year, the commissioner of finance 290.22 determines that there will be a positive unrestricted budgetary 290.23 general fund balance at the close of the biennium, the 290.24 commissioner of finance must allocate money as follows: 290.25 (1) first, to the budget reserve until the total amount in 290.26 the account equals $622,000,000; then 290.27 (2) 60 percent to the property tax reform account 290.28 established in section 16A.1521; and 290.29 (3) 40 percentis an unrestricted balance in the general290.30fundto the tax reduction and reform account. 290.31 The amounts necessary to meet the requirements of this 290.32 section are appropriated from the general fund within two weeks 290.33 after the forecast is released. 290.34 Sec. 2. Minnesota Statutes 1998, section 16A.152, is 290.35 amended by adding a subdivision to read: 290.36 Subd. 2a. [PLANNING ESTIMATES.] (a) In forecasts prepared 291.1 after November 1, 1999, and before February 2001, the 291.2 commissioner shall estimate the general fund revenues and 291.3 spending for the 2002-2003 biennium. In preparing these 291.4 estimates, the commissioner shall use the methodology used 291.5 generally to prepare planning estimates. If the commissioner 291.6 estimates that revenues will exceed spending for the 2002-2003 291.7 biennium in any forecast, effective beginning July 1, 2001, the 291.8 estimated amount shall be deposited in the health access fund up 291.9 to the amount of and at the times that the annual tobacco 291.10 settlement payments are received. 291.11 (b) If the commissioner estimates in any forecast that the 291.12 full amount of the annual tobacco settlement payments for the 291.13 2002-2003 biennium are to be deposited in the health care access 291.14 fund under the provisions of paragraph (a), the requirement to 291.15 prepare estimates under paragraph (a) ceases and all future 291.16 annual tobacco settlement payments must be deposited in the 291.17 health care access fund. 291.18 (c) If in any forecast, the commissioner estimates under 291.19 paragraph (a) that $50,000,000 or more of annual tobacco 291.20 settlement payments are to be deposited in the health care 291.21 access fund for the 2002-2003 biennium, the tax rates under 291.22 section 295.52 are reduced to zero effective beginning for 291.23 calendar year 2001. If in the November 1999 forecast the 291.24 commissioner estimates that $100,000,000 or more of annual 291.25 tobacco settlement payments are to be deposited in the health 291.26 care access fund for the 2002-2003 biennium, the tax rates under 291.27 section 295.52 for calendar year 2000 are reduced by 0.5 291.28 percentage point for each $50,000,000 of increased deposits over 291.29 $50,000,000. 291.30 Sec. 3. [16A.1522] [STATEMENT OF PURPOSE.] 291.31 (a) The state of Minnesota derives revenues from a variety 291.32 of taxes, fees, and other sources. 291.33 (b) The general fund state budget is enacted for a two-year 291.34 period based on a forecast of state revenues and authorized 291.35 spending. The two-year biennial budget period begins July 1 of 291.36 odd-numbered years and ends June 30 of odd-numbered years. 292.1 (c) Section 4 is intended to require that any positive 292.2 unrestricted budgetary general fund balance in excess of 292.3 one-half of one percent of total general fund biennial revenues 292.4 at the close of the biennium be returned to the taxpayers of 292.5 Minnesota in the form of a rebate, payable at the end of the 292.6 budget period. 292.7 Sec. 4. [16A.1523] [REBATE REQUIREMENTS.] 292.8 (a) If, on the basis of a forecast of general fund revenues 292.9 and expenditures in November of an even-numbered year or 292.10 February of an odd-numbered year, the commissioner of finance 292.11 projects that there will be a positive unrestricted budgetary 292.12 general fund balance at the close of the biennium that exceeds 292.13 one-half of one percent of total general fund biennial revenues, 292.14 the commissioner of finance shall designate the entire balance 292.15 as available for rebate to the taxpayers of Minnesota. 292.16 (b) If the commissioner of finance designates an amount for 292.17 rebate in either forecast, then the governor shall present a 292.18 plan to the legislature for rebating that amount to the 292.19 taxpayers of Minnesota. The plan must provide for payments to 292.20 begin no later than August 15 of the odd-numbered year. The 292.21 legislature must adopt or modify any plan presented by the 292.22 governor by April 15 of each odd-numbered year. 292.23 (c) By July 15 of each odd-numbered year, the commissioner 292.24 of finance shall certify to the commissioner of revenue the 292.25 amount of revenues available for rebate as determined by 292.26 preliminary June 30 end-of-year fiscal analysis. 292.27 (d) If the amount of a positive unrestricted budgetary 292.28 general fund balance existing on June 30 of an odd-numbered year 292.29 is less than one-half of one percent of the total general fund 292.30 biennial revenues, the total amount of the positive balance 292.31 shall be deposited into the tax relief account. 292.32 (e) Amounts certified for rebate by the commissioner of 292.33 finance are appropriated from the general fund to the 292.34 commissioner of revenue for the sole purpose of making the 292.35 payments required by this section. 292.36 Sec. 5. [EFFECTIVE DATE.] 293.1 Sections 1 to 4 are effective September 1, 1999. 