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, 1997 1998. 
 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, and the 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 federal 
 18.21  taxable income under section 1366 of the Internal Revenue Code 
 18.22  flowing from a corporation that has a valid election in effect 
 18.23  for the taxable year under section 1362 of the Internal Revenue 
 18.24  Code, but which is not allowed to be an "S" corporation under 
 18.25  section 290.9725; 
 18.26     (6) the amount of any distributions in cash or property 
 18.27  made to a shareholder during the taxable year by a corporation 
 18.28  that has a valid election in effect for the taxable year under 
 18.29  section 1362 of the Internal Revenue Code, but which is not 
 18.30  allowed to be an "S" corporation under section 290.9725 to the 
 18.31  extent not already included in federal taxable income under 
 18.32  section 1368 of the Internal Revenue Code; 
 18.33     (7) in the year stock of a corporation that had made a 
 18.34  valid election under section 1362 of the Internal Revenue Code 
 18.35  but was not an "S" corporation under section 290.9725 is sold or 
 18.36  disposed of in a transaction taxable under the Internal Revenue 
 19.1   Code, the amount of difference between the Minnesota basis of 
 19.2   the stock under subdivision 19f, paragraph (m), and the federal 
 19.3   basis if the Minnesota basis is lower than the shareholder's 
 19.4   federal 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 each dependent 
 19.28  qualifying child in grades kindergarten to 6 and $2,500 for each 
 19.29  dependent qualifying child in grades 7 to 12, for tuition, 
 19.30  textbooks, and transportation of each dependent qualifying 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 the 25 percent 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), the 
 21.24  amount of income or gain included in federal taxable income 
 21.25  under section 1366 of the Internal Revenue Code flowing from a 
 21.26  corporation that has a valid election in effect for the taxable 
 21.27  year under section 1362 of the Internal Revenue Code which is 
 21.28  not allowed to be an "S" corporation under section 290.9725; 
 21.29     (12) in the year stock of a corporation that had made a 
 21.30  valid election under section 1362 of the Internal Revenue Code 
 21.31  but was not an "S" corporation under section 290.9725 is sold or 
 21.32  disposed of in a transaction taxable under the Internal Revenue 
 21.33  Code, the amount of difference between the Minnesota basis of 
 21.34  the stock under subdivision 19f, paragraph (m), and the federal 
 21.35  basis if the Minnesota basis is higher than the shareholder's 
 21.36  federal basis; and 
 22.1      (13) an amount equal to an individual's, trust's, or 
 22.2   estate's net federal income tax liability for the tax year that 
 22.3   is attributable to items of income, expense, gain, loss, or 
 22.4   credits federally flowing to the taxpayer in the tax year from a 
 22.5   corporation, having a valid election in effect for federal tax 
 22.6   purposes under section 1362 of the Internal Revenue Code but not 
 22.7   treated as an "S" corporation for state tax purposes under 
 22.8   section 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 the 
 24.26  taxable year under section 1362 of the Internal Revenue Code, 
 24.27  but is not allowed to be an "S" corporation under section 
 24.28  290.9725, and the corporation is liquidated or the individual 
 24.29  shareholder disposes of the stock, the Minnesota basis in the 
 24.30  shareholder's stock in the corporation shall be computed as if 
 24.31  the corporation were not an "S" corporation for federal tax 
 24.32  purposes. 
 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, 1997 1998. 
 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, 6 5.5 percent; 
 25.26     (2) On all over $19,910 $34,500, but not 
 25.27  over $79,120 $113,360, 8 7 percent; 
 25.28     (3) On all over $79,120 $113,360, 8.5 8 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, 6 5.5 percent; 
 26.1      (2) On all over $13,620 $17,250, but not 
 26.2   over $44,750 $56,680, 8 7 percent; 
 26.3      (3) On all over $44,750 $56,680, 8.5 8 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, 6 5.5 percent; 
 26.9      (2) On all over $16,770 $25,870, but not 
 26.10  over $67,390 $85,020, 8 7 percent; 
 26.11     (3) On all over $67,390 $85,020, 8.5 8 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 Code disregarding income or loss flowing from a 
 26.30  corporation having a valid election for the taxable year under 
 26.31  section 1362 of the Internal Revenue Code but which is not an 
 26.32  "S" corporation under section 290.9725 and 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, clauses clause (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, 1991 1999, 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, 1990 1998, and before January 
 27.18  1, 1992 2000.  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 "1990 1998" shall be substituted for the 
 27.28  word "1987 1992."  For 1991 2000, the commissioner shall then 
 27.29  determine the percent change from the 12 months ending on August 
 27.30  31, 1990 1998, to the 12 months ending on August 31, 1991 1999, 
 27.31  and in each subsequent year, from the 12 months ending on August 
 27.32  31, 1990 1998, 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 exceeds has 
 30.16  been offered in compliance with the inflation protection 
 30.17  requirements of the long-term care insurance model regulation 
 30.18  cited under section 7702B(g)(2)(A)(i)(x) of the Internal Revenue 
 30.19  Code 62S.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  a dependent qualifying 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 
 31.31  dependent qualifying 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 to seven 6.5 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; and 
 33.9      (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 by 
 33.30  section 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 as 
 34.9   provided by section 290.01, subdivision 19b, clauses (11) and 
 34.10  (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" equals seven 6.5 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) seven 6.5 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 as 
 35.20  provided by section 290.01, subdivision 19a, clauses (5), (6), 
 35.21  and (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 corporation does business both within and 
 37.6   without Minnesota, and apportions 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 OR BUSINESS INCOME; GENERAL RULE.] All 
 37.19  income of a unitary business is subject to apportionment except 
 37.20  nonbusiness income.  Income derived from carrying on a trade or 
 37.21  a unitary business must be assigned to this state if the trade 
 37.22  or unitary 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  a trade or unitary business is carried on exclusively within or 
 37.28  without this state:  
 37.29     (a) A trade or unitary 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) A trade or unitary 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 to farm income 
 38.21  subject 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 which are of mutual benefit, dependent upon, or 
 38.27  contributory to one another, individually or as a group result 
 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 for 
 41.23  which allocation of income within and without this state is 
 41.24  required, if the taxpayer has any income not connected with the 
 41.25  trade or business carried on partly within and partly without 
 41.26  this state that income must be allocated under subdivision 2.  
