1st Unofficial Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to taxation; providing for payment of a sales 1.3 tax rebate; reducing certain income tax rates and 1.4 expanding certain income tax brackets; providing for 1.5 apportionment of certain income; modifying the 1.6 determination and administration of income, property, 1.7 sales, fuel, waste management, health care provider, 1.8 and other taxes; conforming with changes in federal 1.9 income tax provisions; authorizing the cities of 1.10 Proctor and New Ulm to impose sales and use taxes; 1.11 reducing the motor vehicle registration tax; providing 1.12 programs and funding for workforce development 1.13 programs; providing certain property tax exemptions 1.14 and modifying classifications; reducing the class 1.15 rates on agricultural property; authorizing issuance 1.16 of bonds for acquisition of conservation rights, by 1.17 regional rail authorities, for capital investments 1.18 related to transit, for projects in certain 1.19 municipalities, and for youth ice facilities; 1.20 authorizing and modifying payment of certain aids to 1.21 local units of government; authorizing levies by 1.22 certain political subdivisions; providing for state 1.23 funding of district courts; modifying provisions 1.24 relating to tax increment financing and local economic 1.25 development; authorizing exceptions to general law for 1.26 certain tax increment financing districts; authorizing 1.27 establishment of certain local economic development 1.28 agencies and water and sanitary sewer districts; 1.29 authorizing the metropolitan airports commission to 1.30 impose a tax on airport sales, and providing for the 1.31 use of the proceeds; modifying tax delinquency and 1.32 forfeiture provisions; adjusting the rate of the 1.33 taconite production tax and providing for use of the 1.34 proceeds; requiring tax rebates when there is a budget 1.35 surplus; authorizing the director of the office of 1.36 strategic and long-range planning to require certain 1.37 processes in relation to the Minnesota municipal 1.38 board; authorizing Chisago county to impose an 1.39 aggregate removal tax; regulating state and local 1.40 business subsidies; establishing a tobacco settlement 1.41 fund; creating an advisory task force; providing for 1.42 certain transfers of funds; appropriating money; 1.43 amending Minnesota Statutes 1998, sections 16D.09; 1.44 60A.19, subdivision 6; 92.51; 97A.065, subdivision 2; 1.45 116L.03, subdivisions 1 and 2; 168.013, subdivision 1.46 1a; 204B.135, by adding a subdivision; 256.969, by 2.1 adding a subdivision; 268.022; 270.07, subdivision 1; 2.2 270.65; 270.78; 270A.03, subdivision 2; 270A.07, 2.3 subdivision 2; 270A.08, subdivision 2; 272.02, 2.4 subdivision 1; 272.026; 272.027; 272.03, subdivision 2.5 6; 272.67, by adding a subdivision; 273.11, 2.6 subdivision 16; 273.111, by adding a subdivision; 2.7 273.124, subdivisions 1, 7, 8, 14, and by adding a 2.8 subdivision; 273.13, subdivisions 23, 24, and 31; 2.9 273.1382, subdivision 1; 273.1398, subdivisions 1a, 2, 2.10 and by adding a subdivision; 273.1399, subdivision 1; 2.11 275.066; 279.37, subdivisions 1, 1a, and 2; 281.23, 2.12 subdivisions 2, 4, and 6; 282.01, subdivisions 1, 4, 2.13 and 7; 282.04, subdivision 2; 282.05; 282.08; 282.09; 2.14 282.241; 282.261, subdivision 4, and by adding a 2.15 subdivision; 283.10; 287.01, subdivision 3, as 2.16 amended; 287.05, subdivisions 1, as amended, and 1a, 2.17 as amended; 289A.02, subdivision 7; 289A.31, 2.18 subdivision 2; 289A.40, subdivision 1a; 289A.50, 2.19 subdivision 7; 289A.55, subdivision 9; 289A.56, 2.20 subdivision 4; 290.01, subdivisions 7, 19, 19b, 31, 2.21 and by adding a subdivision; 290.06, subdivisions 2c 2.22 and 2d; 290.0671, subdivision 1; 290.0674, subdivision 2.23 1; 290.091, subdivision 2; 290.17, subdivisions 3, 4, 2.24 and 6; 290A.03, subdivision 15; 291.005, subdivision 2.25 1; 295.50, subdivisions 4 and 9b; 295.53, subdivision 2.26 1; 295.55, subdivisions 2 and 3; 295.57, by adding a 2.27 subdivision; 296A.16, by adding subdivisions; 297A.48, 2.28 by adding a subdivision; 297H.05; 298.22, subdivision 2.29 7; 298.24, subdivision 1; 298.28, subdivisions 9a and 2.30 9b; 298.296, subdivision 4; 299D.03, subdivision 5; 2.31 357.021, subdivision 1a; 373.40, subdivision 1; 2.32 375.18, subdivision 12; 375.192, subdivision 2; 2.33 383C.482, subdivision 1; 383D.41, subdivisions 1, 2, 2.34 3, and by adding subdivisions; 398A.04, subdivisions 2.35 1, 8, and 9; 398A.07, subdivision 2; 428A.11, 2.36 subdivision 6, and by adding subdivisions; 428A.13, 2.37 subdivisions 1 and 3; 428A.14, subdivision 1; 428A.15; 2.38 428A.16; 428A.17; 428A.19; 465.82, by adding a 2.39 subdivision; 469.169, subdivision 12; 469.1735, by 2.40 adding a subdivision; 469.176, subdivision 4g; 2.41 469.1763, by adding a subdivision; 469.1791, 2.42 subdivision 3; 469.1813, subdivisions 1, 2, and by 2.43 adding subdivisions; 473.39, by adding subdivisions; 2.44 473.898, subdivision 3; 475.52, subdivisions 1, 3, and 2.45 4; 475.58, by adding a subdivision; 477A.011, 2.46 subdivision 36; 477A.03, subdivision 2; 485.018, 2.47 subdivision 5; 487.02, subdivision 2; 487.32, 2.48 subdivision 3; 487.33, subdivision 5; 574.34, 2.49 subdivision 1; Laws 1988, chapter 645, section 3; Laws 2.50 1993, chapter 375, article 14, section 22, subdivision 2.51 1; Laws 1997, chapter 231, articles 1, section 19, 2.52 subdivisions 1 and 3; and 2, section 68, subdivision 2.53 3, as amended; Laws 1997, First Special Session 2.54 chapter 3, section 27; Laws 1997, Second Special 2.55 Session chapter 2, section 6; Laws 1998, chapter 389, 2.56 article 11, section 29; proposing coding for new law 2.57 in Minnesota Statutes, chapters 16A; 103F; 116J; 116L; 2.58 256B; 375; 414; and 415; repealing Minnesota Statutes 2.59 1998, sections 92.22; 116J.991; 268.975; 268.976; 2.60 268.9771; 268.978; 268.9781; 268.9782; 268.9783; 2.61 268.979; 268.98; 273.1383; 280.27; 281.13; 281.38; 2.62 284.01; 284.02; 284.03; 284.04; 284.05; 284.06; 2.63 428A.21; and 477A.05; Laws 1997, chapter 231, article 2.64 1, section 19, subdivision 2. 2.65 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.66 ARTICLE 1 2.67 SALES TAX REBATE 3.1 Section 1. [STATEMENT OF PURPOSE.] 3.2 (a) The state of Minnesota derives revenues from a variety 3.3 of taxes, fees, and other sources, including the state sales tax. 3.4 (b) It is fair and reasonable to refund the existing state 3.5 budget surplus in the form of a rebate of nonbusiness consumer 3.6 sales taxes paid by individuals in calendar year 1997. 3.7 (c) Information concerning the amount of sales tax paid at 3.8 various income levels is contained in the Minnesota tax 3.9 incidence report, which is written by the commissioner of 3.10 revenue and presented to the legislature according to Minnesota 3.11 Statutes, section 270.0682. 3.12 (d) It is fair and reasonable to use information contained 3.13 in the Minnesota tax incidence report to determine the 3.14 proportionate share of the sales tax rebate due each eligible 3.15 taxpayer since no effective or practical mechanism exists for 3.16 determining the amount of actual sales tax paid by each eligible 3.17 individual. 3.18 Sec. 2. [SALES TAX REBATE.] 3.19 (a) An individual who: 3.20 (1) was eligible for a credit under Laws 1997, chapter 231, 3.21 article 1, section 16, as amended by Laws 1997, First Special 3.22 Session chapter 5, section 35, and Laws 1997, Third Special 3.23 Session chapter 3, section 11, and Laws 1998, chapter 304, and 3.24 Laws 1998, chapter 389, article 1, section 3, and who filed for 3.25 that credit on or before June 15, 1999; or 3.26 (2) filed a 1997 Minnesota income tax return and had a tax 3.27 liability before refundable credits on that return of at least 3.28 $1 but did not file the claim for credit authorized under Laws 3.29 1997, chapter 231, article 1, section 16, as amended, and who 3.30 was not allowed to be claimed as a dependent on a 1997 federal 3.31 income tax return filed by another person; or 3.32 (3) had the property taxes payable on his or her homestead 3.33 abated to zero under Laws 1997, chapter 231, article 2, section 3.34 64, 3.35 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) Prior to payment, the commissioner of revenue shall 6.21 reduce the sales tax rebates calculated in paragraphs (b), (c), 6.22 and (d) proportionately to account for the amount of credits 6.23 described in Laws 1997, chapter 231, article 1, section 16, as 6.24 amended, that are paid on or after January 1, 1999, but before 6.25 July 1, 1999, so that the amount of sales tax rebates payable 6.26 under paragraphs (b), (c), and (d) do not exceed $1,321,000,000. 6.27 These adjustments are not rules subject to Minnesota Statutes, 6.28 chapter 14. 6.29 (g) The commissioner of revenue may begin making sales tax 6.30 rebates by August 1, 1999. Sales tax rebates not paid by 6.31 October 1, 1999, shall bear interest at the rate specified in 6.32 Minnesota Statutes, section 270.75. 6.33 (h) A sales tax rebate shall not be adjusted based on 6.34 changes to the return on which the claim for credit authorized 6.35 under Laws 1997, chapter 231, article 1, section 16, as amended, 6.36 is based that are made by order of assessment after April 15, 7.1 1999, or made by the taxpayer that are filed with the 7.2 commissioner of revenue after April 15, 1999. 7.3 (i) Individuals who filed a joint claim for credit under 7.4 Laws 1997, chapter 231, article 1, section 16, as amended, shall 7.5 receive a joint sales tax rebate. After the sales tax rebate 7.6 has been issued, but before the check has been cashed, either 7.7 joint claimant may request a separate check for one-half of the 7.8 joint sales tax rebate. 7.9 (j) The sales tax rebate is a "Minnesota tax law" for 7.10 purposes of Minnesota Statutes, section 270B.01, subdivision 8. 7.11 (k) The sales tax rebate is "an overpayment of any tax 7.12 collected by the commissioner" for purposes of Minnesota 7.13 Statutes, section 270.07, subdivision 5. For purposes of this 7.14 paragraph, a joint sales tax rebate is payable to each spouse 7.15 equally. 7.16 (l) If the commissioner of revenue cannot locate an 7.17 individual entitled to a sales tax rebate by July 1, 2001, or if 7.18 an individual to whom a sales tax rebate was issued has not 7.19 cashed the check by July 1, 2001, the right to the sales tax 7.20 rebate shall lapse and the check shall be deposited in the 7.21 general fund. 7.22 (m) Individuals entitled to a sales tax rebate pursuant to 7.23 paragraph (a), but who did not receive one, and individuals who 7.24 receive a sales tax rebate that was not correctly computed, must 7.25 file a claim with the commissioner before July 1, 2000, in a 7.26 form prescribed by the commissioner. These claims shall be 7.27 treated as if they are a claim for refund under Minnesota 7.28 Statutes, section 289A.50, subdivisions 4 and 7. 7.29 (n) The sales tax rebate is a refund subject to revenue 7.30 recapture under Minnesota Statutes, chapter 270A. The 7.31 commissioner of revenue shall remit the entire refund to the 7.32 claimant agency, which shall, upon the request of the spouse who 7.33 does not owe the debt, refund one-half of the joint sales tax 7.34 rebate to the spouse who does not owe the debt. 7.35 (o) The amount necessary to make the sales tax rebates and 7.36 interest provided in this section is appropriated from the 8.1 general fund to the commissioner of revenue in fiscal years 2000 8.2 and 2001. 8.3 (p) If a sales tax rebate check is cashed by someone other 8.4 than the payee or payees of the check, and the commissioner of 8.5 revenue determines that the check has been forged or improperly 8.6 endorsed, the commissioner may issue an order of assessment for 8.7 the amount of the check against the person or persons cashing 8.8 it. The assessment must be made within two years after the 8.9 check is cashed, but if cashing the check constitutes theft 8.10 under Minnesota Statutes, section 609.52, or forgery under 8.11 Minnesota Statutes, section 609.631, the assessment can be made 8.12 at any time. The assessment may be appealed administratively 8.13 and judicially. The commissioner may take action to collect the 8.14 assessment in the same manner as provided by Minnesota Statutes, 8.15 chapter 289A, for any other order of the commissioner assessing 8.16 tax. 8.17 (q) Notwithstanding Minnesota Statutes, sections 9.031, 8.18 16A.40, 16B.49, 16B.50, and any other law to the contrary, the 8.19 commissioner of revenue may take whatever actions the 8.20 commissioner deems necessary to pay the rebates required by this 8.21 section, and may, in consultation with the commissioner of 8.22 finance and the state treasurer, contract with a private vendor 8.23 or vendors to process, print, and mail the rebate checks or 8.24 warrants required under this section and receive and disburse 8.25 state funds to pay those checks or warrants. 8.26 (r) The commissioner may make payment of rebates required 8.27 by this section by electronic funds transfer to those 8.28 individuals who requested that their 1998 individual income tax 8.29 refund be paid through electronic funds transfer. The 8.30 commissioner may make the electronic funds transfer payments to 8.31 the same financial institution and into the same account as the 8.32 1998 individual income tax refund. 8.33 Sec. 3. [APPROPRIATIONS.] 8.34 $1,000,000 is appropriated from the general fund to the 8.35 commissioner of revenue to administer the sales tax rebate for 8.36 fiscal year 1999. Any unencumbered balance remaining on June 9.1 30, 1999, does not cancel but is available for expenditure by 9.2 the commissioner of revenue until June 30, 2001. 9.3 Sec. 4. [EFFECTIVE DATE.] 9.4 Sections 1 to 3 are effective the day following final 9.5 enactment. 9.6 ARTICLE 2 9.7 INCOME AND FRANCHISE TAXES 9.8 Section 1. Minnesota Statutes 1998, section 16D.09, is 9.9 amended to read: 9.10 16D.09 [UNCOLLECTIBLE DEBTS.] 9.11 Subdivision 1. [GENERALLY.] When a debt is determined by a 9.12 state agency to be uncollectible, the debt may be written off by 9.13 the state agency from the state agency's financial accounting 9.14 records and no longer recognized as an account receivable for 9.15 financial reporting purposes. A debt is considered to be 9.16 uncollectible when (1) all reasonable collection efforts have 9.17 been exhausted, (2) the cost of further collection action will 9.18 exceed the amount recoverable, (3) the debt is legally without 9.19 merit or cannot be substantiated by evidence, (4) the debtor 9.20 cannot be located, (5) the available assets or income, current 9.21 or anticipated, that may be available for payment of the debt 9.22 are insufficient, (6) the debt has been discharged in 9.23 bankruptcy, (7) the applicable statute of limitations for 9.24 collection of the debt has expired, or (8) it is not in the 9.25 public interest to pursue collection of the debt. The 9.26 determination of the uncollectibility of a debt must be reported 9.27 by the state agency along with the basis for that decision as 9.28 part of its quarterly reports to the commissioner of finance. 9.29 Determining that the debt is uncollectible does not cancel the 9.30 legal obligation of the debtor to pay the debt, except in the 9.31 case of a debt related to a tax liability that is canceled by 9.32 the department of revenue. 9.33 Subd. 2. [NOTIFICATION OF ACTION BY DEPARTMENT OF 9.34 REVENUE.] When the department of revenue has determined that a 9.35 debt is uncollectible and has written off that debt as provided 9.36 in subdivision 1, the commissioner of revenue must make a 10.1 reasonable attempt to notify the debtor of that action and of 10.2 the release of any liens imposed under section 270.69 related to 10.3 that debt, within 30 days after the determination has been 10.4 reported to the commissioner of finance. 10.5 Sec. 2. Minnesota Statutes 1998, section 290.01, 10.6 subdivision 7, is amended to read: 10.7 Subd. 7. [RESIDENT.] The term "resident" means (1) any 10.8 individual domiciled in Minnesota, except that an individual is 10.9 not a "resident" for the period of time that the individual is a 10.10 "qualified individual" as defined in section 911(d)(1) of the 10.11 Internal Revenue Code, if the qualified individual notifies the 10.12 county within three months of moving out of the country that 10.13 homestead status be revoked for the Minnesota residence of the 10.14 qualified individual, and the property is not classified as a 10.15 homestead while the individual remains a qualified individual; 10.16 and (2) any individual domiciled outside the state who maintains 10.17 a place of abode in the state and spends in the aggregate more 10.18 than one-half of the tax year in Minnesota, unless the 10.19 individual or the spouse of the individual is in the armed 10.20 forces of the United States, or the individual is covered under 10.21 the reciprocity provisions in section 290.081. 10.22 For purposes of this subdivision, presence within the state 10.23 for any part of a calendar day constitutes a day spent in the 10.24 state. Individuals shall keep adequate records to substantiate 10.25 the days spent outside the state. 10.26 The term "abode" means a dwelling maintained by an 10.27 individual, whether or not owned by the individual and whether 10.28 or not occupied by the individual, and includes a dwelling place 10.29 owned or leased by the individual's spouse. 10.30 Neither the commissioner nor any court shall consider 10.31 charitable contributions made by an individual within or without 10.32 the state in determining if the individual is domiciled in 10.33 Minnesota. 10.34 Sec. 3. Minnesota Statutes 1998, section 290.01, 10.35 subdivision 19b, is amended to read: 10.36 Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 11.1 individuals, estates, and trusts, there shall be subtracted from 11.2 federal taxable income: 11.3 (1) interest income on obligations of any authority, 11.4 commission, or instrumentality of the United States to the 11.5 extent includable in taxable income for federal income tax 11.6 purposes but exempt from state income tax under the laws of the 11.7 United States; 11.8 (2) if included in federal taxable income, the amount of 11.9 any overpayment of income tax to Minnesota or to any other 11.10 state, for any previous taxable year, whether the amount is 11.11 received as a refund or as a credit to another taxable year's 11.12 income tax liability; 11.13 (3) the amount paid to others, less the credit allowed 11.14 under section 290.0674, not to exceed $1,625 for each dependent 11.15 in grades kindergarten to 6 and $2,500 for each dependent in 11.16 grades 7 to 12, for tuition, textbooks, and transportation of 11.17 each dependent in attending an elementary or secondary school 11.18 situated in Minnesota, North Dakota, South Dakota, Iowa, or 11.19 Wisconsin, wherein a resident of this state may legally fulfill 11.20 the state's compulsory attendance laws, which is not operated 11.21 for profit, and which adheres to the provisions of the Civil 11.22 Rights Act of 1964 and chapter 363. For the purposes of this 11.23 clause, "tuition" includes fees or tuition as defined in section 11.24 290.0674, subdivision 1, clause (1). As used in this clause, 11.25 "textbooks" includes books and other instructional materials and 11.26 equipment used in elementary and secondary schools in teaching 11.27 only those subjects legally and commonly taught in public 11.28 elementary and secondary schools in this state. Equipment 11.29 expenses qualifying for deduction includes expenses as defined 11.30 and limited in section 290.0674, subdivision 1, clause (3). 11.31 "Textbooks" does not include instructional books and materials 11.32 used in the teaching of religious tenets, doctrines, or worship, 11.33 the purpose of which is to instill such tenets, doctrines, or 11.34 worship, nor does it include books or materials for, or 11.35 transportation to, extracurricular activities including sporting 11.36 events, musical or dramatic events, speech activities, driver's 12.1 education, or similar programs; 12.2 (4) to the extent included in federal taxable income, 12.3 distributions from a qualified governmental pension plan, an 12.4 individual retirement account, simplified employee pension, or 12.5 qualified plan covering a self-employed person that represent a 12.6 return of contributions that were included in Minnesota gross 12.7 income in the taxable year for which the contributions were made 12.8 but were deducted or were not included in the computation of 12.9 federal adjusted gross income. The distribution shall be 12.10 allocated first to return of contributions until the 12.11 contributions included in Minnesota gross income have been 12.12 exhausted. This subtraction applies only to contributions made 12.13 in a taxable year prior to 1985; 12.14 (5) income as provided under section 290.0802; 12.15 (6) the amount of unrecovered accelerated cost recovery 12.16 system deductions allowed under subdivision 19g; 12.17 (7) to the extent included in federal adjusted gross 12.18 income, income realized on disposition of property exempt from 12.19 tax under section 290.491; 12.20 (8) to the extent not deducted in determining federal 12.21 taxable income, the amount paid for health insurance of 12.22 self-employed individuals as determined under section 162(l) of 12.23 the Internal Revenue Code, except that the 25 percent limit does 12.24 not apply. If the taxpayer deducted insurance payments under 12.25 section 213 of the Internal Revenue Code of 1986, the 12.26 subtraction under this clause must be reduced by the lesser of: 12.27 (i) the total itemized deductions allowed under section 12.28 63(d) of the Internal Revenue Code, less state, local, and 12.29 foreign income taxes deductible under section 164 of the 12.30 Internal Revenue Code and the standard deduction under section 12.31 63(c) of the Internal Revenue Code; or 12.32 (ii) the lesser of (A) the amount of insurance qualifying 12.33 as "medical care" under section 213(d) of the Internal Revenue 12.34 Code to the extent not deducted under section 162(1) of the 12.35 Internal Revenue Code or excluded from income or (B) the total 12.36 amount deductible for medical care under section 213(a); 13.1 (9) the exemption amount allowed under Laws 1995, chapter 13.2 255, article 3, section 2, subdivision 3; 13.3 (10) to the extent included in federal taxable income, 13.4 postservice benefits for youth community service under section 13.5 124D.42 for volunteer service under United States Code, title 13.6 42, section 5011(d), as amended; 13.7 (11) to the extent not subtracted under clause (1), the 13.8 amount of income or gain included in federal taxable income 13.9 under section 1366 of the Internal Revenue Code flowing from a 13.10 corporation that has a valid election in effect for the taxable 13.11 year under section 1362 of the Internal Revenue Code which is 13.12 not allowed to be an "S" corporation under section 290.9725; 13.13 (12) in the year stock of a corporation that had made a 13.14 valid election under section 1362 of the Internal Revenue Code 13.15 but was not an "S" corporation under section 290.9725 is sold or 13.16 disposed of in a transaction taxable under the Internal Revenue 13.17 Code, the amount of difference between the Minnesota basis of 13.18 the stock under subdivision 19f, paragraph (m), and the federal 13.19 basis if the Minnesota basis is higher than the shareholder's 13.20 federal basis;and13.21 (13) an amount equal to an individual's, trust's, or 13.22 estate's net federal income tax liability for the tax year that 13.23 is attributable to items of income, expense, gain, loss, or 13.24 credits federally flowing to the taxpayer in the tax year from a 13.25 corporation, having a valid election in effect for federal tax 13.26 purposes under section 1362 of the Internal Revenue Code but not 13.27 treated as an "S" corporation for state tax purposes under 13.28 section 290.9725; and 13.29 (14) to the extent included in federal taxable income, 13.30 holocaust victims' settlement payments for any injury incurred 13.31 as a result of the holocaust, if received by an individual who 13.32 was persecuted for racial or religious reasons by Nazi Germany 13.33 or any other Axis regime or an heir of such a person. 13.34 Sec. 4. Minnesota Statutes 1998, section 290.01, is 13.35 amended by adding a subdivision to read: 13.36 Subd. 32. [HOLOCAUST SETTLEMENT PAYMENTS.] "Holocaust 14.1 victims' settlement payments" means: 14.2 (1) a payment received as a result of settlement of the 14.3 action entitled In re Holocaust Victims' Asset Litigation, in 14.4 United States district court for the eastern district of New 14.5 York, C.A. No. 96-4849; 14.6 (2) any amount received under the German Act Regulating 14.7 Unresolved Property Claims or any other foreign law providing 14.8 for payments for holocaust claims; and 14.9 (3) a payment received as a result of the settlement of a 14.10 holocaust claim not described in clause (1) or (2), including an 14.11 insurance claim, a claim relating to looted art or financial 14.12 assets, and a claim relating to slave labor wages. 14.13 Sec. 5. Minnesota Statutes 1998, section 290.06, 14.14 subdivision 2c, is amended to read: 14.15 Subd. 2c. [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 14.16 AND TRUSTS.] (a) The income taxes imposed by this chapter upon 14.17 married individuals filing joint returns and surviving spouses 14.18 as defined in section 2(a) of the Internal Revenue Code must be 14.19 computed by applying to their taxable net income the following 14.20 schedule of rates: 14.21 (1) On the first$19,910$29,930,65.5 percent; 14.22 (2) On all over$19,910$29,930, but not 14.23 over$79,120$100,200,87.5 percent; 14.24 (3) On all over$79,120$100,200, 8.5 percent. 14.25 Married individuals filing separate returns, estates, and 14.26 trusts must compute their income tax by applying the above rates 14.27 to their taxable income, except that the income brackets will be 14.28 one-half of the above amounts. 14.29 (b) The income taxes imposed by this chapter upon unmarried 14.30 individuals must be computed by applying to taxable net income 14.31 the following schedule of rates: 14.32 (1) On the first$13,620$17,250,65.5 percent; 14.33 (2) On all over$13,620$17,250, but not 14.34 over$44,750$56,680,87.5 percent; 14.35 (3) On all over$44,750$56,680, 8.5 percent. 14.36 (c) The income taxes imposed by this chapter upon unmarried 15.1 individuals qualifying as a head of household as defined in 15.2 section 2(b) of the Internal Revenue Code must be computed by 15.3 applying to taxable net income the following schedule of rates: 15.4 (1) On the first$16,770$21,240,65.5 percent; 15.5 (2) On all over$16,770$21,240, but not 15.6 over$67,390$85,350,87.5 percent; 15.7 (3) On all over$67,390$85,350, 8.5 percent. 15.8 (d) In lieu of a tax computed according to the rates set 15.9 forth in this subdivision, the tax of any individual taxpayer 15.10 whose taxable net income for the taxable year is less than an 15.11 amount determined by the commissioner must be computed in 15.12 accordance with tables prepared and issued by the commissioner 15.13 of revenue based on income brackets of not more than $100. The 15.14 amount of tax for each bracket shall be computed at the rates 15.15 set forth in this subdivision, provided that the commissioner 15.16 may disregard a fractional part of a dollar unless it amounts to 15.17 50 cents or more, in which case it may be increased to $1. 15.18 (e) An individual who is not a Minnesota resident for the 15.19 entire year must compute the individual's Minnesota income tax 15.20 as provided in this subdivision. After the application of the 15.21 nonrefundable credits provided in this chapter, the tax 15.22 liability must then be multiplied by a fraction in which: 15.23 (1) the numerator is the individual's Minnesota source 15.24 federal adjusted gross income as defined in section 62 of the 15.25 Internal Revenue Code disregarding income or loss flowing from a 15.26 corporation having a valid election for the taxable year under 15.27 section 1362 of the Internal Revenue Code but which is not an 15.28 "S" corporation under section 290.9725 and increased by the 15.29 additions required under section 290.01, subdivision 19a, 15.30 clauses (1) and (9), after applying the allocation and 15.31 assignability provisions of section 290.081, clause (a), or 15.32 290.17; and 15.33 (2) the denominator is the individual's federal adjusted 15.34 gross income as defined in section 62 of the Internal Revenue 15.35 Code of 1986, increased by the amounts specified in section 15.36 290.01, subdivision 19a, clauses (1), (5), (6), (7), and (9), 16.1 and reduced by the amounts specified in section 290.01, 16.2 subdivision 19b, clauses (1), (11), and (12). 16.3 Sec. 6. Minnesota Statutes 1998, section 290.06, 16.4 subdivision 2d, is amended to read: 16.5 Subd. 2d. [INFLATION ADJUSTMENT OF BRACKETS.] (a) For 16.6 taxable years beginning after December 31,19911999, the 16.7 minimum and maximum dollar amounts for each rate bracket for 16.8 which a tax is imposed in subdivision 2c shall be adjusted for 16.9 inflation by the percentage determined under paragraph (b). For 16.10 the purpose of making the adjustment as provided in this 16.11 subdivision all of the rate brackets provided in subdivision 2c 16.12 shall be the rate brackets as they existed for taxable years 16.13 beginning after December 31,19901998, and before January 16.14 1,19922000. The rate applicable to any rate bracket must not 16.15 be changed. The dollar amounts setting forth the tax shall be 16.16 adjusted to reflect the changes in the rate brackets. The rate 16.17 brackets as adjusted must be rounded to the nearest $10 amount. 16.18 If the rate bracket ends in $5, it must be rounded up to the 16.19 nearest $10 amount. 16.20 (b) The commissioner shall adjust the rate brackets and by 16.21 the percentage determined pursuant to the provisions of section 16.22 1(f) of the Internal Revenue Code, except that in section 16.23 1(f)(3)(B) the word "19901998" shall be substituted for the 16.24 word "19871992." For19911999, the commissioner shall then 16.25 determine the percent change from the 12 months ending on August 16.26 31,19901998, to the 12 months ending on August 31,19911999, 16.27 and in each subsequent year, from the 12 months ending on August 16.28 31,19901999, to the 12 months ending on August 31 of the year 16.29 preceding the taxable year. The determination of the 16.30 commissioner pursuant to this subdivision shall not be 16.31 considered a "rule" and shall not be subject to the 16.32 Administrative Procedure Act contained in chapter 14. 16.33 No later than December 15 of each year, the commissioner 16.34 shall announce the specific percentage that will be used to 16.35 adjust the tax rate brackets. 16.36 Sec. 7. Minnesota Statutes 1998, section 290.0671, 17.1 subdivision 1, is amended to read: 17.2 Subdivision 1. [CREDIT ALLOWED.] (a) An individual is 17.3 allowed a credit against the tax imposed by this chapter equal 17.4 to a percentage of earned income. To receive a credit, a 17.5 taxpayer must be eligible for a credit under section 32 of the 17.6 Internal Revenue Code. 17.7 (b) For individuals with no qualifying children, the credit 17.8 equals 1.1475 percent of the first $4,460 of earned income. The 17.9 credit is reduced by 1.1475 percent of earned income or modified 17.10 adjusted gross income, whichever is greater, in excess of 17.11 $5,570, but in no case is the credit less than zero. 17.12 (c) For individuals with one qualifying child, the credit 17.13 equals6.87.45 percent of the first $6,680 of earned income and 17.14 8.5 percent of earned income over $11,650 but less than 17.15 $12,990. The credit is reduced by4.775.13 percent of earned 17.16 income or modified adjusted gross income, whichever is greater, 17.17 in excess of $14,560, but in no case is the credit less than 17.18 zero. 17.19 (d) For individuals with two or more qualifying children, 17.20 the credit equalseight8.8 percent of the first $9,390 of 17.21 earned income and 20 percent of earned income over $14,350 but 17.22 less than $16,230. The credit is reduced by8.89.38 percent of 17.23 earned income or modified adjusted gross income, whichever is 17.24 greater, in excess of $17,280, but in no case is the credit less 17.25 than zero. 17.26 (e) For a nonresident or part-year resident, the credit 17.27 must be allocated based on the percentage calculated under 17.28 section 290.06, subdivision 2c, paragraph (e). 17.29 (f) For a person who was a resident for the entire tax year 17.30 and has earned income not subject to tax under this chapter, the 17.31 credit must be allocated based on the ratio of federal adjusted 17.32 gross income reduced by the earned income not subject to tax 17.33 under this chapter over federal adjusted gross income. 17.34 Sec. 8. Minnesota Statutes 1998, section 290.0674, 17.35 subdivision 1, is amended to read: 17.36 Subdivision 1. [CREDIT ALLOWED.] An individual is allowed 18.1 a credit against the tax imposed by this chapter in an amount 18.2 equal to the amount paid for education-related expenses for a 18.3 dependent in kindergarten through grade 12. For purposes of 18.4 this section, "education-related expenses" means: 18.5 (1) fees or tuition for instruction by an instructor under 18.6 section 120A.22, subdivision 10, clause (1), (2), (3), (4), or 18.7 (5), or by a member of the Minnesota music teachers association, 18.8 for instruction outside the regular school day or school year, 18.9 including tutoring, driver's education offered as part of school 18.10 curriculum, regardless of whether it is taken from a public or 18.11 private entity or summer camps, in grade or age appropriate 18.12 curricula that supplement curricula and instruction available 18.13 during the regular school year, that assists a dependent to 18.14 improve knowledge of core curriculum areas or to expand 18.15 knowledge and skills under the graduation rule under section 18.16 120B.02 and that do not include the teaching of religious 18.17 tenets, doctrines, or worship, the purpose of which is to 18.18 instill such tenets, doctrines, or worship; 18.19 (2) expenses for textbooks, including books and other 18.20 instructional materials and equipment used in elementary and 18.21 secondary schools in teaching only those subjects legally and 18.22 commonly taught in public elementary and secondary schools in 18.23 this state. "Textbooks" does not include instructional books 18.24 and materials used in the teaching of religious tenets, 18.25 doctrines, or worship, the purpose of which is to instill such 18.26 tenets, doctrines, or worship, nor does it include books or 18.27 materials for extracurricular activities including sporting 18.28 events, musical or dramatic events, speech activities, driver's 18.29 education, or similar programs; 18.30 (3) a maximum expense of $200 per family for personal 18.31 computer hardware, excluding single purpose processors, and 18.32 educational software that assists a dependent to improve 18.33 knowledge of core curriculum areas or to expand knowledge and 18.34 skills under the graduation rule under section 120B.02 purchased 18.35 for use in the taxpayer's home and not used in a trade or 18.36 business regardless of whether the computer is required by the 19.1 dependent's school; and 19.2 (4) the amount paid to others for transportation of a 19.3 dependent attending an elementary or secondary school situated 19.4 in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 19.5 wherein a resident of this state may legally fulfill the state's 19.6 compulsory attendance laws, which is not operated for profit, 19.7 and which adheres to the provisions of the Civil Rights Act of 19.8 1964 and chapter 363. 19.9 Sec. 9. Minnesota Statutes 1998, section 290.091, 19.10 subdivision 2, is amended to read: 19.11 Subd. 2. [DEFINITIONS.] For purposes of the tax imposed by 19.12 this section, the following terms have the meanings given: 19.13 (a) "Alternative minimum taxable income" means the sum of 19.14 the following for the taxable year: 19.15 (1) the taxpayer's federal alternative minimum taxable 19.16 income as defined in section 55(b)(2) of the Internal Revenue 19.17 Code; 19.18 (2) the taxpayer's itemized deductions allowed in computing 19.19 federal alternative minimum taxable income, but excluding: 19.20 (i) the Minnesota charitable contribution deduction; 19.21 (ii) the medical expense deduction; 19.22 (iii) the casualty, theft, and disaster loss deduction;and19.23 (iv) the impairment-related work expenses of a disabled 19.24 person; and 19.25 (v) holocaust victims' settlement payments to the extent 19.26 allowed under section 290.01, subdivision 19b; and 19.27 (3) for depletion allowances computed under section 613A(c) 19.28 of the Internal Revenue Code, with respect to each property (as 19.29 defined in section 614 of the Internal Revenue Code), to the 19.30 extent not included in federal alternative minimum taxable 19.31 income, the excess of the deduction for depletion allowable 19.32 under section 611 of the Internal Revenue Code for the taxable 19.33 year over the adjusted basis of the property at the end of the 19.34 taxable year (determined without regard to the depletion 19.35 deduction for the taxable year); 19.36 (4) to the extent not included in federal alternative 20.1 minimum taxable income, the amount of the tax preference for 20.2 intangible drilling cost under section 57(a)(2) of the Internal 20.3 Revenue Code determined without regard to subparagraph (E); 20.4 (5) to the extent not included in federal alternative 20.5 minimum taxable income, the amount of interest income as 20.6 provided by section 290.01, subdivision 19a, clause (1); 20.7 (6) amounts added to federal taxable income as provided by 20.8 section 290.01, subdivision 19a, clauses (5), (6), and (7); 20.9 less the sum of theamounts determined under thefollowing 20.10clauses (1) to (4): 20.11 (1) interest income as defined in section 290.01, 20.12 subdivision 19b, clause (1); 20.13 (2) an overpayment of state income tax as provided by 20.14 section 290.01, subdivision 19b, clause (2), to the extent 20.15 included in federal alternative minimum taxable income; 20.16 (3) the amount of investment interest paid or accrued 20.17 within the taxable year on indebtedness to the extent that the 20.18 amount does not exceed net investment income, as defined in 20.19 section 163(d)(4) of the Internal Revenue Code. Interest does 20.20 not include amounts deducted in computing federal adjusted gross 20.21 income; and 20.22 (4) amounts subtracted from federal taxable income as 20.23 provided by section 290.01, subdivision 19b, clauses (11) and 20.24 (12). 20.25 In the case of an estate or trust, alternative minimum 20.26 taxable income must be computed as provided in section 59(c) of 20.27 the Internal Revenue Code. 20.28 (b) "Investment interest" means investment interest as 20.29 defined in section 163(d)(3) of the Internal Revenue Code. 20.30 (c) "Tentative minimum tax" equals seven percent of 20.31 alternative minimum taxable income after subtracting the 20.32 exemption amount determined under subdivision 3. 20.33 (d) "Regular tax" means the tax that would be imposed under 20.34 this chapter (without regard to this section and section 20.35 290.032), reduced by the sum of the nonrefundable credits 20.36 allowed under this chapter. 21.1 (e) "Net minimum tax" means the minimum tax imposed by this 21.2 section. 21.3 (f) "Minnesota charitable contribution deduction" means a 21.4 charitable contribution deduction under section 170 of the 21.5 Internal Revenue Code to or for the use of an entity described 21.6 in section 290.21, subdivision 3, clauses (a) to (e). When the 21.7 federal deduction for charitable contributions is limited under 21.8 section 170(b) of the Internal Revenue Code, the allowable 21.9 contributions in the year of contribution are deemed to be first 21.10 contributions to entities described in section 290.21, 21.11 subdivision 3, clauses (a) to (e). 21.12 Sec. 10. Minnesota Statutes 1998, section 290.17, 21.13 subdivision 3, is amended to read: 21.14 Subd. 3. [TRADE ORBUSINESS INCOME; GENERAL RULE.] All 21.15 income of a unitary business is subject to apportionment except 21.16 nonbusiness income. Income derived fromcarrying on a trade or21.17 a unitary business must be assigned to this state if thetrade21.18orunitary business is conducted wholly within this state, 21.19 assigned outside this state if conducted wholly without this 21.20 state and apportioned between this state and other states and 21.21 countries under this subdivision if conducted partly within and 21.22 partly without this state. For purposes of determining whether 21.23 atrade orunitary business is carried on exclusively within or 21.24 without this state: 21.25 (a) Atrade orunitary business physically located 21.26 exclusively within this state is nevertheless carried on partly 21.27 within and partly without this state if any of the principles 21.28 set forth in section 290.191 for the allocation of sales or 21.29 receipts within or without this state when applied to the 21.30 taxpayer's situation result in the allocation of any sales or 21.31 receipts without this state. 21.32 (b) Atrade orunitary business physically located 21.33 exclusively without this state is nevertheless carried on partly 21.34 within and partly without this state if any of the principles 21.35 set forth in section 290.191 for the allocation of sales or 21.36 receipts within or without this state when applied to the 22.1 taxpayer's situation result in the allocation of any sales or 22.2 receipts without this state. The jurisdiction to tax such a 22.3 business under this chapter must be determined in accordance 22.4 with sections 290.014 and 290.015. 22.5 Sec. 11. Minnesota Statutes 1998, section 290.17, 22.6 subdivision 4, is amended to read: 22.7 Subd. 4. [UNITARY BUSINESS PRINCIPLE.] (a) If a trade or 22.8 business conducted wholly within this state or partly within and 22.9 partly without this state is part of a unitary business, the 22.10 entire income of the unitary business is subject to 22.11 apportionment pursuant to section 290.191. Notwithstanding 22.12 subdivision 2, paragraph (c), none of the income of a unitary 22.13 business is considered to be derived from any particular source 22.14 and none may be allocated to a particular place except as 22.15 provided by the applicable apportionment formula. The 22.16 provisions of this subdivision do not apply to farm income 22.17 subject to subdivision 5, paragraph (a), business income subject 22.18 to subdivision 5, paragraph (b) or (c), income of an insurance 22.19 company determined under section 290.35, or income of an 22.20 investment company determined under section 290.36. 22.21 (b) The term "unitary business" means business activities 22.22 or operations whichare of mutual benefit, dependent upon, or22.23contributory to one another, individually or as a groupresult 22.24 in a flow of value between them. The term may be applied within 22.25 a single legal entity or between multiple entities and without 22.26 regard to whether each entity is a sole proprietorship, a 22.27 corporation, a partnership or a trust. 22.28 (c) Unity is presumed whenever there is unity of ownership, 22.29 operation, and use, evidenced by centralized management or 22.30 executive force, centralized purchasing, advertising, 22.31 accounting, or other controlled interaction, but the absence of 22.32 these centralized activities will not necessarily evidence a 22.33 nonunitary business. Unity is also presumed when business 22.34 activities or operations are of mutual benefit, dependent upon 22.35 or contributory to one another, either individually or as a 22.36 group. 23.1 (d) Where a business operation conducted in Minnesota is 23.2 owned by a business entity that carries on business activity 23.3 outside the state different in kind from that conducted within 23.4 this state, and the other business is conducted entirely outside 23.5 the state, it is presumed that the two business operations are 23.6 unitary in nature, interrelated, connected, and interdependent 23.7 unless it can be shown to the contrary. 23.8 (e) Unity of ownership is not deemed to exist when a 23.9 corporation is involved unless that corporation is a member of a 23.10 group of two or more business entities and more than 50 percent 23.11 of the voting stock of each member of the group is directly or 23.12 indirectly owned by a common owner or by common owners, either 23.13 corporate or noncorporate, or by one or more of the member 23.14 corporations of the group. For this purpose, the term "voting 23.15 stock" shall include membership interests of mutual insurance 23.16 holding companies formed under section 60A.077. 23.17 (f) The net income and apportionment factors under section 23.18 290.191 or 290.20 of foreign corporations and other foreign 23.19 entities which are part of a unitary business shall not be 23.20 included in the net income or the apportionment factors of the 23.21 unitary business. A foreign corporation or other foreign entity 23.22 which is required to file a return under this chapter shall file 23.23 on a separate return basis. The net income and apportionment 23.24 factors under section 290.191 or 290.20 of foreign operating 23.25 corporations shall not be included in the net income or the 23.26 apportionment factors of the unitary business except as provided 23.27 in paragraph (g). 23.28 (g) The adjusted net income of a foreign operating 23.29 corporation shall be deemed to be paid as a dividend on the last 23.30 day of its taxable year to each shareholder thereof, in 23.31 proportion to each shareholder's ownership, with which such 23.32 corporation is engaged in a unitary business. Such deemed 23.33 dividend shall be treated as a dividend under section 290.21, 23.34 subdivision 4. 