293.2 ARTICLE 14 293.3 MISCELLANEOUS 293.4 Section 1. Minnesota Statutes 1998, section 3.986, 293.5 subdivision 2, is amended to read: 293.6 Subd. 2. [LOCAL FISCAL IMPACT.] (a) "Local fiscal impact" 293.7 means increased or decreased costs or revenues that a political 293.8 subdivision would incur as a result of a law enacted after June 293.9 30, 1997, or rule proposed after December 31, 1998: 293.10 (1) that mandates a new program, eliminates an existing 293.11 mandated program, requires an increased level of service of an 293.12 existing program, or permits a decreased level of service in an 293.13 existing mandated program; 293.14 (2) that implements or interprets federal law and, by its 293.15 implementation or interpretation, increases or decreases program 293.16 or service levels beyond the level required by the federal law; 293.17 (3) that implements or interprets a statute or amendment 293.18 adopted or enacted pursuant to the approval of a statewide 293.19 ballot measure by the voters and, by its implementation or 293.20 interpretation, increases or decreases program or service levels 293.21 beyond the levels required by the ballot measure; 293.22 (4) that removes an option previously available to 293.23 political subdivisions, or adds an option previously unavailable 293.24 to political subdivisions, thus requiring higher program or 293.25 service levels or permitting lower program or service levels, or 293.26 prohibits a specific activity and so forces political 293.27 subdivisions to use a more costly alternative to provide a 293.28 mandated program or service; 293.29 (5) that requires that an existing program or service be 293.30 provided in a shorter time period and thus increases the cost of 293.31 the program or service, or permits an existing mandated program 293.32 or service to be provided in a longer time period, thus 293.33 permitting a decrease in the cost of the program or service; 293.34 (6) that adds new requirements to an existing optional 293.35 program or service and thus increases the cost of the program or 293.36 service because the political subdivisions have no reasonable 294.1 alternative other than to continue the optional program; 294.2 (7) that affects local revenue collections by changes in 294.3 property or sales and use tax exemptions; 294.4 (8) that requires costs previously incurred at local option 294.5 that have subsequently been mandated by the state; or 294.6 (9) that requires payment of a new fee or increases the 294.7 amount of an existing fee, or permits the elimination or 294.8 decrease of an existing fee mandated by the state. 294.9 (b) When state law is intended to achieve compliance with 294.10 federal law or court orders, state mandates shall be determined 294.11 as follows: 294.12 (1) if the federal law or court order is discretionary, the 294.13 state law is a state mandate; 294.14 (2) if the state law exceeds what is required by the 294.15 federal law or court order, only the provisions of the state law 294.16 that exceed the federal requirements are a state mandate; and 294.17 (3) if the state law does not exceed what is required by 294.18 the federal statute or regulation or court order, the state law 294.19 is not a state mandate. 294.20 Sec. 2. Minnesota Statutes 1998, section 3.987, 294.21 subdivision 1, is amended to read: 294.22 Subdivision 1. [LOCAL IMPACT NOTES.] The commissioner of 294.23 finance shall coordinate the development of a local impact note 294.24 for any proposed legislation introduced after June 30, 1997,or294.25any rule proposed after December 31, 1998,upon request of the 294.26 chair or the ranking minority member of either legislative tax 294.27 committee. Upon receipt of a request to prepare a local impact 294.28 note, the commissioner must notify the authors of the proposed 294.29 legislationor, for an administrative rule, the head of the294.30relevant executive agency or department,that the request has 294.31 been made. The local impact note must be made available to the 294.32 public upon request. If the action is among the exceptions 294.33 listed in section 3.988, a local impact note need not be 294.34 requested nor prepared. The commissioner shall make a 294.35 reasonable and timely estimate of the local fiscal impact on 294.36 each type of political subdivision that would result from the 295.1 proposed legislation. The commissioner of finance may require 295.2 any political subdivision or the commissioner of an 295.3 administrative agency of the state to supply in a timely manner 295.4 any information determined to be necessary to determine local 295.5 fiscal impact. The political subdivision, its representative 295.6 association, or commissioner shall convey the requested 295.7 information to the commissioner of finance with a signed 295.8 statement to the effect that the information is accurate and 295.9 complete to the best of its ability. The political subdivision, 295.10 its representative association, or commissioner, when requested, 295.11 shall update its determination of local fiscal impact based on 295.12 actual cost or revenue figures, improved estimates, or both. 295.13 Upon completion of the note, the commissioner must provide a 295.14 copy to the authors of the proposed legislationor, for an295.15administrative rule, to the head of the relevant executive295.16agency or department. 