 41.27  Intangible property is employed in a trade or business if the 
 41.28  owner of the property holds it as a means of furthering the 
 41.29  trade 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) 70 80 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) 15 10 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) 15 10 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) 70 80 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) 15 10 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) 15 10 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, 
 43.32  except that a corporation which either: 
 43.33     (1) is a financial institution to which either section 585 
 43.34  or section 593 of the Internal Revenue Code applies; or 
 43.35     (2) has a wholly owned subsidiary as described in section 
 43.36  1361(b)(3)(B) of the Internal Revenue Code which is a financial 
 44.1   institution as described above 
 44.2   is 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; or 
 46.13     (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, 1997 1998. 
 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, 
 48.18  1997 1998. 
 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" are means 
 59.12  services authorized or required to be performed by 
 59.13  a "hospital" hospital under chapter 144 and regulations rules 
 59.14  thereunder or under the applicable licensure law of any other 
 59.15  jurisdiction.  This exemption does 
 59.16     (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 exemption 
 60.7   does These 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 exemption 
 60.13  does These 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 does These 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 by way of gift or by any other 
 63.27  manner or by any other means whatsoever, 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 
 63.36  a husband and wife or parent and child individuals, 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  subdivision 6 1 determine that the revenues raised from the sum 
 68.18  of all the taxes authorized by referendum under this subdivision 
 68.19  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 money or to perform or refrain from performing 
 69.24  an act that 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 placed 
 71.34  into inventory after January 1, 1987, pull-tab deals or games; 
 71.35  and (2) tipboards purchased and placed into inventory after June 
 71.36  30, 1988 tipboard deals or games; and (3) items listed in 
 72.1   section 297E.01, subdivision 8, clauses (4) and (5), at the rate 
 72.2   of 9.5 8.5 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 is 1.9 1.7 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 to 1.9 1.7 percent of the face value of the unsold 
 74.13  pull-tab or tipboard tickets, provided that the refund or credit 
 74.14  will be 1.95 1.8 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 February 1999 2000 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      $700,000                            1.9 1.7 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 plus 3.8 
 75.7                                          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 plus 5.7 
 75.11                                         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 DEBT DEDUCTION REFUND.] 
 75.22  Claims for refund must be filed with the commissioner within one 
 75.23  year of during the one-year period beginning with the timely 
 75.24  filing date of 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; and 
 78.24     (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, and 1999, 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).  Health 
 80.32  maintenance organizations, community integrated service 
 80.33  networks, and nonprofit health service plan corporations that 
 80.34  have met the cost containment goals established under section 
 80.35  62J.04 in the individual and small employer market for calendar 
 80.36  year 1996 are exempt from payment of the tax imposed under this 
 81.1   section for premiums paid after March 30, 1997, and before April 
 81.2   1, 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 year 1998 are 
 81.13  exempt from payment of the tax imposed under this section for 
 81.14  premiums paid after March 30, 1999, and before January 1, 
 81.15  2000 during the calendar year.  