23.35 Dividends actually paid by a foreign operating corporation 23.36 to a corporate shareholder which is a member of the same unitary 24.1 business as the foreign operating corporation shall be 24.2 eliminated from the net income of the unitary business in 24.3 preparing a combined report for the unitary business. The 24.4 adjusted net income of a foreign operating corporation shall be 24.5 its net income adjusted as follows: 24.6 (1) any taxes paid or accrued to a foreign country, the 24.7 commonwealth of Puerto Rico, or a United States possession or 24.8 political subdivision of any of the foregoing shall be a 24.9 deduction; and 24.10 (2) the subtraction from federal taxable income for 24.11 payments received from foreign corporations or foreign operating 24.12 corporations under section 290.01, subdivision 19d, clause (11), 24.13 shall not be allowed. 24.14 If a foreign operating corporation incurs a net loss, 24.15 neither income nor deduction from that corporation shall be 24.16 included in determining the net income of the unitary business. 24.17 (h) For purposes of determining the net income of a unitary 24.18 business and the factors to be used in the apportionment of net 24.19 income pursuant to section 290.191 or 290.20, there must be 24.20 included only the income and apportionment factors of domestic 24.21 corporations or other domestic entities other than foreign 24.22 operating corporations that are determined to be part of the 24.23 unitary business pursuant to this subdivision, notwithstanding 24.24 that foreign corporations or other foreign entities might be 24.25 included in the unitary business. 24.26 (i) Deductions for expenses, interest, or taxes otherwise 24.27 allowable under this chapter that are connected with or 24.28 allocable against dividends, deemed dividends described in 24.29 paragraph (g), or royalties, fees, or other like income 24.30 described in section 290.01, subdivision 19d, clause (11), shall 24.31 not be disallowed. 24.32 (j) Each corporation or other entity, except a sole 24.33 proprietorship, that is part of a unitary business must file 24.34 combined reports as the commissioner determines. On the 24.35 reports, all intercompany transactions between entities included 24.36 pursuant to paragraph (h) must be eliminated and the entire net 25.1 income of the unitary business determined in accordance with 25.2 this subdivision is apportioned among the entities by using each 25.3 entity's Minnesota factors for apportionment purposes in the 25.4 numerators of the apportionment formula and the total factors 25.5 for apportionment purposes of all entities included pursuant to 25.6 paragraph (h) in the denominators of the apportionment formula. 25.7 (k) If a corporation has been divested from a unitary 25.8 business and is included in a combined report for a fractional 25.9 part of the common accounting period of the combined report: 25.10 (1) its income includable in the combined report is its 25.11 income incurred for that part of the year determined by 25.12 proration or separate accounting; and 25.13 (2) its sales, property, and payroll included in the 25.14 apportionment formula must be prorated or accounted for 25.15 separately. 25.16 Sec. 12. Minnesota Statutes 1998, section 290.17, 25.17 subdivision 6, is amended to read: 25.18 Subd. 6. [NONBUSINESS INCOME.]For a trade or business for25.19which allocation of income within and without this state is25.20required, if the taxpayer has any income not connected with the25.21trade or business carried on partly within and partly without25.22this state that income must be allocated under subdivision 2.25.23Intangible property is employed in a trade or business if the25.24owner of the property holds it as a means of furthering the25.25trade or business.Nonbusiness income is income of the unitary 25.26 business that cannot be apportioned by this state because of the 25.27 United States Constitution or the constitution of the state of 25.28 Minnesota and includes income that is derived from a capital 25.29 transaction that serves an investment function. Nonbusiness 25.30 income must be allocated under subdivision 2. 25.31 Sec. 13. [NONBUSINESS INCOME; LIMITATION ON ASSESSMENT OF 25.32 TAX.] 25.33 If all items of income, gain, or loss are reported by a 25.34 taxpayer as business income or loss on an original or amended 25.35 return for a tax year to which this section applies, the 25.36 commissioner of revenue shall not adjust the tax liability for 26.1 that tax year, or for any other tax year affected by a carryover 26.2 from that tax year, by treating any of the items as nonbusiness 26.3 income or loss under Minnesota Statutes, section 290.17, 26.4 subdivision 6. Any adjustment treating an item as nonbusiness 26.5 income or loss ordered by the commissioner before the effective 26.6 date of this section must be reversed if the order is subject to 26.7 administrative or judicial challenge on the effective date and 26.8 such a challenge is timely filed. The reporting of any item as 26.9 nonbusiness income, gain, or loss does not preclude the 26.10 application of this section if the taxpayer may not 26.11 constitutionally be required to treat the item as business 26.12 income, gain, or loss. 26.13 Sec. 14. [EFFECTIVE DATE.] 26.14 (a) Section 1 applies to claims written off after June 30, 26.15 1999. 26.16 (b) Section 2 is intended to clarify rather than to change 26.17 the definition of resident, and is effective for all 26.18 examinations, claims for refund, administrative appeals, and 26.19 court proceedings that are pending or begin on or after the day 26.20 following final enactment. 26.21 (c) Sections 3, 4, 5, and 7 to 12 are effective for taxable 26.22 years beginning after December 31, 1998. 26.23 (d) Section 13 is effective for tax years beginning before 26.24 January 1, 1999. 26.25 ARTICLE 3 26.26 FEDERAL UPDATE 26.27 Section 1. Minnesota Statutes 1998, section 289A.02, 26.28 subdivision 7, is amended to read: 26.29 Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically 26.30 defined otherwise, "Internal Revenue Code" means the Internal 26.31 Revenue Code of 1986, as amended through December 31,19971998. 26.32 Sec. 2. Minnesota Statutes 1998, section 290.01, 26.33 subdivision 19, is amended to read: 26.34 Subd. 19. [NET INCOME.] The term "net income" means the 26.35 federal taxable income, as defined in section 63 of the Internal 26.36 Revenue Code of 1986, as amended through the date named in this 27.1 subdivision, incorporating any elections made by the taxpayer in 27.2 accordance with the Internal Revenue Code in determining federal 27.3 taxable income for federal income tax purposes, and with the 27.4 modifications provided in subdivisions 19a to 19f. 27.5 In the case of a regulated investment company or a fund 27.6 thereof, as defined in section 851(a) or 851(g) of the Internal 27.7 Revenue Code, federal taxable income means investment company 27.8 taxable income as defined in section 852(b)(2) of the Internal 27.9 Revenue Code, except that: 27.10 (1) the exclusion of net capital gain provided in section 27.11 852(b)(2)(A) of the Internal Revenue Code does not apply; 27.12 (2) the deduction for dividends paid under section 27.13 852(b)(2)(D) of the Internal Revenue Code must be applied by 27.14 allowing a deduction for capital gain dividends and 27.15 exempt-interest dividends as defined in sections 852(b)(3)(C) 27.16 and 852(b)(5) of the Internal Revenue Code; and 27.17 (3) the deduction for dividends paid must also be applied 27.18 in the amount of any undistributed capital gains which the 27.19 regulated investment company elects to have treated as provided 27.20 in section 852(b)(3)(D) of the Internal Revenue Code. 27.21 The net income of a real estate investment trust as defined 27.22 and limited by section 856(a), (b), and (c) of the Internal 27.23 Revenue Code means the real estate investment trust taxable 27.24 income as defined in section 857(b)(2) of the Internal Revenue 27.25 Code. 27.26 The net income of a designated settlement fund as defined 27.27 in section 468B(d) of the Internal Revenue Code means the gross 27.28 income as defined in section 468B(b) of the Internal Revenue 27.29 Code. 27.30 The Internal Revenue Code of 1986, as amended through 27.31 December 31, 1986, shall be in effect for taxable years 27.32 beginning after December 31, 1986. The provisions of sections 27.33 10104, 10202, 10203, 10204, 10206, 10212, 10221, 10222, 10223, 27.34 10226, 10227, 10228, 10611, 10631, 10632, and 10711 of the 27.35 Omnibus Budget Reconciliation Act of 1987, Public Law Number 27.36 100-203, the provisions of sections 1001, 1002, 1003, 1004, 28.1 1005, 1006, 1008, 1009, 1010, 1011, 1011A, 1011B, 1012, 1013, 28.2 1014, 1015, 1018, 2004, 3041, 4009, 6007, 6026, 6032, 6137, 28.3 6277, and 6282 of the Technical and Miscellaneous Revenue Act of 28.4 1988, Public Law Number 100-647, the provisions of sections 28.5 7811, 7816, and 7831 of the Omnibus Budget Reconciliation Act of 28.6 1989, Public Law Number 101-239, the provisions of sections 28.7 1305, 1704(r), and 1704(e)(1) of the Small Business Job 28.8 Protection Act, Public Law Number 104-188, and the provisions of 28.9 sections 975 and 1604(d)(2) and (e) of the Taxpayer Relief Act 28.10 of 1997, Public Law Number 105-34, and the provisions of section 28.11 4004 of the Omnibus Consolidated and Emergency Supplemental 28.12 Appropriations Act, 1999, Public Law Number 105-277 shall be 28.13 effective at the time they become effective for federal income 28.14 tax purposes. 28.15 The Internal Revenue Code of 1986, as amended through 28.16 December 31, 1987, shall be in effect for taxable years 28.17 beginning after December 31, 1987. The provisions of sections 28.18 4001, 4002, 4011, 5021, 5041, 5053, 5075, 6003, 6008, 6011, 28.19 6030, 6031, 6033, 6057, 6064, 6066, 6079, 6130, 6176, 6180, 28.20 6182, 6280, and 6281 of the Technical and Miscellaneous Revenue 28.21 Act of 1988, Public Law Number 100-647, the provisions of 28.22 sections 7815 and 7821 of the Omnibus Budget Reconciliation Act 28.23 of 1989, Public Law Number 101-239, and the provisions of 28.24 section 11702 of the Revenue Reconciliation Act of 1990, Public 28.25 Law Number 101-508, shall become effective at the time they 28.26 become effective for federal tax purposes. 28.27 The Internal Revenue Code of 1986, as amended through 28.28 December 31, 1988, shall be in effect for taxable years 28.29 beginning after December 31, 1988. The provisions of sections 28.30 7101, 7102, 7104, 7105, 7201, 7202, 7203, 7204, 7205, 7206, 28.31 7207, 7210, 7211, 7301, 7302, 7303, 7304, 7601, 7621, 7622, 28.32 7641, 7642, 7645, 7647, 7651, and 7652 of the Omnibus Budget 28.33 Reconciliation Act of 1989, Public Law Number 101-239, the 28.34 provision of section 1401 of the Financial Institutions Reform, 28.35 Recovery, and Enforcement Act of 1989, Public Law Number 101-73, 28.36 the provisions of sections 11701 and 11703 of the Revenue 29.1 Reconciliation Act of 1990, Public Law Number 101-508, and the 29.2 provisions of sections 1702(g) and 1704(f)(2)(A) and (B) of the 29.3 Small Business Job Protection Act, Public Law Number 104-188, 29.4 shall become effective at the time they become effective for 29.5 federal tax purposes. 29.6 The Internal Revenue Code of 1986, as amended through 29.7 December 31, 1989, shall be in effect for taxable years 29.8 beginning after December 31, 1989. The provisions of sections 29.9 11321, 11322, 11324, 11325, 11403, 11404, 11410, and 11521 of 29.10 the Revenue Reconciliation Act of 1990, Public Law Number 29.11 101-508, and the provisions of sections 13224 and 13261 of the 29.12 Omnibus Budget Reconciliation Act of 1993, Public Law Number 29.13 103-66, shall become effective at the time they become effective 29.14 for federal purposes. 29.15 The Internal Revenue Code of 1986, as amended through 29.16 December 31, 1990, shall be in effect for taxable years 29.17 beginning after December 31, 1990. 29.18 The provisions of section 13431 of the Omnibus Budget 29.19 Reconciliation Act of 1993, Public Law Number 103-66, shall 29.20 become effective at the time they became effective for federal 29.21 purposes. 29.22 The Internal Revenue Code of 1986, as amended through 29.23 December 31, 1991, shall be in effect for taxable years 29.24 beginning after December 31, 1991. 29.25 The provisions of sections 1936 and 1937 of the 29.26 Comprehensive National Energy Policy Act of 1992, Public Law 29.27 Number 102-486, the provisions of sections 13101, 13114, 13122, 29.28 13141, 13150, 13151, 13174, 13239, 13301, and 13442 of the 29.29 Omnibus Budget Reconciliation Act of 1993, Public Law Number 29.30 103-66, and the provisions of section 1604(a)(1), (2), and (3) 29.31 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 29.32 shall become effective at the time they become effective for 29.33 federal purposes. 29.34 The Internal Revenue Code of 1986, as amended through 29.35 December 31, 1992, shall be in effect for taxable years 29.36 beginning after December 31, 1992. 30.1 The provisions of sections 13116, 13121, 13206, 13210, 30.2 13222, 13223, 13231, 13232, 13233, 13239, 13262, and 13321 of 30.3 the Omnibus Budget Reconciliation Act of 1993, Public Law Number 30.4 103-66, the provisions of sections 1703(a), 1703(d), 1703(i), 30.5 1703(l), and 1703(m) of the Small Business Job Protection Act, 30.6 Public Law Number 104-188, and the provision of section 1604(c) 30.7 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 30.8 shall become effective at the time they become effective for 30.9 federal purposes. 30.10 The Internal Revenue Code of 1986, as amended through 30.11 December 31, 1993, shall be in effect for taxable years 30.12 beginning after December 31, 1993. 30.13 The provision of section 741 of Legislation to Implement 30.14 Uruguay Round of General Agreement on Tariffs and Trade, Public 30.15 Law Number 103-465, the provisions of sections 1, 2, and 3, of 30.16 the Self-Employed Health Insurance Act of 1995, Public Law 30.17 Number 104-7, the provision of section 501(b)(2) of the Health 30.18 Insurance Portability and Accountability Act, Public Law Number 30.19 104-191, the provisions of sections 1604 and 1704(p)(1) and (2) 30.20 of the Small Business Job Protection Act, Public Law Number 30.21 104-188, and the provisions of sections 1011, 1211(b)(1), and 30.22 1602(f) of the Taxpayer Relief Act of 1997, Public Law Number 30.23 105-34, shall become effective at the time they become effective 30.24 for federal purposes. 30.25 The Internal Revenue Code of 1986, as amended through 30.26 December 31, 1994, shall be in effect for taxable years 30.27 beginning after December 31, 1994. 30.28 The provisions of sections 1119(a), 1120, 1121, 1202(a), 30.29 1444, 1449(b), 1602(a), 1610(a), 1613, and 1805 of the Small 30.30 Business Job Protection Act, Public Law Number 104-188, the 30.31 provision of section 511 of the Health Insurance Portability and 30.32 Accountability Act, Public Law Number 104-191, and the 30.33 provisions of sections 1174 and 1601(i)(2) of the Taxpayer 30.34 Relief Act of 1997, Public Law Number 105-34, shall become 30.35 effective at the time they become effective for federal purposes. 30.36 The Internal Revenue Code of 1986, as amended through March 31.1 22, 1996, is in effect for taxable years beginning after 31.2 December 31, 1995. 31.3 The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 31.4 1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 31.5 1616, 1617, 1704(l), and 1704(m) of the Small Business Job 31.6 Protection Act, Public Law Number 104-188, the provisions of 31.7 Public Law Number 104-117,andthe provisions of sections 313(a) 31.8 and (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 31.9 1002, 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 31.10 1087, 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 31.11 1601(f)(5) and (h), and 1604(d)(1) of the Taxpayer Relief Act of 31.12 1997, Public Law Number 105-34, the provisions of section 6010 31.13 of the Internal Revenue Service Restructuring and Reform Act of 31.14 1998, Public Law Number 105-206, and the provisions of section 31.15 4003 of the Omnibus Consolidated and Emergency Supplemental 31.16 Appropriations Act, 1999, Public Law Number 105-277, shall 31.17 become effective at the time they become effective for federal 31.18 purposes. 31.19 The Internal Revenue Code of 1986, as amended through 31.20 December 31, 1996, shall be in effect for taxable years 31.21 beginning after December 31, 1996. 31.22 The provisions of sections 202(a) and (b), 221(a), 225, 31.23 312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 31.24 (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 31.25 1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 31.26 1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 31.27 of the Taxpayer Relief Act of 1997, Public Law Number 31.28 105-34, the provisions of sections 6004, 6005, 6012, 6013, 6015, 31.29 6016, 7002, and 7003 of the Internal Revenue Service 31.30 Restructuring and Reform Act of 1998, Public Law Number 105-206, 31.31 and the provisions of section 3001 of the Omnibus Consolidated 31.32 and Emergency Supplemental Appropriations Act, 1999, Public Law 31.33 Number 105-277, shall become effective at the time they become 31.34 effective for federal purposes. 31.35 The Internal Revenue Code of 1986, as amended through 31.36 December 31, 1997, shall be in effect for taxable years 32.1 beginning after December 31, 1997. 32.2 The provisions of sections 5002, 6009, 6011, and 7001 of 32.3 the Internal Revenue Service Restructuring and Reform Act of 32.4 1998, Public Law Number 105-206, the provisions of section 9010 32.5 of the Transportation Equity Act for the 21st Century, Public 32.6 Law Number 105-178, the provisions of sections 1004, 4002, and 32.7 5301 of the Omnibus Consolidation and Emergency Supplemental 32.8 Appropriations Act, 1999, Public Law Number 105-277, and the 32.9 provision of section 303 of the Ricky Ray Hemophilia Relief Fund 32.10 Act of 1998, Public Law Number 105-369, shall become effective 32.11 at the time they become effective for federal purposes. 32.12 The Internal Revenue Code of 1986, as amended through 32.13 December 31, 1998, shall be in effect for taxable years 32.14 beginning after December 31, 1998. 32.15 Except as otherwise provided, references to the Internal 32.16 Revenue Code in subdivisions 19a to 19g mean the code in effect 32.17 for purposes of determining net income for the applicable year. 32.18 Sec. 3. Minnesota Statutes 1998, section 290.01, 32.19 subdivision 19b, is amended to read: 32.20 Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 32.21 individuals, estates, and trusts, there shall be subtracted from 32.22 federal taxable income: 32.23 (1) interest income on obligations of any authority, 32.24 commission, or instrumentality of the United States to the 32.25 extent includable in taxable income for federal income tax 32.26 purposes but exempt from state income tax under the laws of the 32.27 United States; 32.28 (2) if included in federal taxable income, the amount of 32.29 any overpayment of income tax to Minnesota or to any other 32.30 state, for any previous taxable year, whether the amount is 32.31 received as a refund or as a credit to another taxable year's 32.32 income tax liability; 32.33 (3) the amount paid to others, less the credit allowed 32.34 under section 290.0674, not to exceed $1,625 for each dependent 32.35 in grades kindergarten to 6 and $2,500 for each dependent in 32.36 grades 7 to 12, for tuition, textbooks, and transportation of 33.1 each dependent in attending an elementary or secondary school 33.2 situated in Minnesota, North Dakota, South Dakota, Iowa, or 33.3 Wisconsin, wherein a resident of this state may legally fulfill 33.4 the state's compulsory attendance laws, which is not operated 33.5 for profit, and which adheres to the provisions of the Civil 33.6 Rights Act of 1964 and chapter 363. For the purposes of this 33.7 clause, "tuition" includes fees or tuition as defined in section 33.8 290.0674, subdivision 1, clause (1). As used in this clause, 33.9 "textbooks" includes books and other instructional materials and 33.10 equipment used in elementary and secondary schools in teaching 33.11 only those subjects legally and commonly taught in public 33.12 elementary and secondary schools in this state. Equipment 33.13 expenses qualifying for deduction includes expenses as defined 33.14 and limited in section 290.0674, subdivision 1, clause (3). 33.15 "Textbooks" does not include instructional books and materials 33.16 used in the teaching of religious tenets, doctrines, or worship, 33.17 the purpose of which is to instill such tenets, doctrines, or 33.18 worship, nor does it include books or materials for, or 33.19 transportation to, extracurricular activities including sporting 33.20 events, musical or dramatic events, speech activities, driver's 33.21 education, or similar programs; 33.22 (4) to the extent included in federal taxable income, 33.23 distributions from a qualified governmental pension plan, an 33.24 individual retirement account, simplified employee pension, or 33.25 qualified plan covering a self-employed person that represent a 33.26 return of contributions that were included in Minnesota gross 33.27 income in the taxable year for which the contributions were made 33.28 but were deducted or were not included in the computation of 33.29 federal adjusted gross income. The distribution shall be 33.30 allocated first to return of contributions until the 33.31 contributions included in Minnesota gross income have been 33.32 exhausted. This subtraction applies only to contributions made 33.33 in a taxable year prior to 1985; 33.34 (5) income as provided under section 290.0802; 33.35 (6) the amount of unrecovered accelerated cost recovery 33.36 system deductions allowed under subdivision 19g; 34.1 (7) to the extent included in federal adjusted gross 34.2 income, income realized on disposition of property exempt from 34.3 tax under section 290.491; 34.4 (8) to the extent not deducted in determining federal 34.5 taxable income, the amount paid for health insurance of 34.6 self-employed individuals as determined under section 162(l) of 34.7 the Internal Revenue Code, except that the25percent limit does 34.8 not apply. If the taxpayer deducted insurance payments under 34.9 section 213 of the Internal Revenue Code of 1986, the 34.10 subtraction under this clause must be reduced by the lesser of: 34.11 (i) the total itemized deductions allowed under section 34.12 63(d) of the Internal Revenue Code, less state, local, and 34.13 foreign income taxes deductible under section 164 of the 34.14 Internal Revenue Code and the standard deduction under section 34.15 63(c) of the Internal Revenue Code; or 34.16 (ii) the lesser of (A) the amount of insurance qualifying 34.17 as "medical care" under section 213(d) of the Internal Revenue 34.18 Code to the extent not deducted under section 162(1) of the 34.19 Internal Revenue Code or excluded from income or (B) the total 34.20 amount deductible for medical care under section 213(a); 34.21 (9) the exemption amount allowed under Laws 1995, chapter 34.22 255, article 3, section 2, subdivision 3; 34.23 (10) to the extent included in federal taxable income, 34.24 postservice benefits for youth community service under section 34.25 124D.42 for volunteer service under United States Code, title 34.26 42, section 5011(d), as amended; 34.27 (11) to the extent not subtracted under clause (1), the 34.28 amount of income or gain included in federal taxable income 34.29 under section 1366 of the Internal Revenue Code flowing from a 34.30 corporation that has a valid election in effect for the taxable 34.31 year under section 1362 of the Internal Revenue Code which is 34.32 not allowed to be an "S" corporation under section 290.9725; 34.33 (12) in the year stock of a corporation that had made a 34.34 valid election under section 1362 of the Internal Revenue Code 34.35 but was not an "S" corporation under section 290.9725 is sold or 34.36 disposed of in a transaction taxable under the Internal Revenue 35.1 Code, the amount of difference between the Minnesota basis of 35.2 the stock under subdivision 19f, paragraph (m), and the federal 35.3 basis if the Minnesota basis is higher than the shareholder's 35.4 federal basis; and 35.5 (13) an amount equal to an individual's, trust's, or 35.6 estate's net federal income tax liability for the tax year that 35.7 is attributable to items of income, expense, gain, loss, or 35.8 credits federally flowing to the taxpayer in the tax year from a 35.9 corporation, having a valid election in effect for federal tax 35.10 purposes under section 1362 of the Internal Revenue Code but not 35.11 treated as an "S" corporation for state tax purposes under 35.12 section 290.9725. 35.13 Sec. 4. Minnesota Statutes 1998, section 290.01, 35.14 subdivision 31, is amended to read: 35.15 Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically 35.16 defined otherwise, "Internal Revenue Code" means the Internal 35.17 Revenue Code of 1986, as amended through December 31,19971998. 35.18 Sec. 5. Minnesota Statutes 1998, section 290A.03, 35.19 subdivision 15, is amended to read: 35.20 Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 35.21 means the Internal Revenue Code of 1986, as amended through 35.22 December 31,19971998. 35.23 Sec. 6. Minnesota Statutes 1998, section 291.005, 35.24 subdivision 1, is amended to read: 35.25 Subdivision 1. Unless the context otherwise clearly 35.26 requires, the following terms used in this chapter shall have 35.27 the following meanings: 35.28 (1) "Federal gross estate" means the gross estate of a 35.29 decedent as valued and otherwise determined for federal estate 35.30 tax purposes by federal taxing authorities pursuant to the 35.31 provisions of the Internal Revenue Code. 35.32 (2) "Minnesota gross estate" means the federal gross estate 35.33 of a decedent after (a) excluding therefrom any property 35.34 included therein which has its situs outside Minnesota and (b) 35.35 including therein any property omitted from the federal gross 35.36 estate which is includable therein, has its situs in Minnesota, 36.1 and was not disclosed to federal taxing authorities. 36.2 (3) "Personal representative" means the executor, 36.3 administrator or other person appointed by the court to 36.4 administer and dispose of the property of the decedent. If 36.5 there is no executor, administrator or other person appointed, 36.6 qualified, and acting within this state, then any person in 36.7 actual or constructive possession of any property having a situs 36.8 in this state which is included in the federal gross estate of 36.9 the decedent shall be deemed to be a personal representative to 36.10 the extent of the property and the Minnesota estate tax due with 36.11 respect to the property. 36.12 (4) "Resident decedent" means an individual whose domicile 36.13 at the time of death was in Minnesota. 36.14 (5) "Nonresident decedent" means an individual whose 36.15 domicile at the time of death was not in Minnesota. 36.16 (6) "Situs of property" means, with respect to real 36.17 property, the state or country in which it is located; with 36.18 respect to tangible personal property, the state or country in 36.19 which it was normally kept or located at the time of the 36.20 decedent's death; and with respect to intangible personal 36.21 property, the state or country in which the decedent was 36.22 domiciled at death. 36.23 (7) "Commissioner" means the commissioner of revenue or any 36.24 person to whom the commissioner has delegated functions under 36.25 this chapter. 36.26 (8) "Internal Revenue Code" means the United States 36.27 Internal Revenue Code of 1986, as amended through December 31, 36.2819971998. 36.29 Sec. 7. [EFFECTIVE DATES.] 36.30 Sections 1, 4, 5, and 6 are effective at the same time 36.31 federal changes made by the Internal Revenue Service 36.32 Restructuring and Reform Act of 1998, Public Law Number 105-206 36.33 and the Omnibus Consolidation and Emergency Supplemental 36.34 Appropriations Act, 1999, Public Law Number 105-277 which are 36.35 incorporated into Minnesota Statutes, chapters 289A, 290, 290A, 36.36 and 291 by these sections become effective for federal tax 37.1 purposes. Section 3 is effective for tax years beginning after 37.2 December 31, 1998. 37.3 ARTICLE 4 37.4 SALES TAX 37.5 Section 1. Minnesota Statutes 1998, section 289A.56, 37.6 subdivision 4, is amended to read: 37.7 Subd. 4. [CAPITAL EQUIPMENT REFUNDS; REFUNDS TO 37.8 PURCHASERS.] Notwithstanding subdivision 3, for refunds payable 37.9 under section 297A.15, subdivision 5, interest is computed from 37.10 the date the refund claim is filed with the commissioner. For 37.11 refunds payable under section 289A.50, subdivision 2a, interest 37.12 is computed from the 20th day of the month following the month 37.13 of the invoice date for the purchase which is the subject of the 37.14 refund, if the refund claim includes a detailed schedule of 37.15 purchases made during each of the periods in the claim. If the 37.16 refund claim submitted does not contain a schedule reflecting 37.17 purchases made in each period, interest is computed from the 37.18 date the claim was filed. 37.19 Sec. 2. Minnesota Statutes 1998, section 297A.48, is 37.20 amended by adding a subdivision to read: 37.21 Subd. 1a. [RULES FOR ADOPTION, USE, TERMINATION.] (a) 37.22 Imposition of a local sales tax is subject to approval by voters 37.23 of the political subdivision at a general or special election. 37.24 (b) The proceeds of the tax must be dedicated exclusively 37.25 to payment of the cost of a specific capital improvement which 37.26 is designated at least 90 days before the referendum on 37.27 imposition of the tax is conducted. 37.28 (c) The tax must terminate after the improvement designated 37.29 under paragraph (b) has been completed. 37.30 (d) After a sales tax imposed by a political subdivision 37.31 has expired or been terminated, the political subdivision is 37.32 prohibited from imposing a local sales tax for a period of one 37.33 year. 37.34 Sec. 3. [CITY OF NEW ULM; TAXES AUTHORIZED.] 37.35 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 37.36 Minnesota Statutes, section 477A.016, or any other provision of 38.1 law, ordinance, or city charter, if approved by the city voters 38.2 at the first municipal general election held after the date of 38.3 final enactment of this act, the city of New Ulm may impose by 38.4 ordinance a sales and use tax of up to one-half of one percent 38.5 for the purposes specified in subdivision 3. The provisions of 38.6 Minnesota Statutes, section 297A.48, govern the imposition, 38.7 administration, collection, and enforcement of the tax 38.8 authorized under this subdivision. 38.9 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 38.10 Minnesota Statutes, section 477A.016, or any other provision of 38.11 law, ordinance, or city charter, the city of New Ulm may impose 38.12 by ordinance, for the purposes specified in subdivision 3, an 38.13 excise tax of up to $20 per motor vehicle, as defined by 38.14 ordinance, purchased or acquired from any person engaged within 38.15 the city in the business of selling motor vehicles at retail. 38.16 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 38.17 authorized by subdivisions 1 and 2 must be used by the city to 38.18 pay the cost of collecting the taxes and to pay for construction 38.19 and improvement of a civic and community center and recreational 38.20 facilities to serve all ages, including seniors and youth. 38.21 Authorized expenses include, but are not limited to, acquiring 38.22 property, paying construction and operating expenses related to 38.23 the development of an authorized facility, funding facilities 38.24 replacement reserves, and paying debt service on bonds or other 38.25 obligations issued to finance the construction or expansion of 38.26 an authorized facility. The capital expenses for all projects 38.27 authorized under this subdivision that may be paid with these 38.28 taxes are limited to $9,000,000, plus an amount equal to the 38.29 costs related to issuance of the bonds and funding facilities 38.30 replacement reserves. 38.31 Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds 38.32 under Minnesota Statutes, chapter 475, to finance the capital 38.33 expenditure and improvement projects. An election to approve 38.34 the bonds under Minnesota Statutes, section 475.58, may be held 38.35 in combination with the election to authorize imposition of the 38.36 tax under subdivision 1. Whether to permit imposition of the 39.1 tax and issuance of bonds may be posed to the voters as a single 39.2 question. The question must state that the sales tax revenues 39.3 are pledged to pay the bonds, but that the bonds are general 39.4 obligations and will be guaranteed by the city's property taxes. 39.5 (b) The issuance of bonds under this subdivision is not 39.6 subject to Minnesota Statutes, sections 275.60 and 275.61. 39.7 (c) The bonds are not included in computing any debt 39.8 limitation applicable to the city, and the levy of taxes under 39.9 Minnesota Statutes, section 475.61, to pay principal of and 39.10 interest on the bonds is not subject to any levy limitation. 39.11 The aggregate principal amount of bonds, plus the aggregate of 39.12 the taxes used directly to pay eligible capital expenditures and 39.13 improvements may not exceed $9,000,000, plus an amount equal to 39.14 the costs related to issuance of the bonds. 39.15 (d) The taxes may be pledged to and used for the payment of 39.16 the bonds and any bonds issued to refund them, only if the bonds 39.17 and any refunding bonds are general obligations of the city. 39.18 Subd. 5. [TERMINATION OF TAXES.] The taxes imposed under 39.19 subdivisions 1 and 2 expire when the city council determines 39.20 that sufficient funds have been received from the taxes to 39.21 finance the capital and administrative costs for the 39.22 acquisition, construction, and improvement of facilities 39.23 described in subdivision 3, and to prepay or retire at maturity 39.24 the principal, interest, and premium due on any bonds issued for 39.25 the facilities under subdivision 4. Any funds remaining after 39.26 completion of the project and retirement or redemption of the 39.27 bonds may be placed in the general fund of the city. The taxes 39.28 imposed under subdivisions 1 and 2 may expire at an earlier time 39.29 if the city so determines by ordinance. 39.30 Subd. 6. [EFFECTIVE DATE.] This section is effective the 39.31 day after compliance by the governing body of the city of New 39.32 Ulm with Minnesota Statutes, section 645.021, subdivision 3. 39.33 Sec. 4. [CITY OF PROCTOR; TAXES AUTHORIZED.] 39.34 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 39.35 Minnesota Statutes, section 477A.016, or any other provision of 39.36 law, ordinance, or city charter, if approved by the city voters 40.1 at the first municipal general election held after the date of 40.2 final enactment of this act or at a special election, the city 40.3 of Proctor may impose by ordinance a sales and use tax of up to 40.4 one-half of one percent for the purposes specified in 40.5 subdivision 3. The provisions of Minnesota Statutes, section 40.6 297A.48, govern the imposition, administration, collection, and 40.7 enforcement of the tax authorized under this subdivision. 40.8 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 40.9 Minnesota Statutes, section 477A.016, or any other provision of 40.10 law, ordinance, or city charter, the city of Proctor may impose 40.11 by ordinance, for the purposes specified in subdivision 3, an 40.12 excise tax of up to $20 per motor vehicle, as defined by 40.13 ordinance, purchased or acquired from any person engaged within 40.14 the city in the business of selling motor vehicles at retail. 40.15 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 40.16 authorized by subdivisions 1 and 2 must be used by the city to 40.17 pay the cost of collecting the taxes and to pay for construction 40.18 and improvement of the following city facilities: 40.19 (1) streets and sidewalks; 40.20 (2) bikeways, including providing matching funds for 40.21 trails; and 40.22 (3) constructing and equipping the Proctor community 40.23 activity center. 40.24 Authorized expenses include, but are not limited to, 40.25 acquiring property, paying construction and operating expenses 40.26 related to the development of an authorized facility, and paying 40.27 debt service on bonds or other obligations, including lease 40.28 obligations, issued to finance the construction, expansion, or 40.29 improvement of an authorized facility. The capital expenses for 40.30 all projects authorized under this paragraph that may be paid 40.31 with these taxes is limited to $3,600,000, plus an amount equal 40.32 to the costs related to issuance of the bonds. 40.33 Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds 40.34 under Minnesota Statutes, chapter 475, to finance the capital 40.35 expenditure and improvement projects described in subdivision 40.36 3. An election to approve the bonds under Minnesota Statutes, 41.1 section 475.58, is not required. 41.2 (b) The issuance of bonds under this subdivision is not 41.3 subject to Minnesota Statutes, sections 275.60 and 279.61. 41.4 (c) The bonds are not included in computing any debt 41.5 limitation applicable to the city, and the levy of taxes under 41.6 Minnesota Statutes, section 475.61, to pay principal of and 41.7 interest on the bonds is not subject to any levy limitation. 41.8 (d) The aggregate principal amount of bonds, plus the 41.9 aggregate of the taxes used directly to pay eligible capital 41.10 expenditures and improvements, may not exceed $3,600,000, plus 41.11 an amount equal to the costs related to issuance of the bonds, 41.12 including interest on the bonds. 41.13 (e) The sales and use and excise taxes authorized in this 41.14 section may be pledged to and used for the payment of the bonds 41.15 and any bonds issued to refund them only if the bonds and any 41.16 refunding bonds are general obligations of the city. 41.17 Subd. 5. [TERMINATION OF TAXES.] The taxes imposed under 41.18 subdivisions 1 and 2 expire when the city council determines 41.19 that the amount described in subdivision 4, paragraph (d), has 41.20 been received from the taxes to finance the capital and 41.21 administrative costs for the acquisition, construction, 41.22 expansion, and improvement of facilities described in 41.23 subdivision 3, plus the additional amount needed to pay the 41.24 costs related to issuance of bonds under subdivision 4. Any 41.25 funds remaining after completion of the project and retirement 41.26 or redemption of the bonds may be placed in the general fund of 41.27 the city. The taxes imposed under subdivisions 1 and 2 may 41.28 expire at an earlier time if the city so determines by ordinance. 41.29 Subd. 6. [EFFECTIVE DATE.] This section is effective the 41.30 day after compliance by the governing body of the city of 41.31 Proctor with Minnesota Statutes, section 645.021, subdivision 3. 41.32 Sec. 5. [EFFECTIVE DATE.] 41.33 Section 1 is effective for amended returns and refund 41.34 claims filed on or after July 1, 1999. 41.35 ARTICLE 5 41.36 MOTOR VEHICLE REGISTRATION TAX 42.1 Section 1. Minnesota Statutes 1998, section 168.013, 42.2 subdivision 1a, is amended to read: 42.3 Subd. 1a. [PASSENGER AUTOMOBILE; HEARSE.] (a) On passenger 42.4 automobiles as defined in section 168.011, subdivision 7, and 42.5 hearses, except as otherwise provided, the tax shall be $10 plus 42.6 an additional tax equal to1.251.2 percent of the base value. 42.7 (b) Subject to the classification provisions herein, "base 42.8 value" means the manufacturer's suggested retail price of the 42.9 vehicle including destination charge using list price 42.10 information published by the manufacturer or determined by the 42.11 registrar if no suggested retail price exists, and shall not 42.12 include the cost of each accessory or item of optional equipment 42.13 separately added to the vehicle and the suggested retail price. 42.14 (c) If the manufacturer's list price information contains a 42.15 single vehicle identification number followed by various 42.16 descriptions and suggested retail prices, the registrar shall 42.17 select from those listings only the lowest price for determining 42.18 base value. 42.19 (d) If unable to determine the base value because the 42.20 vehicle is specially constructed, or for any other reason, the 42.21 registrar may establish such value upon the cost price to the 42.22 purchaser or owner as evidenced by a certificate of cost but not 42.23 including Minnesota sales or use tax or any local sales or other 42.24 local tax. 42.25 (e) The registrar shall classify every vehicle in its 42.26 proper base value class as follows: 42.27 FROM TO 42.28 $ 0 $199.99 42.29 200 399.99 42.30 and thereafter a series of classes successively set in brackets 42.31 having a spread of $200 consisting of such number of classes as 42.32 will permit classification of all vehicles. 42.33 (f) The base value for purposes of this section shall be 42.34 the middle point between the extremes of its class. 42.35 (g) The registrar shall establish the base value, when new, 42.36 of every passenger automobile and hearse registered prior to the 43.1 effective date of Extra Session Laws 1971, chapter 31, using 43.2 list price information published by the manufacturer or any 43.3 nationally recognized firm or association compiling such data 43.4 for the automotive industry. If unable to ascertain the base 43.5 value of any registered vehicle in the foregoing manner, the 43.6 registrar may use any other available source or method. The tax 43.7 on all previously registered vehicles shall be computed upon the 43.8 base value thus determined taking into account the depreciation 43.9 provisions of paragraph (h). 43.10 (h)Except as provided in paragraph (i),The annual 43.11 additional tax computed upon the base value as provided herein, 43.12 during the firstand second yearsyear of vehicle life shall be 43.13 computed upon 100 percent of the base value; for thethird and43.14fourth yearssecond year, 90 percent of such value; for 43.15 the third year, 82.5 percent of such value; for the fourth year, 43.16 75 percent of such value; for the fifthand sixth yearsyear,7543.17 65 percent of such value; for the sixth year, 60 percent of such 43.18 value; for the seventh year,6045 percent of such value; for 43.19 the eighth year,4030 percent of such value; for the ninth 43.20 year,3020 percent of such value; for the tenth year, ten 43.21 percent of such value; for the 11th and each succeeding year, 43.22 the sum of $25. 43.23 In no event shall the annual additional tax be less than 43.24 $25. 43.25(i) The annual additional tax under paragraph (h) on a43.26motor vehicle on which the first annual tax was paid before43.27January 1, 1990, must not exceed the tax that was paid on that43.28vehicle the year before.43.29 Sec. 2. [TRANSFERS TO HIGHWAY USER TAX DISTRIBUTION FUND.] 43.30 By January 1, 2000, the commissioner of finance shall 43.31 transfer $32,900,000 from the general fund to the highway user 43.32 tax distribution fund. For fiscal year 2001, the commissioner 43.33 of finance shall transfer $68,769,000 from the general fund to 43.34 the highway user tax distribution fund. 43.35 As part of the biennial budget for fiscal years 2002 and 43.36 2003 and in each biennial budget thereafter, the commissioner 44.1 shall provide an estimate of the amount of revenue lost to the 44.2 highway user tax distribution fund due to the registration tax 44.3 reduction in section 1. 44.4 Sec. 3. [EFFECTIVE DATE.] 44.5 Section 1 is effective January 1, 2000. 44.6 ARTICLE 6 44.7 SPECIAL TAXES 44.8 Section 1. Minnesota Statutes 1998, section 60A.19, 44.9 subdivision 6, is amended to read: 44.10 Subd. 6. [RETALIATORY PROVISIONS.] (1) When by the laws of 44.11 any other state or country any taxes, fines, deposits, 44.12 penalties, licenses, or fees,other than assessments made by an44.13insurance guaranty association or similar organization,in 44.14 addition to or in excess of those imposed by the laws of this 44.15 state upon foreign insurance companies and their agents doing 44.16 business in this state,other than assessments by an insurance44.17guaranty association or similar organization organized under the44.18laws of this state,are imposed on insurance companies of this 44.19 state and their agents doing business in that state or country, 44.20 or when any conditions precedent to the right to do business in 44.21 that state are imposed by the laws thereof, beyond those imposed 44.22 upon these foreign companies by the laws of this state, the same 44.23 taxes, fines, deposits, penalties, licenses, fees, and 44.24 conditions precedent shall be imposed upon every similar 44.25 insurance company of that state or country and their agents 44.26 doing or applying to do business in this state so long as these 44.27 foreign laws remain in force. Special purpose obligations or 44.28 assessments, including assessments by an insurance guaranty 44.29 association, joint underwriting association or similar 44.30 organization, or assessments imposed in connection with 44.31 particular kinds of insurance, are not taxes, licenses, or fees 44.32 as these terms are used in this section. 44.33 (2) In the event that a domestic insurance company, after 44.34 complying with all reasonable laws and rulings of any other 44.35 state or country, is refused permission by that state or country 44.36 to transact business therein after the commissioner of commerce 45.1 of Minnesota has determined that that company is solvent and 45.2 properly managed and after the commissioner has so certified to 45.3 the proper authority of that other state or country, then, and 45.4 in every such case, the commissioner may forthwith suspend or 45.5 cancel the certificate of authority of every insurance company 45.6 organized under the laws of that other state or country to the 45.7 extent that it insures, or seeks to insure, in this state 45.8 against any of the risks or hazards which that domestic company 45.9 seeks to insure against in that other state or country. Without 45.10 limiting the application of the foregoing provision, it is 45.11 hereby determined that any law or ruling of any other state or 45.12 country which prescribes to a Minnesota domestic insurance 45.13 company the premium rate or rates for life insurance issued or 45.14 to be issued outside that other state or country shall not be 45.15 reasonable. 