295.17 Sec. 3. Minnesota Statutes 1998, section 270.07, 295.18 subdivision 1, is amended to read: 295.19 Subdivision 1. [POWERS OF COMMISSIONER; APPLICATION FOR 295.20 ABATEMENT; ORDERS.] (a) The commissioner of revenue shall 295.21 prescribe the form of all blanks and books required under this 295.22 chapter and shall hear and determine all matters of grievance 295.23 relating to taxation. Except for matters delegated to the 295.24 various boards of county commissioners under section 375.192, 295.25 and except as otherwise provided by law, the commissioner shall 295.26 have power to grant such reduction or abatement of net tax 295.27 capacities or taxes and of any costs, penalties or interest 295.28 thereon as the commissioner may deem just and equitable, and to 295.29 order the refundment, in whole or in part, of any taxes, costs, 295.30 penalties or interest thereon which have been erroneously or 295.31 unjustly paid. Application therefor shall be submitted with a 295.32 statement of facts in the case and the favorable recommendation 295.33 of the county board or of the board of abatement of any city 295.34 where any such board exists, and the county auditor of the 295.35 county wherein such tax was levied or paid. In the case of taxes 295.36 other than gross earnings taxes, the order may be made only on 296.1 application and approval as provided in this paragraph. No 296.2 reduction, abatement, or refundment of any special assessments 296.3 made or levied by any municipality for local improvements shall 296.4 be made unless it is also approved by the board of review or 296.5 similar taxing authority of such municipality. 296.6 (b) The commissioner has the power to grant reductions or 296.7 abatements of gross earnings tax. An application for reduction 296.8 of gross earnings taxes may be made directly to the commissioner 296.9 without the favorable action of the county board and county 296.10 auditor. The commissioner shall direct that any gross earnings 296.11 taxes that may have been erroneously or unjustly paid be applied 296.12 against unpaid taxes due from the applicant. 296.13 (c) The commissioner shall forward to the county auditor a 296.14 copy of the order made by the commissioner in all cases in which 296.15 the approval of the county board is required. 296.16 (d) The commissioner may refer any question that may arise 296.17 in reference to the true construction of this chapter to the 296.18 attorney general, and the decision thereon shall be in force and 296.19 effect until annulled by the judgment of a court of competent 296.20 jurisdiction. 296.21 (e) The commissioner may by written order abate, reduce, or 296.22 refund any penalty or interest imposed by any law relating to 296.23 taxation, if in the commissioner's opinion the failure to timely 296.24 pay the tax or failure to timely file the return is due to 296.25 reasonable cause, or if the taxpayer is located in a 296.26 presidentially declared disaster area.The order shall be made296.27on application of the taxpayer to the commissioner.296.28(f) If an order issued under this subdivision is for an296.29abatement, reduction, or refund of over $5,000, it shall be296.30valid only if approved in writing by the attorney general.296.31(g)(f) An appeal may not be taken to the tax court from 296.32 any order of the commissioner of revenue made in the exercise of 296.33 the discretionary authority granted in paragraph (a) with 296.34 respect to the reduction or abatement of real or personal 296.35 property taxes in response to a taxpayer's application for an 296.36 abatement, reduction, or refund of taxes, net tax capacities, 297.1 costs, penalties, or interest. 297.2 Sec. 4. Minnesota Statutes 1998, section 270.65, is 297.3 amended to read: 297.4 270.65 [DATE OF ASSESSMENT; DEFINITION.] 297.5 For purposes of taxes administered by the commissioner, the 297.6 term "date of assessment" means the date a return was filed or 297.7 the date a return should have been filed, whichever is later; 297.8 or, in the case of taxes determined by the commissioner, "date 297.9 of assessment" means the date of the order assessing taxes; or, 297.10 in the case of an amended return filed by the taxpayer, the 297.11 assessment date is the date the return was filed with the 297.12 commissioner; or, in the case of a check from a taxpayer that is 297.13 dishonored and results in an erroneous refund being given to the 297.14 taxpayer, remittance of the check is deemed to be an assessment 297.15 and the "date of assessment" is the date the check was received 297.16 by the commissioner. 297.17 Sec. 5. Minnesota Statutes 1998, section 270.67, is 297.18 amended by adding a subdivision to read: 297.19 Subd. 4. [OFFER-IN-COMPROMISE PROGRAM.] (a) In 297.20 implementing the authority provided in subdivision 1 or in 297.21 section 8.30 to accept offers of installment payments or 297.22 offers-in-compromise of tax liabilities, the commissioner of 297.23 revenue shall prescribe guidelines for employees of the 297.24 department of revenue to determine whether an 297.25 offer-in-compromise or an offer to make installment payments is 297.26 adequate and should be accepted to resolve a dispute. In 297.27 prescribing the guidelines, the commissioner shall develop and 297.28 publish schedules of national and local allowances designed to 297.29 provide that taxpayers entering into a compromise have an 297.30 adequate means to provide for basic living expenses. The 297.31 guidelines must provide that the taxpayer's ownership interest 297.32 in a motor vehicle, to the extent of the value allowed in 297.33 section 550.37, will not be considered as an asset; in the case 297.34 of an offer related to a joint tax liability of spouses, that 297.35 value of two motor vehicles must be excluded. The guidelines 297.36 must provide that employees of the department shall determine, 298.1 on the basis of the facts and circumstances of each taxpayer, 298.2 whether the use of the schedules is appropriate and that 298.3 employees must not use the schedules to the extent the use would 298.4 result in the taxpayer not having adequate means to provide for 298.5 basic living expenses. The guidelines must provide that: 298.6 (1) an employee of the department shall not reject an 298.7 offer-in-compromise from a low-income taxpayer solely on the 298.8 basis of the amount of the offer; and 298.9 (2) in the case of an offer-in-compromise which relates 298.10 only to issues of liability of the taxpayer: 298.11 (i) the offer must not be rejected solely because the 298.12 commissioner is unable to locate the taxpayer's return or return 298.13 information for verification of the liability; and 298.14 (ii) the taxpayer shall not be required to provide an 298.15 audited, reviewed, or compiled financial statement. 