 81.16     (i) For calendar years after 1999 2001, 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, 1999 
 81.19  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 company as defined 
 83.5   in 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 shall 
 84.6   assist the commissioner of revenue in activities related to 
 84.7   collection of the health care provider tax required under Laws 
 84.8   1992, chapter 549, article 9.  Upon the request of the 
 84.9   commissioner or 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 of 
 84.20  revenue with data on gross revenue and other information 
 84.21  required for the commissioner to implement sections 295.50 to 
 84.22  295.58; 
 84.23     (3) intentional failure to pay the health care provider tax 
 84.24  required 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 297H and 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 a 
 88.27  patient or consumer" includes goods and services provided in 
 88.28  connection with independent medical examinations under section 
 88.29  65B.56 or other examinations for purposes of litigation or 
 88.30  insurance 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 calendar years year: 
 89.13     (1) 1998 and, 1999 shall 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 extend 
 89.16  the reduced tax rate of 1.5 percent for gross revenues received 
 89.17  on or after January 1, 2000, and before January 1, 2002, if the 
 89.18  commissioner of finance determines that the health care access 
 89.19  fund structural balance projected for fiscal year 2001 will 
 89.20  remain positive, prior to any increase of the one percent 
 89.21  premium tax under section 60A.15, subdivision 1, paragraph (h), 
 89.22  and prior to any tax expenditures related to the increase in the 
 89.23  maximum tax credit for research expenses under section 295.53, 
 89.24  subdivision 4a, as amended by Laws 1997, chapter 225 2001; 
 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 Minnesota to a patient who is not domiciled in 
 91.4   Minnesota; 
 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 by a post-secondary an 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; and 
 91.36     (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 return at 
 92.29  the rate specified in section 270.75 whichever 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 the actual gross revenues received during 
 92.34  the month previous 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 return at 
 93.15  the rate specified in section 270.75 whichever 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 the actual gross revenues received during 
 93.20  the quarter previous 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  in section 273.13, subdivision 32 2, 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. 
 95.5   As provided by section 273.13, subdivision 32, the governor 
 95.6   shall recommend to the legislature uses The 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) in cases 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) ten seven percent of the value in the 
109.29  preceding assessment, or (2) one-fourth 15 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 least 35 45 years old at the time of the improvement and (2) 
110.13  either 
110.14     (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, 
110.16  or $300,000. 
110.17     (b) if the estimated market value of the house is over 
110.18  $150,000 market value but is less than $300,000 on January 2 of 
110.19  the current year, the property qualifies if 
110.20     (i) it is located in a city or town in which 50 percent or 
110.21  more of the owner-occupied housing units were constructed before 
110.22  1960 based upon the 1990 federal census, and 
110.23     (ii) the city or town's median family income based upon the 
110.24  1990 federal census is less than the statewide median family 
110.25  income based upon the 1990 federal census, or 
110.26     (c) if the estimated market value of the house is $300,000 
110.27  or more on January 2 of the current year, the property qualifies 
110.28  if 
110.29     (i) it is located in a city or town in which 45 percent or 
110.30  more of the homes were constructed before 1940 based upon the 
110.31  1990 federal census, and 
110.32     (ii) it is located in a city or town in which 45 percent or 
110.33  more of the housing units were rental based upon the 1990 
110.34  federal census, and 
110.35     (iii) the city or town's median value of owner-occupied 
110.36  housing units based upon the 1990 federal census is less than 
111.1   the statewide median value of owner-occupied housing units based 
111.2   upon 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.  Any 
111.21  improvement The 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 granted for an 
112.13  improvement by 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, at 
112.23  which time an amount equal to 20 percent of the qualifying value 
112.24  shall be added back in each of the five subsequent assessment 
112.25  years.  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 from up to 
113.20  three separate multiple improvements to the homestead.  The 
113.21  application shall state, in clear language, that If more than 
113.22  three improvements are made to the qualifying property, a 
113.23  taxpayer may choose which three improvements are eligible, 
113.24  provided that after the taxpayer has made the choice and any 
113.25  valuation attributable to those improvements has been excluded 
113.26  from 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 property must need 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 of 1.7 1.6 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 of 0.35 0.33 
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 of 0.8 0.75 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 of 1.25 1.15 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 of 1.25 1.15 
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; 
134.16  and 
134.17     (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 5 
136.5   property as identified in subdivision 31, clause (1), is class 
136.6   3a.  Each parcel of real property has a class rate of 2.45 2.25 
136.7   percent of the first tier of market value, and 3.5 3.25 percent 
136.8   of the remaining market value, except that in the case of 
136.9   contiguous parcels of commercial and industrial property 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 the 
136.14  case of utility property owned by one person or entity, only one 
136.15  parcel in each county has a reduced class rate on the first tier 
136.16  of 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  3b and has a class rate of 2.3 percent of the first $50,000 of 
136.34  market value and 3.5 percent of the remainder, except that for 
136.35  employment property located in a border city enterprise zone 
136.36  designated pursuant to section 469.168, subdivision 4, paragraph 
137.1   (c),.  The class rate of the first tier of market value and the 
137.2   class rate of the remainder is rates 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  equal to 85 percent of to 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 to 85 
137.25  percent of the 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 of 2.5 2.25 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 of 1.7 1.6 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 of 1.25 1.15 percent on the 
142.11  first $75,000 $78,000 of market value and a class rate of 1.7 
142.12  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 of 1.8 1.6 percent of 
145.20  market value, except that (i) for each parcel of seasonal 
145.21  residential recreational property not used for commercial 
145.22  purposes the first $75,000 of market value has a class rate of 
145.23  1.25 percent, and the market value that exceeds $75,000 has a 
145.24  class rate of 2.2 percent has the same class rates as class 4bb 
145.25  property, (ii) manufactured home parks assessed under clause (5) 
145.26  have a the same class rate of two percent as 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 portion 
146.6   of any structure located within a city that was converted from 
146.7   nonresidential 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, but 
146.11  before January 1, 2003; and 
146.12     (4) the conversion involved an investment of at least 
146.13  $25,000 per residential unit. 