45.16 (3) This section does not apply to insurance companies 45.17 organized or domiciled in a state or country, the laws of which 45.18 do not impose retaliatory taxes, fines, deposits, penalties, 45.19 licenses, or fees or which grant, on a reciprocal basis, 45.20 exemptions from retaliatory taxes, fines, deposits, penalties, 45.21 licenses, or fees to insurance companies domiciled in this state. 45.22 Sec. 2. Minnesota Statutes 1998, section 296A.16, is 45.23 amended by adding a subdivision to read: 45.24 Subd. 4a. [UNDYED KEROSENE; REFUNDS.] Notwithstanding 45.25 subdivision 1, the commissioner shall allow a refund of the tax 45.26 paid on undyed kerosene used exclusively for a purpose other 45.27 than as fuel for a motor vehicle using the streets and 45.28 highways. To obtain a refund, the person making the sale to an 45.29 end user must meet the Internal Revenue Service requirements for 45.30 sales from a blocked pump. A claim for a refund may be filed as 45.31 provided in this section. 45.32 Sec. 3. Minnesota Statutes 1998, section 296A.16, is 45.33 amended by adding a subdivision to read: 45.34 Subd. 4b. [RACING GASOLINE; REFUNDS.] Notwithstanding 45.35 subdivision 1, the commissioner shall allow a licensed 45.36 distributor a refund of the tax paid on leaded gasoline of 110 46.1 octane or more that does not meet ASTM specification D4814 for 46.2 gasoline and that is sold in bulk for use in nonregistered motor 46.3 vehicles. A claim for a refund may be filed as provided for in 46.4 this section. 46.5 Sec. 4. Minnesota Statutes 1998, section 297H.05, is 46.6 amended to read: 46.7 297H.05 [SELF-HAULERS.] 46.8 (a) A self-hauler of mixed municipal solid waste shall pay 46.9 the tax to the operator of the waste management facility to 46.10 which the waste is delivered at the rate imposed under section 46.11 297H.03, based on the sales price of the waste management 46.12 services, except that a self-hauler of mixed municipal solid 46.13 waste from a residential generator shall pay the tax to the 46.14 operator of the waste management facility to which the waste is 46.15 delivered at the rate imposed under section 297H.02. 46.16 (b) A self-hauler of non-mixed-municipal solid waste shall 46.17 pay the tax to the operator of the waste management facility to 46.18 which the waste is delivered at the rate imposed under section 46.19 297H.04. 46.20 (c) The tax imposed on the self-hauler of 46.21 non-mixed-municipal solid waste may be based either on the 46.22 capacity of the container, the actual volume, or the 46.23 weight-to-volume conversion schedule in paragraph (d). However, 46.24 the tax must be calculated by the operator using the same method 46.25 for calculating the tipping fee so that both are calculated 46.26 according to container capacity, actual volume, or weight. 46.27 (d) The weight-to-volume conversion schedule for: 46.28 (1) construction debris as defined in section 115A.03, 46.29 subdivision 7, is one ton equals 3.33 cubic yards, or $2 per 46.30 ton; 46.31 (2) industrial waste as defined in section 115A.03, 46.32 subdivision 13a, is equal to 60 cents per cubic yard. The 46.33 commissioner of revenue, after consultation with the 46.34 commissioner of the pollution control agency, shall determine, 46.35 and may publish by notice, a conversion schedule for various 46.36 industrial wastes; and 47.1 (3) infectious waste as defined in section 116.76, 47.2 subdivision 12, and pathological waste as defined in section 47.3 116.76, subdivision 14, is 150 pounds equals one cubic yard, or 47.4 60 cents per 150 pounds. 47.5 (e) For mixed municipal solid waste the tax is imposed upon 47.6 the difference between the market price and the tip fee at a 47.7 processing or disposal facility if the tip fee is less than the 47.8 market price and the political subdivision subsidizes the cost 47.9 of service at the facility. The political subdivision is liable 47.10 for the tax. 47.11 Sec. 5. [EFFECTIVE DATE.] 47.12 Section 1 is effective for tax years beginning after 47.13 December 31, 1999. Section 2 is effective retroactively for 47.14 sales made after June 30, 1998. Section 3 is effective 47.15 retroactively for sales made after January 31, 1999. Section 4 47.16 is effective for services provided after June 30, 1999. 47.17 ARTICLE 7 47.18 WORKFORCE DEVELOPMENT AND EDUCATION INCENTIVES 47.19 Section 1. Minnesota Statutes 1998, section 116L.03, 47.20 subdivision 1, is amended to read: 47.21 Subdivision 1. [MEMBERS.] The partnership shall be 47.22 governed by a board of1112 directors. 47.23 Sec. 2. Minnesota Statutes 1998, section 116L.03, 47.24 subdivision 2, is amended to read: 47.25 Subd. 2. [APPOINTMENT.] The Minnesota job skills 47.26 partnership board consists of: eight members appointed by the 47.27 governor, the commissioner of trade and economic development, 47.28 the commissioner of economic security, and the chancellor, or 47.29 the chancellor's designee, of the Minnesota state colleges and 47.30 universities. If the chancellor makes a designation under this 47.31 subdivision, the designee must have experience in technical 47.32 education. Two of the appointed members must be representatives 47.33 from organized labor. 47.34 Sec. 3. [116L.07] [WORKFORCE DEVELOPMENT FUND.] 47.35 Subdivision 1. [CREATED.] The Minnesota workforce 47.36 development fund is created as a separate dedicated account in 48.1 the treasury. Earnings, including interest earnings of the 48.2 fund, must be credited to the account. Money in the fund is 48.3 appropriated to the jobs skills partnership board and must be 48.4 allocated and expended as provided in this section. The board 48.5 shall consult with the governor's workforce development council 48.6 about fund expenditures. 48.7 Subd. 2. [USES; ALLOCATIONS.] The board shall allocate all 48.8 available money in the fund each fiscal year to the following 48.9 programs in the following percentages: 48.10 (1) forty percent to the partnership program described 48.11 under section 116L.04, subdivision 1; 48.12 (2) ten percent to the pathways program under section 48.13 116L.04, subdivision 1a; and 48.14 (3) fifty percent to be allocated to the dislocated worker 48.15 program under sections 116L.07 to 116L.17, the apprenticeship 48.16 program under sections 178.01 to 178.10, and other job training 48.17 programs. 48.18 Priority for allocations under clause (3) must be to fund 48.19 the dislocated worker program and the apprenticeship program. 48.20 The board shall focus funding efforts on retraining programs 48.21 when there is low unemployment and place more emphasis on 48.22 dislocated worker programs when there is high unemployment. The 48.23 board shall, for the purpose of maintaining continuity in 48.24 training and placement programs, give priority for grants and 48.25 loans to organizations with a history of effectiveness in job 48.26 placement and that previously have received funding from public 48.27 or private nonprofit sources. 48.28 Expenditures for the dislocated worker program under 48.29 sections 116L.08 to 116L.17 shall be allocated as follows: 48.30 (1) 40 percent to be allocated annually to substate 48.31 grantees and independent grantees for provision of expeditious 48.32 response activities under section 116L.11 and worker adjustment 48.33 services under section 116L.13; and 48.34 (2) 60 percent to be allocated to activities and programs 48.35 authorized under sections 116L.07 to 116L.17. 48.36 Any funds not allocated, obligated, or expended in a fiscal 49.1 year shall be available for allocation, obligation, and 49.2 expenditure in the following fiscal year. The board shall 49.3 require that programs receiving money from the development fund 49.4 coordinate their activities with the workforce center system 49.5 operated by the department of economic security to the maximum 49.6 extent feasible and cooperate with the centers. 49.7 Sec. 4. [116L.08] [DEFINITIONS.] 49.8 Subdivision 1. [TERMS.] For the purposes of sections 49.9 116L.07 to 116L.17, the following terms have the meanings given 49.10 them. 49.11 Subd. 2. [BOARD.] "Board" means the job skills partnership 49.12 board. 49.13 Subd. 3. [DISLOCATED WORKER.] "Dislocated worker" means an 49.14 individual who is a resident of Minnesota at the time employment 49.15 ceased or was working in the state at the time employment ceased 49.16 and: 49.17 (1) has been terminated or who has received a notice of 49.18 termination from public or private sector employment, is 49.19 eligible for or has exhausted entitlement to reemployment 49.20 insurance, and is unlikely to return to the previous industry or 49.21 occupation; 49.22 (2) has been terminated or has received a notice of 49.23 termination of employment as a result of any plant closing or 49.24 any substantial layoff at a plant, facility, or enterprise; 49.25 (3) has been long-term unemployed and has limited 49.26 opportunities for employment or reemployment in the same or a 49.27 similar occupation in the area in which the individual resides, 49.28 including older individuals who may have substantial barriers to 49.29 employment by reason of age; or 49.30 (4) has been self-employed, including farmers and ranchers, 49.31 and is unemployed as a result of general economic conditions in 49.32 the community in which the individual resides or because of 49.33 natural disasters, subject to rules to be adopted by the board. 49.34 Subd. 3a. [ADDITIONAL DISLOCATED WORKER.] "Additional 49.35 dislocated worker" means an individual who was a full-time 49.36 homemaker for a substantial number of years and derived the 50.1 substantial share of support from: 50.2 (1) a spouse and no longer receives such support due to the 50.3 death, divorce, permanent disability of, or permanent separation 50.4 from the spouse; or 50.5 (2) public assistance on account of dependents in the home 50.6 and no longer receives such support. 50.7 An additional dislocated worker must have resided in 50.8 Minnesota at the time the support ceased. 50.9 Subd. 4. [ELIGIBLE ORGANIZATION.] "Eligible organization" 50.10 means a local government unit, nonprofit organization, community 50.11 action agency, business organization or association, or labor 50.12 organization. 50.13 Subd. 5. [LOCAL GOVERNMENT UNIT.] "Local government unit" 50.14 means a statutory or home rule charter city, county, or town. 50.15 Subd. 6. [PLANT CLOSING.] "Plant closing" means the 50.16 announced or actual permanent shutdown of a single site of 50.17 employment, or one or more facilities or operating units within 50.18 a single site of employment. 50.19 Subd. 7. [PREFEASIBILITY STUDY GRANT.] "Prefeasibility 50.20 study grant" means the grant awarded under section 116L.12. 50.21 Subd. 8. [SUBSTANTIAL LAYOFF.] "Substantial layoff" means 50.22 a permanent reduction in the work force, which is not a result 50.23 of a plant closing, and which results in an employment loss at a 50.24 single site of employment during any 30-day period for at least 50.25 25 employees excluding those employees that work less than 20 50.26 hours a week. 50.27 Subd. 9. [SUBSTATE GRANTEE.] "Substate grantee" means the 50.28 agency or organization designated to administer at the local 50.29 level federal dislocated worker programs pursuant to the federal 50.30 Job Training Partnership Act, United States Code, title 29, 50.31 section 1501, et seq. 50.32 Subd. 10. [WORKER ADJUSTMENT SERVICES.] "Worker adjustment 50.33 services" means the array of employment and training services 50.34 designed to assist dislocated workers make the transition to new 50.35 employment, including basic readjustment assistance, training 50.36 assistance, and support services. 51.1 Subd. 11. [BASIC READJUSTMENT ASSISTANCE.] "Basic 51.2 readjustment assistance" means employment transition services 51.3 that include, but are not limited to: development of individual 51.4 readjustment plans for participants; outreach and intake; early 51.5 readjustment; job or career counseling; testing; orientation; 51.6 assessment, including evaluation of educational attainment and 51.7 participant interests and aptitudes; determination of 51.8 occupational skills; provision of occupational information; job 51.9 placement assistance; labor market information; job clubs; job 51.10 search; job development; prelayoff assistance; work readiness 51.11 skills for new employment environments; relocation assistance; 51.12 and programs conducted in cooperation with employers or labor 51.13 organizations to provide early intervention in the event of 51.14 plant closings or substantial layoffs. 51.15 Subd. 12. [TRAINING ASSISTANCE.] "Training assistance" 51.16 means services that will enable a dislocated worker to become 51.17 reemployed by retraining for a new occupation or industry, 51.18 enhancing current skills, or relocating to employ existing 51.19 skills. Training services include, but are not limited to: 51.20 classroom training; occupational skill training; on-the-job 51.21 training; out-of-area job search; relocation; basic and remedial 51.22 education; literacy and English for training non-English 51.23 speakers; entrepreneurial training; and other appropriate 51.24 training activities directly related to appropriate employment 51.25 opportunities in the local labor market. 51.26 Subd. 13. [SUPPORT SERVICES.] "Support services" means 51.27 assistance provided to dislocated workers to enable their 51.28 participation in an employment transition and/or training 51.29 program. Services include, but are not limited to: family care 51.30 assistance, including child care; commuting assistance; housing 51.31 and rental assistance; counseling assistance, including personal 51.32 and financial; health care; emergency health assistance; 51.33 emergency financial assistance; work-related tools and clothing; 51.34 and other appropriate support services that enable a person to 51.35 participate in an employment and training program. 51.36 Sec. 5. [116L.10] [EARLY WARNING SYSTEM.] 52.1 Subdivision 1. [EARLY WARNING INDICATORS.] The board, in 52.2 cooperation with the commissioners of economic security, 52.3 revenue, and trade and economic development, shall establish and 52.4 oversee an early warning system to identify industries and 52.5 businesses likely to experience large losses in employment 52.6 including a plant closing or a substantial layoff, by collecting 52.7 and analyzing information which may include, but not be limited 52.8 to, products and markets experiencing declining growth rates, 52.9 companies and industries subject to competition from production 52.10 in low wage counties, changes in ownership, layoff and 52.11 employment patterns, payments of reemployment insurance 52.12 contributions, and state tax payments. The board may request 52.13 the assistance of businesses, business organizations, organized 52.14 labor, and trade associations in identifying businesses, 52.15 industries, and specific establishments that are likely to 52.16 experience large losses in employment. The board may request 52.17 information and other assistance from other state agencies for 52.18 the purposes of this subdivision. 52.19 Subd. 2. [NOTICE.] (a) The board shall encourage those 52.20 business establishments considering a decision to effect a plant 52.21 closing, substantial layoff, or relocation of operations located 52.22 in this state to give notice of that decision as early as 52.23 possible to the board, the employees of the affected 52.24 establishment, any organized labor union representing the 52.25 employees, and the local government unit in which the affected 52.26 establishment is located. This notice shall be in addition to 52.27 any notice required under the Worker Adjustment and Retraining 52.28 Notification Act, United States Code, title 29, section 2101. 52.29 (b) Notwithstanding section 268.975, subdivision 6, for 52.30 purposes of this section, "plant closing" means the announced or 52.31 actual permanent or temporary shutdown of a single site of 52.32 employment, or one or more facilities or operating units within 52.33 a single site of employment, if the shutdown results in an 52.34 employment loss at the single site of employment during any 52.35 30-day period for 25 or more employees excluding employees who 52.36 work less than 20 hours per week. 53.1 Subd. 3. [EMPLOYER RESPONSIBILITY.] An employer providing 53.2 notice of a plant closing, substantial layoff, or relocation of 53.3 operations under the Worker Adjustment and Retraining 53.4 Notification Act, United States Code, title 29, section 2101, or 53.5 under subdivision 2 must report to the board the names, 53.6 addresses, and occupations of the employees who will be or have 53.7 been terminated. 53.8 Sec. 6. [116L.11] [RAPID AND EXPEDITIOUS RESPONSE.] 53.9 Subdivision 1. [RESPONSIBILITY.] The board shall respond 53.10 quickly and effectively to announced or actual plant closings 53.11 and substantial layoffs. Affected workers and employers, as 53.12 well as appropriate business organizations or associations, 53.13 labor organizations, substate grantees, independent grantees, 53.14 state and local government units, and community organizations 53.15 shall be assisted by the board through either rapid response 53.16 activities or expeditious response activities as described in 53.17 this section to respond effectively to a plant closing or mass 53.18 layoff. 53.19 Subd. 2. [COVERAGE.] Rapid response is to be provided by 53.20 the board where permanent plant closings or substantial layoffs 53.21 affect at least 25 workers over a 30-day period as evidenced by 53.22 actual separation from employment or by advance notification of 53.23 a closing or layoff. Expeditious response is to be provided by 53.24 worker adjustment services plan grantees in coordination with 53.25 rapid response activities or where permanent plant closings and 53.26 substantial layoffs are not otherwise covered by rapid response. 53.27 Subd. 3. [COORDINATION.] The board and expeditious 53.28 response grantees shall coordinate their respective rapid 53.29 response and expeditious response activities. The roles and 53.30 responsibilities of each shall be detailed in written agreements 53.31 and address on-site contact with employer and employee 53.32 representatives when notified of a plant closing or substantial 53.33 layoff. The activities include formation of a community task 53.34 force, collecting and disseminating information related to 53.35 economic dislocation and available services to dislocated 53.36 workers, providing basic readjustment assistance services to 54.1 workers affected by a plant closure or substantial layoff, 54.2 conducting a needs assessment survey of workers, and developing 54.3 a plan of action responsive to the worker adjustment services 54.4 needs of affected workers. 54.5 Subd. 4. [RAPID RESPONSE ACTIVITIES.] The board shall be 54.6 responsible for implementing the following rapid response 54.7 activities: 54.8 (1) establishing on-site contact with employer and employee 54.9 representatives immediately after becoming aware of a current or 54.10 projected plant closing or substantial layoff in order to: 54.11 (i) provide information on and facilitate access to 54.12 available public programs and services; and 54.13 (ii) provide emergency assistance adapted to the particular 54.14 closure or layoff; 54.15 (2) promoting the formation of a labor-management committee 54.16 by providing: 54.17 (i) immediate assistance in the establishment of the 54.18 labor-management committee; 54.19 (ii) technical advice and information on sources of 54.20 assistance, and liaison with other public and private services 54.21 and programs; and 54.22 (iii) assistance in the selection of worker representatives 54.23 in the event no union is present; 54.24 (3) collecting and disseminating information related to 54.25 economic dislocation, including potential closings or layoffs, 54.26 and all available resources with the state for dislocated 54.27 workers; 54.28 (4) providing or obtaining appropriate financial and 54.29 technical advice and liaison with economic development agencies 54.30 and other organizations to assist in efforts to avert 54.31 dislocations; 54.32 (5) disseminating information throughout the state on the 54.33 availability of services and activities carried out by the 54.34 dislocated worker unit; 54.35 (6) assisting the local community in developing its own 54.36 coordinated response to a plant closing or substantial layoff 55.1 and access to state economic development assistance; 55.2 (7) promoting the use of prefeasibility study grants under 55.3 section 116L.12; and 55.4 (8) conducting surveys of workers, if appropriate, affected 55.5 by plant closings or layoffs to identify worker characteristics 55.6 and worker adjustment service needs. 55.7 Subd. 5. [EXPEDITIOUS RESPONSE ACTIVITIES.] Grantees 55.8 designated to provide worker adjustment services through worker 55.9 adjustment services plans shall be responsible for implementing 55.10 the following expeditious response activities: 55.11 (1) establishing on-site contact with employer and employee 55.12 representatives, not otherwise covered under rapid response, 55.13 within a short period of time after becoming aware of a current 55.14 or projected plant closing or mass layoff in order to provide 55.15 information on available public programs and services; 55.16 (2) obtaining appropriate financial and technical advice 55.17 and liaison with local economic development agencies and other 55.18 organizations to assist in efforts to avert dislocations; 55.19 (3) disseminating information on the availability of 55.20 services and activities carried out by the grantee through its 55.21 worker adjustment services plan; 55.22 (4) providing basic readjustment assistance services for up 55.23 to 90 days following the initial on-site meeting with the 55.24 employer and employee representatives; 55.25 (5) assisting the local community in the development of its 55.26 own coordinated response to the closure or layoff and access to 55.27 economic development assistance; 55.28 (6) facilitating the formation of a community task force, 55.29 if appropriate, to formulate a service plan to assist affected 55.30 dislocated workers from plant closings and mass layoffs; 55.31 (7) conducting surveys of workers, if appropriate, affected 55.32 by plant closings or layoffs to identify worker characteristics 55.33 and worker adjustment service needs; and 55.34 (8) facilitating access to available public or private 55.35 programs and services, including the development of proposals to 55.36 provide access to additional resources to assist workers 56.1 affected by plant closings and substantial layoffs. 56.2 Sec. 7. [116L.12] [PREFEASIBILITY STUDIES.] 56.3 Subdivision 1. [PREFEASIBILITY STUDY GRANTS.] (a) The 56.4 board may make grants for up to $15,000 to eligible 56.5 organizations to provide an initial assessment of the 56.6 feasibility of alternatives to plant closings or substantial 56.7 layoffs. The alternatives may include employee ownership, other 56.8 new ownership, new products or production processes, or public 56.9 financial or technical assistance to keep a plant open. Two or 56.10 more eligible organizations may jointly apply for a grant under 56.11 this section. 56.12 (b) Interested organizations shall apply to the board for 56.13 the grants. As part of the application process, applicants must 56.14 provide a statement of need for a grant, information relating to 56.15 the work force at the plant, the area's unemployment rate, the 56.16 community's and surrounding area's labor market characteristics, 56.17 information of efforts to coordinate the community's response to 56.18 the plant closing or substantial layoff, a timetable of the 56.19 prefeasibility study, a description of the organization applying 56.20 for the grant, a description of the qualifications of persons 56.21 conducting the study, and other information required by the 56.22 board. 56.23 (c) The board shall respond to the applicant within five 56.24 working days of receiving the organization's application. The 56.25 board shall inform each organization that applied for but did 56.26 not receive a grant the reasons for the grant not being 56.27 awarded. The board may request further information from those 56.28 organizations that did not receive a grant, and the organization 56.29 may reapply for the grant. 56.30 Subd. 2. [PREFEASIBILITY STUDY.] (a) The prefeasibility 56.31 study must explore the current and potential viability, 56.32 profitability, and productivity of the plant that may close or 56.33 experience a substantial layoff and alternative uses for the 56.34 plant. The study is not intended to be a major examination of 56.35 each possible alternative but rather is meant to quickly 56.36 determine if further action or examination is feasible and 57.1 should be fully explored. 57.2 (b) The prefeasibility study must contain: 57.3 (1) a description of the plant's present products, 57.4 production techniques, management structure, and history; 57.5 (2) a brief discussion of the feasibility of the various 57.6 alternatives for ownership, production technique, and products; 57.7 (3) an estimate of the financing required to keep the plant 57.8 open and the potential sources of that financing; 57.9 (4) a description of the employer's, employees', and 57.10 community's efforts to maintain the operation of the plant; and 57.11 (5) other information the board may require. 57.12 Sec. 8. [116L.13] [WORKER ADJUSTMENT SERVICES PLANS.] 57.13 Subdivision 1. [WORKER ADJUSTMENT SERVICES PLANS.] The 57.14 board shall establish and fund worker adjustment services plans 57.15 that are designed to assist dislocated workers in their 57.16 transition to new employment. Authorized grantees shall submit 57.17 a worker adjustment services plan biennially, with an annual 57.18 update, in a form and manner prescribed by the board. The 57.19 worker adjustment services plan shall include information 57.20 required in substate plans established under the federal Job 57.21 Training Partnership Act, United States Code, title 29, section 57.22 1501, et seq. and a detailed description of expeditious response 57.23 activities to be implemented under the plan. 57.24 Subd. 2. [GRANTEES.] Entities authorized to submit a 57.25 worker adjustment services plan include substate grantees and up 57.26 to six additional eligible organizations that may be funded by 57.27 state or federal sources of funding. Criteria for selecting the 57.28 six authorized independent nonsubstate grantee eligible 57.29 organizations shall be established by the board, in consultation 57.30 with the workforce development council. The criteria include, 57.31 but are not limited to: 57.32 (1) the capacity to deliver worker adjustment services; 57.33 (2) an identifiable constituency from which eligible 57.34 dislocated workers may be drawn; 57.35 (3) a demonstration of a good faith effort to establish 57.36 coordination agreements with substate grantees in whose 58.1 geographic area the organization would be operating; 58.2 (4) the capability to coordinate delivery of worker 58.3 adjustment services with other appropriate programs and 58.4 agencies, including educational institutions, employment 58.5 service, human service agencies, and economic development 58.6 agencies; and 58.7 (5) sufficient administrative controls to ensure fiscal 58.8 accountability. 58.9 Subd. 3. [COVERAGE.] (a) Persons eligible to receive 58.10 worker adjustment services under this section include dislocated 58.11 workers as defined in section 116L.08, subdivision 3. 58.12 (b) Worker adjustment services available under this section 58.13 shall also be available to additional dislocated workers as 58.14 defined in section 116L.08, subdivision 3a, when they can be 58.15 provided without adversely affecting delivery of services to all 58.16 dislocated workers. 58.17 Subd. 4. [SUBSTATE AND INDEPENDENT GRANTEE FUNDING.] (a) 58.18 Funds allocated to substate and independent grantees for 58.19 expeditious response activities and worker adjustment services 58.20 under this section shall be allocated as follows: 58.21 (1) one-half of available funds shall be allocated to 58.22 substate and independent grantees based on an allocation formula 58.23 prescribed by the board, in consultation with the workforce 58.24 development council; and 58.25 (2) one-half of available funds shall be allocated based on 58.26 need as demonstrated to the board in consultation with the 58.27 workforce development council. 58.28 (b) The formula for allocating substate and independent 58.29 grantee funds must utilize the most appropriate information 58.30 available to the board to distribute funds in order to address 58.31 the state's worker adjustment assistance needs. Information for 58.32 the formula allocation may include, but is not limited to: 58.33 (1) insured unemployment data; 58.34 (2) dislocated worker special assessment receipts data; 58.35 (3) small plant closing data; 58.36 (4) declining industries data; 59.1 (5) farmer-rancher economic hardship data; and 59.2 (6) long-term unemployment data. 59.3 (c) The board shall establish a uniform procedure for 59.4 reallocating substate and independent grantee funds. The 59.5 criteria for reallocating funds from substate and independent 59.6 grantees not expending their allocations consistent with their 59.7 worker adjustment services plans to other substate and 59.8 independent grantees shall be developed by the board in 59.9 consultation with the workforce development council. 59.10 Sec. 9. [116L.14] [DISLOCATION EVENT SERVICES GRANTS.] 59.11 Subdivision 1. [DISLOCATION EVENT SERVICES GRANTS.] The 59.12 board shall establish and fund dislocation event services grants 59.13 designed to provide worker adjustment services to workers 59.14 displaced as a result of larger plant closings and substantial 59.15 layoffs. Grantees shall apply for a dislocation event services 59.16 grant by submitting a proposal to the board in a form and manner 59.17 prescribed by the board. The application must describe the 59.18 demonstrated need for intervention, including the need for 59.19 retraining, the workers to be served, the coordination of 59.20 available local resources, the services to be provided, and the 59.21 budget plan. 59.22 Subd. 2. [GRANTEES.] (a) Entities authorized to submit 59.23 dislocation event services grants include substate grantees and 59.24 other certified eligible organizations. Nonsubstate grantees 59.25 shall demonstrate they meet criteria established by the board, 59.26 in consultation with the workforce development council. The 59.27 criteria include, but are not limited to: 59.28 (1) the capacity to deliver worker adjustment services; 59.29 (2) an ability to coordinate its activities with substate 59.30 grantees in whose geographic area the organization will be 59.31 operating; 59.32 (3) the capability to coordinate delivery of worker 59.33 adjustment services with other appropriate programs and 59.34 agencies, including educational institutions, employment 59.35 service, human service agencies, and economic development 59.36 agencies; and 60.1 (4) sufficient administrative controls to ensure fiscal 60.2 accountability. 60.3 (b) For purposes of this section, the state job service may 60.4 apply directly to the board for a dislocation event services 60.5 grant only if the effect of a plant closing or substantial 60.6 layoff is statewide or results in the termination from 60.7 employment of employees of the state of Minnesota. 60.8 Subd. 3. [COVERAGE.] Persons who may receive worker 60.9 adjustment services under this section are limited to dislocated 60.10 workers affected by plant closings and substantial layoffs 60.11 involving at least 25 workers from a single employer. 60.12 Subd. 4. [FUNDING.] The board, in consultation with the 60.13 workforce development council, may establish an emergency 60.14 funding process for dislocation event services grants. No more 60.15 than 20 percent of the estimated budget of the proposed grant 60.16 may be awarded through this procedure. The grantee shall submit 60.17 a formal dislocation event services grant application within 90 60.18 days of the initial award of emergency funding. 60.19 Sec. 10. [116L.15] [RETRAINING AND TARGETED TRAINING 60.20 GRANTS.] 60.21 Subdivision 1. [ESTABLISHED.] The board may make grants to 60.22 substate grantees or other certified eligible organizations 60.23 designed to provide for the employment of dislocated workers or 60.24 targeted training assistance to workers at risk of dislocation. 60.25 The focus of the grants must be on the provision of skill-based 60.26 training required by the worker's employer or prospective 60.27 employer. The grants must be developed to meet the worker 60.28 training needs of employers individually or together. Two or 60.29 more organizations may jointly apply for a grant. 60.30 Subd. 2. [RETRAINING GRANTS.] An organization interested 60.31 in applying for a grant to retrain workers who are at risk of 60.32 becoming dislocated workers must apply to the board. As part of 60.33 the application process, an applicant must provide: 60.34 (1) a statement of need that identifies the causes 60.35 contributing to the workers being at risk of dislocation, the 60.36 prospects for reemployment of the workers in the employer's 61.1 industry or the worker's occupation, and the employer's past 61.2 record of permanently laying off workers; 61.3 (2) a description of the current skill level of the workers 61.4 targeted for training and the skills needed by the workers to 61.5 significantly reduce their vulnerability to becoming displaced 61.6 from employment; 61.7 (3) a description of the actions and investments made and 61.8 planned by the employer to avert or minimize worker dislocation, 61.9 including the adoption of high performance workplace and worker 61.10 participation systems and practices; 61.11 (4) a training plan that details who will receive training, 61.12 the type and scope of training assistance to be provided to 61.13 workers, the providers of the training, and any impact on worker 61.14 wages; 61.15 (5) evidence that the proposal has the support and 61.16 involvement of labor; and 61.17 (6) any other relevant information the board requires in 61.18 the grant application. 61.19 Subd. 3. [TARGETED TRAINING GRANTS.] An organization 61.20 interested in applying for a grant to target training for 61.21 dislocated workers being hired by an employer must apply to the 61.22 board. As part of the application process, applicants must 61.23 provide: 61.24 (1) a statement of need; 61.25 (2) a description of local labor market characteristics, 61.26 including the area's unemployment rate, types of workers 61.27 available to be employed in terms of occupation, and the local 61.28 availability of workers in the industry of the employer or 61.29 employers; 61.30 (3) a description of the actions and investments made and 61.31 planned by the employer or employers to create and retain jobs, 61.32 including past employment history, wages paid for the same or 61.33 similar work, and whether high performance workplace and worker 61.34 participation systems and practices have been adopted; 61.35 (4) a description of the type of work to be performed, the 61.36 work-related skills needed, projected wages, and the target 62.1 group of workers requiring the training assistance; 62.2 (5) a training plan that details who will receive training, 62.3 the type and scope of training assistance to be provided 62.4 workers, and the providers of the training; 62.5 (6) evidence that the proposal has the support and 62.6 involvement of labor; and 62.7 (7) any other relevant information the board requires in 62.8 the grant application. 62.9 Subd. 4. [CRITERIA.] The criteria used to award targeted 62.10 training grants must include the severity of need, the target 62.11 group of workers, training assistance, worker wages, utilization 62.12 of resources, cost-effectiveness, grantee management capability, 62.13 and other considerations adopted by the board. 62.14 Subd. 5. [COVERAGE.] Persons eligible to receive 62.15 retraining assistance under this section include workers at risk 62.16 of dislocation from employment and dislocated workers as defined 62.17 in section 116L.08, subdivision 3. Workers are considered to be 62.18 at risk of dislocation as evidenced by a pattern of worker 62.19 layoffs from an employer, a pattern of substantial layoffs or 62.20 plant closures in the same or related industry, or where worker 62.21 skills needed by the employer have become obsolete due to 62.22 advances in technology. 62.23 Subd. 6. [FUNDING.] The board may award retraining and 62.24 targeted training grants, if approved by the workforce 62.25 development council, through a request for proposal process if: 62.26 (1) employers benefiting from a retraining and targeted 62.27 training grant provide a match of at least one for one that may 62.28 be in the form of funding, equipment, staff, instructors, and 62.29 work release time for workers enrolled in training; 62.30 (2) employers benefiting from a retraining and targeted 62.31 training grant to retrain workers at risk of dislocation 62.32 maintain their past rate of expenditure from other sources for 62.33 that training during the grant period; and 62.34 (3) employers benefiting from a retraining and targeted 62.35 training grant to train new workers do not have workers in 62.36 layoff status, unless it can be documented the layoff is 63.1 temporary or seasonal. 63.2 Subd. 7. [LIMITATION.] No more than five percent of the 63.3 amount allocated to dislocated worker programs under section 63.4 116L.07, subdivision 2, clause (3), may be used for the grants 63.5 authorized under this section. 63.6 Sec. 11. [116L.16] [DISLOCATED WORKER COORDINATION.] 63.7 The board shall coordinate the actions taken by state 63.8 agencies and public post-secondary educational institutions to 63.9 respond to or address the specific needs of dislocated workers 63.10 and to provide services to dislocated workers including 63.11 education and retraining. The board shall also assist local 63.12 government units, community groups, business associations or 63.13 organizations, labor organizations, and others in coordinating 63.14 their efforts in providing services to dislocated workers. 63.15 Sec. 12. [116L.17] [PERFORMANCE STANDARDS, REPORTING, COST 63.16 LIMITATIONS.] 63.17 Subdivision 1. [PERFORMANCE STANDARDS.] The board shall 63.18 establish performance standards for the programs and activities 63.19 administered or funded under sections 116L.08 to 116L.17. The 63.20 board may use, when appropriate, existing federal performance 63.21 standards or, if the board determines that the federal standards 63.22 are inadequate or not suitable, may formulate new performance 63.23 standards to ensure that the programs and activities of the 63.24 dislocated worker program are effectively administered. 63.25 The board shall, at a minimum, establish performance 63.26 standards which appropriately gauge the program's effectiveness 63.27 at achieving the following objectives: 63.28 (1) placement of dislocated workers in employment; 63.29 (2) replacing lost income resulting from worker dislocation 63.30 from employment; 63.31 (3) early intervention with workers shortly after or 63.32 shortly before becoming displaced from employment; and 63.33 (4) retraining of workers from one occupation or industry 63.34 to another. 63.35 The standards shall be applied to plans or grants 63.36 authorized under sections 116L.13; 116L.14; and 116L.15 and for 64.1 other activities the board considers appropriate. 64.2 Subd. 2. [REPORTS.] (a) Grantees receiving funds under 64.3 sections 116L.11; 116L.12; 116L.13; and 116L.14 shall report to 64.4 the board information on program participants, activities 64.5 funded, and utilization of funds in a form and manner prescribed 64.6 by the board. 64.7 (b) The board shall report quarterly to the workforce 64.8 development council information on prefeasibility study grants 64.9 awarded, rapid response and expeditious response activities, 64.10 worker adjustment services plans, and dislocation event services 64.11 grants. Specific information to be reported shall be by 64.12 agreement between the board and the workforce development 64.13 council. 64.14 Subd. 3. [COST LIMITATIONS.] (a) For purposes of sections 64.15 116L.13 and 116L.14, funds allocated to a grantee are subject to 64.16 the following limitations: 64.17 (1) a maximum of 15 percent for administration in a worker 64.18 adjustment services plan or in a dislocation event services 64.19 grant; 64.20 (2) a minimum of 50 percent for provision of training 64.21 assistance; 64.22 (3) a minimum of ten percent and maximum of 30 percent for 64.23 provision of support services; and 64.24 (4) the balance used for provision of basic readjustment 64.25 assistance. 64.26 (b) A waiver of the cost limitation on providing training 64.27 assistance may be requested. The waiver may not permit less 64.28 than 30 percent of the funds be spent on training assistance. 64.29 (c) The board shall prescribe the form and manner for 64.30 submission of an application for a waiver under paragraph (b). 64.31 Criteria for granting a waiver shall be established by the 64.32 board, in consultation with the workforce development council. 64.33 Sec. 13. Minnesota Statutes 1998, section 268.022, is 64.34 amended to read: 64.35 268.022 [WORKFORCE INVESTMENT FUND.] 64.36 Subdivision 1. [DETERMINATION AND COLLECTION OF SPECIAL 65.1 ASSESSMENT.] (a) In addition to all other taxes, assessments, 65.2 and payment obligations under chapter 268, each employer, except 65.3 an employer making payments in lieu of taxes is liable for a 65.4 special assessment levied at the rate of one-tenth of one 65.5 percent per year on all taxable wages, as defined in section 65.6 268.04, subdivision 25b. The assessment shall become due and be 65.7 paid by each employer to the department on the same schedule and 65.8 in the same manner as other taxes. 65.9 (b) The special assessment levied under this section shall 65.10 not affect the computation of any other taxes, assessments, or 65.11 payment obligations due under this chapter. 65.12(c) Notwithstanding any provision to the contrary, if on65.13June 30 of any year the unobligated balance of the special65.14assessment fund under this section is greater than $30,000,000,65.15the special assessment for the following year only shall be65.16levied at a rate of 1/20th of one percent on all taxable wages.65.17 Subd. 2. [DISBURSEMENT OF SPECIAL ASSESSMENT FUNDS.] (a) 65.18 The money collected under this section shall be deposited in the 65.19 state treasury and credited toa dedicated fund to provide for65.20the employment and training programs established under sections65.21268.975 to 268.98; including vocational guidance, training,65.22placement, and job developmentthe Minnesota workforce 65.23 development fund created by section 116L.07. 65.24 (b)All money in the dedicated fund is appropriated to the65.25commissioner who must act as the fiscal agent for the money and65.26must disburse the money for the purposes of this section, not65.27allowing the money to be used for any other obligation of the65.28state. All money in the dedicated fund shall be deposited,65.29administered, and disbursed in the same manner and under the65.30same conditions and requirements as are provided by law for the65.31other dedicated funds in the state treasury, except that all65.32interest or net income resulting from the investment or deposit65.33of money in the fund shall accrue to the fund for the purposes65.34of the fund.65.35(c)No more than five percent of the dedicated funds 65.36 collected in each fiscal year may be used by the department of 66.1 economic security for its administrative costs. 66.2(d)(c) Reimbursement for costs related to collection of 66.3 the special assessment shall be in an amount negotiated between 66.4 the commissioner and the United States Department of Labor. 66.5(e) The dedicated funds, less amounts under paragraphs (c)66.6and (d) shall be allocated as follows:66.7(1) 40 percent to be allocated annually to substate66.8grantees for provision of expeditious response activities under66.9section 268.9771 and worker adjustment services under section66.10268.9781; and66.11(2) 60 percent to be allocated to activities and programs66.12authorized under sections 268.975 to 268.98.66.13(f) Any funds not allocated, obligated, or expended in a66.14fiscal year shall be available for allocation, obligation, and66.15expenditure in the following fiscal year.66.16 Sec. 14. [WORKFORCE DEVELOPMENT ANALYSIS.] 66.17 The office of strategic and long-range planning must 66.18 identify workforce training programs administered by state 66.19 agencies and by January 15, 2000, present a plan to the governor 66.20 and to the legislature that consolidates those programs and 66.21 provides for an economic development focus to that consolidated 66.22 program. 66.23 Sec. 15. [TRANSFER OF DISLOCATED WORKER PROGRAM FUNCTION 66.24 TO DEPARTMENT OF TRADE AND ECONOMIC DEVELOPMENT.] 66.25 The responsibility of the department of economic security 66.26 for the dislocated workers program under Minnesota Statutes, 66.27 sections 268.975 to 268.98 is transferred pursuant to section 66.28 15.039 to the jobs skills partnership board. 66.29 Sec. 16. [GOVERNOR'S DESIGNATION.] 66.30 The governor shall designate the jobs skills partnership 66.31 board as the responsible state agency for federal dislocated 66.32 worker programs. 66.33 Sec. 17. [FUND TRANSFER.] 