298.16 (b) The commissioner shall establish procedures: 298.17 (1) for an independent administrative review of any 298.18 rejection of a proposed offer-in-compromise or installment 298.19 agreement made by a taxpayer under this section before the 298.20 rejection is communicated to the taxpayer; 298.21 (2) that allow a taxpayer to appeal any rejection of the 298.22 offer or agreement to the commissioner of revenue; 298.23 (3) that provide for notification to the taxpayer when an 298.24 offer-in-compromise has been accepted, and issuance of 298.25 certificates of release of any liens imposed under section 298.26 270.69 related to the liability which is the subject of the 298.27 compromise; and 298.28 (4) that require presentation of a counteroffer by the 298.29 commissioner if the amount offered by the taxpayer in an 298.30 offer-in-compromise is not accepted by the commissioner. 298.31 Sec. 6. Minnesota Statutes 1998, section 270B.14, is 298.32 amended by adding a subdivision to read: 298.33 Subd. 17. [DISCLOSURE TO DEPARTMENT OF COMMERCE.] The 298.34 commissioner may disclose to the commissioner of commerce 298.35 information required to administer the Uniform Disposition of 298.36 Unclaimed Property Act in sections 354.31 to 345.60, including 299.1 the social security numbers of the taxpayers whose refunds are 299.2 on the report of abandoned property submitted by the 299.3 commissioner to the commissioner of commerce under section 299.4 345.41. Except for data published under section 345.42, the 299.5 information received that is private or nonpublic data retains 299.6 its classification and can be used by the commissioner of 299.7 commerce only for the purpose of verifying that the persons 299.8 claiming the refunds are the owners. 299.9 Sec. 7. Minnesota Statutes 1998, section 289A.31, 299.10 subdivision 2, is amended to read: 299.11 Subd. 2. [JOINT INCOME TAX RETURNS.] (a) If a joint income 299.12 tax return is made by a husband and wife, the liability for the 299.13 tax is joint and several. A spouse whois relieved ofqualifies 299.14 for relief from a liability attributable toa substantialan 299.15 underpayment under section6013(e)6015(b) of the Internal 299.16 Revenue Code isalsorelieved of the state income tax liability 299.17 on thesubstantialunderpayment. 299.18 (b) In the case of individuals who were a husband and wife 299.19 prior to the dissolution of their marriage or their legal 299.20 separation, or prior to the death of one of the individuals, for 299.21 tax liabilities reported on a joint or combined return, the 299.22 liability of each person is limited to the proportion of the tax 299.23 due on the return that equals that person's proportion of the 299.24 total tax due if the husband and wife filed separate returns for 299.25 the taxable year. This provision is effective only when the 299.26 commissioner receives written notice of the marriage 299.27 dissolution, legal separation, or death of a spouse from the 299.28 husband or wife. No refund may be claimed by an ex-spouse, 299.29 legally separated or widowed spouse for any taxes paid more than 299.30 60 days before receipt by the commissioner of the written notice. 299.31 Sec. 8. Minnesota Statutes 1998, section 289A.40, 299.32 subdivision 1, is amended to read: 299.33 Subdivision 1. [TIME LIMIT; GENERALLY.] Unless otherwise 299.34 provided in this chapter, a claim for a refund of an overpayment 299.35 of state tax must be filed within 3-1/2 years from the date 299.36 prescribed for filing the return, plus any extension of time 300.1 granted for filing the return, but only if filed within the 300.2 extended time, or one year from the date of an order assessing 300.3 tax under section 289A.37, subdivision 1, or an order 300.4 determining an appeal under section 289A.65, subdivision 8, or 300.5 one year from the date of a return made by the commissioner 300.6 under section 289A.35, upon payment in full of the tax, 300.7 penalties, and interest shown on the order or return made by the 300.8 commissioner, whichever period expires later. Claims for 300.9 refund, except for taxes under chapter 297A, filed after the 300.10 3-1/2 year period but within the one-year period are limited to 300.11 the amount of the tax, penalties, and interest on the order or 300.12 return made by the commissioner and to issues determined by the 300.13 order or return made by the commissioner. 300.14 In the case of assessments under section 289A.38, 300.15 subdivision 5 or 6, claims for refund under chapter 297A filed 300.16 after the 3-1/2 year period but within the one-year period are 300.17 limited to the amount of the tax, penalties, and interest on the 300.18 order or return made by the commissioner that are due for the 300.19 period before the 3-1/2 year period. 300.20 Sec. 9. Minnesota Statutes 1998, section 289A.40, 300.21 subdivision 1a, is amended to read: 300.22 Subd. 1a. [INDIVIDUAL INCOME TAXES;REASONABLE300.23CAUSESUSPENSION DURING PERIOD OF DISABILITY.] If the 300.24 taxpayerestablishes reasonable cause for failing to timely file300.25the return required by section 289A.08, subdivision 1, files the300.26required return within ten years of the date specified in300.27section 289A.18, subdivision 1, and independently verifies that300.28an overpayment has been made, the commissioner shall grant a300.29refund claimed by the original return, notwithstanding the300.30limitations of subdivision 1meets the requirements for 300.31 suspending the running of the time period to file a claim for 300.32 refund under section 6511(h) of the Internal Revenue Code, the 300.33 time period in subdivision 1 for the taxpayer to file a claim 300.34 for an individual income tax refund is suspended. 