146.14     Class 4e property has a class rate of 2.3 percent, provided 
146.15  that a structure is eligible for class 4e classification only in 
146.16  the 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 electric 
148.10  generating, transmission, or distribution system or a pipeline 
148.11  system transporting or distributing water, gas, crude oil, or 
148.12  petroleum products or mains and pipes used in the distribution 
148.13  of steam or hot or chilled water for heating or cooling 
148.14  buildings, 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 of 3.5 3.25 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.  [EDUCATION HOMESTEAD CREDIT 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 education homestead credit local tax rate for the 
148.31  district.  The 
148.32     Subd. 1a.  [EDUCATION HOMESTEAD CREDIT.] Each county 
148.33  auditor shall then determine a general education homestead 
148.34  credit for each homestead within the county equal to 68 66.2 
148.35  percent for taxes payable in 1999 and 69 96 percent for taxes 
148.36  payable in 2000 and thereafter of the general education 
149.1   homestead credit local tax 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. 
149.9      Subd. 1a.  [CREDIT PERCENTAGE REDUCTION.] If the general 
149.10  education levy target for fiscal year 2000 or 2001 is increased 
149.11  by another law enacted prior to the 1999 legislative session, 
149.12  the commissioner of revenue shall adjust the percentage rates of 
149.13  the education homestead credit for the corresponding taxes 
149.14  payable year by multiplying the percentage rate by the ratio of 
149.15  the prior general education levy target to the current general 
149.16  education levy target.  If an adjustment is made under this 
149.17  section for fiscal year 2001, the adjusted rate shall remain in 
149.18  effect 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 year 1998 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 
155.9   county in which the property is located school districts within 
155.10  the county, and 
155.11     (ii) the other remaining 50 percent must be distributed to 
155.12  the school districts within the county as 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" equals five three 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, 1999 2001. 
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; and 
168.31     (3) one plus a percentage equal to the percentage increase 
168.32  in the taxable market value of the jurisdiction due to new 
168.33  construction of class 3 and class 5 property, as defined in 
168.34  section 273.13, subdivisions 24 and 31, for the most recent year 
168.35  for 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 tax levied by the 
170.5   metropolitan council levy limit for general purposes for taxes 
170.6   payable in 2000 and thereafter shall not exceed the product of:  
170.7   (1) the metropolitan council's property tax levy limitation for 
170.8   general purposes for the previous year determined under this 
170.9   subdivision multiplied by (2) the lesser of 
170.10     (i) an index for market valuation changes equal to the 
170.11  total market valuation of all taxable property located within 
170.12  the metropolitan area for the current taxes payable year divided 
170.13  by the total market valuation of all taxable property located 
170.14  within the metropolitan area for the previous taxes payable 
170.15  year; 
170.16     (ii) an index equal to the implicit price deflator for 
170.17  government consumption expenditures and gross investment for 
170.18  state and local governments for the most recent month for which 
170.19  data are available divided by the same implicit price deflator 
170.20  for the same month of the previous year; or 
170.21     (iii) 103 percent. 
170.22     (c) For the purpose of determining the metropolitan 
170.23  council's property tax levy limitation for general purposes, 
170.24  "total market valuation" means the total market valuation of all 
170.25  taxable property within the metropolitan area without valuation 
170.26  adjustments for fiscal disparities (chapter 473F), tax increment 
170.27  financing (sections 469.174 to 469.179), and high voltage 
170.28  transmission 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 fund the amount, 
170.35  if any, provided for under subdivision 4, and the 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   the following amount for the years specified:  
171.10     (a)(1) for taxes payable in 1996, 50 percent of (i) the 
171.11  metropolitan mosquito control commission's property tax levy for 
171.12  taxes payable in 1995 multiplied by (ii) an index for market 
171.13  valuation changes equal to the total market valuation of all 
171.14  taxable property located within the metropolitan area for the 
171.15  current taxes payable year divided by the total market valuation 
171.16  of all taxable property located in the metropolitan area for the 
171.17  previous taxes payable year; and 
171.18     (2) for taxes payable in 1997 and subsequent years, the 
171.19  product of (i) the property tax levy limit under this 
171.20  subdivision for the previous year multiplied by (ii) an index 
171.21  for market valuation changes equal to the total market valuation 
171.22  of all taxable property located within the metropolitan area for 
171.23  the current taxes payable year divided by the total market 
171.24  valuation of all taxable property located in the metropolitan 
171.25  area for the previous taxes payable year. 