66.34 The unobligated balance in the workforce investment 66.35 dedicated fund administered under Minnesota Statutes, section 66.36 268.022, subdivision 2, as of July 1, 1999, is transferred to 67.1 the Minnesota workforce development fund created by Minnesota 67.2 Statutes, section 116L.07. 67.3 Sec. 18. [APPROPRIATION.] 67.4 $29,000,000 is appropriated on July 1, 1999, from the 67.5 general fund to the workforce development fund created by 67.6 Minnesota Statutes, section 116L.07. 67.7 Sec. 19. [REPEALER.] 67.8 Minnesota Statutes 1998, sections 268.975; 268.976; 67.9 268.9771; 268.978; 268.9781; 268.9782; 268.9783; 268.979; and 67.10 268.98, are repealed. 67.11 ARTICLE 8 67.12 MINNESOTACARE TAXES 67.13 Section 1. Minnesota Statutes 1998, section 295.50, 67.14 subdivision 4, is amended to read: 67.15 Subd. 4. [HEALTH CARE PROVIDER.] (a) "Health care 67.16 provider" means: 67.17 (1) a person whose health care occupation is regulated or 67.18 required to be regulated by the state of Minnesota furnishing 67.19 any or all of the following goods or services directly to a 67.20 patient or consumer: medical, surgical, optical, visual, 67.21 dental, hearing, nursing services, drugs, laboratory, diagnostic 67.22 or therapeutic services; 67.23 (2) a person who provides goods and services not listed in 67.24 clause (1) that qualify for reimbursement under the medical 67.25 assistance program provided under chapter 256B; 67.26 (3) a staff model health plan company; 67.27 (4) an ambulance service required to be licensed; or 67.28 (5) a person who sells or repairs hearing aids and related 67.29 equipment or prescription eyewear. 67.30 (b) Health care provider does not include: (1) hospitals; 67.31 medical supplies distributors, except as specified under 67.32 paragraph (a), clause (5); nursing homes licensed under chapter 67.33 144A or licensed in any other jurisdiction; pharmacies; surgical 67.34 centers; bus and taxicab transportation, or any other providers 67.35 of transportation services other than ambulance services 67.36 required to be licensed; supervised living facilities for 68.1 persons with mental retardation or related conditions, licensed 68.2 under Minnesota Rules, parts 4665.0100 to 4665.9900; residential 68.3 care homes licensed under chapter 144B; board and lodging 68.4 establishments providing only custodial services that are 68.5 licensed under chapter 157 and registered under section 157.17 68.6 to provide supportive services or health supervision services; 68.7 adult foster homes as defined in Minnesota Rules, part 68.8 9555.5105; day training and habilitation services for adults 68.9 with mental retardation and related conditions as defined in 68.10 section 252.41, subdivision 3; and boarding care homes, as 68.11 defined in Minnesota Rules, part 4655.0100.; 68.12(c) For purposes of this subdivision, "directly to a68.13patient or consumer" includes goods and services provided in68.14connection with independent medical examinations under section68.1565B.56 or other examinations for purposes of litigation or68.16insurance claims.68.17 (2) home health agencies as defined in Minnesota Rules, 68.18 part 9505.0175, subpart 15; a person providing personal care 68.19 services and supervision of personal care services as defined in 68.20 Minnesota Rules, part 9505.0335; a person providing private duty 68.21 nursing services as defined in Minnesota Rules, part 9505.0360; 68.22 and home care providers required to be licensed under chapter 68.23 144A; 68.24 (3) a person who employs health care providers solely for 68.25 the purpose of providing patient services to its employees; and 68.26 (4) an educational institution that employs health care 68.27 providers solely for the purpose of providing patient services 68.28 to its students if the institution does not receive fee for 68.29 service payments or payments for extended coverage. 68.30 Sec. 2. Minnesota Statutes 1998, section 295.50, 68.31 subdivision 9b, is amended to read: 68.32 Subd. 9b. [PATIENT SERVICES.] (a) "Patient services" means 68.33 inpatient and outpatient services and other goods and services 68.34 provided by hospitals, surgical centers, or health care 68.35 providers. They include the following health care goods and 68.36 services provided to a patient or consumer: 69.1 (1) bed and board; 69.2 (2) nursing services and other related services; 69.3 (3) use of hospitals, surgical centers, or health care 69.4 provider facilities; 69.5 (4) medical social services; 69.6 (5) drugs, biologicals, supplies, appliances, and 69.7 equipment; 69.8 (6) other diagnostic or therapeutic items or services; 69.9 (7) medical or surgical services; 69.10 (8) items and services furnished to ambulatory patients not 69.11 requiring emergency care; 69.12 (9) emergency services;and69.13 (10) examinations, including but not limited to reviews of 69.14 medical records for the purpose of utilization reviews, 69.15 insurance claims or eligibility, litigation, and employment; and 69.16 (11) covered services listed in section 256B.0625 and in 69.17 Minnesota Rules, parts 9505.0170 to 9505.0475. 69.18 (b) "Patient services" does not include home health care 69.19 services. 69.20 Sec. 3. Minnesota Statutes 1998, section 295.53, 69.21 subdivision 1, is amended to read: 69.22 Subdivision 1. [EXEMPTIONS.] (a) The following payments 69.23 are excluded from the gross revenues subject to the hospital, 69.24 surgical center, or health care provider taxes under sections 69.25 295.50 to 295.57: 69.26 (1) payments received for services provided under the 69.27 Medicare program, including payments received from the 69.28 government, and organizations governed by sections 1833 and 1876 69.29 of title XVIII of the federal Social Security Act, United States 69.30 Code, title 42, section 1395, and enrollee deductibles, 69.31 coinsurance, and copayments, whether paid by the Medicare 69.32 enrollee or by a Medicare supplemental coverage as defined in 69.33 section 62A.011, subdivision 3, clause (10). Payments for 69.34 services not covered by Medicare are taxable; 69.35 (2) medical assistance payments including payments received 69.36 directly from the government or from a prepaid plan; 70.1 (3) payments received for home health care services; 70.2 (4) payments received from hospitals or surgical centers 70.3 for goods and services on which liability for tax is imposed 70.4 under section 295.52 or the source of funds for the payment is 70.5 exempt under clause (1), (2), (7), (8),or(10), or (13); 70.6 (5) payments received from health care providers for goods 70.7 and services on which liability for tax is imposed under this 70.8 chapter or the source of funds for the payment is exempt under 70.9 clause (1), (2), (7), (8),or(10), or (13); 70.10 (6) amounts paid for legend drugs, other than nutritional 70.11 products, to a wholesale drug distributor who is subject to tax 70.12 under section 295.52, subdivision 3, reduced by reimbursements 70.13 received for legend drugs under clauses (1), (2), (7), and (8); 70.14 (7) payments received under the general assistance medical 70.15 care program including payments received directly from the 70.16 government or from a prepaid plan; 70.17 (8) payments received for providing services under the 70.18 MinnesotaCare program including payments received directly from 70.19 the government or from a prepaid plan and enrollee deductibles, 70.20 coinsurance, and copayments. For purposes of this clause, 70.21 coinsurance means the portion of payment that the enrollee is 70.22 required to pay for the covered service; 70.23 (9) payments received by a health care provider or the 70.24 wholly owned subsidiary of a health care provider for care 70.25 provided outside Minnesotato a patient who is not domiciled in70.26Minnesota; 70.27 (10) payments received from the chemical dependency fund 70.28 under chapter 254B; 70.29 (11) payments received in the nature of charitable 70.30 donations that are not designated for providing patient services 70.31 to a specific individual or group; 70.32 (12) payments received for providing patient services 70.33 incurred through a formal program of health care research 70.34 conducted in conformity with federal regulations governing 70.35 research on human subjects. Payments received from patients or 70.36 from other persons paying on behalf of the patients are subject 71.1 to tax; 71.2 (13) payments received from any governmental agency for 71.3 services benefiting the public, not including payments made by 71.4 the government in its capacity as an employer or insurer; 71.5 (14) payments received for services provided by community 71.6 residential mental health facilities licensed under Minnesota 71.7 Rules, parts 9520.0500 to 9520.0690, community support programs 71.8 and family community support programs approved under Minnesota 71.9 Rules, parts 9535.1700 to 9535.1760, and community mental health 71.10 centers as defined in section 245.62, subdivision 2; 71.11 (15) government payments received by a regional treatment 71.12 center; 71.13 (16) payments received for hospice care services; 71.14 (17) payments received by a health care provider for 71.15 hearing aids and related equipment or prescription eyewear 71.16 delivered outside of Minnesota; 71.17 (18) payments received bya post-secondaryan educational 71.18 institution from student tuition, student activity fees, health 71.19 care service fees, government appropriations, donations, or 71.20 grants. Fee for service payments and payments for extended 71.21 coverage are taxable;and71.22 (19) payments received for services provided by: assisted 71.23 living programs and congregate housing programs; and 71.24 (20) payments received from nursing homes licensed under 71.25 chapter 144A for services provided to a nursing home. 71.26 (b) Payments received by wholesale drug distributors for 71.27 legend drugs sold directly to veterinarians or veterinary bulk 71.28 purchasing organizations are excluded from the gross revenues 71.29 subject to the wholesale drug distributor tax under sections 71.30 295.50 to 295.59. 71.31 Sec. 4. Minnesota Statutes 1998, section 295.55, 71.32 subdivision 2, is amended to read: 71.33 Subd. 2. [ESTIMATED TAX; HOSPITALS; SURGICAL CENTERS.] (a) 71.34 Each hospital or surgical center must make estimated payments of 71.35 the taxes for the calendar year in monthly installments to the 71.36 commissioner within 15 days after the end of the month. 72.1 (b) Estimated tax payments are not required of hospitals or 72.2 surgical centers if: (1) the tax for the current calendar year 72.3 is less than $500; or (2) the tax for the previous calendar year 72.4 is less than $500, if the taxpayer had a tax liability and was 72.5 doing business the entire year; or (3) if a hospital has been 72.6 allowed a grant under section 144.1484, subdivision 2, for the 72.7 year. 72.8 (c) Underpayment of estimated installments bear interest at 72.9 the rate specified in section 270.75, from the due date of the 72.10 payment until paid or until the due date of the annual returnat72.11the rate specified in section 270.75whichever comes first. An 72.12 underpayment of an estimated installment is the difference 72.13 between the amount paid and the lesser of (1) 90 percent of 72.14 one-twelfth of the tax for the calendar year or (2) one-twelfth 72.15 of the total tax for theactual gross revenues received during72.16the monthprevious calendar year if the taxpayer had a tax 72.17 liability and was doing business the entire year. 72.18 Sec. 5. Minnesota Statutes 1998, section 295.55, 72.19 subdivision 3, is amended to read: 72.20 Subd. 3. [ESTIMATED TAX; OTHER TAXPAYERS.] (a) Each 72.21 taxpayer, other than a hospital or surgical center, must make 72.22 estimated payments of the taxes for the calendar year in 72.23 quarterly installments to the commissioner by April 15, July 15, 72.24 October 15, and January 15 of the following calendar year. 72.25 (b) Estimated tax payments are not required if: (1) the 72.26 tax for the current calendar year is less than $500; or (2) the 72.27 tax for the previous calendar year is less than $500, if the 72.28 taxpayer had a tax liability and was doing business the entire 72.29 year. 72.30 (c) Underpayment of estimated installments bear interest at 72.31 the rate specified in section 270.75, from the due date of the 72.32 payment until paid or until the due date of the annual returnat72.33the rate specified in section 270.75whichever comes first. An 72.34 underpayment of an estimated installment is the difference 72.35 between the amount paid and the lesser of (1) 90 percent of 72.36 one-quarter of the tax for the calendar year or (2) one-quarter 73.1 of the total tax for theactual gross revenues received during73.2the quarterprevious calendar year if the taxpayer had a tax 73.3 liability and was doing business the entire year. 73.4 Sec. 6. Minnesota Statutes 1998, section 295.57, is 73.5 amended by adding a subdivision to read: 73.6 Subd. 4. [SAMPLING TECHNIQUES.] The commissioner may use 73.7 statistical or other sampling techniques consistent with 73.8 generally accepted auditing standards in examining returns or 73.9 records and making assessments. 73.10 Sec. 7. [EFFECTIVE DATE.] 73.11 Sections 1, 3, 4, and 5 are effective for payments received 73.12 on or after January 1, 2000. Sections 2 and 6 are effective the 73.13 day following final enactment. 73.14 ARTICLE 9 73.15 PROPERTY TAX 73.16 Section 1. [103F.002] [COLLECTION OF PENALTIES.] 73.17 If a penalty imposed for violation of an ordinance enacted 73.18 under this chapter is unpaid for more than 60 days after the 73.19 date when payment is due, the local government unit that imposed 73.20 the penalty may certify the delinquent penalty, together with 73.21 any interest and additional penalties that apply to it, to the 73.22 county auditor for collection to the same extent and in the same 73.23 manner provided by law for the assessment and collection of real 73.24 estate taxes. 73.25 Sec. 2. Minnesota Statutes 1998, section 204B.135, is 73.26 amended by adding a subdivision to read: 73.27 Subd. 5. [REDISTRICTING EXPENSES.] The county board may 73.28 levy a tax not to exceed $1 per capita in the year ending in "0" 73.29 to pay costs incurred in the year ending in "1" or "2" that are 73.30 reasonably related to the redistricting of election districts, 73.31 establishment of precinct boundaries, designation of polling 73.32 places, and the updating of voter records in the statewide 73.33 registration system. The county auditor shall distribute to 73.34 each municipality in the county on a per capita basis 25 percent 73.35 of the amount levied as provided in this subdivision, based on 73.36 the population of the municipality in the most recent census. 74.1 This levy is not subject to statutory levy limits. 74.2 Sec. 3. Minnesota Statutes 1998, section 270.07, 74.3 subdivision 1, is amended to read: 74.4 Subdivision 1. [POWERS OF COMMISSIONER; APPLICATION FOR 74.5 ABATEMENT; ORDERS.] (a) The commissioner of revenue shall 74.6 prescribe the form of all blanks and books required under this 74.7 chapter and shall hear and determine all matters of grievance 74.8 relating to taxation. Except for matters delegated to the 74.9 various boards of county commissioners under section 375.192, 74.10 and except as otherwise provided by law, the commissioner shall 74.11 have power to grant such reduction or abatement of net tax 74.12 capacities or taxes and of any costs, penalties or interest 74.13 thereon as the commissioner may deem just and equitable, and to 74.14 order the refundment, in whole or in part, of any taxes, costs, 74.15 penalties or interest thereon which have been erroneously or 74.16 unjustly paid. Application therefor shall be submitted with a 74.17 statement of facts in the case and the favorable recommendation 74.18 of the county board or of the board of abatement of any city 74.19 where any such board exists, and the county auditor of the 74.20 county wherein such tax was levied or paid. In the case of taxes 74.21 other than gross earnings taxes, the order may be made only on 74.22 application and approval as provided in this paragraph. No 74.23 reduction, abatement, or refundment of any special assessments 74.24 made or levied by any municipality for local improvements shall 74.25 be made unless it is also approved by the board of review or 74.26 similar taxing authority of such municipality. 74.27 (b) The commissioner has the power to grant reductions or 74.28 abatements of gross earnings tax. An application for reduction 74.29 of gross earnings taxes may be made directly to the commissioner 74.30 without the favorable action of the county board and county 74.31 auditor. The commissioner shall direct that any gross earnings 74.32 taxes that may have been erroneously or unjustly paid be applied 74.33 against unpaid taxes due from the applicant. 74.34 (c) The commissioner shall forward to the county auditor a 74.35 copy of the order made by the commissioner in all cases in which 74.36 the approval of the county board is required. 75.1 (d) The commissioner may refer any question that may arise 75.2 in reference to the true construction of this chapter to the 75.3 attorney general, and the decision thereon shall be in force and 75.4 effect until annulled by the judgment of a court of competent 75.5 jurisdiction. 75.6 (e) The commissioner may by written order abate, reduce, or 75.7 refund any penalty or interest imposed by any law relating to 75.8 taxation, if in the commissioner's opinion the failure to timely 75.9 pay the tax or failure to timely file the return is due to 75.10 reasonable cause, or if the taxpayer is located in a 75.11 presidentially declared disaster area.The order shall be made75.12on application of the taxpayer to the commissioner.75.13(f) If an order issued under this subdivision is for an75.14abatement, reduction, or refund of over $5,000, it shall be75.15valid only if approved in writing by the attorney general.75.16(g)(f) An appeal may not be taken to the tax court from 75.17 any order of the commissioner of revenue made in the exercise of 75.18 the discretionary authority granted in paragraph (a) with 75.19 respect to the reduction or abatement of real or personal 75.20 property taxes in response to a taxpayer's application for an 75.21 abatement, reduction, or refund of taxes, net tax capacities, 75.22 costs, penalties, or interest. 75.23 Sec. 4. Minnesota Statutes 1998, section 272.02, 75.24 subdivision 1, is amended to read: 75.25 Subdivision 1. [EXEMPT PROPERTY DESCRIBED.] All property 75.26 described in this section to the extent herein limited shall be 75.27 exempt from taxation: 75.28 (1) All public burying grounds. 75.29 (2) All public schoolhouses. 75.30 (3) All public hospitals. 75.31 (4) All academies, colleges, and universities, and all 75.32 seminaries of learning. 75.33 (5) All churches, church property, and houses of worship. 75.34 (6) Institutions of purely public charity except parcels of 75.35 property containing structures and the structures described in 75.36 section 273.13, subdivision 25, paragraph (e), other than those 76.1 that qualify for exemption under clause (25). 76.2 (7) All public property exclusively used for any public 76.3 purpose. 76.4 (8) Except for the taxable personal property enumerated 76.5 below, all personal property and the property described in 76.6 section 272.03, subdivision 1, paragraphs (c) and (d), shall be 76.7 exempt. 76.8 The following personal property shall be taxable: 76.9 (a) personal property which is part of an electric 76.10 generating, transmission, or distribution system or a pipeline 76.11 system transporting or distributing water, gas, crude oil, or 76.12 petroleum products or mains and pipes used in the distribution 76.13 of steam or hot or chilled water for heating or cooling 76.14 buildings and structures; 76.15 (b) railroad docks and wharves which are part of the 76.16 operating property of a railroad company as defined in section 76.17 270.80; 76.18 (c) personal property defined in section 272.03, 76.19 subdivision 2, clause (3); 76.20 (d) leasehold or other personal property interests which 76.21 are taxed pursuant to section 272.01, subdivision 2; 273.124, 76.22 subdivision 7; or 273.19, subdivision 1; or any other law 76.23 providing the property is taxable as if the lessee or user were 76.24 the fee owner; 76.25 (e) manufactured homes and sectional structures, including 76.26 storage sheds, decks, and similar removable improvements 76.27 constructed on the site of a manufactured home, sectional 76.28 structure, park trailer or travel trailer as provided in section 76.29 273.125, subdivision 8, paragraph (f); and 76.30 (f) flight property as defined in section 270.071. 76.31 (9) Personal property used primarily for the abatement and 76.32 control of air, water, or land pollution to the extent that it 76.33 is so used, and real property which is used primarily for 76.34 abatement and control of air, water, or land pollution as part 76.35 of an agricultural operation, as a part of a centralized 76.36 treatment and recovery facility operating under a permit issued 77.1 by the Minnesota pollution control agency pursuant to chapters 77.2 115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 77.3 and 7045.0020 to 7045.1260, as a wastewater treatment facility 77.4 and for the treatment, recovery, and stabilization of metals, 77.5 oils, chemicals, water, sludges, or inorganic materials from 77.6 hazardous industrial wastes, or as part of an electric 77.7 generation system. For purposes of this clause, personal 77.8 property includes ponderous machinery and equipment used in a 77.9 business or production activity that at common law is considered 77.10 real property. 77.11 Any taxpayer requesting exemption of all or a portion of 77.12 any real property or any equipment or device, or part thereof, 77.13 operated primarily for the control or abatement of air or water 77.14 pollution shall file an application with the commissioner of 77.15 revenue. The equipment or device shall meet standards, rules, 77.16 or criteria prescribed by the Minnesota pollution control 77.17 agency, and must be installed or operated in accordance with a 77.18 permit or order issued by that agency. The Minnesota pollution 77.19 control agency shall upon request of the commissioner furnish 77.20 information or advice to the commissioner. On determining that 77.21 property qualifies for exemption, the commissioner shall issue 77.22 an order exempting the property from taxation. The equipment or 77.23 device shall continue to be exempt from taxation as long as the 77.24 permit issued by the Minnesota pollution control agency remains 77.25 in effect. 77.26 (10) Wetlands. For purposes of this subdivision, 77.27 "wetlands" means: (i) land described in section 103G.005, 77.28 subdivision 15a; (ii) land which is mostly under water, produces 77.29 little if any income, and has no use except for wildlife or 77.30 water conservation purposes, provided it is preserved in its 77.31 natural condition and drainage of it would be legal, feasible, 77.32 and economically practical for the production of livestock, 77.33 dairy animals, poultry, fruit, vegetables, forage and grains, 77.34 except wild rice; or (iii) land in a wetland preservation area 77.35 under sections 103F.612 to 103F.616. "Wetlands" under items (i) 77.36 and (ii) include adjacent land which is not suitable for 78.1 agricultural purposes due to the presence of the wetlands, but 78.2 do not include woody swamps containing shrubs or trees, wet 78.3 meadows, meandered water, streams, rivers, and floodplains or 78.4 river bottoms. Exemption of wetlands from taxation pursuant to 78.5 this section shall not grant the public any additional or 78.6 greater right of access to the wetlands or diminish any right of 78.7 ownership to the wetlands. 78.8 (11) Native prairie. The commissioner of the department of 78.9 natural resources shall determine lands in the state which are 78.10 native prairie and shall notify the county assessor of each 78.11 county in which the lands are located. Pasture land used for 78.12 livestock grazing purposes shall not be considered native 78.13 prairie for the purposes of this clause. Upon receipt of an 78.14 application for the exemption provided in this clause for lands 78.15 for which the assessor has no determination from the 78.16 commissioner of natural resources, the assessor shall refer the 78.17 application to the commissioner of natural resources who shall 78.18 determine within 30 days whether the land is native prairie and 78.19 notify the county assessor of the decision. Exemption of native 78.20 prairie pursuant to this clause shall not grant the public any 78.21 additional or greater right of access to the native prairie or 78.22 diminish any right of ownership to it. 78.23 (12) Property used in a continuous program to provide 78.24 emergency shelter for victims of domestic abuse, provided the 78.25 organization that owns and sponsors the shelter is exempt from 78.26 federal income taxation pursuant to section 501(c)(3) of the 78.27 Internal Revenue Code of 1986, as amended through December 31, 78.28 1992, notwithstanding the fact that the sponsoring organization 78.29 receives funding under section 8 of the United States Housing 78.30 Act of 1937, as amended. 78.31 (13) If approved by the governing body of the municipality 78.32 in which the property is located, property not exceeding one 78.33 acre which is owned and operated by any senior citizen group or 78.34 association of groups that in general limits membership to 78.35 persons age 55 or older and is organized and operated 78.36 exclusively for pleasure, recreation, and other nonprofit 79.1 purposes, no part of the net earnings of which inures to the 79.2 benefit of any private shareholders; provided the property is 79.3 used primarily as a clubhouse, meeting facility, or recreational 79.4 facility by the group or association and the property is not 79.5 used for residential purposes on either a temporary or permanent 79.6 basis. 79.7 (14) To the extent provided by section 295.44, real and 79.8 personal property used or to be used primarily for the 79.9 production of hydroelectric or hydromechanical power on a site 79.10 owned by the federal government, the state, or a local 79.11 governmental unit which is developed and operated pursuant to 79.12 the provisions of section 103G.535. 79.13 (15) If approved by the governing body of the municipality 79.14 in which the property is located, and if construction is 79.15 commenced after June 30, 1983: 79.16 (a) a "direct satellite broadcasting facility" operated by 79.17 a corporation licensed by the federal communications commission 79.18 to provide direct satellite broadcasting services using direct 79.19 broadcast satellites operating in the 12-ghz. band; and 79.20 (b) a "fixed satellite regional or national program service 79.21 facility" operated by a corporation licensed by the federal 79.22 communications commission to provide fixed satellite-transmitted 79.23 regularly scheduled broadcasting services using satellites 79.24 operating in the 6-ghz. band. 79.25 An exemption provided by clause (15) shall apply for a period 79.26 not to exceed five years. When the facility no longer qualifies 79.27 for exemption, it shall be placed on the assessment rolls as 79.28 provided in subdivision 4. Before approving a tax exemption 79.29 pursuant to this paragraph, the governing body of the 79.30 municipality shall provide an opportunity to the members of the 79.31 county board of commissioners of the county in which the 79.32 facility is proposed to be located and the members of the school 79.33 board of the school district in which the facility is proposed 79.34 to be located to meet with the governing body. The governing 79.35 body shall present to the members of those boards its estimate 79.36 of the fiscal impact of the proposed property tax exemption. 80.1 The tax exemption shall not be approved by the governing body 80.2 until the county board of commissioners has presented its 80.3 written comment on the proposal to the governing body or 30 days 80.4 have passed from the date of the transmittal by the governing 80.5 body to the board of the information on the fiscal impact, 80.6 whichever occurs first. 80.7 (16) Real and personal property owned and operated by a 80.8 private, nonprofit corporation exempt from federal income 80.9 taxation pursuant to United States Code, title 26, section 80.10 501(c)(3), primarily used in the generation and distribution of 80.11 hot water for heating buildings and structures. 80.12 (17) Notwithstanding section 273.19, state lands that are 80.13 leased from the department of natural resources under section 80.14 92.46. 80.15 (18) Electric power distribution lines and their 80.16 attachments and appurtenances, that are used primarily for 80.17 supplying electricity to farmers at retail. 80.18 (19) Transitional housing facilities. "Transitional 80.19 housing facility" means a facility that meets the following 80.20 requirements. (i) It provides temporary housing to individuals, 80.21 couples, or families. (ii) It has the purpose of reuniting 80.22 families and enabling parents or individuals to obtain 80.23 self-sufficiency, advance their education, get job training, or 80.24 become employed in jobs that provide a living wage. (iii) It 80.25 provides support services such as child care, work readiness 80.26 training, and career development counseling; and a 80.27 self-sufficiency program with periodic monitoring of each 80.28 resident's progress in completing the program's goals. (iv) It 80.29 provides services to a resident of the facility for at least 80.30 three months but no longer than three years, except residents 80.31 enrolled in an educational or vocational institution or job 80.32 training program. These residents may receive services during 80.33 the time they are enrolled but in no event longer than four 80.34 years. (v) It is owned and operated or under lease from a unit 80.35 of government or governmental agency under a property 80.36 disposition program and operated by one or more organizations 81.1 exempt from federal income tax under section 501(c)(3) of the 81.2 Internal Revenue Code of 1986, as amended through December 31, 81.3 1992. This exemption applies notwithstanding the fact that the 81.4 sponsoring organization receives financing by a direct federal 81.5 loan or federally insured loan or a loan made by the Minnesota 81.6 housing finance agency under the provisions of either Title II 81.7 of the National Housing Act or the Minnesota Housing Finance 81.8 Agency Law of 1971 or rules promulgated by the agency pursuant 81.9 to it, and notwithstanding the fact that the sponsoring 81.10 organization receives funding under Section 8 of the United 81.11 States Housing Act of 1937, as amended. 81.12 (20) Real and personal property, including leasehold or 81.13 other personal property interests, owned and operated by a 81.14 corporation if more than 50 percent of the total voting power of 81.15 the stock of the corporation is owned collectively by: (i) the 81.16 board of regents of the University of Minnesota, (ii) the 81.17 University of Minnesota Foundation, an organization exempt from 81.18 federal income taxation under section 501(c)(3) of the Internal 81.19 Revenue Code of 1986, as amended through December 31, 1992, and 81.20 (iii) a corporation organized under chapter 317A, which by its 81.21 articles of incorporation is prohibited from providing pecuniary 81.22 gain to any person or entity other than the regents of the 81.23 University of Minnesota; which property is used primarily to 81.24 manage or provide goods, services, or facilities utilizing or 81.25 relating to large-scale advanced scientific computing resources 81.26 to the regents of the University of Minnesota and others. 81.27 (21)(a) Small scale wind energy conversion systems 81.28 installed after January 1, 1991, and used as an electric power 81.29 source are exempt. 81.30 "Small scale wind energy conversion systems" are wind 81.31 energy conversion systems, as defined in section 216C.06, 81.32 subdivision 12, including the foundation or support pad, which 81.33 are (i) used as an electric power source; (ii) located within 81.34 one county and owned by the same owner; and (iii) produce two 81.35 megawatts or less of electricity as measured by nameplate 81.36 ratings. 82.1 (b) Medium scale wind energy conversion systems installed 82.2 after January 1, 1991, are treated as follows: (i) the 82.3 foundation and support pad are taxable; (ii) the associated 82.4 supporting and protective structures are exempt for the first 82.5 five assessment years after they have been constructed, and 82.6 thereafter, 30 percent of the market value of the associated 82.7 supporting and protective structures are taxable; and (iii) the 82.8 turbines, blades, transformers, and its related equipment, are 82.9 exempt. "Medium scale wind energy conversion systems" are wind 82.10 energy conversion systems as defined in section 216C.06, 82.11 subdivision 12, including the foundation or support pad, which 82.12 are: (i) used as an electric power source; (ii) located within 82.13 one county and owned by the same owner; and (iii) produce more 82.14 than two but equal to or less than 12 megawatts of energy as 82.15 measured by nameplate ratings. 82.16 (c) Large scale wind energy conversion systems installed 82.17 after January 1, 1991, are treated as follows: 25 percent of 82.18 the market value of all property is taxable, including (i) the 82.19 foundation and support pad; (ii) the associated supporting and 82.20 protective structures; and (iii) the turbines, blades, 82.21 transformers, and its related equipment. "Large scale wind 82.22 energy conversion systems" are wind energy conversion systems as 82.23 defined in section 216C.06, subdivision 12, including the 82.24 foundation or support pad, which are: (i) used as an electric 82.25 power source; and (ii) produce more than 12 megawatts of energy 82.26 as measured by nameplate ratings. 82.27 (22) Containment tanks, cache basins, and that portion of 82.28 the structure needed for the containment facility used to 82.29 confine agricultural chemicals as defined in section 18D.01, 82.30 subdivision 3, as required by the commissioner of agriculture 82.31 under chapter 18B or 18C. 82.32 (23) Photovoltaic devices, as defined in section 216C.06, 82.33 subdivision 13, installed after January 1, 1992, and used to 82.34 produce or store electric power. 82.35 (24) Real and personal property owned and operated by a 82.36 private, nonprofit corporation exempt from federal income 83.1 taxation pursuant to United States Code, title 26, section 83.2 501(c)(3), primarily used for an ice arena or ice rink, and used 83.3 primarily for youth and high school programs. 83.4 (25) A structure that is situated on real property that is 83.5 used for: 83.6 (i) housing for the elderly or for low- and moderate-income 83.7 families as defined in Title II of the National Housing Act, as 83.8 amended through December 31, 1990, and funded by a direct 83.9 federal loan or federally insured loan made pursuant to Title II 83.10 of the act; or 83.11 (ii) housing lower income families or elderly or 83.12 handicapped persons, as defined in Section 8 of the United 83.13 States Housing Act of 1937, as amended. 83.14 In order for a structure to be exempt under item (i) or 83.15 (ii), it must also meet each of the following criteria: 83.16 (A) is owned by an entity which is operated as a nonprofit 83.17 corporation organized under chapter 317A; 83.18 (B) is owned by an entity which has not entered into a 83.19 housing assistance payments contract under Section 8 of the 83.20 United States Housing Act of 1937, or, if the entity which owns 83.21 the structure has entered into a housing assistance payments 83.22 contract under Section 8 of the United States Housing Act of 83.23 1937, the contract provides assistance for less than 90 percent 83.24 of the dwelling units in the structure, excluding dwelling units 83.25 intended for management or maintenance personnel; 83.26 (C) operates an on-site congregate dining program in which 83.27 participation by residents is mandatory, and provides assisted 83.28 living or similar social and physical support services for 83.29 residents; and 83.30 (D) was not assessed and did not pay tax under chapter 273 83.31 prior to the 1991 levy, while meeting the other conditions of 83.32 this clause. 83.33 An exemption under this clause remains in effect for taxes 83.34 levied in each year or partial year of the term of its permanent 83.35 financing. 83.36 (26) Real and personal property that is located in the 84.1 Superior National Forest, and owned or leased and operated by a 84.2 nonprofit organization that is exempt from federal income 84.3 taxation under section 501(c)(3) of the Internal Revenue Code of 84.4 1986, as amended through December 31, 1992, and primarily used 84.5 to provide recreational opportunities for disabled veterans and 84.6 their families. 84.7 (27) Manure pits and appurtenances, which may include 84.8 slatted floors and pipes, installed or operated in accordance 84.9 with a permit, order, or certificate of compliance issued by the 84.10 Minnesota pollution control agency. The exemption shall 84.11 continue for as long as the permit, order, or certificate issued 84.12 by the Minnesota pollution control agency remains in effect. 84.13 (28) Notwithstanding clause (8), item (a), attached 84.14 machinery and other personal property which is part of a 84.15 facility containing a cogeneration system as described in 84.16 section 216B.166, subdivision 2, paragraph (a), if the 84.17 cogeneration system has met the following criteria: (i) the 84.18 system utilizes natural gas as a primary fuel and the 84.19 cogenerated steam initially replaces steam generated from 84.20 existing thermal boilers utilizing coal; (ii) the facility 84.21 developer is selected as a result of a procurement process 84.22 ordered by the public utilities commission; and (iii) 84.23 construction of the facility is commenced after July 1, 1994, 84.24 and before July 1, 1997. 84.25 (29) Real property acquired by a home rule charter city, 84.26 statutory city, county, town, or school district under a lease 84.27 purchase agreement or an installment purchase contract during 84.28 the term of the lease purchase agreement as long as and to the 84.29 extent that the property is used by the city, county, town, or 84.30 school district and devoted to a public use and to the extent it 84.31 is not subleased to any private individual, entity, association, 84.32 or corporation in connection with a business or enterprise 84.33 operated for profit. 84.34 (30) Property owned by a nonprofit charitable organization 84.35 that qualifies for tax exemption under section 501(c)(3) of the 84.36 Internal Revenue Code of 1986, as amended through December 31, 85.1 1997, that is intended to be used as a business incubator in a 85.2 high-unemployment countybut is not occupied on the assessment85.3date. As used in this clause, a "business incubator" is a 85.4 facility used for the development of nonretail businesses, 85.5 offering access to equipment, space, services, and advice to the 85.6 tenant businesses, for the purpose of encouraging economic 85.7 development, diversification, and job creation in the area 85.8 served by the organization, and "high-unemployment county" is a 85.9 county that had an average annual unemployment rate of 7.9 85.10 percent or greater in 1997. Property that qualifies for the 85.11 exemption under this clause is limited to no more than two 85.12 contiguous parcels and structures that do not exceed in the 85.13 aggregate 40,000 square feet. This exemption expires after 85.14 taxes payable in 2005. 85.15 (31) Notwithstanding any other law to the contrary, real 85.16 property that meets the following criteria is exempt: 85.17 (i) constitutes a wastewater treatment system (a) 85.18 constructed by a municipality using public funds, (b) operates 85.19 under a State Disposal System Permit issued by the Minnesota 85.20 pollution control agency pursuant to chapters 115 and 116 and 85.21 Minnesota Rules, chapter 700l, and (c) applies its effluent to 85.22 land used as part of an agricultural operation; 85.23 (ii) is located within a municipality of a population of 85.24 less than 10,000; 85.25 (iii) is used for treatment of effluent from a private 85.26 potato processing facility; and 85.27 (iv) is owned by a municipality and operated by a private 85.28 entity under agreement with that municipality. 85.29 (32) Notwithstanding clause (8), item (a), attached 85.30 machinery and other personal property which is part of a 85.31 simple-cycle combustion-turbine electric generation facility 85.32 that exceeds 250 megawatts of installed capacity and that meets 85.33 the requirements of this clause. At the time of construction, 85.34 the facility must: 85.35 (i) not be owned by a public utility as defined in section 85.36 216B.02, subdivision 4; 86.1 (ii) utilize natural gas as a primary fuel; 86.2 (iii) be located within 20 miles of the intersection of an 86.3 existing 42-inch (outside diameter) natural gas pipeline and a 86.4 345-kilovolt high-voltage electric transmission line; and 86.5 (iv) be designed to provide peaking, emergency backup, or 86.6 contingency services, and have received a certificate of need 86.7 pursuant to section 216B.243 demonstrating demand for its 86.8 capacity. 86.9 Construction of the facility must be commenced after July 1, 86.10 1999, and before July 1, 2003. Property eligible for this 86.11 exemption does not include electric transmission lines and 86.12 interconnections or gas pipelines and interconnections 86.13 appurtenant to the property or the facility. 86.14 Sec. 5. Minnesota Statutes 1998, section 272.027, is 86.15 amended to read: 86.16 272.027 [PERSONAL PROPERTY USED TO GENERATE ELECTRICITY FOR 86.17 PRODUCTION AND RESALE.] 86.18 Subdivision 1. [ELECTRICITY GENERATED TO PRODUCE GOODS AND 86.19 SERVICES.] Personal property used to generate electric power is 86.20 exempt from property taxation if the electric power is used to 86.21 manufacture or produce goods, products, or services, other than 86.22 electric power, by the owner of the electric generation 86.23 plant. Except as provided in subdivision 2, the exemption does 86.24 not apply to property used to produce electric power for sale to 86.25 others and does not apply to real property. In determining the 86.26 value subject to tax, a proportionate share of the value of the 86.27 generating facilities, equal to the proportion that the power 86.28 sold to others bears to the total generation of the plant, is 86.29 subject to the general property tax in the same manner as other 86.30 property. Power generated in such a plant and exchanged for an 86.31 equivalent amount of power that is used for the manufacture or 86.32 production of goods, products, or services other than electric 86.33 power by the owner of the generating plant is considered to be 86.34 used by the owner of the plant. 86.35 Subd. 2. [EXEMPTION FOR CUSTOMER OWNED PROPERTY 86.36 TRANSFERRED TO A UTILITY.] (a) Tools, implements, and machinery 87.1 of an electric generating facility are exempt if all the 87.2 following requirements are met: 87.3 (1) the electric generating facilities were operational and 87.4 met the requirements for exemption of personal property under 87.5 subdivision 1 on January 2, 1999; and 87.6 (2) the generating facility is sold to a Minnesota electric 87.7 utility before July 2001. 87.8 (b) Any tools, implements, and machinery used to increase 87.9 generation capacity that are installed by a utility at a 87.10 facility at which tools, implements, and machinery are exempt 87.11 under paragraph (a) are also exempt under this section. 87.12 Sec. 6. Minnesota Statutes 1998, section 272.03, 87.13 subdivision 6, is amended to read: 87.14 Subd. 6. [TRACT, LOT, PARCEL, AND PIECE OR PARCEL.] 87.15 (a) "Tract," "lot," "parcel," and "piece or parcel" of land 87.16 means any contiguous quantity of land in the possession of, 87.17 owned by, or recorded as the property of, the same claimant or 87.18 person. 87.19 (b) Notwithstanding paragraph (a), property that is owned 87.20 by a utility, leased for residential or recreational uses for 87.21 terms of 20 years or longer, and separately valued by the 87.22 assessor, will be treated for property tax purposes as separate 87.23 parcels. 87.24 Sec. 7. Minnesota Statutes 1998, section 272.67, is 87.25 amended by adding a subdivision to read: 87.26 Subd. 9. [DIVISION INTO URBAN AND RURAL SERVICE 87.27 DISTRICTS.] Notwithstanding the provisions of subdivisions 1 and 87.28 6, in order to carry out an orderly annexation agreement entered 87.29 into on or after August 16, 1996, a city may divide its area 87.30 into urban service districts and rural service districts 87.31 constituting separate taxing districts for the purpose of all 87.32 municipal property taxes including those levied for the payment 87.33 of bonds and judgments and interest on them. 87.34 Sec. 8. Minnesota Statutes 1998, section 273.11, 87.35 subdivision 16, is amended to read: 87.36 Subd. 16. [VALUATION EXCLUSION FOR CERTAIN IMPROVEMENTS.] 