300.35 Sec. 10. Minnesota Statutes 1998, section 289A.50, is 300.36 amended by adding a subdivision to read: 301.1 Subd. 1a. [REFUND FORM.] On or before January 1, 2000, the 301.2 commissioner of revenue shall prepare and make available to 301.3 taxpayers a form for filing claims for refund of taxes paid in 301.4 excess of the amount due. If the commissioner fails to prepare 301.5 a form under this subdivision by January 1, 2000, any claims for 301.6 refund made after January 1, 2000, and up to ten days after the 301.7 form is made available to taxpayers are deemed to be made in 301.8 compliance with the requirement of the form. 301.9 Sec. 11. Minnesota Statutes 1998, section 289A.50, 301.10 subdivision 7, is amended to read: 301.11 Subd. 7. [REMEDIES.] (a) If the taxpayer is notified by 301.12 the commissioner that the refund claim is denied in whole or in 301.13 part, the taxpayer may: 301.14 (1) file an administrative appeal as provided in section 301.15 289A.65, or an appeal with the tax court, within 60 days after 301.16 issuance of the commissioner's notice of denial; or 301.17 (2) file an action in the district court to recover the 301.18 refund. 301.19 (b) An action in the district court on a denied claim for 301.20 refund must be brought within 18 months of the date of the 301.21 denial of the claim by the commissioner. 301.22 (c) No action in the district court or the tax court shall 301.23 be brought within six months of the filing of the refund claim 301.24 unless the commissioner denies the claim within that period. 301.25 (d) If a taxpayer files a claim for refund and the 301.26 commissioner has not issued a denial of the claim, the taxpayer 301.27 may bring an action in the district court or the tax court at 301.28 any time after the expiration of six months of the time the 301.29 claim was filed, but within four years of the date that the 301.30 claim was filed. 301.31 (e) If the claim for refund has been filed on and in 301.32 compliance with the requirements of the form prepared by the 301.33 commissioner under subdivision 1a and if the commissioner has 301.34 not denied the claim within 30 months after the claim was filed, 301.35 the claim is deemed granted on the last day of the 30th month. 301.36 The commissioner shall refund the amount claimed. The 302.1 commissioner and the taxpayer may agree to extend the 30-month 302.2 period before its expiration. 302.3 (f) The commissioner and the taxpayer may agree to extend 302.4 the period for bringing an action in the district court. 302.5(f)(g) An action for refund of tax by the taxpayer must be 302.6 brought in the district court of the district in which lies the 302.7 county of the taxpayer's residence or principal place of 302.8 business. In the case of an estate or trust, the action must be 302.9 brought at the principal place of its administration. Any 302.10 action may be brought in the district court for Ramsey county. 302.11 Sec. 12. Minnesota Statutes 1998, section 289A.60, 302.12 subdivision 3, is amended to read: 302.13 Subd. 3. [COMBINED PENALTIES.] When penalties are imposed 302.14 under subdivisions 1 and 2,except for the minimum penalty under302.15subdivision 2,the penalties imposed under both subdivisions 302.16 combined must not exceed 38 percent. 302.17 Sec. 13. Minnesota Statutes 1998, section 289A.60, 302.18 subdivision 21, is amended to read: 302.19 Subd. 21. [PENALTY FOR FAILURE TO MAKE PAYMENT BY 302.20 ELECTRONIC FUNDS TRANSFER.](a)In addition to other applicable 302.21 penalties imposed by this section, after notification from the 302.22 commissioner to the taxpayer that payments are required to be 302.23 made by means of electronic funds transfer under section 302.24 289A.20, subdivision 2, paragraph (e), or 4, paragraph (d), or 302.25 289A.26, subdivision 2a, and the payments are remitted by some 302.26 other means, there is a penalty in the amount of five percent of 302.27 each payment that should have been remitted electronically. The 302.28 penalty can be abated under the abatement procedures prescribed 302.29 in section 270.07, subdivision 6, if the failure to remit the 302.30 payment electronically is due to reasonable cause. 302.31(b) The penalty under paragraph (a) does not apply if the302.32taxpayer pays by other means the amount due at least three302.33business days before the date the payment is due. This302.34paragraph does not apply after December 31, 1997.302.35 Sec. 14. Minnesota Statutes 1998, section 297A.15, 302.36 subdivision 5, is amended to read: 303.1 Subd. 5. [REFUND; APPROPRIATION.] Notwithstanding the 303.2 provisions of sections 297A.02, subdivision 5, and 297A.25, 303.3 subdivision 42, the tax on sales of capital equipment, and 303.4 replacement capital equipment, shall be imposed and collected as 303.5 if the rate under section 297A.02, subdivision 1, applied. Upon 303.6 application by the purchaser, on forms prescribed by the 303.7 commissioner, a refund equal to the reduction in the tax due as 303.8 a result of the application of the exemption under section 303.9 297A.25, subdivision 42, and the rate under section 297A.02, 303.10 subdivision 5, shall be paid to the purchaser. The application 303.11 must include sufficient information to permit the commissioner 303.12 to verify the sales tax paid for the project. The application 303.13 shall include information necessary for the commissioner 303.14 initially to verify that the purchases qualified as capital 303.15 equipment under section 297A.25, subdivision 42, or replacement 303.16 capital equipment under section 297A.01, subdivision 20. No 303.17 more than two applications for refunds may be filed under this 303.18 subdivision in a calendar year. Unless otherwise specifically 303.19 provided by this subdivision, the provisions ofsectionsections 303.20 289A.40 and 289A.50 apply to the refunds payable under this 303.21 subdivision. There is annually appropriated to the commissioner 303.22 of revenue the amount required to make the refunds. 