171.26     For the purposes of this subdivision, "total market 
171.27  valuation" means the total market valuation of all taxable 
171.28  property within the metropolitan area without valuation 
171.29  adjustments for fiscal disparities under chapter 473F, tax 
171.30  increment financing under sections 469.174 to 469.179, and high 
171.31  voltage transmission lines under section 273.425 levy 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 be 
172.1   received in 1996, the fund's homestead and agricultural credit 
172.2   base shall equal 50 percent of the metropolitan mosquito control 
172.3   commission's certified homestead and agricultural credit aid for 
172.4   1995, determined under section 273.1398, subdivision 2, less any 
172.5   permanent 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  exceeds 2 mills .0063 percent of taxable market value.  The 
172.15  proceeds 
172.16     (b) .0048 percent of taxable market value of that tax 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 1997 and 1998 through 2000, payable in 1998 and 1999 through 
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   1997 and 1998 through 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 November 24 17 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, will 
177.22  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.  It In 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  meeting and if 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   November 27 20 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  advertisement for cities and counties must 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  November 29 19 and December 20 10, 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 least five three business days but no more than 14 seven 
187.18  business days after the initial hearing.  A continuation hearing 
187.19  may not be held later than December 20 10 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 the first Thursday third Tuesday in December November 
187.25  each year, and may hold additional initial hearings on other 
187.26  dates before December 20 10 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 the third 
187.29  Tuesday first Thursday in December.  If the third Tuesday in 
187.30  December falls on December 21, the county's continuation hearing 
187.31  shall 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, the first and 
188.22  second Mondays fourth 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 towns and, 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 the second 
191.1   fourth Tuesday of December November 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 county 
195.16  shall have its homestead and agricultural credit aid permanently 
195.17  reduced by an amount equal to one-third of the additional amount 
195.18  received by the county under section 477A.03, subdivision 2, 
195.19  paragraph (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 in the eighth a 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 general 
200.30  fund 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 the county state treasurer shall 
201.16  then refund accordingly.  The county state 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 housing 
204.15  district, 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, or 
206.17  a facility used for social, recreational, or conference purposes 
206.18  and not primarily for conducting the business of the 
206.19  municipality.  
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 may 
213.21  require a development authority to transfer available increments 
213.22  for any of its tax increment financing districts in the city to 
213.23  make up an insufficiency in another district in the city, 
213.24  regardless of whether the district was established by the 
213.25  development authority or another development authority.  
213.26  Notwithstanding any law to the contrary, increments transferred 
213.27  under this authority must be spent to pay preexisting 
213.28  obligations.  "Development authority" for this purpose means any 
213.29  authority 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; or 
214.19     (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   tax levied by amount 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 to the 
215.15  value of the land or the 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 DISTRICT ABATEMENT PROCEDURE ABATEMENTS.] 
215.20  Notwithstanding the amounts in subdivision 2, a school district 
215.21  that grants an abatement under this section must limit the 
215.22  abatement for any property to not more than an amount equal to 
215.23  the product of:  (1) the property's net tax capacity, and (2) 
215.24  the difference between the district's total tax rate for that 
215.25  year and one-half of the general education tax rate for that 
215.26  year.  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 
215.32  other than a school district may 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 one 
216.7   year at a time.  Once a school district has authorized an 
216.8   abatement for a property, it may reauthorize the abatement in 
216.9   any subsequent year for the next seven years, or nine years if 
216.10  provided in the original abatement agreement.  This prohibition 
216.11  does not apply to improvements added after and not subject to 
216.12  the 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 than March August 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  grants or pooling authority under 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, 
218.2   2001 2002. 
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 the 
223.13  county treasurer of the tax certificate given upon tax sale, in 
223.14  case the lands have not been redeemed, the tax purchaser has the 
223.15  right to pay the principal and interest then in default upon the 
223.16  land sale certificate as its assignee.  To redeem from a tax 
223.17  sale, the person redeeming must pay the county treasurer, for 
223.18  the holder and owner of the tax sale certificate, in addition to 
223.19  all sums required to be paid in other cases, all amounts paid by 
223.20  the holder and owner for interest and principal upon the land 
223.21  sale certificate, with interest at 12 percent per year.  When 
223.22  the director receives the tax certificate with the county 
223.23  auditor's certificate of the expiration of the time for 
223.24  redemption, and the county treasurer's receipt for all 
223.25  delinquent interest and penalty on the land sale certificate, 
223.26  the director shall issue the holder and owner of the tax 
223.27  certificate a special certificate with the same terms and the 
223.28  same 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, as hereinafter provided 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 property shall 
224.4   are only be eligible 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 of less 
224.22  than $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 as herein provided 
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 payment shall must 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  remaining shall be is payable in four equal annual installments; 
224.34  and 
224.35     (b) (d) The amounts entered in judgment shall bear 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 county wherein in 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 amount hereinbefore provided, 
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, and shall thereby waive also 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 agree therein to 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 offer shall must 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 estate situate located in 
225.35  .................... county, Minnesota, to-wit: 
225.36  .............................. Upon which that 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 $...... and hereby waive all irregularities in the tax 
226.6   proceedings affecting such these taxes and any defense or 
226.7   objection which I may have thereto to them, and direct judgment 
226.8   to be entered for the amount hereby confessed amount stated 
226.9   above, less minus the sum of $............, hereby tendered to 
226.10  be paid with this document, being which is one-tenth of the 
226.11  amount of said the taxes, costs, penalty, and interest; stated 
226.12  above.  I agree to pay the balance of said the 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  unpaid from time to time, said.  I agree to pay the installments 
226.16  and interest to be paid on 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  contest such the taxes under Minnesota Statutes 1941, sections 
226.21  278.01 to 278.13. 