88.1 Improvements to homestead property made before January 2, 2003, 88.2 shall be fully or partially excluded from the value of the 88.3 property for assessment purposes provided that (1) the house is 88.4 at least 35 years old at the time of the improvement and (2) 88.5 either 88.6 (a) the assessor's estimated market value of the house on 88.7 January 2 of the current year is equal to or less than $150,000, 88.8 or 88.9 (b) if the estimated market value of the house is over 88.10 $150,000 market value but is less than $300,000 on January 2 of 88.11 the current year, the property qualifies if 88.12 (i) it is located in a city or town in which 50 percent or 88.13 more of the owner-occupied housing units were constructed before 88.14 1960 based upon the 1990 federal census, and 88.15 (ii) the city or town's median family income based upon the 88.16 1990 federal census is less than the statewide median family 88.17 income based upon the 1990 federal census, or 88.18 (c) if the estimated market value of the house is $300,000 88.19 or more on January 2 of the current year, the property qualifies 88.20 if 88.21 (i) it is located in a city or town in which 45 percent or 88.22 more of the homes were constructed before 1940 based upon the 88.23 1990 federal census, and 88.24 (ii) it is located in a city or town in which 45 percent or 88.25 more of the housing units were rental based upon the 1990 88.26 federal census, and 88.27 (iii) the city or town's median value of owner-occupied 88.28 housing units based upon the 1990 federal census is less than 88.29 the statewide median value of owner-occupied housing units based 88.30 upon the 1990 federal census. 88.31 For purposes of determining this eligibility, "house" means 88.32 land and buildings. 88.33 The age of a residence is the number of years since the 88.34 original year of its construction. In the case of a residence 88.35 that is relocated, the relocation must be from a location within 88.36 the state and the only improvements eligible for exclusion under 89.1 this subdivision are (1) those for which building permits were 89.2 issued to the homeowner after the residence was relocated to its 89.3 present site, and (2) those undertaken during or after the year 89.4 the residence is initially occupied by the homeowner, excluding 89.5 any market value increase relating to basic improvements that 89.6 are necessary to install the residence on its foundation and 89.7 connect it to utilities at its present site. In the case of an 89.8 owner-occupied duplex or triplex, the improvement is eligible 89.9 regardless of which portion of the property was improved. 89.10 If the property lies in a jurisdiction which is subject to 89.11 a building permit process, a building permit must have been 89.12 issued prior to commencement of the improvement. Any 89.13 improvement must add at least $1,000 to the value of the 89.14 property to be eligible for exclusion under this subdivision. 89.15 Only improvements to the structure which is the residence of the 89.16 qualifying homesteader or construction of or improvements to no 89.17 more than one two-car garage per residence qualify for the 89.18 provisions of this subdivision. If an improvement was begun 89.19 between January 2, 1992, and January 2, 1993, any value added 89.20 from that improvement for the January 1994 and subsequent 89.21 assessments shall qualify for exclusion under this subdivision 89.22 provided that a building permit was obtained for the improvement 89.23 between January 2, 1992, and January 2, 1993. Whenever a 89.24 building permit is issued for property currently classified as 89.25 homestead, the issuing jurisdiction shall notify the property 89.26 owner of the possibility of valuation exclusion under this 89.27 subdivision. The assessor shall requirean application,89.28includingdocumentation of the age of the house from the owner, 89.29 if unknown by the assessor.The application may be filed89.30subsequent to the date of the building permit provided that the89.31application must be filed within three years of the date the89.32building permit was issued for the improvement.If the property 89.33 lies in a jurisdiction which is not subject to a building permit 89.34 process,thean application must be filed within three years of 89.35 the date the improvement was made. The assessor may require 89.36 proof from the taxpayer of the date the improvement was made. 90.1ApplicationsThe application, if required, must be received 90.2 prior to July 1 of any year in order to be effective for taxes 90.3 payable in the following year. 90.4 No exclusion may be granted for an improvement by a local 90.5 board of review or county board of equalization and no abatement 90.6 of the taxes for qualifying improvements may be granted by the 90.7 county board unless (1) a building permit was issued prior to 90.8 the commencement of the improvement if the jurisdiction requires 90.9 a building permit, and (2) an application was completed if the 90.10 jurisdiction is not subject to a building permit process. 90.11 The assessor shall note the qualifying value of each 90.12 improvement on the property's record, and the sum of those 90.13 amounts shall be subtracted from the value of the property in 90.14 each year for ten years after the improvement has been made, at 90.15 which time an amount equal to 20 percent of the qualifying value 90.16 shall be added back in each of the five subsequent assessment 90.17 years. Ifana required application is filed after the first 90.18 assessment date at which an improvement could have been subject 90.19 to the valuation exclusion under this subdivision, the ten-year 90.20 period during which the value is subject to exclusion is reduced 90.21 by the number of years that have elapsed since the property 90.22 would have qualified initially. The valuation exclusion shall 90.23 terminate whenever (1) the property is sold, or (2) the property 90.24 is reclassified to a class which does not qualify for treatment 90.25 under this subdivision. Improvements made by an occupant who is 90.26 the purchaser of the property under a conditional purchase 90.27 contract do not qualify under this subdivision unless the seller 90.28 of the property is a governmental entity. The qualifying value 90.29 of the property shall be computed based upon the increase from 90.30 that structure's market value as of January 2 preceding the 90.31 acquisition of the property by the governmental entity. 90.32 The total qualifying value for a homestead may not exceed 90.33 $50,000. The total qualifying value for a homestead with a 90.34 house that is less than 70 years old may not exceed $25,000. 90.35 The term "qualifying value" means the increase in estimated 90.36 market value resulting from the improvement if the improvement 91.1 occurs when the house is at least 70 years old, or one-half of 91.2 the increase in estimated market value resulting from the 91.3 improvement otherwise. The $25,000 and $50,000 maximum 91.4 qualifying value under this subdivision may result from up to 91.5 three separate improvements to the homestead.The application91.6shall state, in clear language, thatIf more than three 91.7 improvements are made to the qualifying property, a taxpayer may 91.8 choose which three improvements are eligible, provided that 91.9 after the taxpayer has made the choice and any valuation 91.10 attributable to those improvements has been excluded from 91.11 taxation, no further changes can be made by the taxpayer. 91.12 If 50 percent or more of the square footage of a structure 91.13 is voluntarily razed or removed, the valuation increase 91.14 attributable to any subsequent improvements to the remaining 91.15 structure does not qualify for the exclusion under this 91.16 subdivision. If a structure is unintentionally or accidentally 91.17 destroyed by a natural disaster, the property is eligible for an 91.18 exclusion under this subdivision provided that the structure was 91.19 not completely destroyed. The qualifying value on property 91.20 destroyed by a natural disaster shall be computed based upon the 91.21 increase from that structure's market value as determined on 91.22 January 2 of the year in which the disaster occurred. A 91.23 property receiving benefits under the homestead disaster 91.24 provisions under section 273.123 is not disqualified from 91.25 receiving an exclusion under this subdivision. If any 91.26 combination of improvements made to a structure after January 1, 91.27 1993, increases the size of the structure by 100 percent or 91.28 more, the valuation increase attributable to the portion of the 91.29 improvement that causes the structure's size to exceed 100 91.30 percent does not qualify for exclusion under this subdivision. 91.31 Sec. 9. Minnesota Statutes 1998, section 273.111, is 91.32 amended by adding a subdivision to read: 91.33 Subd. 15. [DISSECTED PARCELS; CONTINUED DEFERMENT.] Real 91.34 estate consisting of more than ten, but less than 15, acres 91.35 which has: 91.36 (1) been owned by the applicant or the applicant's parents 92.1 for at least 70 years; 92.2 (2) been dissected by two or more major parkways or 92.3 interstate highways; and 92.4 (3) qualified for the agricultural valuation and tax 92.5 deferment under this section through assessment year 1996, taxes 92.6 payable 1997, shall continue to qualify for deferral of special 92.7 assessments under this section until the applicant's death or 92.8 transfer or sale by the applicant of the applicant's interest in 92.9 the real estate. If the property otherwise no longer qualifies 92.10 for assessment under this section, subdivision 9 does not apply. 92.11 Sec. 10. Minnesota Statutes 1998, section 273.124, 92.12 subdivision 1, is amended to read: 92.13 Subdivision 1. [GENERAL RULE.] (a) Residential real estate 92.14 that is occupied and used for the purposes of a homestead by its 92.15 owner, who must be a Minnesota resident, is a residential 92.16 homestead. 92.17 Agricultural land, as defined in section 273.13, 92.18 subdivision 23, that is occupied and used as a homestead by its 92.19 owner, who must be a Minnesota resident, is an agricultural 92.20 homestead. 92.21 Dates for establishment of a homestead and homestead 92.22 treatment provided to particular types of property are as 92.23 provided in this section. 92.24 Property of a trustee, beneficiary, or grantor of a trust 92.25 is not disqualified from receiving homestead benefits if the 92.26 homestead requirements under this chapter are satisfied. 92.27 The assessor shall require proof, as provided in 92.28 subdivision 13, of the facts upon which classification as a 92.29 homestead may be determined. Notwithstanding any other law, the 92.30 assessor may at any time require a homestead application to be 92.31 filed in order to verify that any property classified as a 92.32 homestead continues to be eligible for homestead status. 92.33 Notwithstanding any other law to the contrary, the department of 92.34 revenue may, upon request from an assessor, verify whether an 92.35 individual who is requesting or receiving homestead 92.36 classification has filed a Minnesota income tax return as a 93.1 resident for the most recent taxable year for which the 93.2 information is available. 93.3 When there is a name change or a transfer of homestead 93.4 property, the assessor may reclassify the property in the next 93.5 assessment unless a homestead application is filed to verify 93.6 that the property continues to qualify for homestead 93.7 classification. 93.8 (b) For purposes of this section, homestead property shall 93.9 include property which is used for purposes of the homestead but 93.10 is separated from the homestead by a road, street, lot, 93.11 waterway, or other similar intervening property. The term "used 93.12 for purposes of the homestead" shall include but not be limited 93.13 to uses for gardens, garages, or other outbuildings commonly 93.14 associated with a homestead, but shall not include vacant land 93.15 held primarily for future development. In order to receive 93.16 homestead treatment for the noncontiguous property, the owner 93.17 must use the property for the purposes of the homestead, and 93.18 must apply to the assessor, both by the deadlines given in 93.19 subdivision 9. After initial qualification for the homestead 93.20 treatment, additional applications for subsequent years are not 93.21 required. 93.22 (c) Residential real estate that is occupied and used for 93.23 purposes of a homestead by a relative of the owner is a 93.24 homestead but only to the extent of the homestead treatment that 93.25 would be provided if the related owner occupied the property. 93.26 For purposes of this paragraph and paragraph (g), "relative" 93.27 means a parent, stepparent, child, stepchild, grandparent, 93.28 grandchild, brother, sister, uncle,oraunt, nephew, or niece. 93.29 This relationship may be by blood or marriage. Property that 93.30 has been classified as seasonal recreational residential 93.31 property at any time during which it has been owned by the 93.32 current owner or spouse of the current owner will not be 93.33 reclassified as a homestead unless it is occupied as a homestead 93.34 by the owner; this prohibition also applies to property that, in 93.35 the absence of this paragraph, would have been classified as 93.36 seasonal recreational residential property at the time when the 94.1 residence was constructed. Neither the related occupant nor the 94.2 owner of the property may claim a property tax refund under 94.3 chapter 290A for a homestead occupied by a relative. In the 94.4 case of a residence located on agricultural land, only the 94.5 house, garage, and immediately surrounding one acre of land 94.6 shall be classified as a homestead under this paragraph, except 94.7 as provided in paragraph (d). 94.8 (d) Agricultural property that is occupied and used for 94.9 purposes of a homestead by a relative of the owner, is a 94.10 homestead, only to the extent of the homestead treatment that 94.11 would be provided if the related owner occupied the property, 94.12 and only if all of the following criteria are met: 94.13 (1) the relative who is occupying the agricultural property 94.14 is a son, daughter, father, or mother of the owner of the 94.15 agricultural property or a son or daughter of the spouse of the 94.16 owner of the agricultural property, 94.17 (2) the owner of the agricultural property must be a 94.18 Minnesota resident, 94.19 (3) the owner of the agricultural property must not receive 94.20 homestead treatment on any other agricultural property in 94.21 Minnesota, and 94.22 (4) the owner of the agricultural property is limited to 94.23 only one agricultural homestead per family under this paragraph. 94.24 Neither the related occupant nor the owner of the property 94.25 may claim a property tax refund under chapter 290A for a 94.26 homestead occupied by a relative qualifying under this 94.27 paragraph. For purposes of this paragraph, "agricultural 94.28 property" means the house, garage, other farm buildings and 94.29 structures, and agricultural land. 94.30 Application must be made to the assessor by the owner of 94.31 the agricultural property to receive homestead benefits under 94.32 this paragraph. The assessor may require the necessary proof 94.33 that the requirements under this paragraph have been met. 94.34 (e) In the case of property owned by a property owner who 94.35 is married, the assessor must not deny homestead treatment in 94.36 whole or in part if only one of the spouses occupies the 95.1 property and the other spouse is absent due to: (1) marriage 95.2 dissolution proceedings, (2) legal separation, (3) employment or 95.3 self-employment in another location, or (4) other personal 95.4 circumstances causing the spouses to live separately, not 95.5 including an intent to obtain two homestead classifications for 95.6 property tax purposes. To qualify under clause (3), the 95.7 spouse's place of employment or self-employment must be at least 95.8 50 miles distant from the other spouse's place of employment, 95.9 and the homesteads must be at least 50 miles distant from each 95.10 other. Homestead treatment, in whole or in part, shall not be 95.11 denied to the owner's spouse who previously occupied the 95.12 residence with the owner if the absence of the owner is due to 95.13 one of the exceptions provided in this paragraph. 95.14 (f) The assessor must not deny homestead treatment in whole 95.15 or in part if: 95.16 (1) in the case of a property owner who is not married, the 95.17 owner is absent due to residence in a nursing home or boarding 95.18 care facility and the property is not otherwise occupied; or 95.19 (2) in the case of a property owner who is married, the 95.20 owner or the owner's spouse or both are absent due to residence 95.21 in a nursing home or boarding care facility and the property is 95.22 not occupied or is occupied only by the owner's spouse. 95.23 (g) If an individual is purchasing property with the intent 95.24 of claiming it as a homestead and is required by the terms of 95.25 the financing agreement to have a relative shown on the deed as 95.26 a coowner, the assessor shall allow a full homestead 95.27 classification. This provision only applies to first-time 95.28 purchasers, whether married or single, or to a person who had 95.29 previously been married and is purchasing as a single individual 95.30 for the first time. The application for homestead benefits must 95.31 be on a form prescribed by the commissioner and must contain the 95.32 data necessary for the assessor to determine if full homestead 95.33 benefits are warranted. 95.34 Sec. 11. Minnesota Statutes 1998, section 273.124, 95.35 subdivision 7, is amended to read: 95.36 Subd. 7. [LEASED BUILDINGS OR LAND.] For purposes of class 96.1 1 determinations, homesteads include: 96.2 (a) buildings and appurtenances owned and used by the 96.3 occupant as a permanent residence which are located upon land 96.4 the title to which is vested in a person or entity other than 96.5 the occupant; 96.6 (b) all buildings and appurtenances located upon land owned 96.7 by the occupant and used for the purposes of a homestead 96.8 together with the land upon which they are located, if all of 96.9 the following criteria are met: 96.10 (1) the occupant is using the property as a permanent 96.11 residence; 96.12 (2) the occupant is paying the property taxes and any 96.13 special assessments levied against the property; 96.14 (3) the occupant has signed a lease which has an option to 96.15 purchase the buildings and appurtenances; 96.16 (4) the term of the lease is at least five years; and 96.17 (5) the occupant has made a down payment of at least $5,000 96.18 in cash if the property was purchased by means of a contract for 96.19 deed or subject to a mortgage. 96.20 (c) all buildings and appurtenances and the land upon which 96.21 they are located that are used for purposes of a homestead, if 96.22 all of the following criteria are met: 96.23 (1) the land is owned by a utility, which maintains 96.24 ownership of the land in order to facilitate compliance with the 96.25 terms of its hydroelectric project license from the federal 96.26 energy regulatory commission; 96.27 (2) the land is leased for a term of 20 years or more; 96.28 (3) the occupant is using the property as a permanent 96.29 residence; and 96.30 (4) the occupant is paying the property taxes and any 96.31 special assessments levied against the property. 96.32 Any taxpayer meeting all the requirements of this paragraph 96.33 must notify the county assessor, or the assessor who has the 96.34 powers of the county assessor pursuant to section 273.063, in 96.35 writing, as soon as possible after signing the lease agreement 96.36 and occupying the buildings as a homestead. 97.1 Sec. 12. Minnesota Statutes 1998, section 273.124, 97.2 subdivision 8, is amended to read: 97.3 Subd. 8. [HOMESTEAD OWNED BY FAMILY FARM CORPORATION OR 97.4 PARTNERSHIP OR LEASED TO FAMILY FARM CORPORATION OR 97.5 PARTNERSHIP.] (a) Each family farm corporation and each 97.6 partnership operating a family farm is entitled to class 1b 97.7 under section 273.13, subdivision 22, paragraph (b), or class 2a 97.8 assessment for one homestead occupied by a shareholder or 97.9 partner thereof who is residing on the land and actively engaged 97.10 in farming of the land owned by the corporation or partnership. 97.11 Homestead treatment applies even if legal title to the property 97.12 is in the name of the corporation or partnership and not in the 97.13 name of the person residing on it. "Family farm corporation" 97.14 and "family farm" have the meanings given in section 500.24, 97.15 except that the number of allowable shareholders or partners 97.16 under this subdivision shall not exceed 12. 97.17 (b) In addition to property specified in paragraph (a), any 97.18 other residences owned by corporations or partnerships described 97.19 in paragraph (a) which are located on agricultural land and 97.20 occupied as homesteads by shareholders or partners who are 97.21 actively engaged in farming on behalf of the corporation or 97.22 partnership must also be assessed as class 2a property or as 97.23 class 1b property under section 273.13, subdivision 22, 97.24 paragraph (b), but the property eligible is limited to the97.25residence itself and as much of the land surrounding the97.26homestead, not exceeding one acre, as is reasonably necessary97.27for the use of the dwelling as a home, and does not include any97.28other structures that may be located on it. 97.29 (c) Agricultural property owned by a shareholder of a 97.30 family farm corporation, as defined in paragraph (a), or by a 97.31 partner in a partnership operating a family farm and leased to 97.32 the family farm corporation by the shareholder or to the 97.33 partnership by the partner, is eligible for classification as 97.34 class 1b under section 273.13, subdivision 22, paragraph (b), or 97.35 class 2a under section 273.13, subdivision 23, paragraph (a), if 97.36 the owner is actually residing on the property and is actually 98.1 engaged in farming the land on behalf of the corporation or 98.2 partnership. This paragraph applies without regard to any legal 98.3 possession rights of the family farm corporation or partnership 98.4 operating a family farm under the lease. 98.5 Sec. 13. Minnesota Statutes 1998, section 273.124, 98.6 subdivision 14, is amended to read: 98.7 Subd. 14. [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 98.8 (a) Real estate of less than ten acres that is the homestead of 98.9 its owner must be classified as class 2a under section 273.13, 98.10 subdivision 23, paragraph (a), if: 98.11 (1) the parcel on which the house is located is contiguous 98.12 on at least two sides to (i) agricultural land, (ii) land owned 98.13 or administered by the United States Fish and Wildlife Service, 98.14 or (iii) land administered by the department of natural 98.15 resources on which in lieu taxes are paid under sections 477A.11 98.16 to 477A.14; 98.17 (2) its owner also owns a noncontiguous parcel of 98.18 agricultural land that is at least 20 acres; and 98.19 (3)the noncontiguous land is located not farther than four98.20townships or cities, or a combination of townships or cities98.21from the homestead; and98.22(4)the agricultural use value of the noncontiguous land 98.23 and farm buildings is equal to at least 50 percent of the market 98.24 value of the house, garage, and one acre of land. 98.25 Homesteads initially classified as class 2a under the 98.26 provisions of this paragraph shall remain classified as class 98.27 2a, irrespective of subsequent changes in the use of adjoining 98.28 properties, as long as the homestead remains under the same 98.29 ownership, the owner owns a noncontiguous parcel of agricultural 98.30 land that is at least 20 acres, and the agricultural use value 98.31 qualifies under clause(4)(3). 98.32 (b)Except as provided in paragraph (d),Noncontiguous land 98.33 shall be included as part of a homestead under section 273.13, 98.34 subdivision 23, paragraph (a), only if the homestead is 98.35 classified as class 2aand the detached land is located in the98.36same township or city, or not farther than four townships or99.1cities or combination thereof from the homestead. Any taxpayer 99.2 ofthesenoncontiguous lands must notify the county assessor 99.3 that the noncontiguous land is part of the taxpayer's homestead, 99.4 and, if the homestead is located in another county, the taxpayer 99.5 must also notify the assessor of the other county. 99.6 (c) Agricultural land used for purposes of a homestead and 99.7 actively farmed by a person holding a vested remainder interest 99.8 in it must be classified as a homestead under section 273.13, 99.9 subdivision 23, paragraph (a). If agricultural land is 99.10 classified class 2a, any other dwellings on the land used for 99.11 purposes of a homestead by persons holding vested remainder 99.12 interests who are actively engaged in farming the property, and 99.13 up to one acre of the land surrounding each homestead and 99.14 reasonably necessary for the use of the dwelling as a home, must 99.15 also be assessed class 2a. 99.16 (d) Agricultural land and buildings that were class 2a 99.17 homestead property under section 273.13, subdivision 23, 99.18 paragraph (a), for the 1997 assessment shall remain classified 99.19 as agricultural homesteads for subsequent assessments if: 99.20 (1) the property owner abandoned the homestead dwelling 99.21 located on the agricultural homestead as a result of the April 99.22 1997 floods; 99.23 (2) the property is located in the county of Polk, Clay, 99.24 Kittson, Marshall, Norman, or Wilkin; 99.25 (3) the agricultural land and buildings remain under the 99.26 same ownership for the current assessment year as existed for 99.27 the 1997 assessment year and continue to be used for 99.28 agricultural purposes; 99.29 (4) the dwelling occupied by the owner is located in 99.30 Minnesota and is within 30 miles of one of the parcels of 99.31 agricultural land that is owned by the taxpayer; and 99.32 (5) the owner notifies the county assessor that the 99.33 relocation was due to the 1997 floods, and the owner furnishes 99.34 the assessor any information deemed necessary by the assessor in 99.35 verifying the change in dwelling. Further notifications to the 99.36 assessor are not required if the property continues to meet all 100.1 the requirements in this paragraph and any dwellings on the 100.2 agricultural land remain uninhabited. 100.3 (e) Agricultural land and buildings that were class 2a 100.4 homestead property under section 273.13, subdivision 23, 100.5 paragraph (a), for the 1998 assessment shall remain classified 100.6 agricultural homesteads for subsequent assessments if: 100.7 (1) the property owner abandoned the homestead dwelling 100.8 located on the agricultural homestead as a result of damage 100.9 caused by a March 29, 1998, tornado; 100.10 (2) the property is located in the county of Blue Earth, 100.11 Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice; 100.12 (3) the agricultural land and buildings remain under the 100.13 same ownership for the current assessment year as existed for 100.14 the 1998 assessment year; 100.15 (4) the dwelling occupied by the owner is located in this 100.16 state and is within 50 miles of one of the parcels of 100.17 agricultural land that is owned by the taxpayer; and 100.18 (5) the owner notifies the county assessor that the 100.19 relocation was due to a March 29, 1998, tornado, and the owner 100.20 furnishes the assessor any information deemed necessary by the 100.21 assessor in verifying the change in homestead dwelling. For 100.22 taxes payable in 1999, the owner must notify the assessor by 100.23 December 1, 1998. Further notifications to the assessor are not 100.24 required if the property continues to meet all the requirements 100.25 in this paragraph and any dwellings on the agricultural land 100.26 remain uninhabited. 100.27 Sec. 14. Minnesota Statutes 1998, section 273.124, is 100.28 amended by adding a subdivision to read: 100.29 Subd. 20. [ADDITIONAL REQUIREMENTS PROHIBITED.] No 100.30 political subdivision may impose any requirements not contained 100.31 in this chapter or chapter 272 to disqualify property from being 100.32 classified as a homestead if the property otherwise meets the 100.33 requirements for homestead treatment under this chapter and 100.34 chapter 272. 100.35 Sec. 15. Minnesota Statutes 1998, section 273.13, 100.36 subdivision 23, is amended to read: 101.1 Subd. 23. [CLASS 2.] (a) Class 2a property is agricultural 101.2 land including any improvements that is homesteaded. The market 101.3 value of the house and garage and immediately surrounding one 101.4 acre of land has the same class rates as class 1a property under 101.5 subdivision 22. The value of the remaining land including 101.6 improvements up to$115,000$250,000 has a net class rate of 101.7 0.35 percent of market value. The remaining value of class 2a 101.8 property over$115,000$250,000 and up to $500,000 of market 101.9 valuethat does not exceed 320 acreshas a net class rate of0.8101.10 0.7 percent of market value. The remaining property 101.11 over$115,000$500,000 of market value in excess of 320 acres 101.12 has a class rate of1.251.05 percent of market value. 101.13 (b) Class 2b property is (1) real estate, rural in 101.14 character and used exclusively for growing trees for timber, 101.15 lumber, and wood and wood products; (2) real estate that is not 101.16 improved with a structure and is used exclusively for growing 101.17 trees for timber, lumber, and wood and wood products, if the 101.18 owner has participated or is participating in a cost-sharing 101.19 program for afforestation, reforestation, or timber stand 101.20 improvement on that particular property, administered or 101.21 coordinated by the commissioner of natural resources; (3) real 101.22 estate that is nonhomestead agricultural land; or (4) a landing 101.23 area or public access area of a privately owned public use 101.24 airport. Class 2b property has a net class rate of1.251.05 101.25 percent of market value. 101.26 (c) Agricultural land as used in this section means 101.27 contiguous acreage of ten acres or more, used during the 101.28 preceding year for agricultural purposes. "Agricultural 101.29 purposes" as used in this section means the raising or 101.30 cultivation of agricultural products or enrollment in the 101.31 Reinvest in Minnesota program under sections 103F.501 to 101.32 103F.535 or the federal Conservation Reserve Program as 101.33 contained in Public Law Number 99-198. Contiguous acreage on 101.34 the same parcel, or contiguous acreage on an immediately 101.35 adjacent parcel under the same ownership, may also qualify as 101.36 agricultural land, but only if it is pasture, timber, waste, 102.1 unusable wild land, or land included in state or federal farm 102.2 programs. Agricultural classification for property shall be 102.3 determined excluding the house, garage, and immediately 102.4 surrounding one acre of land, and shall not be based upon the 102.5 market value of any residential structures on the parcel or 102.6 contiguous parcels under the same ownership. 102.7 (d) Real estate, excluding the house, garage, and 102.8 immediately surrounding one acre of land, of less than ten acres 102.9 which is exclusively and intensively used for raising or 102.10 cultivating agricultural products, shall be considered as 102.11 agricultural land. 102.12 Land shall be classified as agricultural even if all or a 102.13 portion of the agricultural use of that property is the leasing 102.14 to, or use by another person for agricultural purposes. 102.15 Classification under this subdivision is not determinative 102.16 for qualifying under section 273.111. 102.17 The property classification under this section supersedes, 102.18 for property tax purposes only, any locally administered 102.19 agricultural policies or land use restrictions that define 102.20 minimum or maximum farm acreage. 102.21 (e) The term "agricultural products" as used in this 102.22 subdivision includes production for sale of: 102.23 (1) livestock, dairy animals, dairy products, poultry and 102.24 poultry products, fur-bearing animals, horticultural and nursery 102.25 stock described in sections 18.44 to 18.61, fruit of all kinds, 102.26 vegetables, forage, grains, bees, and apiary products by the 102.27 owner; 102.28 (2) fish bred for sale and consumption if the fish breeding 102.29 occurs on land zoned for agricultural use; 102.30 (3) the commercial boarding of horses if the boarding is 102.31 done in conjunction with raising or cultivating agricultural 102.32 products as defined in clause (1); 102.33 (4) property which is owned and operated by nonprofit 102.34 organizations used for equestrian activities, excluding racing; 102.35and102.36 (5) game birds and waterfowl bred and raised for use on a 103.1 shooting preserve licensed under section 97A.115; and 103.2 (6) insects primarily bred to be used as food for animals. 103.3 (f) If a parcel used for agricultural purposes is also used 103.4 for commercial or industrial purposes, including but not limited 103.5 to: 103.6 (1) wholesale and retail sales; 103.7 (2) processing of raw agricultural products or other goods; 103.8 (3) warehousing or storage of processed goods; and 103.9 (4) office facilities for the support of the activities 103.10 enumerated in clauses (1), (2), and (3), 103.11 the assessor shall classify the part of the parcel used for 103.12 agricultural purposes as class 1b, 2a, or 2b, whichever is 103.13 appropriate, and the remainder in the class appropriate to its 103.14 use. The grading, sorting, and packaging of raw agricultural 103.15 products for first sale is considered an agricultural purpose. 103.16 A greenhouse or other building where horticultural or nursery 103.17 products are grown that is also used for the conduct of retail 103.18 sales must be classified as agricultural if it is primarily used 103.19 for the growing of horticultural or nursery products from seed, 103.20 cuttings, or roots and occasionally as a showroom for the retail 103.21 sale of those products. Use of a greenhouse or building only 103.22 for the display of already grown horticultural or nursery 103.23 products does not qualify as an agricultural purpose. 103.24 The assessor shall determine and list separately on the 103.25 records the market value of the homestead dwelling and the one 103.26 acre of land on which that dwelling is located. If any farm 103.27 buildings or structures are located on this homesteaded acre of 103.28 land, their market value shall not be included in this separate 103.29 determination. 103.30 (g) To qualify for classification under paragraph (b), 103.31 clause (4), a privately owned public use airport must be 103.32 licensed as a public airport under section 360.018. For 103.33 purposes of paragraph (b), clause (4), "landing area" means that 103.34 part of a privately owned public use airport properly cleared, 103.35 regularly maintained, and made available to the public for use 103.36 by aircraft and includes runways, taxiways, aprons, and sites 104.1 upon which are situated landing or navigational aids. A landing 104.2 area also includes land underlying both the primary surface and 104.3 the approach surfaces that comply with all of the following: 104.4 (i) the land is properly cleared and regularly maintained 104.5 for the primary purposes of the landing, taking off, and taxiing 104.6 of aircraft; but that portion of the land that contains 104.7 facilities for servicing, repair, or maintenance of aircraft is 104.8 not included as a landing area; 104.9 (ii) the land is part of the airport property; and 104.10 (iii) the land is not used for commercial or residential 104.11 purposes. 104.12 The land contained in a landing area under paragraph (b), clause 104.13 (4), must be described and certified by the commissioner of 104.14 transportation. The certification is effective until it is 104.15 modified, or until the airport or landing area no longer meets 104.16 the requirements of paragraph (b), clause (4). For purposes of 104.17 paragraph (b), clause (4), "public access area" means property 104.18 used as an aircraft parking ramp, apron, or storage hangar, or 104.19 an arrival and departure building in connection with the airport. 104.20 Sec. 16. Minnesota Statutes 1998, section 273.13, 104.21 subdivision 24, is amended to read: 104.22 Subd. 24. [CLASS 3.] (a) Commercial and industrial 104.23 property and utility real and personal property, except class 5 104.24 property as identified in subdivision 31, clause (1), is class 104.25 3a. Each parcel has a class rate of 2.45 percent of the first 104.26 tier of market value, and 3.5 percent of the remaining market 104.27 value, except that in the case of contiguous parcels of 104.28 commercial and industrial property owned by the same person or 104.29 entity, only the value equal to the first-tier value of the 104.30 contiguous parcels qualifies for the reduced class rate. For 104.31 the purposes of this subdivision, the first tier means the first 104.32 $150,000 of market value. In the case of utility property owned 104.33 by one person or entity, only one parcel in each county has a 104.34 reduced class rate on the first tier of market value, except 104.35 that this limitation does not apply to utility property 104.36 described in section 272.03, subdivision 6, paragraph (b). 105.1 For purposes of this paragraph, parcels are considered to 105.2 be contiguous even if they are separated from each other by a 105.3 road, street, vacant lot, waterway, or other similar intervening 105.4 type of property. 105.5 (b) Employment property defined in section 469.166, during 105.6 the period provided in section 469.170, shall constitute class 105.7 3b and has a class rate of 2.3 percent of the first $50,000 of 105.8 market value and 3.5 percent of the remainder, except that for 105.9 employment property located in a border city enterprise zone 105.10 designated pursuant to section 469.168, subdivision 4, paragraph 105.11 (c), the class rate of the first tier of market value and the 105.12 class rate of the remainder is determined under paragraph (a), 105.13 unless the governing body of the city designated as an 105.14 enterprise zone determines that a specific parcel shall be 105.15 assessed pursuant to the first clause of this sentence. The 105.16 governing body may provide for assessment under the first clause 105.17 of the preceding sentence only for property which is located in 105.18 an area which has been designated by the governing body for the 105.19 receipt of tax reductions authorized by section 469.171, 105.20 subdivision 1. 105.21 (c) Structures which are (i) located on property classified 105.22 as class 3a, (ii) constructed under an initial building permit 105.23 issued after January 2, 1996, (iii) located in a transit zone as 105.24 defined under section 473.3915, subdivision 3, (iv) located 105.25 within the boundaries of a school district, and (v) not 105.26 primarily used for retail or transient lodging purposes, shall 105.27 have a class rate equal to 85 percent of the class rate of the 105.28 second tier of the commercial property rate under paragraph (a) 105.29 on any portion of the market value that does not qualify for the 105.30 first tier class rate under paragraph (a). As used in item (v), 105.31 a structure is primarily used for retail or transient lodging 105.32 purposes if over 50 percent of its square footage is used for 105.33 those purposes. A class rate equal to 85 percent of the class 105.34 rate of the second tier of the commercial property class rate 105.35 under paragraph (a) shall also apply to improvements to existing 105.36 structures that meet the requirements of items (i) to (v) if the 106.1 improvements are constructed under an initial building permit 106.2 issued after January 2, 1996, even if the remainder of the 106.3 structure was constructed prior to January 2, 1996. For the 106.4 purposes of this paragraph, a structure shall be considered to 106.5 be located in a transit zone if any portion of the structure 106.6 lies within the zone. If any property once eligible for 106.7 treatment under this paragraph ceases to remain eligible due to 106.8 revisions in transit zone boundaries, the property shall 106.9 continue to receive treatment under this paragraph for a period 106.10 of three years. 106.11 Sec. 17. Minnesota Statutes 1998, section 273.13, 106.12 subdivision 31, is amended to read: 106.13 Subd. 31. [CLASS 5.] Class 5 property includes: 106.14 (1) tools, implements, and machinery of an electric 106.15 generating, transmission, or distribution system, unless exempt 106.16 under section 272.027, or a pipeline system transporting or 106.17 distributing water, gas, crude oil, or petroleum products or 106.18 mains and pipes used in the distribution of steam or hot or 106.19 chilled water for heating or cooling buildings, which are 106.20 fixtures; 106.21 (2) unmined iron ore and low-grade iron-bearing formations 106.22 as defined in section 273.14; and 106.23 (3) all other property not otherwise classified. 106.24 Class 5 property has a class rate of 3.5 percent of market 106.25 value. 106.26 Sec. 18. Minnesota Statutes 1998, section 273.1382, 106.27 subdivision 1, is amended to read: 106.28 Subdivision 1. [EDUCATION HOMESTEAD CREDIT.] Each year, 106.29 the respective county auditors shall determine the initial tax 106.30 rate for each school district for the general education levy 106.31 certified under section 126C.13, subdivision 2 or 3. That rate 106.32 plus the school district's education homestead credit tax rate 106.33 adjustment under section 275.08, subdivision 1e, shall be the 106.34 general education homestead credit local tax rate for the 106.35 district. The auditor shall then determine a general education 106.36 homestead credit for each homestead within the county equal to 107.168 percent for taxes payable in 1999 and 6977.5 percent for 107.2 taxes payable in 2000 and thereafter of the general education 107.3 homestead credit local tax rate times the net tax capacity of 107.4 the homestead for the taxes payable year. The amount of general 107.5 education homestead credit for a homestead may not exceed$320107.6for taxes payable in 1999 and $335$400 for taxes payable in 107.7 2000 and thereafter. In the case of an agricultural homestead, 107.8 only the net tax capacity of the house, garage, and surrounding 107.9 one acre of land shall be used in determining the property's 107.10 education homestead credit. 107.11 Sec. 19. Minnesota Statutes 1998, section 273.1398, 107.12 subdivision 1a, is amended to read: 107.13 Subd. 1a. [TAX BASE DIFFERENTIAL.] (a) For aids payable in 107.14 2000, the tax base differential is: 107.15 (1) the following percentages of the assessment year 1998 107.16 taxable market value of class 2a agricultural homestead 107.17 property, excluding the house, garage, and surrounding one acre 107.18 of land: between $115,000 and $250,000 and less than 320 acres, 107.19 .45 percent; between $115,000 and $250,000 and over 320 acres, 107.20 .9 percent; over $250,000 up to $500,000 and less than 320 107.21 acres, 0.1 percent; over $250,000 up to $500,000 and over 320 107.22 acres, 0.55 percent; and the market value that exceeds $500,000, 107.23 .20 percent; plus .20 percent of the assessment year 1998 107.24 taxable market value of class 2b nonhomestead agricultural land 107.25 and timberland; plus 107.26 (2) for purposes of computing the fiscal disparity 107.27 adjustment only,the tax base differential is0.2 percent of the 107.28 assessment year 1998 taxable market value of class 3 107.29 commercial-industrial property over $150,000. 107.30 (b) For the purposes of the distribution of homestead and 107.31 agricultural credit aid for aids payable in 2000, the 107.32 commissioner of revenue shall use the best information available 107.33 as of June 30, 1999, to make an estimate of the value described 107.34 in paragraph (a), clause (1). The commissioner shall adjust the 107.35 distribution of homestead and agricultural credit aid for aids 107.36 payable in 2001 and subsequent years if new information 108.1 regarding the value described in paragraph (a), clause (1), 108.2 becomes available after June 30, 1999. 108.3 Sec. 20. Minnesota Statutes 1998, section 275.066, is 108.4 amended to read: 108.5 275.066 [SPECIAL TAXING DISTRICTS; DEFINITION.] 108.6 For the purposes of property taxation and property tax 108.7 state aids, the term "special taxing districts" includes the 108.8 following entities: 108.9 (1) watershed districts under chapter 103D; 108.10 (2) sanitary districts under sections 115.18 to 115.37; 108.11 (3) regional sanitary sewer districts under sections 115.61 108.12 to 115.67; 108.13 (4) regional public library districts under section 108.14 134.201; 108.15 (5) park districts under chapter 398; 108.16 (6) regional railroad authorities under chapter 398A; 108.17 (7) hospital districts under sections 447.31 to 447.38; 108.18 (8) St. Cloud metropolitan transit commission under 108.19 sections 458A.01 to 458A.15; 108.20 (9) Duluth transit authority under sections 458A.21 to 108.21 458A.37; 108.22 (10) regional development commissions under sections 108.23 462.381 to 462.398; 108.24 (11) housing and redevelopment authorities under sections 108.25 469.001 to 469.047; 108.26 (12) port authorities under sections 469.048 to 469.068; 108.27 (13) economic development authorities under sections 108.28 469.090 to 469.1081; 108.29 (14) metropolitan council under sections 473.123 to 108.30 473.549; 108.31 (15) metropolitan airports commission under sections 108.32 473.601 to 473.680; 108.33 (16) metropolitan mosquito control commission under 108.34 sections 473.701 to 473.716; 108.35 (17) Morrison county rural development financing authority 108.36 under Laws 1982, chapter 437, section 1; 109.1 (18) Croft Historical Park District under Laws 1984, 109.2 chapter 502, article 13, section 6; 109.3 (19) East Lake county medical clinic district under Laws 109.4 1989, chapter 211, sections 1 to 6; 109.5 (20) Floodwood area ambulance district under Laws 1993, 109.6 chapter 375, article 5, section 39;and109.7 (21) Middle Mississippi River Watershed Management 109.8 Organization under sections 103B.211 and 103B.241; and 109.9 (22) any other political subdivision of the state of 109.10 Minnesota, excluding counties, school districts, cities, and 109.11 towns, that has the power to adopt and certify a property tax 109.12 levy to the county auditor, as determined by the commissioner of 109.13 revenue. 109.14 Sec. 21. Minnesota Statutes 1998, section 282.05, is 109.15 amended to read: 109.16 282.05 [PROCEEDS APPORTIONED.] 