303.23 The amount to be refunded shall bear interest at the rate 303.24 in section 270.76 from the date the refund claim is filed with 303.25 the commissioner. 303.26 Sec. 15. Minnesota Statutes 1998, section 298.24, 303.27 subdivision 1, is amended to read: 303.28 Subdivision 1. (a) For concentrate produced in1997 and303.2919981999 and thereafter, there is imposed upon taconite and 303.30 iron sulphides, and upon the mining and quarrying thereof, and 303.31 upon the production of iron ore concentrate therefrom, and upon 303.32 the concentrate so produced, a tax of $2.141 per gross ton of 303.33 merchantable iron ore concentrate produced therefrom. 303.34 (b)For concentrates produced in 1999 and subsequent years,303.35the tax rate shall be equal to the preceding year's tax rate303.36plus an amount equal to the preceding year's tax rate multiplied304.1by the percentage increase in the implicit price deflator from304.2the fourth quarter of the second preceding year to the fourth304.3quarter of the preceding year. "Implicit price deflator" for304.4the gross national product means the implicit price deflator304.5prepared by the bureau of economic analysis of the United States304.6Department of Commerce.304.7(c)On concentrates produced in 1997 and thereafter, an 304.8 additional tax is imposed equal to three cents per gross ton of 304.9 merchantable iron ore concentrate for each one percent that the 304.10 iron content of the product exceeds 72 percent, when dried at 304.11 212 degrees Fahrenheit. 304.12(d)(c) The tax shall be imposed on the average of the 304.13 production for the current year and the previous two years. The 304.14 rate of the tax imposed will be thecurrent year'stax rate 304.15 determined under this subdivision. Thisclauseparagraph shall 304.16 not apply in the case of the closing of a taconite facility if 304.17 the property taxes on the facility would be higher if this 304.18 clause and section 298.25 were not applicable. 304.19(e)(d) If the tax or any part of the tax imposed by this 304.20 subdivision is held to be unconstitutional, a tax of $2.141 per 304.21 gross ton of merchantable iron ore concentrate produced shall be 304.22 imposed. 304.23(f)(e) Consistent with the intent of this subdivision to 304.24 impose a tax based upon the weight of merchantable iron ore 304.25 concentrate, the commissioner of revenue may indirectly 304.26 determine the weight of merchantable iron ore concentrate 304.27 included in fluxed pellets by subtracting the weight of the 304.28 limestone, dolomite, or olivine derivatives or other basic flux 304.29 additives included in the pellets from the weight of the 304.30 pellets. For purposes of this paragraph, "fluxed pellets" are 304.31 pellets produced in a process in which limestone, dolomite, 304.32 olivine, or other basic flux additives are combined with 304.33 merchantable iron ore concentrate. No subtraction from the 304.34 weight of the pellets shall be allowed for binders, mineral and 304.35 chemical additives other than basic flux additives, or moisture. 304.36(g)(f)(1) Notwithstanding any other provision of this 305.1 subdivision, for the first two years of a plant's production of 305.2 direct reduced ore, no tax is imposed under this section. As 305.3 used in this paragraph, "direct reduced ore" is ore that results 305.4 in a product that has an iron content of at least 75 percent. 305.5 For the third year of a plant's production of direct reduced 305.6 ore, the rate to be applied to direct reduced ore is 25 percent 305.7 of the rate otherwise determined under this subdivision. For 305.8 the fourth such production year, the rate is 50 percent of the 305.9 rate otherwise determined under this subdivision; for the fifth 305.10 such production year, the rate is 75 percent of the rate 305.11 otherwise determined under this subdivision; and for all 305.12 subsequent production years, the full rate is imposed. 305.13 (2) Subject to clause (1), production of direct reduced ore 305.14 in this state is subject to the tax imposed by this section, but 305.15 if that production is not produced by a producer of taconite or 305.16 iron sulfides, the production of taconite or iron sulfides 305.17 consumed in the production of direct reduced iron in this state 305.18 is not subject to the tax imposed by this section on taconite or 305.19 iron sulfides. 305.20 (g) For purposes of distribution of the tax proceeds under 305.21 section 298.28, "implicit price deflator" means the implicit 305.22 price deflator for the gross domestic product prepared by the 305.23 Bureau of Economic Analysis of the United States Department of 305.24 Commerce, from the fourth quarter of the second preceding year 305.25 to the fourth quarter of the preceding year. 305.26 Sec. 16. Minnesota Statutes 1998, section 298.28, 305.27 subdivision 9a, is amended to read: 305.28 Subd. 9a. [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 305.2915.425.4 cents per ton for distributions in1996, 1998, 1999,305.30and2000and 20.4 cents per ton for distributions in 1997shall 305.31 be paid to the taconite economic development fund. For each of 305.32 the following nine years thereafter, the amount per ton for 305.33 distributions must be increased 1.7 cents over the amount for 305.34 the previous year and paid to the taconite economic development 305.35 fund. No distribution shall be made under this paragraph in any 305.36 year in which total industry production falls below 30 million 306.1 tons. 306.2 (b) An amount equal to 50 percent of the tax under section 306.3 298.24 for concentrate sold in the form of pellet chips and 306.4 fines not exceeding 5/16 inch in size and not including crushed 306.5 pellets shall be paid to the taconite economic development 306.6 fund. The amount paid shall not exceed $700,000 annually for 306.7 all companies. If the initial amount to be paid to the fund 306.8 exceeds this amount, each company's payment shall be prorated so 306.9 the total does not exceed $700,000. 