226.22     Dated this .............., ......." 
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 SALE FORM.] 
226.26  All parcels of land bid in at the same tax judgment sale and 
226.27  having the same period of redemption shall be covered by a 
226.28  single posted notice, but a separate notice may be posted for 
226.29  any parcel which may be omitted.  Such The 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 
227.4   shall be is 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 persons interested having an interest in the lands 
227.9   hereinafter described in this notice: 
227.10     You are hereby notified that the parcels of land 
227.11  hereinafter described, situated in this notice and located in 
227.12  the county of ................................, state of 
227.13  Minnesota, were bid in for the state on the 
227.14  .........................  day of ......................., 
227.15  ......., at the tax judgment sale of land for delinquent taxes 
227.16  for the year .......; that the legal descriptions and tax parcel 
227.17  identification numbers of such parcels and names of the 
227.18  taxpayers and fee owners and in addition those parties who have 
227.19  filed their addresses pursuant to section 276.041, and the 
227.20  amount necessary to redeem as of the date hereof and, at the 
227.21  election of the county auditor, the current filed addresses of 
227.22  any 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   and in Addition 
228.1    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    Date Hereof
228.6                                                    of Notice
228.7    ................       ...........    ......    ............
228.8    ................       ...........    ......    ............
228.9      That the time for redemption of such lands from such sale 
228.10  will expire 60 days after service of notice and the filing of 
228.11  proof thereof in my office, as provided by law.  The redemption 
228.12  must be made in my office.  
228.13    FAILURE TO REDEEM SUCH THE LANDS PRIOR TO THE EXPIRATION 
228.14        OF REDEMPTION WILL RESULT IN THE LOSS OF THE LAND AND 
228.15        FORFEITURE OF SAID LAND TO THE STATE OF MINNESOTA. 
228.16     Inquiries as to the these proceedings set forth above can 
228.17  be made to the County Auditor for the ............... County of 
228.18  ..............., 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)."  
228.28     Such The notice shall must be posted by the auditor in the 
228.29  auditor's office, subject to public inspection, and shall must 
228.30  remain so posted until at least one week after the date of the 
228.31  last publication of notice, as hereinafter provided in this 
228.32  section.  Proof of such posting shall must 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 of such the notice affidavit, as provided 
229.2   by law, shall must be filed in the office of the county 
229.3   auditor.  A single published notice shall be sufficient for all 
229.4   may include parcels of land bid in at the same different tax 
229.5   judgment sale sales, having the same period but included parcels 
229.6   must have a common year for expiration of redemption, and 
229.7   covered by a notice or notices kept posted during the time of 
229.8   the 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) Forthwith Immediately 
229.12  after the commencement of such publication 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 of such the notice of expiration of redemption for 
229.16  service upon on the persons in possession of all parcels of such 
229.17  land as are actually 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 receipt thereof of the notice, 
229.21  the sheriff or other person serving the notice shall make such 
229.22  investigation investigate as may be necessary to ascertain 
229.23  whether or not the parcels covered by such the notice are 
229.24  actually occupied parcels, and shall serve a copy of such the 
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.  Such The return shall 
230.2   must be made upon on a copy of such the notice and shall be 
230.3   is prima facie evidence of the facts therein stated 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, such fees and mileage for service on persons 
230.7   in possession as are prescribed by law for such service in other 
230.8   cases, and shall also receive such compensation 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 mileage shall must 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 taxes shall must 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 board may consider considers 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 within 90 60 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 within 90 60 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 for one year six 
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 
232.10  shall must be conducted by the county auditor at the county seat 
232.11  of the county in which the parcels lie, provided except 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 parcels shall 
232.14  must be sold for cash only and at not less than the appraised 
232.15  value, unless the county board of the county shall have has 
232.16  adopted a resolution providing for their sale on terms, in which 
232.17  event the resolution shall control controls with respect thereto 
232.18  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, thereupon and the balance 
232.21  shall must 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.  No Standing timber or timber 
232.26  products shall must 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 value shall must be allocated between 
232.33  the land and the timber in proportion to the their respective 
232.34  appraised values thereof, and no.  In that case, standing timber 
232.35  or timber products shall must 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   value thereof of 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 sale herein provided for shall must commence 
233.20  at such the time as determined by the county board of the county 
233.21  wherein such in which the parcels lie, shall direct are 
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 a less sum less than the 
233.25  appraised value, until all of the parcels of land shall have 
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 value thereof, except that if the person could have 
233.29  repurchased a parcel of property under section 282.012 or 
233.30  282.241, that person shall not be allowed to may 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 all delinquent taxes 
233.33  and, assessments, penalties, interest, and costs due at the time 
233.34  of forfeiture computed under section 282.251, together with 