109.17 The net proceeds received from the sale or rental of 109.18 forfeited lands shall be apportioned to the general funds of the 109.19 state or municipal subdivision thereof, in the manner 109.20hereinafterprovided, and shall be first used by the municipal109.21subdivision to retire any indebtedness then existingin section 109.22 282.08. 109.23 Sec. 22. Minnesota Statutes 1998, section 298.22, 109.24 subdivision 7, is amended to read: 109.25 Subd. 7. [GIANTS RIDGE RECREATION AREA.] (a) In addition 109.26 to the other powers granted in this section and other law, the 109.27 commissioner, for purposes of fostering economic development and 109.28 tourism within the Giants Ridge recreation area, may spend any 109.29 money made available to the agency under section 298.28 to 109.30 acquire real or personal property or interests therein by gift, 109.31 purchase, or lease and may convey by lease, sale, or other means 109.32 of conveyance or commitment any or all of those property 109.33 interests acquired. 109.34 (b)Notwithstanding any other law to the contrary, property109.35conveyed under this subdivision and used for residential109.36purposes is not eligible for property tax homestead110.1classification under section 273.124 or for a property tax110.2refund under chapter 290A.110.3(c)In furtherance of development of the Giants Ridge 110.4 recreation area, the commissioner may establish and participate 110.5 in charitable foundations and nonprofit corporations, including 110.6 a corporation within the meaning of section 317A.011, 110.7 subdivision 6. 110.8(d)(c) The term "Giants Ridge recreation area" refers to 110.9 an economic development project area established by the 110.10 commissioner in furtherance of the powers delegated in this 110.11 section within St. Louis county in the western portions of the 110.12 town of White and in the eastern portion of the westerly, 110.13 adjacent, unorganized township. 110.14 Sec. 23. Minnesota Statutes 1998, section 373.40, 110.15 subdivision 1, is amended to read: 110.16 Subdivision 1. [DEFINITIONS.] For purposes of this 110.17 section, the following terms have the meanings given. 110.18 (a) "Bonds" means an obligation as defined under section 110.19 475.51. 110.20 (b) "Capital improvement" means acquisition or betterment 110.21 of public lands, development rights in the form of conservation 110.22 easements under chapter 84C, buildings, or other improvements 110.23 within the county for the purpose of a county courthouse, 110.24 administrative building, health or social service facility, 110.25 correctional facility, jail, law enforcement center, hospital, 110.26 morgue, library, park, qualified indoor ice arena, and roads and 110.27 bridges. An improvement must have an expected useful life of 110.28 five years or more to qualify. "Capital improvement" does not 110.29 include light rail transit or any activity related to it or a 110.30 recreation or sports facility building (such as, but not limited 110.31 to, a gymnasium, ice arena, racquet sports facility, swimming 110.32 pool, exercise room or health spa), unless the building is part 110.33 of an outdoor park facility and is incidental to the primary 110.34 purpose of outdoor recreation. 110.35 (c) "Commissioner" means the commissioner of trade and 110.36 economic development. 111.1 (d) "Metropolitan county" means a county located in the 111.2 seven-county metropolitan area as defined in section 473.121 or 111.3 a county with a population of 90,000 or more. 111.4 (e) "Population" means the population established by the 111.5 most recent of the following (determined as of the date the 111.6 resolution authorizing the bonds was adopted): 111.7 (1) the federal decennial census, 111.8 (2) a special census conducted under contract by the United 111.9 States Bureau of the Census, or 111.10 (3) a population estimate made either by the metropolitan 111.11 council or by the state demographer under section 4A.02. 111.12 (f) "Qualified indoor ice arena" means a facility that 111.13 meets the requirements of section 373.43. 111.14 (g) "Tax capacity" means total taxable market value, but 111.15 does not include captured market value. 111.16 Sec. 24. Minnesota Statutes 1998, section 375.18, 111.17 subdivision 12, is amended to read: 111.18 Subd. 12. [LAND FOR PUBLIC USE.] Each county board may 111.19 acquire by gift or purchase and improve land within the county, 111.20 for use as a park, site for a building, or other public purpose, 111.21 and, when required by the public interest, sell and convey it. 111.22 The land may be paid for out of moneys in the county treasury 111.23 not otherwise appropriated, or by issuing bonds of the 111.24 county. The county board may acquire development rights in the 111.25 form of a conservation easement under chapter 84C. The holder 111.26 of the conservation easement may be a governmental body or a 111.27 charitable corporation, as provided by section 84C.01. 111.28 Sec. 25. [375.511] [ADMINISTRATIVE PENALTIES.] 111.29 A county board may impose an administrative penalty for 111.30 violation of an ordinance enacted under chapter 103F. No 111.31 penalty may be imposed unless the owner has received notice, 111.32 served personally or by mail, of the alleged violation and an 111.33 opportunity for a hearing before a person authorized by the 111.34 county board to conduct the hearing. A decision that a 111.35 violation occurred must be in writing. The amount of the 111.36 penalty with interest may not exceed the amount allowed for a 112.1 single misdemeanor violation. A person aggrieved by a decision 112.2 under this section may have the decision reviewed in the 112.3 district court. If a penalty imposed under this section is 112.4 unpaid for more than 60 days after the date when payment is due, 112.5 the county board may certify the penalty to the county auditor 112.6 for collection to the same extent and in the same manner 112.7 provided by law for the assessment and collection of real estate 112.8 taxes. 112.9 Sec. 26. Minnesota Statutes 1998, section 398A.04, 112.10 subdivision 1, is amended to read: 112.11 Subdivision 1. [GENERAL.] An authority may exercise all 112.12 the powers necessary or desirable to implement the powers 112.13 specifically granted in this section, and in exercising the 112.14 powers is deemed to be performing an essential governmental 112.15 function and exercising a part of the sovereign power of the 112.16 state, and is a local government unit and political subdivision 112.17 of the state. Without limiting the generality of the foregoing, 112.18 the authority may: 112.19 (a) sue and be sued, have a seal, which may but need not be 112.20 affixed to documents as directed by the board, make and perform 112.21 contracts, and have perpetual succession; 112.22 (b) acquire real and personal property within or outside 112.23 its taxing jurisdiction, by purchase, gift, devise, 112.24 condemnation, conditional sale, lease, lease purchase, or 112.25 otherwise; or for purposes, including the facilitation of an 112.26 economic development project pursuant to section 383B.81 or 112.27 469.091 or 469.175, subdivision 7, that also improve rail 112.28 service;and112.29 (c) hold, manage, control, sell, convey, lease, mortgage, 112.30 or otherwise dispose of real or personal property; and 112.31 (d) make grants or otherwise appropriate funds to the 112.32 department of transportation, the metropolitan council, or any 112.33 other state or local governmental unit for the purposes 112.34 described in subdivision 2 with respect to railroad facilities 112.35 located or to be located within the authority's jurisdiction, 112.36 whether or not the facilities will be acquired, constructed, 113.1 owned, or operated by the authority. 113.2 Sec. 27. Minnesota Statutes 1998, section 398A.04, 113.3 subdivision 8, is amended to read: 113.4 Subd. 8. [TAXATION.] Before deciding to exercise the power 113.5 to tax, the authority shall give six weeks' published notice in 113.6 all municipalities in the region. If a number of voters in the 113.7 region equal to five percent of those who voted for candidates 113.8 for governor at the last gubernatorial election present a 113.9 petition within nine weeks of the first published notice to the 113.10 secretary of state requesting that the matter be submitted to 113.11 popular vote, it shall be submitted at the next general 113.12 election. The question prepared shall be: 113.13 "Shall the regional rail authority have the power to impose 113.14 a property tax? 113.15 Yes ....... 113.16 No ........" 113.17 If a majority of those voting on the question approve or if 113.18 no petition is presented within the prescribed time the 113.19 authority may levy a tax at any annual rate not exceeding 113.20 0.04835 percent of market value of all taxable property situated 113.21 within the municipality or municipalities named in its 113.22 organization resolution; provided, however, that the maximum 113.23 amount of the tax which may be levied in any year shall be 113.24 reduced by the amount of taxes levied to pay principal and 113.25 interest due in the following year on any outstanding general 113.26 obligation bonds issued pursuant to section 398A.07. Its 113.27 recording officer shall file, on or before September 15, in the 113.28 office of the county auditor of each county in which territory 113.29 under the jurisdiction of the authority is located a certified 113.30 copy of the board of commissioners' resolution levying the tax, 113.31 and each county auditor shall assess and extend upon the tax 113.32 rolls of each municipality named in the organization resolution 113.33 the portion of the tax that bears the same ratio to the whole 113.34 amount that the net tax capacity of taxable property in that 113.35 municipality bears to the net tax capacity of taxable property 113.36 in all municipalities named in the organization resolution. 114.1 Collections of the tax shall be remitted by each county 114.2 treasurer to the treasurer of the authority. For taxes levied 114.3 in 1991, the amount levied for light rail transit purposes under 114.4 this subdivision shall not exceed 75 percent of the amount 114.5 levied in 1990 for light rail transit purposes under this 114.6 subdivision. 114.7 Sec. 28. Minnesota Statutes 1998, section 398A.04, 114.8 subdivision 9, is amended to read: 114.9 Subd. 9. [AGREEMENTS.] The authority may enter into joint 114.10 powers agreements under section 471.59 or other agreements with 114.11 the municipality or municipalities named in the organization 114.12 agreement, or; with other municipalities situated in the 114.13 counties named in the resolution, respecting the matters 114.14 referred to in section 398A.06or; with another authority; with 114.15 a state agency; or with the metropolitan council about any 114.16 matter subject to this chapter. 114.17 Sec. 29. Minnesota Statutes 1998, section 398A.07, 114.18 subdivision 2, is amended to read: 114.19 Subd. 2. [SECURITY.] Bonds may be made payable exclusively 114.20 from the revenues from one or more projects, or from one or more 114.21 revenue producing contracts, or from the authority's revenues 114.22 generally, including but not limited to specified taxes which 114.23 the authority may levy or which a particular municipality may 114.24 agree to levy for a specified purpose, and may be additionally 114.25 secured by a pledge of any grant, subsidy, or contribution from 114.26 any public agency, including but not limited to a participating 114.27 municipality, or any income or revenues from any source. They 114.28 may be secured by a mortgage or deed of trust of the whole or 114.29 any part of the property of the authority. They shall be 114.30 payable solely from the revenues, funds, and property pledged or 114.31 mortgaged for their payment. No commissioner, officer, 114.32 employee, agent, or trustee of the authority shall be liable 114.33 personally on its bonds or be subject to any personal liability 114.34 or accountability by reason of their issuance. Neither the 114.35 state nor a county or other municipality except the authority 114.36 may pledge its faith and credit or taxing power or shall be 115.1 obligated in any manner for the payment of the bonds or interest 115.2 on them, except as specifically provided by agreement under 115.3 section 398A.06; but nothing herein shall affect the obligation 115.4 of the state or municipality to perform any contract made by it 115.5 with the authority, and when the authority's rights under a 115.6 contract with the state or a municipality are pledged by the 115.7 authority for the security of its bonds, the holders or a bond 115.8 trustee may enforce the rights as a third party beneficiary. 115.9 All bonds shall be negotiable within the meaning and for the 115.10 purposes of the Uniform Commercial Code, subject only to any 115.11 registration requirement. If the authority is authorized to 115.12 levy taxes under section 398A.04, subdivision 8, the authority 115.13 may issue general obligation bonds of the authority, without a 115.14 referendum, which are payable primarily from such taxes. If the 115.15 maximum amount of principal and interest to become due in any 115.16 year on all outstanding bonds issued under this section which 115.17 are general obligations, including the bonds to be issued, does 115.18 not exceed 0.04835 percent of the market value of taxable 115.19 property in the municipality or municipalities named in its 115.20 organization resolution for taxes payable in the year in which 115.21 the bonds are issued, the authority may levy a tax on all 115.22 taxable property in such municipality or municipalities without 115.23 limit as to rate or amount to pay principal and interest on its 115.24 general obligation bonds when due. 115.25 Sec. 30. [415.18] [SIDEWALK UTILITY.] 115.26 A home rule charter or statutory city may establish a 115.27 sidewalk utility as provided in section 412.321 including the 115.28 voting requirement of section 412.321, subdivision 2, for other 115.29 utilities in statutory cities, or as otherwise provided by law 115.30 or charter for utilities for home rule charter cities. Section 115.31 412.321 applies to the creation of the sidewalk utility except 115.32 that the creation of the sidewalk utility requires approval by 115.33 only a majority vote of those voting on the proposition. The 115.34 purpose of the sidewalk utility is to acquire land for, 115.35 construct, maintain, and replace public sidewalks and 115.36 appurtenances to public sidewalks. Snow and ice removal are 116.1 expressly not included in the purposes of the utility. Utility 116.2 charges may be imposed on any reasonable and equitable basis on 116.3 which other utility charges are made including a uniform charge 116.4 per account for another utility to be added to the account for 116.5 the other utility but separately listed. Revenues received for 116.6 sidewalk utilities must be segregated from other funds as 116.7 otherwise provided for utility revenues and may be used only for 116.8 sidewalk utility purposes. 116.9 Sec. 31. Minnesota Statutes 1998, section 428A.11, 116.10 subdivision 6, is amended to read: 116.11 Subd. 6. [HOUSING UNIT.] "Housing unit" means real 116.12 property and improvements thereon consisting of a one-dwelling 116.13 unit, or an apartment as described in chapter 515or, 515A, or 116.14 515B, that is occupied by a person or family for use as a 116.15 residence. 116.16 Sec. 32. Minnesota Statutes 1998, section 428A.11, is 116.17 amended by adding a subdivision to read: 116.18 Subd. 7. [AUTHORITY.] "Authority" means an economic 116.19 development authority created pursuant to section 469.091 or a 116.20 housing and redevelopment authority created pursuant to section 116.21 469.003. 116.22 Sec. 33. Minnesota Statutes 1998, section 428A.11, is 116.23 amended by adding a subdivision to read: 116.24 Subd. 8. [IMPLEMENTING ENTITY.] "Implementing entity" 116.25 means the city or authority designated in the enabling ordinance 116.26 as responsible for implementing and administering the housing 116.27 improvement area. 116.28 Sec. 34. Minnesota Statutes 1998, section 428A.13, 116.29 subdivision 1, is amended to read: 116.30 Subdivision 1. [ORDINANCE.] The governing body of the city 116.31 may adopt an ordinance establishingaone or more housing 116.32 improvementareaareas. The ordinance must specifically 116.33 describe the portion of the city to be included in the area, the 116.34 basis for the imposition of the fees, and the number of years 116.35 the fee will be in effect. In addition, the ordinance must 116.36 include findings that without the housing improvement area, the 117.1 proposed improvements could not be made by the condominium 117.2 associations or housing unit owners, and the designation is 117.3 needed to maintain and preserve the housing units within the 117.4 housing improvement area. The ordinance shall designate the 117.5 implementing entity. The ordinance may not be adopted until a 117.6 public hearing has been held regarding the ordinance. The 117.7 ordinance may be amended by the governing body of the city, 117.8 provided the governing body complies with the public hearing 117.9 notice provisions of subdivision 2. Within 30 days after 117.10 adoption of the ordinance under this subdivision, the governing 117.11 body shall send a copy of the ordinance to the commissioner of 117.12 revenue. 117.13 Sec. 35. Minnesota Statutes 1998, section 428A.13, 117.14 subdivision 3, is amended to read: 117.15 Subd. 3. [PROPOSED HOUSING IMPROVEMENTS.] At the public 117.16 hearing held under subdivision 2, thecityproposed implementing 117.17 entity shall provide a preliminary listing of the housing 117.18 improvements to be made in the area. The listing shall identify 117.19 those improvements, if any, that are proposed to be made to all 117.20 or a portion of the common elements of a condominium. The 117.21 listing shall also identify those housing units that have 117.22 completed the proposed housing improvements and are proposed to 117.23 be exempted from a portion of the fee. In preparing the list 117.24 thecityproposed implementing entity shall consult with the 117.25 residents of the area and the condominium associations. 117.26 Sec. 36. Minnesota Statutes 1998, section 428A.14, 117.27 subdivision 1, is amended to read: 117.28 Subdivision 1. [AUTHORITY.] Fees may be imposed by the 117.29cityimplementing entity on the housing units within the housing 117.30 improvement area at a rate, term, or amount sufficient to 117.31 produce revenue required to provide housing improvements in the 117.32 area to reimburse the implementing entity for advances made to 117.33 pay for the housing improvements or to pay principal or interest 117.34 on, and premiums, if any, of bonds issued by the implementing 117.35 entity pursuant to section 428A.16. The fee can be imposed on 117.36 the basis of the tax capacity of the housing unit, or the total 118.1 amount of square footage of the housing unit, or a method 118.2 determined by the council and specified in the resolution. 118.3 Before the imposition of the fees, a hearing must be held and 118.4 notice must be published in the official newspaper at least 118.5 seven days before the hearing and shall be mailed at least seven 118.6 days before the hearing to any housing unit owner subject to a 118.7 fee. For purposes of this section, the notice must also include: 118.8 (1) a statement that all interested persons will be given 118.9 an opportunity to be heard at the hearing regarding a proposed 118.10 housing improvement fee; 118.11 (2) the estimated cost of improvements including 118.12 administrative costs to be paid for in whole or in part by the 118.13 fee imposed under the ordinance; 118.14 (3) the amount to be charged against the particular 118.15 property; 118.16 (4) the right of the property owner to prepay the entire 118.17 fee; 118.18 (5) the number of years the fee will be in effect; and 118.19 (6) a statement that the petition requirements of section 118.20 428A.12 have either been met or do not apply to the proposed fee. 118.21 Within six months of the public hearing, thecity118.22 implementing entity may adopt a resolution imposing a fee within 118.23 the area not exceeding the amount expressed in the notice issued 118.24 under this section. 118.25 Prior to adoption of the resolution approving the fee, the 118.26 condominium associations located in the housing improvement area 118.27 shall submit to thecityimplementing entity a financial plan 118.28 prepared by an independent third party, acceptable to thecity118.29 implementing entity and associations, that provides for the 118.30 associations to finance maintenance and operation of the common 118.31 elements in the condominium and a long-range plan to conduct and 118.32 finance capital improvements. 118.33 Sec. 37. Minnesota Statutes 1998, section 428A.15, is 118.34 amended to read: 118.35 428A.15 [COLLECTION OF FEES.] 118.36 Thecityimplementing entity may provide for the collection 119.1 of the housing improvement fees according to the terms of 119.2 section 428A.05. 119.3 Sec. 38. Minnesota Statutes 1998, section 428A.16, is 119.4 amended to read: 119.5 428A.16 [BONDS.] 119.6 At any time after a contract for the construction of all or 119.7 part of an improvement authorized under sections 428A.11 to 119.8 428A.20 has been entered into or the work has been ordered, the 119.9governing body of the cityimplementing entity may issue 119.10 obligations in the amount it deems necessary to defray in whole 119.11 or in part the expense incurred and estimated to be incurred in 119.12 making the improvement, including every item of cost from 119.13 inception to completion and all fees and expenses incurred in 119.14 connection with the improvement or the financing. 119.15 The obligations are payable primarily out of the proceeds 119.16 of the fees imposed under section 428A.14, or from any other 119.17 special assessments or revenues available to be pledged for 119.18 their payment under charter or statutory authority, or from two 119.19 or more of those sources. The governing body of the city, or if 119.20 the governing bodies are the same or consist of identical 119.21 membership, the authority may, by resolution adopted prior to 119.22 the sale of obligations, pledge the full faith, credit, and 119.23 taxing power of the city toassurebonds issued by it to ensure 119.24 payment of the principal and interest if the proceeds of the 119.25 fees in the area are insufficient to pay the principal and 119.26 interest. The obligations must be issued in accordance with 119.27 chapter 475, except that an election is not required, and the 119.28 amount of the obligations are not included in determination of 119.29 the net debt of the city under the provisions of any law or 119.30 charter limiting debt. 119.31 Sec. 39. Minnesota Statutes 1998, section 428A.17, is 119.32 amended to read: 119.33 428A.17 [ADVISORY BOARD.] 119.34 Thegoverning body of the cityimplementing entity may 119.35 create and appoint an advisory board for the housing improvement 119.36 area in the city to advise thegoverning bodyimplementing 120.1 entity in connection with the planning and construction of 120.2 housing improvements. In appointing the board, thecouncil120.3 implementing entity shall consider for membership members of 120.4 condominium associations located in the housing improvement 120.5 area. The advisory board shall make recommendations to 120.6 thegoverning bodyimplementing entity to provide improvements 120.7 or impose fees within the housing improvement area. Before the 120.8 adoption of a proposal by thegoverning bodyimplementing entity 120.9 to provide improvements within the housing improvement area, the 120.10 advisory board of the housing improvement area shall have an 120.11 opportunity to review and comment upon the proposal. 120.12 Sec. 40. Minnesota Statutes 1998, section 428A.19, is 120.13 amended to read: 120.14 428A.19 [ANNUAL REPORTS.] 120.15 Each condominium association located within the housing 120.16 improvement area must, by August 15 annually, submit a copy of 120.17 its audited financial statements to thecityimplementing entity. 120.18 The city may also, as part of the enabling ordinance, require 120.19 the submission of other relevant information from the 120.20 associations. 120.21 Sec. 41. Minnesota Statutes 1998, section 465.82, is 120.22 amended by adding a subdivision to read: 120.23 Subd. 4. [DIFFERENTIAL TAXATION.] The plan for cooperation 120.24 and combination adopted in accordance with subdivision 1 may 120.25 establish that the tax rate of the local government unit with 120.26 the lesser tax rate prior to the effective date of combination 120.27 shall be increased in substantially equal proportions over not 120.28 more than six years to equality with the tax rate on the 120.29 property already within the borders of the local unit of 120.30 government with the higher tax rate. The appropriate period of 120.31 time, if any, for transition to the higher tax rate shall be 120.32 based on the time reasonably required to effectively provide 120.33 equal municipal services to the residents of the local unit of 120.34 government with the lower tax rate. 120.35 Sec. 42. Minnesota Statutes 1998, section 473.39, is 120.36 amended by adding a subdivision to read: 121.1 Subd. 1g. [OBLIGATIONS; 2000-2002.] In addition to the 121.2 authority in subdivisions 1a, 1b, 1c, 1d, and 1e, the council 121.3 may issue certificates of indebtedness, bonds, or other 121.4 obligations under this section in an amount not exceeding 121.5 $52,000,000, which may be used for capital expenditures as 121.6 prescribed in the council's transit capital improvement program 121.7 and for related costs, including the costs of issuance and sale 121.8 of the obligations. 121.9 Sec. 43. Minnesota Statutes 1998, section 473.39, is 121.10 amended by adding a subdivision to read: 121.11 Subd. 1h. [OBLIGATIONS.] After June 30, 2001, in addition 121.12 to the authority in subdivisions 1a, 1b, 1c, 1d, 1e, and 1g, the 121.13 council may issue certificates of indebtedness, bonds, or other 121.14 obligations under this section for capital expenditures as 121.15 prescribed in the council's transit capital improvement program 121.16 and for related costs, including the costs of issuance and sale 121.17 of the obligations. The amount of the obligations issued under 121.18 this subdivision in any calendar year must not exceed the 121.19 following limit, except as provided in this subdivision: 121.20 (1) for calendar year 2002, the limit is $27,000,000; and 121.21 (2) for each subsequent year, the limit equals the previous 121.22 calendar year's limit calculated under this subdivision 121.23 multiplied by an index for market valuation changes equal to the 121.24 total market valuation of all taxable property located within 121.25 the transit taxing district for the current taxes payable year 121.26 divided by the total market valuation of all taxable property 121.27 located within the transit taxing district for the previous 121.28 taxes payable year. For any year in which the council does not 121.29 issue obligations totaling the limit calculated under this 121.30 subdivision, the remaining available amount may be carried 121.31 forward to subsequent years. The council may issue obligations 121.32 in a carry-forward year in an amount exceeding the annual limit 121.33 for that year by the amount carried forward, but the amount 121.34 carried forward is not a permanent increase in the annual limit 121.35 calculated under this subdivision. 121.36 For the purposes of this subdivision, "total market 122.1 valuation" means the total market valuation of all taxable 122.2 property within the transit taxing district without valuation 122.3 adjustments for fiscal disparities under chapter 473F, tax 122.4 increment financing under sections 469.174 to 469.179, and high 122.5 voltage transmission lines under section 273.425. "Transit 122.6 taxing district" means the transit taxing district established 122.7 in section 473.446. 122.8 Sec. 44. Minnesota Statutes 1998, section 473.898, 122.9 subdivision 3, is amended to read: 122.10 Subd. 3. [LIMITATIONS.] The principal amount of the bonds 122.11 issued pursuant to subdivision 1, exclusive of any original 122.12 issue discount, shall not exceed the amount of 122.13$10,000,000$13,306,300, plus the amount the council determines 122.14 necessary to pay the costs of issuance, fund reserves, debt 122.15 service, and pay for any bond insurance or other credit 122.16 enhancement. 122.17 Sec. 45. Minnesota Statutes 1998, section 475.52, 122.18 subdivision 1, is amended to read: 122.19 Subdivision 1. [STATUTORY CITIES.] Any statutory city may 122.20 issue bonds or other obligations for the acquisition or 122.21 betterment of public buildings, means of garbage disposal, 122.22 hospitals, nursing homes, homes for the aged, schools, 122.23 libraries, museums, art galleries, parks, playgrounds, stadia, 122.24 sewers, sewage disposal plants, subways, streets, sidewalks, 122.25 warning systems; for any utility or other public convenience 122.26 from which a revenue is or may be derived; for a permanent 122.27 improvement revolving fund; for changing, controlling or 122.28 bridging streams and other waterways; for the acquisition and 122.29 betterment of bridges and roads within two miles of the 122.30 corporate limits, for the acquisition of development rights in 122.31 the form of conservation easements under chapter 84C; and for 122.32 acquisition of equipment for snow removal, street construction 122.33 and maintenance, or fire fighting. Without limitation by the 122.34 foregoing the city may issue bonds to provide money for any 122.35 authorized corporate purpose except current expenses. 122.36 Sec. 46. Minnesota Statutes 1998, section 475.52, 123.1 subdivision 3, is amended to read: 123.2 Subd. 3. [COUNTIES.] Any county may issue bonds for the 123.3 acquisition or betterment of courthouses, county administrative 123.4 buildings, health or social service facilities, correctional 123.5 facilities, law enforcement centers, jails, morgues, libraries, 123.6 parks, and hospitals, for roads and bridges within the county or 123.7 bordering thereon and for road equipment and machinery and for 123.8 ambulances and related equipment, for the acquisition of 123.9 development rights in the form of conservation easements under 123.10 chapter 84C, and for capital equipment for the administration 123.11 and conduct of elections providing the equipment is uniform 123.12 countywide, except that the power of counties to issue bonds in 123.13 connection with a library shall not exist in Hennepin county. 123.14 Sec. 47. Minnesota Statutes 1998, section 475.52, 123.15 subdivision 4, is amended to read: 123.16 Subd. 4. [TOWNS.] Any town may issue bonds for the 123.17 acquisition and betterment of town halls, town roads and 123.18 bridges, nursing homes and homes for the aged, and for 123.19 acquisition of equipment for snow removal, road construction or 123.20 maintenance, and fire fighting, for the acquisition of 123.21 development rights in the form of conservation easements under 123.22 chapter 84C and for the acquisition and betterment of any 123.23 buildings to house and maintain town equipment. 123.24 Sec. 48. Minnesota Statutes 1998, section 477A.011, 123.25 subdivision 36, is amended to read: 123.26 Subd. 36. [CITY AID BASE.] (a) Except as provided in 123.27 paragraphs (b), (c), and (d)to (k), "city aid base" means, for 123.28 each city, the sum of the local government aid and equalization 123.29 aid it was originally certified to receive in calendar year 1993 123.30 under Minnesota Statutes 1992, section 477A.013, subdivisions 3 123.31 and 5, and the amount of disparity reduction aid it received in 123.32 calendar year 1993 under Minnesota Statutes 1992, section 123.33 273.1398, subdivision 3. 123.34 (b) For aids payable in 1996 and thereafter, a city that in 123.35 1992 or 1993 transferred an amount from governmental funds to 123.36 its sewer and water fund, which amount exceeded its net levy for 124.1 taxes payable in the year in which the transfer occurred, has a 124.2 "city aid base" equal to the sum of (i) its city aid base, as 124.3 calculated under paragraph (a), and (ii) one-half of the 124.4 difference between its city aid distribution under section 124.5 477A.013, subdivision 9, for aids payable in 1995 and its city 124.6 aid base for aids payable in 1995. 124.7 (c) The city aid base for any city with a population less 124.8 than 500 is increased by $40,000 for aids payable in calendar 124.9 year 1995 and thereafter, and the maximum amount of total aid it 124.10 may receive under section 477A.013, subdivision 9, paragraph 124.11 (c), is also increased by $40,000 for aids payable in calendar 124.12 year 1995 only, provided that: 124.13 (i) the average total tax capacity rate for taxes payable 124.14 in 1995 exceeds 200 percent; 124.15 (ii) the city portion of the tax capacity rate exceeds 100 124.16 percent; and 124.17 (iii) its city aid base is less than $60 per capita. 124.18 (d) The city aid base for a city is increased by $20,000 in 124.19 1998 and thereafter and the maximum amount of total aid it may 124.20 receive under section 477A.013, subdivision 9, paragraph (c), is 124.21 also increased by $20,000 in calendar year 1998 only, provided 124.22 that: 124.23 (i) the city has a population in 1994 of 2,500 or more; 124.24 (ii) the city is located in a county, outside of the 124.25 metropolitan area, which contains a city of the first class; 124.26 (iii) the city's net tax capacity used in calculating its 124.27 1996 aid under section 477A.013 is less than $400 per capita; 124.28 and 124.29 (iv) at least four percent of the total net tax capacity, 124.30 for taxes payable in 1996, of property located in the city is 124.31 classified as railroad property. 124.32 (e) The city aid base for a city is increased by $200,000 124.33 in 1999 and thereafter and the maximum amount of total aid it 124.34 may receive under section 477A.013, subdivision 9, paragraph 124.35 (c), is also increased by $200,000 in calendar year 1999 only, 124.36 provided that: 125.1 (i) the city was incorporated as a statutory city after 125.2 December 1, 1993; 125.3 (ii) its city aid base does not exceed $5,600; and 125.4 (iii) the city had a population in 1996 of 5,000 or more. 125.5 (f) The city aid base for a city is increased by $450,000 125.6 in 1999 to 2008 and the maximum amount of total aid it may 125.7 receive under section 477A.013, subdivision 9, paragraph (c), is 125.8 also increased by $450,000 in calendar year 1999 only, provided 125.9 that: 125.10 (i) the city had a population in 1996 of at least 50,000; 125.11 (ii) its population had increased by at least 40 percent in 125.12 the ten-year period ending in 1996; and 125.13 (iii) its city's net tax capacity for aids payable in 1998 125.14 is less than $700 per capita. 125.15 (g) Beginning in 2002, the city aid base for a city is 125.16 equal to the sum of its city aid base in 2001 and the amount of 125.17 additional aid it was certified to receive under section 477A.06 125.18 in 2001. For 2002 only, the maximum amount of total aid a city 125.19 may receive under section 477A.013, subdivision 9, paragraph 125.20 (c), is also increased by the amount it was certified to receive 125.21 under section 477A.06 in 2001. 125.22 (h) The city aid base for a city is increased by $150,000 125.23 for aids payable in 2000 and thereafter, and the maximum amount 125.24 of total aid it may receive under section 477A.013, subdivision 125.25 9, paragraph (c), is also increased by $150,000 in calendar year 125.26 2000 only, provided that: 125.27 (1) the city has a population that is greater than 1,000 125.28 and less than 2,500; 125.29 (2) its commercial and industrial percentage for aids 125.30 payable in 1999 is greater than 45 percent; and 125.31 (3) the total market value of all commercial and industrial 125.32 property in the city for assessment year 1999 is at least 15 125.33 percent less than the total market value of all commercial and 125.34 industrial property in the city for assessment year 1998. 125.35 (i) The city aid base for a city is increased by $200,000 125.36 in 2000 and thereafter, and the maximum amount of total aid it 126.1 may receive under section 477A.013, subdivision 9, paragraph 126.2 (c), is also increased by $200,000 in calendar year 2000 only, 126.3 provided that: 126.4 (1) the city had a population in 1997 of 2,500 or more; 126.5 (2) the net tax capacity of the city used in calculating 126.6 its 1999 aid under section 477A.013 is less than $650 per 126.7 capita; 126.8 (3) the pre-1940 housing percentage of the city used in 126.9 calculating 1999 aid under section 477A.013 is greater than 12 126.10 percent; 126.11 (4) the 1999 local government aid of the city under section 126.12 477A.013 is less than 20 percent of the amount that the formula 126.13 aid of the city would have been if the need increase percentage 126.14 was 100 percent; and 126.15 (5) the city aid base of the city used in calculating aid 126.16 under section 477A.013 is less than $7 per capita. 126.17 (j) The city aid base for a city is increased by $225,000 126.18 in calendar years 2000 to 2002 and the maximum amount of total 126.19 aid it may receive under section 477A.013, subdivision 9, 126.20 paragraph (c), is also increased by $225,000 in calendar year 126.21 2000 only, provided that: 126.22 (1) the city had a population of at least 5,000; 126.23 (2) its population had increased by at least 50 percent in 126.24 the ten-year period ending in 1997; 126.25 (3) the city is located outside of the Minneapolis-St. Paul 126.26 metropolitan statistical area as defined by the United States 126.27 Bureau of the Census; and 126.28 (4) the city received less than $30 per capita in aid under 126.29 section 477A.013, subdivision 9, for aids payable in 1999. 126.30 (k) The city aid base for a city is increased by $102,000 126.31 in 2000 and thereafter, and the maximum amount of total aid it 126.32 may receive under section 477A.013, subdivision 9, paragraph 126.33 (c), is also increased by $102,000 in calendar year 2000 only, 126.34 provided that: 126.35 (1) the city has a population in 1997 of 2,000 or more; 126.36 (2) the net tax capacity of the city used in calculating 127.1 its 1999 aid under section 477A.013 is less than $455 per 127.2 capita; 127.3 (3) the net levy of the city used in calculating 1999 aid 127.4 under section 477A.013 is greater than $195 per capita; and 127.5 (4) the 1999 local government aid of the city under section 127.6 477A.013 is less than 38 percent of the amount that the formula 127.7 aid of the city would have been if the need increase percentage 127.8 was 100 percent. 127.9 Sec. 49. Laws 1988, chapter 645, section 3, is amended to 127.10 read: 127.11 Sec. 3. [TAX; PAYMENT OF EXPENSES.] 127.12 (a) The tax levied by the hospital district under Minnesota 127.13 Statutes, section 447.34, must not be levied at a rate that 127.14 exceeds2 mills.063 percent of taxable market value.The127.15proceeds127.16 (b) .048 percent of taxable market value ofthattax in 127.17 paragraph (a) may be used only for acquisition, betterment, and 127.18 maintenance of the district's hospital and nursing home 127.19 facilities and equipment, and not for administrative or salary 127.20 expenses. 127.21 (c) .015 percent of taxable market value of the tax in 127.22 paragraph (a) may be used solely for the purpose of capital 127.23 expenditures as it relates to ambulance acquisitions for the 127.24 Cook ambulance service and the Orr ambulance service and not for 127.25 administrative or salary expenses. 127.26 The part of the levy referred to in paragraph (c) must be 127.27 administered by the Cook Hospital and passed on directly to the 127.28 Cook area ambulance service board and the city of Orr to be held 127.29 in trust until funding for a new ambulance is needed by either 127.30 the Cook ambulance service or the Orr ambulance service. 127.31 Sec. 50. Laws 1997, chapter 231, article 2, section 68, 127.32 subdivision 3, as amended by Laws 1998, chapter 389, article 3, 127.33 section 36, is amended to read: 127.34 Subd. 3. [MORATORIUM ON CHANGES IN ASSESSMENT PRACTICES.] 127.35 (a) An assessor may not change the current practices or policies 127.36 used generally in assessing elderly assisted living facilities. 128.1 (b) An assessor may not change the assessment of an 128.2 existing elderly assisted living facility, unless the change is 128.3 made as a result of a change in ownership, occupancy, or use of 128.4 the facility. This paragraph does not apply to: 128.5 (1) a facility that was constructed during calendar year 128.6 1997, 1998, or 1999; 128.7 (2) a facility that was converted to an elderly assisted 128.8 living facility during calendar year 1997, 1998, or 1999; or 128.9 (3) a change in market value. 128.10 (c) This subdivision expires and no longer applies on the 128.11 earlier of: 128.12 (1) the enactment of legislation establishing criteria for 128.13 the property taxation of elderly assisted living facilities; or 128.14 (2) final adjournment of the19992000 regular legislative 128.15 session. 128.16 Sec. 51. [ABATEMENT OF TAXES.] 128.17 Subdivision 1. [PROPERTY DEFINED.] As used in this section 128.18 and section 52, "property" means property located in Lake county 128.19 that meets the following description: 128.20 All that part of Government Lot Two (2) of Section One (1) 128.21 in Township Fifty-two (52) North, Range Eleven (11) West of the 128.22 Fourth Principal Meridian, lying within the following described 128.23 lines: 128.24 Commencing at a point on the North-South quarter line of 128.25 said Section 1 which is 20 feet south of the center of said 128.26 Section 1 measured along said North-South quarter line; 128.27 thence easterly at a right angle to said North-South 128.28 quarter line a distance of 5 feet to the point of Beginning; 128.29 thence continuing in an easterly direction at a right angle 128.30 to said North-South quarter line a distance of 335 feet; 128.31 thence southerly at a right angle to the last described 128.32 line a distance of 80 feet; 128.33 thence easterly at a right angle to the last described line 128.34 a distance of 210 feet; 128.35 thence southerly at a right angle to the last described 128.36 line a distance of 255 feet; 129.1 thence southeasterly at an angle of 102 degrees to the last 129.2 described line to the ordinary low-water mark of Agate Bay; 129.3 thence easterly along said ordinary low-water mark to the 129.4 East boundary line of said Government Lot 2; 129.5 thence in a northerly direction along said East boundary 129.6 line to a point on said East boundary line which is 75 feet 129.7 distant in a northerly direction from the East-West quarter line 129.8 of said Section 1, extended, as measured along said East 129.9 boundary line; 129.10 thence in a northwesterly direction to a point which is 190 129.11 feet easterly measured at a right angle to the North-South 129.12 quarter line of said Section 1 from a point on the North-South 129.13 quarter line, which point is 725 feet northerly of the center of 129.14 said Section 1 when measured along said North-South quarter 129.15 line; 129.16 thence in a westerly direction at a right angle to said 129.17 North-South quarter line a distance of 185 feet; 129.18 thence southerly along a line parallel to and 5 feet 129.19 distant easterly from said North-South quarter line a distance 129.20 of 230 feet; 129.21 thence easterly at a right angle to the last described line 129.22 a distance of 130 feet; 129.23 thence southerly at a right angle to the last described 129.24 line a distance of 119.27 feet; 129.25 thence westerly at a right angle to the last described line 129.26 a distance of 130 feet; 129.27 thence southerly along a line parallel to and 5 feet 129.28 distant easterly from said North-South quarter line a distance 129.29 of 395.73 feet to the point of beginning. 129.30 Subd. 2. [AUTHORIZATION.] Upon a majority vote of its 129.31 members, the governing bodies of each of Lake county, the city 129.32 of Two Harbors, and Lake Superior independent school district 129.33 No. 381, may abate the taxes levied on the property described in 129.34 subdivision 1 in 1979 to 1990, payable in 1980 to 1991, as well 129.35 as any interest and penalties due on those taxes. 129.36 Sec. 52. [RECORDING OF CONVEYANCE AUTHORIZED.] 130.1 Notwithstanding Minnesota Statutes, section 272.12, or any 130.2 other law to the contrary, if the governing bodies of Lake 130.3 county, the city of Two Harbors, and Lake Superior independent 130.4 school district No. 381 have all abated the taxes, interest, and 130.5 penalties as provided in section 51, subdivision 2, the county 130.6 auditor may record the conveyance of the property described in 130.7 section 51, subdivision 1. 130.8 Sec. 53. [NORTH FORK CROW RIVER WATERSHED DISTRICT.] 130.9 Subdivision 1. [LEVY AUTHORIZED.] Notwithstanding 130.10 Minnesota Statutes, section 103D.905, subdivision 3, the North 130.11 Fork Crow River watershed district may annually levy up to 130.12 .04836 percent of taxable market value, or $140,000, whichever 130.13 is less, for its administrative fund. 130.14 Subd. 2. [EFFECTIVE DATE.] This section is effective, 130.15 without local approval, beginning with taxes levied in 1999, 130.16 payable in 2000. 130.17 Sec. 54. [SAUK RIVER WATERSHED DISTRICT.] 130.18 Notwithstanding Minnesota Statutes, section 103D.905, 130.19 subdivision 3, the Sauk river watershed district may annually 130.20 levy up to $200,000 for its administrative fund for taxes 130.21 payable in 2000, 2001, 2002, 2003, and 2004. 130.22 Sec. 55. [CEMETERY LEVY FOR SAWYER BY CARLTON COUNTY.] 130.23 Subdivision 1. [LEVY AUTHORIZED.] Notwithstanding other 130.24 law to the contrary, the Carlton county board of commissioners 130.25 may levy in and for the unorganized township of Sawyer an amount 130.26 up to $1,000 annually for cemetery purposes, beginning with 130.27 taxes payable in 2000 and ending with taxes payable in 2009. 