306.10 Sec. 17. Minnesota Statutes 1998, section 360.55, is 306.11 amended by adding a subdivision to read: 306.12 Subd. 8. [AGRICULTURAL AIRCRAFT.] Aircraft registered with 306.13 the Federal Aviation Administration as restricted category 306.14 aircraft used for agricultural purposes must be listed for 306.15 taxation and registration upon filing by the owner a sworn 306.16 affidavit with the commissioner. The affidavit must state: 306.17 (1) the name and address of the owner; 306.18 (2) the name and address of the person from whom purchased; 306.19 (3) the aircraft's make, year, model number, federal 306.20 registration number, and manufacturer's identification number; 306.21 and 306.22 (4) that the aircraft is owned and operated solely for 306.23 agricultural operations and purposes. 306.24 The owner shall file the affidavit and pay an annual fee 306.25 established under sections 360.511 to 360.67, which must not 306.26 exceed $500. Should the aircraft be operated other than for 306.27 agricultural purposes, the owner shall list the aircraft for 306.28 taxation and registration under sections 360.511 to 360.67. If 306.29 the aircraft is sold, the new owner shall list the aircraft for 306.30 taxation and registration under this subdivision or under 306.31 sections 360.511 to 360.67, as applicable. 306.32 Sec. 18. Minnesota Statutes 1998, section 469.169, 306.33 subdivision 12, is amended to read: 306.34 Subd. 12. [ADDITIONAL ZONE ALLOCATIONS.] (a) In addition 306.35 to tax reductions authorized in subdivisions 7, 8, 9, 10, and 306.36 11, the commissioner shall allocate tax reductions to border 307.1 city enterprise zones located on the western border of the state. 307.2 The cumulative total amount of tax reductions for all years of 307.3 the program under sections 469.1731 to 469.1735, is limited to: 307.4 (1) for the city of Breckenridge, $394,000; 307.5 (2) for the city of Dilworth, $118,200; 307.6 (3) for the city of East Grand Forks, $788,000; 307.7 (4) for the city of Moorhead, $591,000; and 307.8 (5) for the city of Ortonville, $78,800. 307.9 Allocations made under this subdivision may be used for tax 307.10 reductions provided in section 469.1732 or 469.1734 or for 307.11 reimbursements under section 469.1735, subdivision 3, but only 307.12 if the municipality determines that the granting of the tax 307.13 reduction or offset is necessary to enable a business to expand 307.14 within a city or to attract a business to a city. Limitations 307.15 on allocations under subdivision 7 do not apply to this 307.16 allocation. 307.17 (b) The limit in the allocation in paragraph (a) for a 307.18 municipality may be waived by the commissioner if the 307.19 commissioner of revenue finds that the municipality must provide 307.20 an incentive under section 469.1732 or 469.1734 that, by itself 307.21 or when aggregated with all other tax reductions granted by the 307.22 municipality under those provisions, exceeds the municipality's 307.23 maximum allocation under paragraph (a), in order to obtain or 307.24 retain a business in the city that would not occur in the 307.25 municipality without the incentive. The limit may be waived 307.26 only if the commissioner finds that the business for which the 307.27 tax incentives are to be provided: 307.28 (1) requires a private capital investment of at least 307.29 $1,000,000 within the city; 307.30 (2) employs at least 25 new or additional full-time 307.31 equivalent employees within the city; and 307.32 (3) pays its employees at the location in the city wages 307.33 that, on the average, will exceed the average wage paid in the 307.34 county in which the municipality is located. 307.35 Any waiver granted under this paragraph must be reported 307.36 within 60 days to the commissioner of finance and the chairs of 308.1 the house and senate tax committees. 308.2 Sec. 19. Minnesota Statutes 1998, section 469.169, is 308.3 amended by adding a subdivision to read: 308.4 Subd. 14. [ADDITIONAL BORDER CITY ALLOCATIONS.] In 308.5 addition to tax reductions authorized in subdivisions 7 to 12, 308.6 the commissioner may allocate $1,500,000 for tax reductions to 308.7 border city enterprise zones in cities located on the western 308.8 border of the state. The commissioner shall make allocations to 308.9 zones in cities on the western border on a per capita basis. 308.10 Allocations made under this subdivision may be used for tax 308.11 reductions as provided in section 469.171, or other offsets of 308.12 taxes imposed on or remitted by businesses located in the 308.13 enterprise zone, but only if the municipality determines that 308.14 the granting of the tax reduction or offset is necessary in 308.15 order to retain a business within or attract a business to the 308.16 zone. Limitations on allocations under subdivision 7, do not 308.17 apply to this allocation. 