233.35  penalties, interest, and costs that accrued or would have 
233.36  accrued if the parcel had not forfeited to the state and any 
234.1   special assessments for improvements certified as of the date of 
234.2   sale.  Said The sale shall must continue until all such 
234.3   the parcels are sold or until the county board shall order 
234.4   orders a reappraisal or shall withdraw withdraws any or all such 
234.5   of the parcels from sale.  Such The 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 values of such.  The added lands must 
234.8   be:  (1) parcels of land as shall that have become forfeited and 
234.9   classified as nonconservation since the commencement of any 
234.10  prior sale or such; (2) parcels as shall that have been 
234.11  reappraised, or such; (3) parcels as shall that have been 
234.12  reclassified as nonconservation; or such (4) other parcels as 
234.13  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 as hereinafter provided for the 
234.16  publication of the original list, provided that any.  Parcels 
234.17  added to such the list shall must 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  parcels of such lands as that are offered and not immediately 
234.21  sold shall, continue to be held in trust by the state for the 
234.22  taxing districts interested in each of said the 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 board may 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 upon such the parcel, and may 
234.33  provide for maintenance of tax-forfeited lands, if it is 
234.34  determined by the county board that such repairs or, 
234.35  improvements, or maintenance are necessary for the operation, 
234.36  use, preservation and safety thereof; and, of the building or 
235.1   structure.  If so authorized by the county board, the county 
235.2   auditor may insure any such the 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 persons therein employed 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   of such the building or structure.  Such The county auditor may, 
235.10  with the approval of the county board, provide for the 
235.11  demolition of any such the 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  materials therefrom from the building or structure.  Such The 
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 of such the personal property, salvaged materials, of 
235.19  timber or other products, or leases made under this law shall 
235.20  must be deposited in the forfeited tax sale fund and shall must 
235.21  be distributed in the same manner as if the parcel had been sold.
235.22     Such The county auditor, with the approval of the county 
235.23  board, may provide for the demolition of any structure or 
235.24  structures on tax-forfeited lands, if in the opinion of the 
235.25  county board, the county auditor, and the land commissioner, if 
235.26  there be is one, the sale of such the land with such the 
235.27  structure or structures thereon on it, or the continued 
235.28  existence of such the structure or structures by 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 of such the 
235.32  tax-forfeited lands, or if the demolition of such the structure 
235.33  or structures will aid in disposing of such the 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 grading thereof of the land by 
236.2   filling or the removal of any surplus material therefrom, and 
236.3   where from it.  If the physical condition of forfeited lands is 
236.4   such that a reasonable grading thereof of the lands is necessary 
236.5   for the protection and preservation of the property of any 
236.6   adjoining owner, such the adjoining property owner or owners may 
236.7   make application apply to the county board to have such the 
236.8   grading done.  If, after considering said the application, the 
236.9   county board believes that such the grading will enhance the 
236.10  value of such the forfeited lands commensurate with the cost 
236.11  involved, it may approve the same it, and any such the work 
236.12  shall must be performed under the supervision of the county or 
236.13  city engineer, as the case may be, and the expense thereof paid 
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, and shall must be first used by the 
236.22  municipal subdivision to retire any indebtedness then existing 
236.23  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 of any products therefrom from 
236.29  the forfeited land, shall must be apportioned by the county 
236.30  auditor to the taxing districts interested therein in the land, 
236.31  as follows: 
236.32     (1) Such the portion as may be required 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 of such the parcel to the 
236.36  state, but not exceeding the amount certified by the clerk of 
237.1   the municipality, shall must be apportioned to the municipal 
237.2   subdivision entitled thereto to it; 
237.3      (2) Such the portion as may be required 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 of such the 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, shall must 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) Such the portion of the remainder as may be required to 
237.13  discharge any special assessment chargeable against such the 
237.14  parcel for drainage or other purpose whether due or deferred at 
237.15  the time of forfeiture, shall must be apportioned to the 
237.16  municipal subdivision entitled thereto to it; and 
237.17     (4) any balance shall must 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.  It shall must 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 authority 
237.30  under paragraph (a) or (b) (iii) Any balance remaining shall 
237.31  must be apportioned as follows:  county, 40 percent; town or 
237.32  city, 20 percent; and school district, 40 percent, and if the 
237.33  board avails itself of the authority under paragraph (a) or (b) 
237.34  the balance remaining shall be apportioned among the county, 
237.35  town or city, and school district in the proportions in this 
237.36  paragraph above stated, provided, however, that in unorganized 
238.1   territory that portion which should would have accrued to the 
238.2   township shall must 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 costs shall must 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, shall must be in the amount 
238.18  determined by the county board.  The county auditor shall must 
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 help that may 
238.24  be needed by the county auditor or land commissioner shall must 
238.25  be in the amount determined by the county board.  All 
238.26  compensation provided for herein shall be in 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 282.014 shall 