130.28 Subd. 2. [EFFECTIVE DATE.] This section is effective June 130.29 1, 1999, without local approval. 130.30 Sec. 56. [APPLICATION.] 130.31 Sections 42 to 44 apply in the counties of Anoka, Carver, 130.32 Dakota, Hennepin, Ramsey, Scott, and Washington. 130.33 Sec. 57. [LOCAL PERFORMANCE AID RECIPIENTS; OTHER AID 130.34 INCREASES.] 130.35 (a) If a county received local performance aid under 130.36 Minnesota Statutes, section 477A.05, in calendar year 1999, the 131.1 amount of homestead and agricultural credit aid determined and 131.2 payable to the county under Minnesota Statutes, section 131.3 273.1398, in 2000 and subsequent years is increased by the 131.4 amount of performance aid it received in 1999. 131.5 (b) If a city received local performance aid under 131.6 Minnesota Statutes, section 477A.05, in calendar year 1999, the 131.7 city aid base of the city under Minnesota Statutes, section 131.8 477A.011, subdivision 36, is increased for aid payable in 2000 131.9 and subsequent years by the amount of performance aid it 131.10 received in 1999, and the maximum amount of total aid it may 131.11 receive under Minnesota Statutes, section 477A.013, subdivision 131.12 9, paragraph (c), is also increased by that amount in calendar 131.13 year 2000 only. 131.14 (c) For purposes of determining the limitation on aid 131.15 increases under Minnesota Statutes, section 477A.013, 131.16 subdivision 9, paragraph (b), for aid payable in 2000, the sum 131.17 of the aid to all cities in 2000 does not include the aid 131.18 increase under paragraph (a) of this section. 131.19 Sec. 58. [GOVERNOR'S PROPERTY TAX REFORM COMMISSION.] 131.20 Subdivision 1. [ESTABLISHMENT; ISSUES.] A governor's 131.21 property tax reform commission is established to study the 131.22 property tax system and the fiscal relationship between the 131.23 state and local governments. The task force shall make 131.24 recommendations on the best means to achieve a balance among the 131.25 following goals: 131.26 (1) clarification of the state and local fiscal 131.27 relationship to enable taxpayers to understand the levels of 131.28 government at which services are provided and taxes are imposed; 131.29 (2) simplifying the state and local fiscal structures to 131.30 the extent possible without sacrificing equity and efficiency; 131.31 (3) achieving accountability by ensuring that aid to local 131.32 governments is based upon need and revenue raising capacity 131.33 rather than local spending decisions; 131.34 (4) ensuring that local governing bodies have the final 131.35 authority in determining local budgets; 131.36 (5) ensuring that all levels of government share equally in 132.1 the growth and decline in Minnesota sales and income tax 132.2 revenues; and 132.3 (6) ensuring that public expenditures that are growing the 132.4 most rapidly due to changing social and demographic forces are 132.5 linked to the most rapidly growing revenue sources. 132.6 Subd. 2. [MEMBERSHIP.] The advisory task force must have 132.7 15 members who are appointed by the governor. No legislators or 132.8 lobbyists registered under Minnesota Statutes, section 10A.03, 132.9 may be appointed to the task force. 132.10 Subd. 3. [REPORT.] The advisory task force shall report to 132.11 the chairs of the committees on taxes of the senate and the 132.12 house of representatives by January 15, 2000, on their 132.13 recommendations. 132.14 Subd. 4. [EXPIRATION.] This section expires March 1, 2000. 132.15 Sec. 59. [RECOMMENDATIONS ON UTILITY PERSONAL PROPERTY TAX 132.16 REVENUES.] 132.17 The commissioner of revenue shall, upon consultation with 132.18 affected parties, develop a detailed proposal for a fair and 132.19 reasonable approach to the replacement of the revenue that would 132.20 be lost to local units of government as a result of the 132.21 elimination of the tax on the personal property of electric 132.22 utilities. The commissioner shall report on the proposal by 132.23 September 1, 2000, to the chairs of the senate committees on 132.24 taxes and jobs, energy and community development, and the house 132.25 of representatives committees on taxes and jobs and economic 132.26 development, and to the governor. 132.27 Sec. 60. [EDUCATION LEVY REDUCTION APPROPRIATION.] 132.28 In addition to any amount appropriated by other law, 132.29 $17,627,000 is appropriated from the general fund to the 132.30 commissioner of children, families, and learning in fiscal year 132.31 2001, and $19,585,000 in fiscal year 2002 and thereafter, to 132.32 fund a reduction in the statewide general education property tax 132.33 levy. The fiscal year 2002 appropriation includes $1,958,000 132.34 for 2001 and $17,627,000 for 2002. 132.35 Sec. 61. [REPEALER.] 132.36 (a) Minnesota Statutes 1998, section 273.1383, is repealed. 133.1 (b) Minnesota Statutes 1998, section 477A.05, is repealed. 133.2 (c) Minnesota Statutes 1998, section 428A.21, is repealed. 133.3 Sec. 62. [EFFECTIVE DATE.] 133.4 (a) Sections 4; 5; 6; 11; 12; 13; 15; 16; 17; 20; 22; 41; 133.5 and 53 are effective for taxes levied in 1999, payable in 2000, 133.6 and thereafter. 133.7 (b) Section 9 is effective retroactively for property taxes 133.8 payable in 1998 and thereafter. 133.9 (c) Sections 19; 57; and 61, paragraph (b), are effective 133.10 for aids payable in 2000, and thereafter. 133.11 (d) Section 21 is effective for net proceeds received after 133.12 the date of final enactment of this act. 133.13 (e) The .0015 percent of taxable market value levy 133.14 described in section 49, paragraph (c), is effective for the 133.15 cities of Cook and Orr and the counties of St. Louis and 133.16 Koochiching for affected parts of those counties on January 1, 133.17 2000, to be requested in the year 2000, with the first payment 133.18 to be received in 2001. 133.19 (f) Sections 51 and 52 are effective the day following 133.20 final enactment, upon approval by and compliance with Minnesota 133.21 Statutes, section 645.021, subdivision 3, by the governing 133.22 bodies of Lake county, the city of Two Harbors, and Lake 133.23 Superior independent school district No. 381. 133.24 (g) Sections 3; 14; 44; and 61, paragraph (a), are 133.25 effective the day following final enactment. 133.26 ARTICLE 10 133.27 STATE FUNDING OF DISTRICT COURTS 133.28 TRANSFER OF FINES, FEES, AND OTHER MONEY TO STATE 133.29 Section 1. Minnesota Statutes 1998, section 97A.065, 133.30 subdivision 2, is amended to read: 133.31 Subd. 2. [FINES AND FORFEITED BAIL.] (a) Fines and 133.32 forfeited bail collected from prosecutions of violations of: 133.33 the game and fish laws; sections 84.091 to 84.15; sections 84.81 133.34 to 84.91; section 169.121, when the violation involved an 133.35 off-road recreational vehicle as defined in section 169.01, 133.36 subdivision 86; chapter 348; and any other law relating to wild 134.1 animals or aquatic vegetation, must be paid to the treasurer of 134.2 the county where the violation is prosecuted. The county 134.3 treasurer shall submit one-half of the receipts to the 134.4 commissioner and credit the balance to the county general 134.5 revenue fund except as provided in paragraphs (b), (c), and 134.6 (d). In a county in a judicial district under section 480.181, 134.7 subdivision 1, paragraph (b), the share that would otherwise go 134.8 to the county under this paragraph must be submitted to the 134.9 state treasurer for deposit in the state treasury and credited 134.10 to the general fund. 134.11 (b) The commissioner must reimburse a county, from the game 134.12 and fish fund, for the cost of keeping prisoners prosecuted for 134.13 violations under this section if the county board, by 134.14 resolution, directs: (1) the county treasurer to submit all 134.15 fines and forfeited bail to the commissioner; and (2) the county 134.16 auditor to certify and submit monthly itemized statements to the 134.17 commissioner. 134.18 (c) The county treasurer shall submit one-half of the 134.19 receipts collected under paragraph (a) from prosecutions of 134.20 violations of sections 84.81 to 84.91, and 169.121, except 134.21 receipts that are surcharges imposed under section 357.021, 134.22 subdivision 6, to the state treasurer and credit the balance to 134.23 the county general fund. The state treasurer shall credit these 134.24 receipts to the snowmobile trails and enforcement account in the 134.25 natural resources fund. 134.26 (d) The county treasurer shall indicate the amount of the 134.27 receipts that are surcharges imposed under section 357.021, 134.28 subdivision 6, and shall submit all of those receipts to the 134.29 state treasurer. 134.30 Sec. 2. Minnesota Statutes 1998, section 273.1398, 134.31 subdivision 2, is amended to read: 134.32 Subd. 2. [HOMESTEAD AND AGRICULTURAL CREDIT AID.] 134.33 Homestead and agricultural credit aid for each unique taxing 134.34 jurisdiction equals the product of (1) the homestead and 134.35 agricultural credit aid base, and (2) the growth adjustment 134.36 factor, plus the net tax capacity adjustment and the fiscal 135.1 disparity adjustment.For aid payable in 2000, each county135.2shall have its homestead and agricultural credit aid permanently135.3reduced by an amount equal to one-third of the additional amount135.4received by the county under section 477A.03, subdivision 2,135.5paragraph (c), clause (ii).135.6 Sec. 3. Minnesota Statutes 1998, section 273.1398, is 135.7 amended by adding a subdivision to read: 135.8 Subd. 4a. [AID OFFSET FOR COURT COSTS.] (a) By August 15, 135.9 1999, the supreme court shall determine and certify to the 135.10 commissioner of revenue for each county, other than counties 135.11 located in the eighth judicial district, the county's share of 135.12 the costs assumed under 1999 S.F. No. 2221, article 7, during 135.13 the fiscal year beginning July 1, 2000, less an amount equal to 135.14 the county's share of transferred fines collected by the trial 135.15 courts in the county during calendar year 1998. 135.16 (b) Payments to a county under subdivision 2 or section 135.17 273.166 for calendar year 2000 must be reduced by an amount 135.18 equal to 100 percent of the net cost to the state for assumption 135.19 of district court costs as certified in paragraph (a). 135.20 (c) Payments to a county under subdivision 2 or section 135.21 273.166 for calendar year 2001 must be reduced by an amount 135.22 equal to 50 percent of the net cost to the state for assumption 135.23 of district court costs as certified in paragraph (a). 135.24 (d) Payments to a county under subdivision 2 or section 135.25 273.166, in calendar year 2002 and thereafter must be 135.26 permanently reduced by an amount equal to 100 percent of the net 135.27 cost to the state for assumption of district court costs as 135.28 certified in paragraph (a). 135.29 Sec. 4. Minnesota Statutes 1998, section 299D.03, 135.30 subdivision 5, is amended to read: 135.31 Subd. 5. [FINES AND FORFEITED BAIL MONEY.] (a) All fines 135.32 and forfeited bail money, from traffic and motor vehicle law 135.33 violations, collected from persons apprehended or arrested by 135.34 officers of the state patrol, shall be paid by the person or 135.35 officer collecting the fines, forfeited bail money or 135.36 installments thereof, on or before the tenth day after the last 136.1 day of the month in which these moneys were collected, to the 136.2 county treasurer of the county where the violation occurred. 136.3 Three-eighths of these receipts shall be credited to the general 136.4 revenue fund of the county, except that in a county in a 136.5 judicial district under section 480.181, subdivision 1, 136.6 paragraph (b), this three-eighths share must be transmitted to 136.7 the state treasurer for deposit in the state treasury and 136.8 credited to the general fund. The other five-eighths of these 136.9 receipts shall be transmitted by that officer to the state 136.10 treasurer and shall be credited as follows: 136.11 (1) In the fiscal year ending June 30, 1991, the first 136.12 $275,000 in money received by the state treasurer after June 4, 136.13 1991, must be credited to the transportation services fund, and 136.14 the remainder in the fiscal year credited to the trunk highway 136.15 fund. 136.16 (2) In fiscal year 1992, the first $215,000 in money 136.17 received by the state treasurer in the fiscal year must be 136.18 credited to the transportation services fund, and the remainder 136.19 credited to the trunk highway fund. 136.20 (3) In fiscal years 1993 and subsequent years, the entire 136.21 amount received by the state treasurer must be credited to the 136.22 trunk highway fund. If, however, the violation occurs within a 136.23 municipality and the city attorney prosecutes the offense, and a 136.24 plea of not guilty is entered, one-third of the receipts shall 136.25 be credited to the general revenue fund of the county, one-third 136.26 of the receipts shall be paid to the municipality prosecuting 136.27 the offense, and one-third shall be transmitted to the state 136.28 treasurer as provided in this subdivision. All costs of 136.29 participation in a nationwide police communication system 136.30 chargeable to the state of Minnesota shall be paid from 136.31 appropriations for that purpose. 136.32 (b) Notwithstanding any other provisions of law, all fines 136.33 and forfeited bail money from violations of statutes governing 136.34 the maximum weight of motor vehicles, collected from persons 136.35 apprehended or arrested by employees of the state of Minnesota, 136.36 by means of stationary or portable scales operated by these 137.1 employees, shall be paid by the person or officer collecting the 137.2 fines or forfeited bail money, on or before the tenth day after 137.3 the last day of the month in which the collections were made, to 137.4 the county treasurer of the county where the violation 137.5 occurred. Five-eighths of These receipts shall be transmitted 137.6 by that officer to the state treasurer and shall be credited to 137.7 the highway user tax distribution fund. Three-eighths of these 137.8 receipts shall be credited to the general revenue fund of the 137.9 county, except that in a county in a judicial district under 137.10 section 480.181, subdivision 1, paragraph (a), this 137.11 three-eighths share must be transmitted to the state treasurer 137.12 for deposit in the state treasury and credited to the general 137.13 fund. 137.14 Sec. 5. Minnesota Statutes 1998, section 357.021, 137.15 subdivision 1a, is amended to read: 137.16 Subd. 1a. [TRANSMITTAL OF FEES TO STATE TREASURER.] (a) 137.17 Every person, including the state of Minnesota and all bodies 137.18 politic and corporate, who shall transact any business in the 137.19 district court, shall pay to the court administrator of said 137.20 court the sundry fees prescribed in subdivision 2. Except as 137.21 provided in paragraph (d), the court administrator shall 137.22 transmit the fees monthly to the state treasurer for deposit in 137.23 the state treasury and credit to the general fund. 137.24 (b) In a county which has a screener-collector position, 137.25 fees paid by a county pursuant to this subdivision shall be 137.26 transmitted monthly to the county treasurer, who shall apply the 137.27 fees first to reimburse the county for the amount of the salary 137.28 paid for the screener-collector position. The balance of the 137.29 fees collected shall then be forwarded to the state treasurer 137.30 for deposit in the state treasury and credited to the general 137.31 fund. In a county inthe eightha judicial district under 137.32 section 480.181, subdivision 1, paragraph (b), which has a 137.33 screener-collector position, the fees paid by a county shall be 137.34 transmitted monthly to the state treasurer for deposit in the 137.35 state treasury and credited to the general fund. A 137.36 screener-collector position for purposes of this paragraph is an 138.1 employee whose function is to increase the collection of fines 138.2 and to review the incomes of potential clients of the public 138.3 defender, in order to verify eligibility for that service. 138.4 (c) No fee is required under this section from the public 138.5 authority or the party the public authority represents in an 138.6 action for: 138.7 (1) child support enforcement or modification, medical 138.8 assistance enforcement, or establishment of parentage in the 138.9 district court, or child or medical support enforcement 138.10 conducted by an administrative law judge in an administrative 138.11 hearing under section 518.5511; 138.12 (2) civil commitment under chapter 253B; 138.13 (3) the appointment of a public conservator or public 138.14 guardian or any other action under chapters 252A and 525; 138.15 (4) wrongfully obtaining public assistance under section 138.16 256.98 or 256D.07, or recovery of overpayments of public 138.17 assistance; 138.18 (5) court relief under chapter 260; 138.19 (6) forfeiture of property under sections 169.1217 and 138.20 609.531 to 609.5317; 138.21 (7) recovery of amounts issued by political subdivisions or 138.22 public institutions under sections 246.52, 252.27, 256.045, 138.23 256.25, 256.87, 256B.042, 256B.14, 256B.15, 256B.37, and 138.24 260.251, or other sections referring to other forms of public 138.25 assistance; 138.26 (8) restitution under section 611A.04; or 138.27 (9) actions seeking monetary relief in favor of the state 138.28 pursuant to section 16D.14, subdivision 5. 138.29 (d) The fees collected for child support modifications 138.30 under subdivision 2, clause (13), must be transmitted to the 138.31 county treasurer for deposit in the county general fund. The 138.32 fees must be used by the county to pay for child support 138.33 enforcement efforts by county attorneys. 138.34 Sec. 6. Minnesota Statutes 1998, section 477A.03, 138.35 subdivision 2, is amended to read: 138.36 Subd. 2. [ANNUAL APPROPRIATION.] (a) A sum sufficient to 139.1 discharge the duties imposed by sections 477A.011 to 477A.014 is 139.2 annually appropriated from the general fund to the commissioner 139.3 of revenue. 139.4 (b) Aid payments to counties under section 477A.0121 are 139.5 limited to $20,265,000 in 1996. Aid payments to counties under 139.6 section 477A.0121 are limited to $27,571,625 in 1997. For aid 139.7 payable in 1998 and thereafter, the total aids paid under 139.8 section 477A.0121 are the amounts certified to be paid in the 139.9 previous year, adjusted for inflation as provided under 139.10 subdivision 3. 139.11 (c)(i) For aids payable in 1998 and thereafter, the total 139.12 aids paid to counties under section 477A.0122 are the amounts 139.13 certified to be paid in the previous year, adjusted for 139.14 inflation as provided under subdivision 3. 139.15 (ii) Aid payments to counties under section 477A.0122in139.162000are further increased by an additional 139.17$30,000,000$20,000,000 in20002001. 139.18 (d) Aid payments to cities in 1999 under section 477A.013, 139.19 subdivision 9, are limited to $380,565,489. For aids payable in 139.20 2000 and 2001, the total aids paid under section 477A.013, 139.21 subdivision 9, are the amounts certified to be paid in the 139.22 previous year, adjusted for inflation as provided under 139.23 subdivision 3. For aids payable in 2002, the total aids paid 139.24 under section 477A.013, subdivision 9, are the amounts certified 139.25 to be paid in the previous year, adjusted for inflation as 139.26 provided under subdivision 3, and increased by the amount 139.27 certified to be paid in 2001 under section 477A.06. For aids 139.28 payable in 2003 and thereafter, the total aids paid under 139.29 section 477A.013, subdivision 9, are the amounts certified to be 139.30 paid in the previous year, adjusted for inflation as provided 139.31 under subdivision 3. The additional amount authorized under 139.32 subdivision 4 is not included when calculating the appropriation 139.33 limits under this paragraph. 139.34 Sec. 7. Minnesota Statutes 1998, section 485.018, 139.35 subdivision 5, is amended to read: 139.36 Subd. 5. [COLLECTION OF FEES.] The court administrator of 140.1 district court shall charge and collect all fees as prescribed 140.2 by law and all such fees collected by the court administrator as 140.3 court administrator of district court shall be paid to the 140.4 county treasurer. Except for those portions of forfeited bail 140.5 paid to victims pursuant to existing law, the county treasurer 140.6 shall forward all revenue from fees and forfeited bail collected 140.7 under chapters 357, 487, and 574 to the state treasurer for 140.8 deposit in the state treasury and credit to the general fund, 140.9 unless otherwise provided in chapter 611A or other law, in the 140.10 manner and at the times prescribed by the state treasurer, but 140.11 not less often than once each month. If the defendant or 140.12 probationer is located after forfeited bail proceeds have been 140.13 forwarded to the state treasurer, the state treasurer shall 140.14 reimburse the county, on request, for actual costs expended for 140.15 extradition, transportation, or other costs necessary to return 140.16 the defendant or probationer to the jurisdiction where the bail 140.17 was posted, in an amount not more than the amount of forfeited 140.18 bail.All other money must be deposited in the county general140.19fund unless otherwise provided by law.The court administrator 140.20 of district court shall not retain any additional compensation, 140.21 per diem or other emolument for services as court administrator 140.22 of district court, but may receive and retain mileage and 140.23 expense allowances as prescribed by law. 140.24 Sec. 8. Minnesota Statutes 1998, section 487.02, 140.25 subdivision 2, is amended to read: 140.26 Subd. 2. Except as provided in this subdivision, the 140.27 county board shall levy taxes annually against the taxable 140.28 property within the county as necessary for the establishment, 140.29 operation and maintenance of the county court or courts within 140.30 the county. Any county in a judicial district under section 140.31 480.181, subdivision 1, paragraph (b) is prohibited from levying 140.32 property taxes for these purposes. 140.33 Sec. 9. Minnesota Statutes 1998, section 487.32, 140.34 subdivision 3, is amended to read: 140.35 Subd. 3. A judge of a county court may order any sums 140.36 forfeited to be reinstated and thecountystate treasurer shall 141.1 then refund accordingly. Thecountystate treasurer shall 141.2 reimburse the court administrator if the court administrator 141.3 refunds the deposit upon a judge's order and obtains a receipt 141.4 to be used as a voucher. 141.5 Sec. 10. Minnesota Statutes 1998, section 487.33, 141.6 subdivision 5, is amended to read: 141.7 Subd. 5. [ALLOCATION.] The court administrator shall 141.8 provide the county treasurer with the name of the municipality 141.9 or other subdivision of government where the offense was 141.10 committed which employed or provided by contract the arresting 141.11 or apprehending officer and the name of the municipality or 141.12 other subdivision of government which employed the prosecuting 141.13 attorney or otherwise provided for prosecution of the offense 141.14 for each fine or penalty and the total amount of fines or 141.15 penalties collected for each municipality or other subdivision 141.16 of government. On or before the last day of each month, the 141.17 county treasurer shall pay over to the treasurer of each 141.18 municipality or subdivision of government within the county all 141.19 fines or penalties for parking violations for which complaints 141.20 and warrants have not been issued and one-third of all fines or 141.21 penalties collected during the previous month for offenses 141.22 committed within the municipality or subdivision of government 141.23 from persons arrested or issued citations by officers employed 141.24 by the municipality or subdivision or provided by the 141.25 municipality or subdivision by contract. An additional 141.26 one-third of all fines or penalties shall be paid to the 141.27 municipality or subdivision of government providing prosecution 141.28 of offenses of the type for which the fine or penalty is 141.29 collected occurring within the municipality or subdivision, 141.30 imposed for violations of state statute or of an ordinance, 141.31 charter provision, rule or regulation of a city whether or not a 141.32 guilty plea is entered or bail is forfeited. Except as provided 141.33 in section 299D.03, subdivision 5, or as otherwise provided by 141.34 law, all other fines and forfeitures and all fees and statutory 141.35 court costs collected by the court administrator shall be paid 141.36 to the county treasurer of the county in which the funds were 142.1 collected who shall dispense them as provided by law. In a 142.2 county in a judicial district under section 480.181, subdivision 142.3 1, paragraph (b), all other fines, forfeitures, fees, and 142.4 statutory court costs must be paid to the state treasurer for 142.5 deposit in the state treasury and credited to the general fund. 142.6 Sec. 11. Minnesota Statutes 1998, section 574.34, 142.7 subdivision 1, is amended to read: 142.8 Subdivision 1. [GENERAL.] Fines and forfeitures not 142.9 specially granted or appropriated by law shall be paid into the 142.10 treasury of the county where they are incurred, except in a 142.11 county in a judicial district under section 480.181, subdivision 142.12 1, paragraph (b), the fines and forfeitures must be deposited in 142.13 the state treasury and credited to the general fund. 142.14 Sec. 12. [APPROPRIATION.] 142.15 $18,930,000 is appropriated for fiscal year 2001 from the 142.16 general fund to the supreme court for purposes of funding the 142.17 district court expenses under this article. 142.18 Sec. 13. [EFFECTIVE DATES; CONTINGENCY.] 142.19 (a) Sections 2 and 6 are effective for aids payable in 142.20 2000. The other provisions of this article providing for the 142.21 transfer of fees and fines to the state are effective January 1, 142.22 2000, with respect to counties in the eighth judicial district, 142.23 and July 1, 2000, with respect to counties in the fifth, 142.24 seventh, and ninth judicial districts. 142.25 (b) Notwithstanding paragraph (a), this article does not 142.26 take effect unless the state assumes the district court costs 142.27 under 1999 S.F. No. 2221, article 7. 142.28 ARTICLE 11 142.29 LOCAL ECONOMIC DEVELOPMENT 142.30 Section 1. Minnesota Statutes 1998, section 272.026, is 142.31 amended to read: 142.32 272.026 [TAX STATUS OF PROPERTY MANAGED BY A HOUSING 142.33 REDEVELOPMENT AUTHORITY OR PUBLIC HOUSING AGENCY.] 142.34 Subdivision 1. [GENERALLY.] Any property that is under the 142.35 direct management and control of, but is not owned by, a housing 142.36 redevelopment authority or public housing agency, and is used in 143.1 a manner authorized and contemplated by sections 469.001 to 143.2 469.047, and for which the authority or agency is eligible for 143.3 assistance payments under federal law, is public property used 143.4 for essential public and governmental purposes, and the property 143.5 and the authority or agency is exempt from all taxes and special 143.6 assessments of the city, the county, the state, or any political 143.7 subdivision of the state in the same manner as property referred 143.8 to in section 469.040, subdivision 1. Payments in lieu of taxes 143.9 for the property shall remain as provided in section 272.68 or 143.10 469.040, subdivision 3. 143.11 Subd. 2. [CERTAIN SOLD PROPERTY.] Any property that is 143.12 owned by a housing and redevelopment authority or a public 143.13 housing agency for at least five years and used in a manner 143.14 authorized by sections 469.001 to 469.047, which is subsequently 143.15 sold to a nonprofit corporation created under chapter 317A 143.16 subject to requirements that the property continue to be so used 143.17 and in accordance with the housing affordability restrictions 143.18 established by the housing and redevelopment authority or public 143.19 housing agency, is deemed to be public property used for 143.20 essential public and governmental purposes. If the nonprofit 143.21 owner also agrees to make service charge payments in lieu of 143.22 taxes under section 469.040, subdivision 3, the property and the 143.23 nonprofit owner are exempt from all taxes and special 143.24 assessments of the city, the county, the state, or any political 143.25 subdivision of the state in the same manner as property referred 143.26 to in section 469.040, subdivision 1. Payments in lieu of taxes 143.27 for the property shall remain as provided in section 469.040, 143.28 subdivision 3, except that they must be charged to and collected 143.29 from the nonprofit owner and do not constitute an obligation of 143.30 the authority or agency. 143.31 The nonprofit owner shall certify each year as part of the 143.32 statement of aggregate shelter rentals filed with the assessor 143.33 under section 469.040, subdivision 3, that the nonprofit 143.34 corporation is the owner of the property and continues in good 143.35 standing as a nonprofit corporation organized and operated under 143.36 chapter 317A, and that the property continues to be used in a 144.1 manner authorized by sections 469.001 to 469.047, and in 144.2 accordance with the housing affordability restrictions 144.3 established by the housing and redevelopment authority or public 144.4 housing agency. 144.5 Sec. 2. Minnesota Statutes 1998, section 273.1399, 144.6 subdivision 1, is amended to read: 144.7 Subdivision 1. [DEFINITIONS.] For purposes of this 144.8 section, the following terms have the meanings given. 144.9 (a) "Qualifying captured net tax capacity" means the 144.10 following amounts: 144.11 (1) The captured net tax capacity of a new or the expanded 144.12 part of an existing economic development tax increment financing 144.13 district, for which certification was requested after April 30, 144.14 1990. 144.15 (2) The captured net tax capacity of a new or the expanded 144.16 part of an existing tax increment financing district, other than 144.17 an economic development district, for which certification was 144.18 requested after April 30, 1990, multiplied by the following 144.19 percentage based on the number of years that have elapsed since 144.20 the assessment year of the original net tax capacity. In no 144.21 case may the final amounts be less than zero or greater than the 144.22 total captured net tax capacity of the district. 144.23 Number of Renewal and All other 144.24 years Renovation Districts 144.25 Districts 144.26 0 to 5 0 0 144.27 6 12.5 6.25 144.28 7 25 12.5 144.29 8 37.5 18.75 144.30 9 50 25 144.31 10 62.5 31.25 144.32 11 75 37.5 144.33 12 87.5 43.75 144.34 13 100 50 144.35 14 100 56.25 144.36 15 100 62.5 145.1 16 100 68.75 145.2 17 100 75 145.3 18 100 81.25 145.4 19 100 87.5 145.5 20 100 93.75 145.6 21 or more 100 100 145.7 (3) The following rules apply to a hazardous substance 145.8 subdistrict. The applicable percentage under clause (2) must be 145.9 determined under the "all other districts" category. The number 145.10 of years must be measured from the date of certification of the 145.11 subdistrict for purposes of the additional captured net tax 145.12 capacity resulting from the reduction in the subdistrict's or 145.13 site's original net tax capacity. After termination of the 145.14 overlying district, captured net tax capacity includes the full 145.15 amount that is captured by the subdistrict. 145.16 (4) Qualified captured tax capacity does not include the 145.17 captured tax capacity of exempt districts under subdivisions 6 145.18 and 7. 145.19 (b) The terms defined in section 469.174 have the meanings 145.20 given in that section. 145.21 (c) "Qualified housing district" means a housing district: 145.22 (1) for a residential rental project or projects in which 145.23 the only properties receiving assistance from revenues derived 145.24 from tax increments from the district meet all of the 145.25 requirements for a low-income housing credit under section 42 of 145.26 the Internal Revenue Code of 1986, as amended through December 145.27 31, 1992, regardless of whether the project actually receives a 145.28 low-income housing credit; or 145.29 (2) for a project in which at least 50 percent of the 145.30 housing receiving assistance from revenues derived from the 145.31 district is either: 145.32 (i) rental housing affordable to persons whose income is at 145.33 or below 50 percent of the area median income as published 145.34 annually by the United States Department of Housing and Urban 145.35 Development, and in accordance with the procedures for 145.36 determining rents under the United States Department of Housing 146.1 and Urban Development section 8 rental assistance programs for 146.2 at least 40 years beginning with the date of commencement of 146.3 construction; or 146.4 (ii) owner occupied housing initially purchased and 146.5 occupied by individuals whose family income is at or below 80 146.6 percent of the area median income as published annually by the 146.7 United States Department of Housing and Urban Development. 146.8 Sec. 3. Minnesota Statutes 1998, section 383D.41, 146.9 subdivision 1, is amended to read: 146.10 Subdivision 1. [HOUSING AND REDEVELOPMENT AUTHORITY146.11 COMMUNITY DEVELOPMENT AGENCY.] There isherebycreated in Dakota 146.12 county a public body corporate and politic, to be known as the 146.13 Dakota countyhousing and redevelopment authoritycommunity 146.14 development agency, having all of the powers and duties of a 146.15 housing and redevelopment authority under sections 469.001 to 146.16 469.047; which act applies to the county of Dakota. For the 146.17 purposes of applying the provisions ofthe municipal housing and146.18redevelopment actsections 469.001 to 469.047 and 469.090 to 146.19 469.1081 to Dakota county, and subject to the provisions of this 146.20 section, the county has all of the powers and duties of a 146.21 municipality, the county board has all of the powers and duties 146.22 of a governing body, the chair of the county board has all of 146.23 the powers and duties of a mayor, and the area of operation 146.24 includes the area within the territorial boundaries of the 146.25 county. 146.26 Sec. 4. Minnesota Statutes 1998, section 383D.41, 146.27 subdivision 2, is amended to read: 146.28 Subd. 2. This section shall not limit or restrict any 146.29 existing housing and redevelopment authority or prevent a 146.30 municipality from creating an authority.The county shall not146.31exercise jurisdiction in any municipality where a municipal146.32housing and redevelopment authority is established.A municipal 146.33 housing and redevelopment authority may request the Dakota 146.34 countyhousing and redevelopment authoritycommunity development 146.35 agency to handle the housing duties of the authorityand, in146.36such an event,. If the municipal authority makes the request, 147.1 the Dakota countyhousing and redevelopment authoritycommunity 147.2 development agency shall act and have exclusive jurisdiction for 147.3 housing in the municipality pursuant to sections 469.001 to 147.4 469.047. A transfer of duties relating to housingshalldoes 147.5 not transfer any duties relating to redevelopment. 147.6 Sec. 5. Minnesota Statutes 1998, section 383D.41, 147.7 subdivision 3, is amended to read: 147.8 Subd. 3. If any housingorproject, development district 147.9 redevelopment project, or economic development project is 147.10 constructed in Dakota county pursuant to this authorization, and 147.11suchthe project is within the boundaries of any incorporated 147.12 home rule charter or statutory city, the location ofsuchthe 147.13 projectshallmust be approved by the governing body of the 147.14 city, and: 147.15 (1) in the case of any housing project or housing 147.16 development project, by the municipal housing and redevelopment 147.17 authority established for the city if it has not previously 147.18 requested that the Dakota county community development agency or 147.19 its predecessor agency handle the housing duties of the 147.20 authority; or 147.21 (2) in the case of any redevelopment project by the 147.22 municipal housing and redevelopment authority established for 147.23 the city. 147.24 Sec. 6. Minnesota Statutes 1998, section 383D.41, is 147.25 amended by adding a subdivision to read: 147.26 Subd. 7. [DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY.] (a) 147.27 After December 31, 1999, the Dakota county housing and 147.28 redevelopment authority shall be known as the Dakota county 147.29 community development agency. In addition to the other powers 147.30 granted in this section, the Dakota county community development 147.31 agency shall have the powers of an economic development 147.32 authority under sections 469.090 to 469.1081 that are granted to 147.33 the agency by resolution adopted by the Dakota county board of 147.34 commissioners, except as provided in paragraph (b). The agency 147.35 may exercise any of the powers granted to it under sections 147.36 469.001 to 469.047 and any of the powers of an economic 148.1 development authority granted to it by the Dakota county board 148.2 of commissioners for the purposes described in these sections. 148.3 (b) The Dakota county community development agency may not 148.4 levy the tax described in section 469.107, but with the approval 148.5 of the Dakota county board may increase its levy of the special 148.6 tax described in section 469.033, subdivision 6, to an amount 148.7 not exceeding 0.01813 percent of net tax capacity, or any higher 148.8 limit authorized under section 469.107 or 469.033, subdivision 6. 148.9 Sec. 7. Minnesota Statutes 1998, section 383D.41, is 148.10 amended by adding a subdivision to read: 148.11 Subd. 8. [OFFERS OF TAX-FORFEITED LANDS.] Notwithstanding 148.12 any other law, Dakota county may offer to the Dakota county 148.13 community development agency, under the conditions and policies 148.14 established by the county, nonconservation tax-forfeited land 148.15 prior to making the properties available to cities in Dakota 148.16 county. 148.17 Sec. 8. Minnesota Statutes 1998, section 469.169, 148.18 subdivision 12, is amended to read: 148.19 Subd. 12. [ADDITIONAL ZONE ALLOCATIONS.] (a) In addition 148.20 to tax reductions authorized in subdivisions 7, 8, 9, 10, and 148.21 11, the commissioner shall allocate tax reductions to border 148.22 city enterprise zones located on the western border of the state. 148.23 The cumulative total amount of tax reductions for all years of 148.24 the program under sections 469.1731 to 469.1735, is limited to: 148.25 (1) for the city of Breckenridge, $394,000; 148.26 (2) for the city of Dilworth, $118,200; 148.27 (3) for the city of East Grand Forks, $788,000; 148.28 (4) for the city of Moorhead, $591,000; and 148.29 (5) for the city of Ortonville, $78,800. 148.30 Allocations made under this subdivision may be used for tax 148.31 reductions provided in section 469.1732 or 469.1734 or for 148.32 reimbursements under section 469.1735, subdivision 3, but only 148.33 if the municipality determines that the granting of the tax 148.34 reduction or offset is necessary to enable a business to expand 148.35 within a city or to attract a business to a city. Limitations 148.36 on allocations under subdivision 7 do not apply to this 149.1 allocation. 149.2 (b) The limit in the allocation in paragraph (a) for a 149.3 municipality may be waived by the commissioner if the 149.4 commissioner of revenue finds that the municipality must provide 149.5 an incentive under section 469.1732 or 469.1734 that, by itself 149.6 or when aggregated with all other tax reductions granted by the 149.7 municipality under those provisions, exceeds the municipality's 149.8 maximum allocation under paragraph (a), in order to obtain or 149.9 retain a business in the city that would not occur in the 149.10 municipality without the incentive. The limit may be waived 149.11 only if the commissioner finds that the business for which the 149.12 tax incentives are to be provided: 149.13 (1) requires a private capital investment of at least 149.14 $1,000,000 within the city; 149.15 (2) employs at least 25 new or additional full-time 149.16 equivalent employees within the city; and 149.17 (3) pays its employees at the location in the city wages 149.18 that, on the average, will exceed the average wage paid in the 149.19 county in which the municipality is located. 149.20 Sec. 9. Minnesota Statutes 1998, section 469.1735, is 149.21 amended by adding a subdivision to read: 149.22 Subd. 4. [APPROPRIATION; WAIVERS.] An amount sufficient to 149.23 fund any tax reductions under a waiver made by the commissioner 149.24 under section 469.169, subdivision 12, paragraph (b), is 149.25 appropriated to the commissioner of revenue from the general 149.26 fund. This appropriation may not be deducted from the dollar 149.27 limits under this section or section 469.1734 or 469.169. 149.28 Sec. 10. Minnesota Statutes 1998, section 469.176, 149.29 subdivision 4g, is amended to read: 149.30 Subd. 4g. [GENERAL GOVERNMENT USE PROHIBITED.] (a) These 149.31 revenues shall not be used to circumvent existing levy limit 149.32 law. No revenues derived from tax increment from any district, 149.33 whether certified before or after August 1, 1979, shall be used 149.34 for the acquisition, construction, renovation, operation, or 149.35 maintenance of a building to be used primarily and regularly for 149.36 conducting the business of a municipality, county, school 150.1 district, or any other local unit of government or the state or 150.2 federal government. For any district certified after June 30, 150.3 1999, or in any geographic area added after June 30, 1999, to a 150.4 district certified before that date, tax increment revenues must 150.5 not be used for the construction or renovation of a commons area 150.6 used as a public park, or a publicly owned facility used for 150.7 social or recreational purposes. This provisionshalldoes not 150.8 prohibit the use of revenues derived from tax increments for the 150.9 construction or renovation of a parking structure, a commons150.10area used as a public park,or a facility used forsocial,150.11recreational, orconference purposesand not primarily for150.12conducting the business of the municipality. 150.13 (b) If any publicly owned facility used for social, 150.14 recreational, or conference purposes and financed in whole or in 150.15 part from revenues derived from a district is operated or 150.16 managed by an entity other than the authority, the operating and 150.17 management policies of the facility must be approved by the 150.18 governing body of the authority. 150.19 Sec. 11. Minnesota Statutes 1998, section 469.1763, is 150.20 amended by adding a subdivision to read: 150.21 Subd. 6. [POOLING PERMITTED FOR DEFICITS.] (a) This 150.22 subdivision applies only to districts for which the request for 150.23 certification was made before June 2, 1997. 150.24 (b) The municipality for the district may transfer 150.25 available increments from another tax increment financing 150.26 district located in the municipality, if the transfer is 150.27 necessary to eliminate a deficit in the district to which the 150.28 increments are transferred. A deficit in the district for 150.29 purposes of this subdivision means the lesser of the following 150.30 two amounts: 150.31 (1)(i) the amount due during the calendar year to pay 150.32 preexisting obligations of the district; minus 150.33 (ii) the total increments to be collected from properties 150.34 located within the district that are available for the calendar 150.35 year, plus 150.36 (iii) total increments from properties located in other 151.1 districts in the municipality that are available to be used to 151.2 meet the district's obligations under this section, excluding 151.3 this subdivision, or other provisions of law (but excluding a 151.4 special tax under section 469.1791 and the grant program under 151.5 Laws 1997, chapter 231, article 1, section 19); or 151.6 (2) the reduction in increments collected from properties 151.7 located in the district for the calendar year as a result of the 151.8 changes in class rates in Laws 1997, chapter 231, article 1, and 151.9 Laws 1998, chapter 389, article 2. 151.10 (c) A preexisting obligation means bonds issued and sold 151.11 before June 2, 1997, and bonds issued to refund such bonds or to 151.12 reimburse expenditures made in conjunction with a signed 151.13 contractual agreement entered into before June 2, 1997, to the 151.14 extent that the bonds are secured by a pledge of increments from 151.15 the tax increment financing district. For purposes of this 151.16 subdivision, bonds exclude an obligation to reimburse or pay a 151.17 developer or owner of property located in the district for 151.18 amounts incurred or paid by the developer or owner. 151.19 (d) The municipality may require a development authority, 151.20 other than a seaway port authority, to transfer available 151.21 increments for any of its tax increment financing districts in 151.22 the municipality to make up an insufficiency in another district 151.23 in the municipality, regardless of whether the district was 151.24 established by the development authority or another development 151.25 authority. This authority applies notwithstanding any law to 151.26 the contrary, but applies only to a development authority that: 151.27 (1) was established by the municipality; or 151.28 (2) the governing body of which is appointed, in whole or 151.29 part, by the municipality or an officer of the municipality or 151.30 which consists, in whole or part, of members of the governing 151.31 body of the municipality. 