308.18 Sec. 20. Minnesota Statutes 1998, section 469.1735, is 308.19 amended by adding a subdivision to read: 308.20 Subd. 4. [APPROPRIATION; WAIVERS.] An amount sufficient to 308.21 fund any tax reductions under a waiver made by the commissioner 308.22 under section 469.169, subdivision 12, paragraph (b), is 308.23 appropriated to the commissioner of revenue from the general 308.24 fund. This appropriation may not be deducted from the dollar 308.25 limits under this section or section 469.169 or 469.1734. 308.26 Sec. 21. Laws 1997, Second Special Session chapter 2, 308.27 section 6, is amended to read: 308.28 Sec. 6. TRADE AND ECONOMIC 308.29 DEVELOPMENT 8,200,000 308.30 Notwithstanding the requirement in 308.31 Minnesota Statutes, section 469.169, 308.32 subdivision 11, as added by Laws 1997, 308.33 chapter 231, article 16, section 20, to 308.34 base allocations to zones in cities on 308.35 the state's western border on a per 308.36 capita basis, $1,200,000 is a one-time 308.37 appropriation from the general fund to 308.38 the commissioner of trade and economic 308.39 development for border city enterprise 308.40 competitiveness grants under Minnesota 308.41 Statutes, sections 469.166 to 469.173. 308.42 Funds shall be allocated to communities 308.43 with significant business losses that 309.1 are at risk of losing business tax base 309.2 due to noncompetitiveness with North 309.3 Dakota and South Dakota and shall be 309.4 available to communities for locally 309.5 administered measures to retain their 309.6 job base. Allocations made under this 309.7 paragraph may be used for tax 309.8 reductions as provided in Minnesota 309.9 Statutes, section 469.171, or other 309.10 offsets of taxes imposed on or remitted 309.11 by businesses located in the enterprise 309.12 zone, but only if the municipality 309.13 determines that the granting of the tax 309.14 reduction or offset is necessary in 309.15 order to retain a business within or 309.16 attract a business to the zone. 309.17 Limitations on allocations under 309.18 Minnesota Statutes, section 469.169, 309.19 subdivision 7, do not apply to this 309.20 appropriation. Enterprise zones that 309.21 receive allocations under this 309.22 paragraph may continue in effect for 309.23 purposes of those allocations 309.24 throughDecember 31, 1998June 30, 1999. 309.25 $6,000,000 is a one-time appropriation 309.26 from the general fund to the Minnesota 309.27 investment fund for grants to local 309.28 units of government for locally 309.29 administered operating loan programs 309.30 for businesses directly and adversely 309.31 affected by the floods. Loan criteria 309.32 and requirements shall be locally 309.33 established with approval by the 309.34 department. For the purposes of this 309.35 appropriation, Minnesota Statutes, 309.36 sections 116J.8731, subdivisions 3, 4, 309.37 5, and 7, and 116J.991, are waived. 309.38 Businesses that receive grants or loans 309.39 from this appropriation shall set goals 309.40 for jobs retained and wages paid within 309.41 the area designated under Presidential 309.42 Declaration of Major Disaster, DR-1175. 309.43 $1,000,000 is a one-time appropriation 309.44 from the petroleum tank release cleanup 309.45 fund to the commissioner of trade and 309.46 economic development. Notwithstanding 309.47 Minnesota Statutes, section 115C.08, 309.48 subdivision 4, as amended by Laws 1997, 309.49 chapter 200, article 2, section 4, 309.50 these funds are to be used for grants 309.51 to buy out property substantially 309.52 damaged by a petroleum tank release. 309.53 Sec. 22. [TRANSFER.] 309.54 The commissioner of finance shall transfer $2,000,000 from 309.55 the conservation fund under Minnesota Statutes, section 40A.151, 309.56 to the general fund on July 1, 1999. 309.57 Sec. 23. [APPROPRIATION.] 309.58 $1,000,000 is appropriated to the commissioner of revenue 309.59 from the general fund for the cost of administering this act. 309.60 This appropriation is for fiscal year 2000 and any unspent 310.1 amount may be carried over to fiscal year 2001. 310.2 Sec. 24. [REPEALER.] 310.3 Minnesota Statutes 1998, sections 297E.12, subdivision 3; 310.4 297F.19, subdivision 4; and 297G.18, subdivision 4, are repealed. 310.5 Sec. 25. [EFFECTIVE DATES.] 310.6 Sections 3, 6, 10, 13, 14, 18, 19, 21, and 24 are effective 310.7 the day following final enactment. 310.8 Section 4 is effective for checks received on or after the 310.9 day following final enactment. 310.10 Section 5 is effective the day following final enactment, 310.11 and applies to offers-in-compromise submitted after June 30, 310.12 1999. 310.13 Section 7, paragraph (a), is effective at the same time 310.14 that section 6015(b) of the Internal Revenue Code is effective 310.15 for federal tax purposes. Section 7, paragraph (b), is 310.16 effective for claims for innocent spouse relief, requests for 310.17 allocation of joint income tax liability, and taxes filed or 310.18 paid on or after the day following final enactment. 310.19 Section 8 is effective for orders issued on or after the 310.20 day following final enactment. 310.21 Section 9 is effective for disabilities existing on or 310.22 after the date of enactment for which claims for refund have not 310.23 expired under the time limit in Minnesota Statutes, section 310.24 289A.40, subdivision 1. Claims based upon reasonable cause must 310.25 be filed prior to the expiration of the repealed ten-year period 310.26 or within one year after the date of enactment, whichever is 310.27 earlier. 310.28 Section 11 is effective for claims for refund filed after 310.29 December 31, 1999. 310.30 Section 12 is effective for tax years ending on or after 310.31 the day following final enactment. 310.32 Section 15 is effective for concentrates produced in 1999 310.33 and thereafter. 310.34 Section 16 is effective for distributions in 2000 to 2009. 310.35 Section 17 is effective for aircraft registered after June 310.36 30, 1999.