238.29  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 amount thereof of 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 of such the disbursements shall must 
239.8   be charged to the account of the taxing districts interested in 
239.9   such parcels forfeited 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 said 
239.15  "Forfeited Tax Sale Fund," the authorities duly charged with the 
239.16  execution of responsible for carrying out the duties imposed by 
239.17  sections 282.01 to 282.13, at their discretion, may expend 
239.18  moneys in repairing from 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, and to cut down, otherwise destroy or eradicate noxious 
239.24  weeds on all tax-forfeited lands.  In any year, the money to be 
239.25  expended for the cutting down, destruction or eradication of 
239.26  noxious weeds shall not exceed in amount more than ten percent 
239.27  of the net proceeds of said "Forfeited Tax Sale Fund" during the 
239.28  preceding calendar year, or $10,000, whichever is the lesser 
239.29  sum, 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 condemn such the 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, such repurchase shall be is 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 that thereby by repurchase undue 
240.16  hardship or injustice resulting from the forfeiture will be 
240.17  corrected, or that permitting such the repurchase will promote 
240.18  the use of such the 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 repurchase shall 
240.24  be is subject to any easement, lease, or other encumbrance 
240.25  granted by the state prior thereto before the repurchase, and if 
240.26  said the land is located within a restricted area established by 
240.27  any county under Laws 1939, chapter 340, such the repurchase 
240.28  shall must not be permitted unless said the resolution with 
240.29  respect thereto approving 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 repurchase contract approved application received 
241.3   after July 1, 1985.  The fee shall must be paid at the time of 
241.4   repurchase application and shall must 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     No such refundment refund shall be granted unless an 
241.19  application therefor shall be duly for refund is approved and 
241.20  presented to the commissioner of revenue within two years from 
241.21  the date of such tax certificate or the 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 board is authorized to may 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 action On any reduction or 
242.21  abatement where when the reduction of taxes, costs, penalties, 
242.22  and interest exceed $10,000, the county board shall give 20 
242.23  days' 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.  If 
242.27  the school board or the municipality object to the granting of 
242.28  the reduction or abatement, the county board must refer the 
242.29  abatement or reduction to the commissioner of revenue with its 
242.30  recommendation.  The commissioner shall consider the abatement 
242.31  or 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, shall make search of the 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  to such the lot or parcel of land, and certify the result of 
243.20  such the 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 amount thereof of liens and tax sales, the year of tax 
243.24  covered by such the lien, and the date of tax sale, and the name 
243.25  of the purchaser at such tax sale.  For the purpose of 
243.26  ascertaining the current tax against such a 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 percent is an unrestricted balance in the general 
290.30  fund to 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, or 
294.25  any 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  legislation or, for an administrative rule, the head of the 
294.30  relevant 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 legislation or, for an 
295.15  administrative rule, to the head of the relevant executive 
295.16  agency 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 made 
296.27  on application of the taxpayer to the commissioner. 
296.28     (f) If an order issued under this subdivision is for an 
296.29  abatement, reduction, or refund of over $5,000, it shall be 
296.30  valid 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 who is relieved of qualifies 
299.14  for relief from a liability attributable to a substantial an 
299.15  underpayment under section 6013(e) 6015(b) of the Internal 
299.16  Revenue Code is also relieved of the state income tax liability 
299.17  on the substantial underpayment.  
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; REASONABLE 
300.23  CAUSE SUSPENSION DURING PERIOD OF DISABILITY.] If the 
300.24  taxpayer establishes reasonable cause for failing to timely file 
300.25  the return required by section 289A.08, subdivision 1, files the 
300.26  required return within ten years of the date specified in 
300.27  section 289A.18, subdivision 1, and independently verifies that 
300.28  an overpayment has been made, the commissioner shall grant a 
300.29  refund claimed by the original return, notwithstanding the 
300.30  limitations of subdivision 1 meets 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 under 
302.15  subdivision 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 the 
302.32  taxpayer pays by other means the amount due at least three 
302.33  business days before the date the payment is due.  This 
302.34  paragraph 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 of section sections 
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 in 1997 and 
303.29  1998 1999 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, 
303.35  the tax rate shall be equal to the preceding year's tax rate 
303.36  plus an amount equal to the preceding year's tax rate multiplied 
304.1   by the percentage increase in the implicit price deflator from 
304.2   the fourth quarter of the second preceding year to the fourth 
304.3   quarter of the preceding year.  "Implicit price deflator" for 
304.4   the gross national product means the implicit price deflator 
304.5   prepared by the bureau of economic analysis of the United States 
304.6   Department 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 the current year's tax rate 
304.15  determined under this subdivision.  This clause paragraph 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) 
305.29  15.4 25.4 cents per ton for distributions in 1996, 1998, 1999, 
305.30  and 2000 and 20.4 cents per ton for distributions in 1997 shall 
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  through December 31, 1998 June 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.