151.32 (e) The authority under this subdivision to spend tax 151.33 increments outside of the area of the district from which the 151.34 tax increments were collected: 151.35 (1) may only be exercised after obtaining approval of the 151.36 use of the increments, in writing, by the commissioner of 152.1 revenue; 152.2 (2) is an exception to the restrictions under section 152.3 469.176, subdivision 4i, and the other provisions of this 152.4 section, and the percentage restrictions under subdivision 2 152.5 must be calculated after deducting increments spent under this 152.6 subdivision from the total increments for the district; and 152.7 (3) applies notwithstanding the provisions of the tax 152.8 increment financing act in effect for districts for which the 152.9 request for certification was made before June 30, 1982, or any 152.10 other law to the contrary. 152.11 Sec. 12. Minnesota Statutes 1998, section 469.1791, 152.12 subdivision 3, is amended to read: 152.13 Subd. 3. [PRECONDITIONS TO ESTABLISH DISTRICT.] (a) A city 152.14 may establish a special taxing district within a tax increment 152.15 financing district under this section only if the conditions 152.16 under paragraphs (b) and (c) are met or if the city elects to 152.17 exercise the authority under paragraph (d). 152.18 (b) The city has determined that: 152.19 (1) total tax increments from the district, including 152.20 unspent increments from previous years and increments 152.21 transferred under paragraph (c), will be insufficient to pay the 152.22 amounts due in a year on preexisting obligations; and 152.23 (2) this insufficiency of increments resulted from the 152.24 reduction in property tax class rates enacted in the 1997 and 152.25 1998 legislative sessions. 152.26 (c) The city has agreed to transfer any available 152.27 increments from other tax increment financing districts in the 152.28 city to pay the preexisting obligations of the district under 152.29 section 469.1763, subdivision 6. This requirement does not 152.30 apply to any available increments of a qualified housing 152.31 district, as defined in section 273.1399, subdivision 152.32 1.Notwithstanding any law to the contrary, the city may152.33require a development authority to transfer available increments152.34for any of its tax increment financing districts in the city to152.35make up an insufficiency in another district in the city,152.36regardless of whether the district was established by the153.1development authority or another development authority.153.2Notwithstanding any law to the contrary, increments transferred153.3under this authority must be spent to pay preexisting153.4obligations. "Development authority" for this purpose means any153.5authority as defined in section 469.174, subdivision 2.153.6 (d) If a tax increment financing district does not qualify 153.7 under paragraphs (b) and (c), the governing body may elect to 153.8 establish a special taxing district under this section. If the 153.9 city elects to exercise this authority, increments from the tax 153.10 increment financing district and the proceeds of the tax imposed 153.11 under this section may only be used to pay preexisting 153.12 obligations and reasonable administrative expenses of the 153.13 authority for the tax increment financing district. The tax 153.14 increment financing district must be decertified when all 153.15 preexisting obligations have been paid. 153.16 Sec. 13. Minnesota Statutes 1998, section 469.1813, 153.17 subdivision 1, is amended to read: 153.18 Subdivision 1. [AUTHORITY.] The governing body of a 153.19 political subdivision may grant an abatement of the taxes 153.20 imposed by the political subdivision on a parcel of property, or 153.21 defer the payments of the taxes and abate the interest and 153.22 penalty that would otherwise be applied, if: 153.23 (a) it expects the benefits to the political subdivision of 153.24 the proposed abatement agreement to at least equal the costs to 153.25 the political subdivision of the proposed agreement; and 153.26 (b) it finds that doing so is in the public interest 153.27 because it will: 153.28 (1) increase or preserve tax base; 153.29 (2) provide employment opportunities in the political 153.30 subdivision; 153.31 (3) provide or help acquire or construct public facilities; 153.32 (4) help redevelop or renew blighted areas; or 153.33 (5) help provide access to services for residents of the 153.34 political subdivision. 153.35 Sec. 14. Minnesota Statutes 1998, section 469.1813, is 153.36 amended by adding a subdivision to read: 154.1 Subd. 1a. [USE OF TERM.] As used in this section and 154.2 sections 469.1814 and 469.1815, "abatement" includes a deferral 154.3 of taxes with abatement of interest and penalties unless the 154.4 context indicates otherwise. 154.5 Sec. 15. Minnesota Statutes 1998, section 469.1813, 154.6 subdivision 2, is amended to read: 154.7 Subd. 2. [ABATEMENT RESOLUTION.] (a) The governing body of 154.8 a political subdivision may grant an abatement only by adopting 154.9 an abatement resolution, specifying the terms of the abatement. 154.10 The resolution must also include a specific statement as to the 154.11 nature and extent of the public benefits which the governing 154.12 body expects to result from the agreement. The abatement may 154.13 reduce all or part of the property tax levied by the political 154.14 subdivision on the parcel. 154.15 (b) The political subdivision may limit the abatement: 154.16 (1) to a specific dollar amount per year or in total; 154.17 (2) to the increase in property taxes resulting from 154.18 improvement of the property; 154.19 (3) to the increases in property taxes resulting from 154.20 increases in the market value or tax capacity of the property; 154.21or154.22 (4) in any other manner the governing body of the 154.23 subdivision determines is appropriate; or 154.24 (5) to the interest and penalty that would otherwise be due 154.25 on taxes that are deferred. 154.26 (c) The political subdivision may not abate tax 154.27 attributable to the value of the land or the areawide tax under 154.28 chapter 276A or 473F. 154.29 Sec. 16. Minnesota Statutes 1998, section 469.1813, is 154.30 amended by adding a subdivision to read: 154.31 Subd. 6a. [DEFERMENT PAYMENT SCHEDULE.] When the tax is 154.32 deferred and the interest and penalty abated, the political 154.33 subdivision must set a schedule for repayments. The deferred 154.34 payment must be included with the current taxes due and payable 154.35 in the years the deferred payments are due and payable and must 154.36 be levied accordingly. 155.1 Sec. 17. Laws 1993, chapter 375, article 14, section 22, 155.2 subdivision 1, is amended to read: 155.3 Subdivision 1. [EXTENSION OF TAX INCREMENT FINANCING 155.4 DISTRICT.] Tax increment financing district No. 3-2, established 155.5 by the city of Inver Grove Heights on April 30, 1992, under Laws 155.6 1990, chapter 604, article 7, section 30, subdivision 2, 155.7 continues in effect until the earlier of (1) May 1,20042006, 155.8 or (2) when all costs provided for in the tax increment 155.9 financing plan relating to the district have been paid. In no 155.10 event may the city receive more thaneightten years of tax 155.11 increments for the districtand. All tax increments received 155.12 after May 1, 2002, and before May 1, 2004, in excess of the 155.13 amount of local government aid lost by the city under Minnesota 155.14 Statutes, section 273.1399, as a result of such tax increments, 155.15 shall be used only to pay or reimburse capital costs of public 155.16 road and bridge improvements. All tax increments received after 155.17 May 1, 2004, in excess of the amount of local government aid 155.18 lost by the city under Minnesota Statutes, section 273.1399, as 155.19 a result of the tax increments, must be used only to pay debt 155.20 service on obligations incurred before January 1, 1999, to pay 155.21 costs provided for in the tax increment financing plan, or on 155.22 obligations incurred to refinance the original obligations. 155.23 Sec. 18. Laws 1997, chapter 231, article 1, section 19, 155.24 subdivision 1, is amended to read: 155.25 Subdivision 1. [TIF GRANTS.] (a) The commissioner of 155.26 revenue shall pay grants to municipalities for deficits in tax 155.27 increment financing districts caused by the changes in class 155.28 rates under this act. Municipalities must submit applications 155.29 for the grants in a form prescribed by the commissioner by no 155.30 later thanMarchAugust 1 for grants payable during the calendar 155.31 year. The maximum grant equals the lesser of: 155.32 (1) for taxes payable in the year before the grant is paid, 155.33 the reduction in the tax increment financing district's revenues 155.34 derived from increment resulting from the class rate changes in 155.35 this article and Laws 1998, chapter 389, article 2; or 155.36 (2) the municipality's total tax increments, including 156.1 unspent increments from previous years, less the amount due 156.2 during the calendar year to pay (i) bonds issued and sold before 156.3 the day following final enactment of this act and (ii) binding 156.4 contracts entered into before the day following final enactment 156.5 of this act. 156.6 (b) The commissioner of revenue may require applicants for 156.7 grantsor pooling authorityunder this section to provide any 156.8 information the commissioner deems appropriate. The 156.9 commissioner shall calculate the amount under paragraph (a), 156.10 clause (2), based on the reports for the tax increment financing 156.11 district or districts filed with the state auditor on or before 156.12 July 1 of the year before the year in which the grant is to be 156.13 paid. 156.14 (c) This subdivision applies only to deficits in tax 156.15 increment financing districts for which: 156.16 (1) the request for certification was made before the 156.17 enactment date of this act; and 156.18 (2) all timely reports have been filed with the state 156.19 auditor, as required by Minnesota Statutes, section 469.175. 156.20 (d) The commissioner shall pay the grants under this 156.21 subdivision by December 26 of the year. 156.22 (e) $2,000,000 is appropriated to the commissioner of 156.23 revenue to make grants under this section. This appropriation 156.24 is available until expended or this section expires under 156.25 subdivision 3, whichever is earlier. If the amount of grant 156.26 entitlements for a year exceed the appropriation, the 156.27 commissioner shall reduce each grant proportionately so the 156.28 total equals the amount available. 156.29 Sec. 19. Laws 1997, chapter 231, article 1, section 19, 156.30 subdivision 3, is amended to read: 156.31 Subd. 3. [EXPIRATION.] This section expires on January 1, 156.3220012002. 156.33 Sec. 20. Laws 1997, Second Special Session chapter 2, 156.34 section 6, is amended to read: 156.35 Sec. 6. TRADE AND ECONOMIC 156.36 DEVELOPMENT 8,200,000 157.1 Notwithstanding the requirement in 157.2 Minnesota Statutes, section 469.169, 157.3 subdivision 11, as added by Laws 1997, 157.4 chapter 231, article 16, section 20, to 157.5 base allocations to zones in cities on 157.6 the state's western border on a per 157.7 capita basis, $1,200,000 is a one-time 157.8 appropriation from the general fund to 157.9 the commissioner of trade and economic 157.10 development for border city enterprise 157.11 competitiveness grants under Minnesota 157.12 Statutes, sections 469.166 to 469.173. 157.13 Funds shall be allocated to communities 157.14 with significant business losses that 157.15 are at risk of losing business tax base 157.16 due to noncompetitiveness with North 157.17 Dakota and South Dakota and shall be 157.18 available to communities for locally 157.19 administered measures to retain their 157.20 job base. Allocations made under this 157.21 paragraph may be used for tax 157.22 reductions as provided in Minnesota 157.23 Statutes, section 469.171, or other 157.24 offsets of taxes imposed on or remitted 157.25 by businesses located in the enterprise 157.26 zone, but only if the municipality 157.27 determines that the granting of the tax 157.28 reduction or offset is necessary in 157.29 order to retain a business within or 157.30 attract a business to the zone. 157.31 Limitations on allocations under 157.32 Minnesota Statutes, section 469.169, 157.33 subdivision 7, do not apply to this 157.34 appropriation. Enterprise zones that 157.35 receive allocations under this 157.36 paragraph may continue in effect for 157.37 purposes of those allocations 157.38 throughDecember 31, 1998June 30, 157.39 1999. $6,000,000 is a one-time 157.40 appropriation from the general fund to 157.41 the Minnesota investment fund for 157.42 grants to local units of government for 157.43 locally administered operating loan 157.44 programs for businesses directly and 157.45 adversely affected by the floods. Loan 157.46 criteria and requirements shall be 157.47 locally established with approval by 157.48 the department. For the purposes of 157.49 this appropriation, Minnesota Statutes, 157.50 sections 116J.8731, subdivisions 3, 4, 157.51 5, and 7, and 116J.991, are waived. 157.52 Businesses that receive grants or loans 157.53 from this appropriation shall set goals 157.54 for jobs retained and wages paid within 157.55 the area designated under Presidential 157.56 Declaration of Major Disaster, DR-1175. 157.57 $1,000,000 is a one-time appropriation 157.58 from the petroleum tank release cleanup 157.59 fund to the commissioner of trade and 157.60 economic development. Notwithstanding 157.61 Minnesota Statutes, section 115C.08, 157.62 subdivision 4, as amended by Laws 1997, 157.63 chapter 200, article 2, section 4, 157.64 these funds are to be used for grants 157.65 to buy out property substantially 157.66 damaged by a petroleum tank release. 157.67 Sec. 21. Laws 1998, chapter 389, article 11, section 29, 157.68 is amended to read: 158.1 Sec. 29. [EFFECTIVE DATE.] 158.2 Sections 1, 5, and 7 apply to tax increment financing 158.3 districts certified on, before, and after August 1, 1979. 158.4 Sections 2, 3, 4, and 8 are effective for disclosures 158.5 required to be made and reports required to be submitted 158.6 beginning in 1999. 158.7 Section 6 is effective for tax increment financing 158.8 districts for which the request for certificationiswas made 158.9 afterApril 30, 1998August 1, 1996. 158.10 Section 9 is effective the day following final enactment 158.11 and applies to tax increment financing districts certified on, 158.12 before, and after August 1, 1979. 158.13 Section 10 is effective beginning for taxes payable in 1999. 158.14 Section 11 is effective upon compliance by Itasca county 158.15 with Minnesota Statutes, section 645.021, subdivision 3. 158.16 Section 12 is effective upon compliance by Koochiching 158.17 county with Minnesota Statutes, section 645.021, subdivision 3. 158.18 Sec. 22. [AUTHORIZATION; AIRPORT IMPACT ZONES.] 158.19 Subdivision 1. [CITY OF RICHFIELD; DESIGNATION.] (a) There 158.20 is established within the city of Richfield an airport impact 158.21 zone consisting of the real property described as follows: 158.22 Commencing at the intersection of the north city limits 158.23 with the w'ly ROW line of T.H. 77, thence south along the w'ly 158.24 ROW line of T.H. 77 to the n'ly ROW line of Interstate Highway 158.25 494, thence west along the n'ly ROW line of Interstate Highway 158.26 494 to the center line of Bloomington Avenue, thence north on 158.27 the center line of Bloomington Avenue to the n'ly ROW line of E. 158.28 77th St., thence east along the n'ly ROW line of E. 77th St. to 158.29 a point 133.2' east of the e'ly ROW line of Bloomington Avenue, 158.30 thence north on a line parallel with and 133.2' east of the e'ly 158.31 ROW line of Bloomington Avenue to the north city limits, thence 158.32 east along the north city limits to the point of beginning. 158.33 (b) The city of Richfield may add area to the airport 158.34 impact zone designated under this subdivision, or establish one 158.35 or more additional airport impact zones, subject to the terms 158.36 and conditions of subdivision 2. 159.1 Subd. 2. [CITIES OF BLOOMINGTON, MINNEAPOLIS, AND EAGAN; 159.2 DESIGNATION; CRITERIA.] (a) Each of the cities of Bloomington, 159.3 Minneapolis, and Eagan may designate one or more airport impact 159.4 zones within their respective boundaries. An airport impact 159.5 zone is a discrete geographic area that meets criteria for such 159.6 a zone established by the metropolitan council. The criteria 159.7 established by the metropolitan council for an airport impact 159.8 zone must: 159.9 (1) be based upon airport impacts found by the council 159.10 after study to be present in the airport impact zone designated 159.11 for the city of Richfield under subdivision 1; and 159.12 (2) be such that any area within any of the cities 159.13 experiencing land use incompatibility substantially similar to 159.14 the area described in subdivision 1, would qualify for 159.15 designation as an airport impact zone. 159.16 (b) A city that intends to establish an airport impact zone 159.17 must prepare and submit to the metropolitan council for approval 159.18 a plan identifying the geographic boundaries of the proposed 159.19 zone and the airport mitigation measures to be undertaken in the 159.20 zone. 159.21 Subd. 3. [AIRPORT IMPACTS DEFINED.] The legislature finds 159.22 that: 159.23 (a) The area included within the airport impact zones 159.24 defined under this section will experience significant adverse 159.25 environmental and socioeconomic impacts associated with the 159.26 operation of the Minneapolis-St. Paul international airport; 159.27 (b) Whether funded directly by the metropolitan airports 159.28 commission or by other means, expenditures for mitigation of 159.29 those airport-created impacts involve an aspect of the airport's 159.30 capital and operating expenses and will be made for airport 159.31 purposes; and 159.32 (c) Appropriate measures to mitigate those adverse impacts 159.33 include, but are not limited to, housing replacement activities. 159.34 Sec. 23. [AIRPORT TAX INCREMENT FINANCING DISTRICTS.] 159.35 Subdivision 1. [RICHFIELD.] (a) The city of Richfield may 159.36 establish an airport impact tax increment financing district 160.1 consisting of the real property within the airport impact zone 160.2 established under section 22, subdivision 1. The tax increment 160.3 financing district is subject to the provisions of subdivision 3. 160.4 (b) If the city of Richfield receives approval for an 160.5 expanded or new airport impact zone under section 22, the city 160.6 may establish an airport impact tax increment financing district 160.7 within that expanded or new zone, subject to the terms and 160.8 conditions of subdivision 2. 160.9 Subd. 2. [BLOOMINGTON, MINNEAPOLIS, AND EAGAN.] (a) Each 160.10 of the cities of Bloomington, Minneapolis, and Eagan may 160.11 establish an airport impact tax increment financing district and 160.12 project within an approved airport impact zone. The district is 160.13 subject to the provisions of subdivision 3. The district may be 160.14 established only if the metropolitan council approves: 160.15 (1) the boundaries of the district; 160.16 (2) the tax increment financing plan for the district; and 160.17 (3) the number of authorized phases of the district. 160.18 Subd. 3. [SPECIAL RULES.] (a) Each district established 160.19 under subdivisions 1 and 2 is considered a redevelopment 160.20 district and project and is subject to Minnesota Statutes, 160.21 sections 469.174 to 469.179, except as otherwise provided in 160.22 this subdivision. 160.23 (1) For the purposes of Minnesota Statutes, section 160.24 469.1763, subdivision 2, the "in-district percentage" is 100 160.25 percent, except to the extent otherwise provided in clause (4), 160.26 and except that administrative expenses are considered 160.27 activities in the district. Minnesota Statutes, section 160.28 469.1763, subdivision 3, does not apply to the district. 160.29 (2) Except as otherwise provided in subdivision 2, the tax 160.30 increment financing plan for the district may identify up to six 160.31 phases, each consisting of a contiguous or noncontiguous 160.32 geographic area within the district. Tax increment must not be 160.33 paid to the authority from any phase after 25 years from the 160.34 date of receipt by the authority of the first tax increment from 160.35 that phase. 160.36 (3) Minnesota Statutes, section 469.176, subdivision 4j, 161.1 does not apply to the district. 161.2 (4) Minnesota Statutes, sections 273.1399 and 469.1782, 161.3 subdivision 1, do not apply to the district if the authority 161.4 elects either or both of the following: 161.5 (i) the exemption under Minnesota Statutes, section 161.6 273.1399, subdivision 6, paragraph (d); or 161.7 (ii) at least 15 percent of the revenue generated from tax 161.8 increment from the district in any year is deposited in the 161.9 housing replacement account of the authority and spent according 161.10 to the tax increment financing plan. 161.11 (b) The authority must identify in the tax increment 161.12 financing plan the housing replacement activities to be assisted 161.13 by the housing replacement account. 161.14 (c) A city or any authority for that city as defined in 161.15 Minnesota Statutes, section 469.174, subdivision 2, may be the 161.16 "authority" under Minnesota Statutes, sections 469.174 to 161.17 469.179, for the purposes of sections 22 to 25. 161.18 (d) Housing replacement activities may include 161.19 rehabilitation, acquisition, demolition, relocation assistance, 161.20 relocation of existing single-family or multifamily housing, and 161.21 financing of new or existing single-family or multifamily 161.22 housing that replaces housing units eliminated by redevelopment 161.23 within the district. 161.24 (e) Housing replacement activities listed in the plan need 161.25 not be located within the district, project area, or airport 161.26 impact zone. 161.27 Sec. 24. [METROPOLITAN AIRPORTS COMMISSION LOCAL SALES 161.28 TAX.] 161.29 Subdivision 1. [SALES TAX AUTHORIZED.] (a) Notwithstanding 161.30 Minnesota Statutes, section 477A.016, or other law, the 161.31 metropolitan airports commission may impose by resolution a 161.32 sales tax of up to four percent upon airport sales for the 161.33 purposes specified in subdivision 2. The provisions of 161.34 Minnesota Statutes, section 297A.48, govern the imposition, 161.35 administration, collection, and enforcement of the tax 161.36 authorized under this section, except: 162.1 (1) the tax is imposed only on airport sales as defined in 162.2 this section; and 162.3 (2) Minnesota Statutes, section 297A.48, subdivisions 4 and 162.4 9a, do not apply. 162.5 (b) For purposes of this section, the term "airport sales" 162.6 means sales that are taxable under Minnesota Statutes, chapter 162.7 297A, and occur on property owned by the metropolitan airports 162.8 commission at the Minneapolis-St. Paul international airport, 162.9 including without limitation, parking, vehicle rental, food and 162.10 beverage, vending, merchandise, and pay telephones. Airport 162.11 sales do not include sales of goods or taxable services 162.12 purchased by the metropolitan airports commission or by persons 162.13 or entities conducting a private trade or business on property 162.14 owned by the metropolitan airports commission at the 162.15 Minneapolis-St. Paul international airport. 162.16 Subd. 2. [USE OF REVENUES.] (a) Revenues received from 162.17 taxes authorized by subdivision 1 must be used by the 162.18 metropolitan airports commission to pay the cost of collecting 162.19 the taxes and for the following purposes: 162.20 (1) to pay principal of, interest on, and redemption 162.21 premium, if any, on obligations issued by the cities of 162.22 Bloomington, Minneapolis, Richfield, and Eagan, or any of those 162.23 cities, under section 25; or 162.24 (2) to pay the costs of any approved airport mitigation 162.25 measures conducting by the cities of Bloomington, Minneapolis, 162.26 Richfield, and Eagan, or any of those cities. 162.27 (b) For the purposes of this section, "approved airport 162.28 mitigation measure" means any action taken by a city to mitigate 162.29 the impacts of airport expansion that are included in an airport 162.30 impact mitigation plan approved by the metropolitan council for 162.31 an airport impact zone in that city. 162.32 Subd. 3. [PAYMENT PROVISIONS.] (a) The chief 162.33 administrative officer of a city issuing obligations or 162.34 conducting approved airport mitigation measures pursuant to this 162.35 section or section 25 must, before June 1 in each year during 162.36 which the local sales tax authorized by this section is in 163.1 effect, certify to the metropolitan airports commission: 163.2 (1) the aggregate amount of obligations issued by the city 163.3 under section 25 that are secured in whole or in part by local 163.4 sales tax revenue; 163.5 (2) the amount of principal of and interest on the 163.6 obligations described in clause (1) payable in the next calendar 163.7 year; 163.8 (3) the amount of net tax increment received by the city or 163.9 the authority in the current calendar year, where the term "net 163.10 tax increment" means the tax increment generated from the 163.11 district to which the activities financed by the obligations 163.12 described in clause (1) relate, less the amount of principal and 163.13 interest payable in the next calendar year on obligations issued 163.14 by the city under section 25 and secured in whole or in part by 163.15 tax increments from that district but not secured by local sales 163.16 tax revenues; 163.17 (4) the amount by which the required payments of principal 163.18 and interest on the obligations described in clause (1) exceeds 163.19 the net tax increment received; and 163.20 (5) the amount of expenditures made by the city or the 163.21 authority (other than from proceeds of obligations) for approved 163.22 airport mitigation measures in the last calendar year. 163.23 (b) The metropolitan airports commission must then issue a 163.24 warrant to the city making the certification in the amounts 163.25 certified payable to the financial officer of that city under 163.26 paragraph (a), clauses (4) and (5), subject to subdivision 4. 163.27 The amounts received by the city representing principal and 163.28 interest on obligations must be deposited in the debt service 163.29 fund from which the obligations are payable. The amount 163.30 representing the costs of approved airport mitigation measures 163.31 may be spent by the city or authority only in accordance with 163.32 the approved airport mitigation plan. 163.33 (c) In each year during which the local sales tax is in 163.34 effect: 163.35 (i) for each city in which no obligations secured by local 163.36 sales tax revenues are outstanding and no certification is made 164.1 under paragraph (a), clause (5), the metropolitan airports 164.2 commission must impose the tax at a rate that is one percent 164.3 less than the maximum four percent tax allowed under subdivision 164.4 1. 164.5 (ii) for each city in which obligations secured by local 164.6 sales tax are outstanding, 25 percent of the revenues collected 164.7 in that year net of collection costs is to be retained by the 164.8 metropolitan airports commission for the purposes described in 164.9 this section. 164.10 Subd. 4. [PRIORITY OF PAYMENTS.] Payments from the 164.11 revenues collected under subdivision 3 are to be made: 164.12 (1) first, prorated based upon the aggregate principal of 164.13 obligations outstanding to the cities of Bloomington, 164.14 Minneapolis, Richfield, and Eagan for the payment of principal 164.15 of, interest on, and redemption premium, if any, on obligations 164.16 issued under section 25; and 164.17 (2) second, prorated based upon the aggregate amount of 164.18 mitigation certifications in each fiscal year to the cities of 164.19 Bloomington, Minneapolis, Richfield, and Eagan for the costs of 164.20 approved airport mitigation measures. 164.21 Subd. 5. [COMMENCEMENT AND TERMINATION OF TAXES.] (a) The 164.22 local sales tax imposed under this section commences upon the 164.23 earlier of: 164.24 (1) notification by the city of Richfield to the 164.25 metropolitan airports commission of its intent to issue 164.26 obligations secured by local sales tax revenues under this 164.27 section; or 164.28 (2) approval by the metropolitan council of an airport 164.29 impact mitigation plan for any of the cities of Bloomington, 164.30 Minneapolis, Richfield, or Eagan; in either case subject to 164.31 compliance with Minnesota Statutes, section 297A.48, subdivision 164.32 9. 164.33 (b) The local sales tax imposed under this section 164.34 terminates on the earlier of: 164.35 (1) the date by which all of the cities of Bloomington, 164.36 Minneapolis, Richfield, and Eagan have notified the metropolitan 165.1 airports commission that all obligations issued under section 25 165.2 secured by local sales tax revenues have been paid or defeased, 165.3 and the cost of all approved airport mitigation measures have 165.4 been paid; or 165.5 (2) after 25 full calendar years of collection, excluding 165.6 the first year if the tax is imposed for only a portion of that 165.7 year. 165.8 (c) If the conditions for commencement of the local sales 165.9 tax under subdivision 5, paragraph (a), have not been met by 165.10 January 1, 2006, no local sales tax may be imposed under this 165.11 section. 165.12 (d) The balance of any local sales tax revenues held by the 165.13 metropolitan airports commission upon termination of the tax and 165.14 the payment of all amounts due under this section must be 165.15 transmitted to the commissioner of revenue for deposit in the 165.16 state general fund. 165.17 Sec. 25. [BONDS; SECURITY.] 165.18 Subdivision 1. [RICHFIELD.] The city of Richfield may 165.19 issue and sell its general obligations, and may pledge to the 165.20 payment of those obligations the revenues described in section 165.21 24, subdivision 3, to finance the costs of land and structure 165.22 acquisition, demolition, relocation, site clearance, and public 165.23 improvements within an airport impact zone established under 165.24 section 22, and the cost of any approved airport mitigation 165.25 measures undertaken within or related to any airport impact 165.26 zone, including without limitation any housing replacement 165.27 activities as defined in section 23. 165.28 Subd. 2. [BLOOMINGTON, MINNEAPOLIS, AND EAGAN.] Each of 165.29 the cities of Bloomington, Minneapolis, and Eagan may issue and 165.30 sell its general obligations, and may pledge to the payment of 165.31 those obligations the revenues described in section 24, 165.32 subdivision 3, to finance the cost of approved airport 165.33 mitigation measures undertaken within or related to an airport 165.34 impact zone, including without limitation any housing 165.35 replacement activities as defined in section 23. 165.36 Subd. 3. [TERMS.] Obligations issued under this section 166.1 must be issued in accordance with Minnesota Statutes, chapter 166.2 475, and may be secured by tax increments subject to clause (4), 166.3 local sales tax revenues under section 24, any other revenues 166.4 available to the city, or any combination of such revenues. 166.5 Notwithstanding any other law or charter provision: 166.6 (1) each city may issue obligations secured by local sales 166.7 tax revenues in an aggregate principal amount not to exceed 166.8 $30,000,000 (after deducting costs of issuance, discount, and 166.9 capitalized interest); 166.10 (2) the pledge of local sales tax revenues to obligations 166.11 issued by any city under this section is on a parity of lien 166.12 with the pledge of such revenues to obligations issued by any 166.13 other city under this section; 166.14 (3) voter approval is not required and net debt limits do 166.15 not apply to obligations issued under this section; 166.16 (4) obligations secured in whole or in part with tax 166.17 increments must be issued in accordance with Minnesota Statutes, 166.18 section 469.178; and 166.19 (5) a city may issue obligations to refund any obligations 166.20 issued under this section, the principal amount of which is not 166.21 included in computing the limits on amount of obligations 166.22 issuable by the city under this section. 166.23 Subd. 4. [METROPOLITAN COUNCIL PLEDGE.] The metropolitan 166.24 council may by resolution pledge the full faith and credit and 166.25 taxing power of the metropolitan council to pay principal of and 166.26 interest on obligations issued by the city of Bloomington, the 166.27 city of Minneapolis, the city of Richfield, or the city of Eagan 166.28 or their respective authorities under sections 22 to 25. The 166.29 pledge must be made in accordance with Minnesota Statutes, 166.30 chapter 475, but voter approval is not required and net debt 166.31 limits do not apply. Taxes levied by the metropolitan council 166.32 by reason of the pledge: 166.33 (1) do not affect the amount or rate of taxes that may be 166.34 levied by council for other purposes; 166.35 (2) must be spread against all taxable property in the 166.36 metropolitan area; and 167.1 (3) are not subject to limit as to rate or amount. 167.2 Subd. 5. [OBLIGATION DEFINED.] In sections 22 to 25, 167.3 "obligation" has the meaning given it in Minnesota Statutes, 167.4 section 475.51, subdivision 3. The term includes obligations 167.5 issued to refund prior obligations issued under sections 22 to 167.6 25. 167.7 Sec. 26. [CITY OF BROOKLYN CENTER; TAX INCREMENT FINANCING 167.8 DISTRICT.] 167.9 Subdivision 1. [CHANGE OF FISCAL DISPARITIES 167.10 ELECTION.] Notwithstanding Minnesota Statutes, section 469.177, 167.11 subdivision 3, paragraph (c), the governing body of the city of 167.12 Brooklyn Center may change its election of the computation of 167.13 tax increment for tax increment district No. 4 under Minnesota 167.14 Statutes, section 469.177, subdivision 3, from the method of 167.15 computation in paragraph (b) to the method in paragraph (a) of 167.16 that provision. 167.17 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 167.18 approval by the governing body of the city of Brooklyn Center 167.19 and compliance with Minnesota Statutes, section 645.021, 167.20 subdivision 3. 167.21 Sec. 27. [CITY OF COLUMBIA HEIGHTS; TAX INCREMENT 167.22 FINANCING.] 167.23 Subdivision 1. [EXTENSION OF TAX INCREMENT FINANCING 167.24 DISTRICT.] The governing body of the city of Columbia Heights 167.25 may extend the duration of tax increment financing district No. 167.26 N7 (53rd Avenue) in the city of Columbia Heights for a period 167.27 not to exceed four years. Minnesota Statutes, section 469.1782, 167.28 subdivision 1, does not apply to the extension of the district 167.29 under this section. 167.30 Subd. 2. [LIMITATIONS.] Tax increments attributable to the 167.31 duration extension in subdivision 1 must be used solely to pay 167.32 the principal of and interest on any outstanding obligations, 167.33 after application of the amounts authorized to be spent under 167.34 subdivision 3, or to repay amounts paid for those purposes by 167.35 the city or its economic development authority from other 167.36 revenues. 168.1 Subd. 3. [POOLING PERMITTED.] Notwithstanding any other 168.2 law to the contrary, tax increments from any tax increment 168.3 financing district in the city may be used to pay the principal 168.4 of and interest on outstanding obligations, the proceeds of 168.5 which were used to finance activities located outside the 168.6 boundaries of the district. The amount authorized under this 168.7 subdivision to be spent outside the district is limited to an 168.8 amount necessary to make payments on outstanding obligations 168.9 after application of tax increments originally pledged to pay 168.10 the outstanding obligations. 168.11 Subd. 4. [OUTSTANDING OBLIGATIONS; DEFINITION.] For the 168.12 purposes of this section, "outstanding obligations" means any 168.13 general obligation bonds issued before January 1, 1999, by the 168.14 city of Columbia Heights or any development authority controlled 168.15 by that city, that were secured in whole or in part with tax 168.16 increments from any tax increment financing district in the 168.17 city, and any bonds issued to refund those bonds. 168.18 Subd. 5. [LOCAL APPROVAL.] This section is effective upon 168.19 approval by the governing body of the city of Columbia Heights 168.20 and compliance with Minnesota Statutes, sections 469.1782, 168.21 subdivision 2, and 645.021, subdivision 3. 168.22 Sec. 28. [CITY OF DAWSON; TAX INCREMENT DISTRICT.] 168.23 Subdivision 1. [DISTRICT EXTENDED.] Notwithstanding 168.24 Minnesota Statutes, section 469.176, subdivision 1b, the Dawson 168.25 economic development authority may collect tax increments from 168.26 tax increment financing district No. 7 for a period of 20 years 168.27 after receipt by the authority of the first increment. 168.28 Subd. 2. [EFFECTIVE DATE; APPLICABILITY.] Subdivision 1 is 168.29 effective upon compliance with Minnesota Statutes, sections 168.30 469.1782, subdivision 2, and 645.021, subdivision 3. Minnesota 168.31 Statutes, section 469.1782, subdivision 1, does not apply to the 168.32 district. 168.33 Sec. 29. [CITY OF FRIDLEY; TAX INCREMENT FINANCING 168.34 DISTRICT.] 168.35 Subdivision 1. [EXTENSION OF TIME.] Notwithstanding 168.36 Minnesota Statutes, section 469.176, subdivision 1b, upon 169.1 approval of the governing body of the city of Fridley, the 169.2 Fridley housing and redevelopment authority may, by resolution, 169.3 extend the duration of tax increment financing district No. 6 169.4 located in the city of Fridley. The housing and redevelopment 169.5 authority may not extend the duration beyond December 31, 2025. 169.6 The provisions of Minnesota Statutes, sections 273.1399, 169.7 subdivision 8, and 469.1782, subdivision 1, do not apply to this 169.8 district if extended. 169.9 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 169.10 approval by the governing body of the city of Fridley and 169.11 compliance with Minnesota Statutes, section 645.021, subdivision 169.12 3. 169.13 Sec. 30. [ITASCA COUNTY; TAX INCREMENT FINANCING 169.14 DISTRICT.] 169.15 Subdivision 1. [AUTHORIZATION.] The governing body of the 169.16 county of Itasca may create an economic development tax 169.17 increment financing district, as provided in this section, on 169.18 one or more parcels to contain an electric power plant and which 169.19 are adjacent to a taconite mine direct reduction plant and steel 169.20 mill. Except as otherwise provided in this section, the 169.21 provisions of Minnesota Statutes, sections 469.174 to 469.179, 169.22 apply to the district. 169.23 Subd. 2. [SPECIAL RULES.] (a) The duration of the district 169.24 established under this section is 25 years from the receipt of 169.25 the first increment, notwithstanding Minnesota Statutes, section 169.26 469.176, subdivision 1b. 169.27 (b) Notwithstanding Minnesota Statutes, section 469.1763, 169.28 tax increment from the district established under section 1 may 169.29 be expended on improvements and activities in aid of the 169.30 electric power plant and the direct reduction plant and steel 169.31 mill and related administrative expenses, but may not otherwise 169.32 be expended outside the district. 169.33 (c) Minnesota Statutes, section 469.1782, subdivision 1, 169.34 does not apply to this section or the district established under 169.35 this section. 169.36 (d) Minnesota Statutes, section 273.1399, does not apply to 170.1 the district. 170.2 (e) The captured net tax capacity of the district 170.3 established under this section includes any property taxed as 170.4 personal property having a situs in the district. 170.5 Subd. 3. [DEVELOPMENT POWERS.] The county may exercise all 170.6 of the powers of a housing and redevelopment authority under 170.7 Minnesota Statutes, sections 469.001 to 469.047, and the powers 170.8 of an economic development authority under Minnesota Statutes, 170.9 sections 469.090 to 469.108, in connection with the development 170.10 of the project described in this section. 170.11 Subd. 4. [EFFECTIVE DATE.] This section is effective upon 170.12 approval by the Itasca county board and compliance with 170.13 Minnesota Statutes, section 645.021, subdivision 3. 170.14 Sec. 31. [CITY OF MEDFORD; ECONOMIC DEVELOPMENT DISTRICT.] 170.15 Subdivision 1. [SIZE OF COMMERCIAL 170.16 FACILITIES.] Notwithstanding any other law to the contrary, the 170.17 city of Medford may use revenues derived from tax increment from 170.18 an economic development district located within the city to 170.19 provide assistance to one or more separately owned commercial 170.20 facilities, each consisting of 30,000 square feet or less. 170.21 Except as otherwise provided in this section, the revenues 170.22 derived from increments must be spent as required under 170.23 Minnesota Statutes, section 469.176, section 4c. 170.24 Subd. 2. [EFFECTIVE DATE; APPLICABILITY.] This section is 170.25 effective upon approval by the governing body of the city of 170.26 Medford and compliance with Minnesota Statutes, section 645.021, 170.27 subdivision 3, and applies to requests for certification of tax 170.28 increment financing districts or additions of new area to tax 170.29 increment financing districts after the day of final enactment. 170.30 Sec. 32. [CITY OF MINNEOTA; TAX INCREMENT FINANCING 170.31 EXPENDITURES.] 170.32 Subdivision 1. [ACTIONS RATIFIED.] The expenditure of tax 170.33 increments on administrative expenses and public utility or 170.34 other improvements by the city of Minneota for its tax increment 170.35 financing district, adopted by city resolution 4-15-85A, are 170.36 ratified and deemed to be authorized by the tax increment 171.1 financing plan for the district. 171.2 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 171.3 compliance by the governing body of the city of Minneota with 171.4 Minnesota Statutes, section 645.021, subdivision 3. 171.5 Sec. 33. [CITY OF MOUNTAIN IRON; ECONOMIC DEVELOPMENT TAX 171.6 INCREMENT FINANCING DISTRICT.] 171.7 Subdivision 1. [AUTHORIZATION.] The Mountain Iron housing 171.8 and redevelopment authority in and for the city of Mountain Iron 171.9 may establish one economic development tax increment financing 171.10 district in the city of Mountain Iron for a commercial facility 171.11 of unlimited size. 171.12 Subd. 2. [SPECIAL RULES.] The tax increment financing 171.13 district authorized in subdivision 1 is subject to Minnesota 171.14 Statutes, sections 469.174 to 469.179, with the exception listed 171.15 in this section. Notwithstanding Minnesota Statutes, section 171.16 469.176, subdivision 4c, paragraph (c), revenues derived from 171.17 tax increment from an economic development district may be used 171.18 to provide improvements, loan subsidies, or assistance in any 171.19 form for any separately owned commercial facility of any size 171.20 located within the municipal jurisdiction of Mountain Iron, a 171.21 small city as defined in Minnesota Statutes, section 469.174, 171.22 subdivision 27. 171.23 Subd. 3. [EFFECTIVE DATE; LOCAL APPROVAL.] 171.24 This section is effective upon approval by the governing 171.25 body of the city of Mountain Iron under Minnesota Statutes, 171.26 section 645.021, subdivision 2. 171.27 Sec. 34. [CITY OF NISSWA; EXTENDING DURATION OF TAX 171.28 INCREMENT FINANCING DISTRICT.] 171.29 Subdivision 1. [AUTHORIZATION.] Notwithstanding Minnesota 171.30 Statutes, section 469.176, subdivision 1b, if the city of Nisswa 171.31 does not receive sufficient funding from other sources to make 171.32 improvements to its wastewater system as required by the 171.33 pollution control agency, tax increment may be paid until 171.34 December 31, 2014, for tax increment financing district No. 1-2 171.35 in the city of Nisswa. Tax increments received after April 4, 171.36 2000, must be used only for the cost of the wastewater system. 172.1 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 172.2 approval by the governing body of the city of Nisswa and 172.3 compliance with Minnesota Statutes, sections 469.1782 and 172.4 645.021, subdivision 3. 172.5 Sec. 35. [CITY OF ONAMIA; USE OF TAX INCREMENT FINANCING.] 172.6 Subdivision 1. [APPLICATION OF TIME LIMIT.] For tax 172.7 increment financing district No. 1-1, established April 14, 172.8 1993, by the city of Onamia, Minnesota Statutes, section 172.9 469.1763, subdivision 3, applies to the qualified portion of the 172.10 district by permitting a period of ten years for commencement of 172.11 activities within the district. As used in this section, 172.12 "qualified portion of the district" means only that portion of 172.13 the district consisting of three parcels fronting on U.S. 169. 172.14 Subd. 2. [EFFECTIVE DATE.] This section is effective upon 172.15 approval by the governing body of the city of Onamia and 172.16 compliance with Minnesota Statutes, section 645.021, subdivision 172.17 3. 172.18 Sec. 36. [TAX INCREMENT DISTRICT POOLING; ST. CLOUD 172.19 HOUSING AND REDEVELOPMENT AUTHORITY.] 172.20 Subdivision 1. [AUTHORIZATION.] Notwithstanding Minnesota 172.21 Statutes, section 469.1763, subdivision 2, and the provisions of 172.22 the tax increment financing act in effect for districts 172.23 established by the St. Cloud housing and redevelopment authority 172.24 for which the request for certification was made after August 1, 172.25 1979, and before June 30, 1982, revenue derived from tax 172.26 increments paid by properties in the districts may be expended 172.27 through a development fund or otherwise to finance the 172.28 redevelopment of commercial properties outside of tax increment 172.29 financing districts which were destroyed or damaged in a natural 172.30 gas explosion on December 11, 1998. 172.31 Subd. 2. [EFFECTIVE DATE.] Subdivision 1 is effective upon 172.32 compliance by the governing body of the St. Cloud housing and 172.33 redevelopment authority with Minnesota Statutes, section 172.34 645.021, subdivision 3. 172.35 Sec. 37. [CITY OF ST. PAUL; DELAY OF DEEMED COMMENCEMENT 172.36 OF TAX INCREMENT FINANCING DISTRICT.] 173.1 Subdivision 1. [AUTHORIZATION.] Notwithstanding Minnesota 173.2 Statutes, section 469.176, or any other law to the contrary, the 173.3 duration limit of the Williams Hill tax increment district in 173.4 the city of St. Paul is determined as if the date of receipt of 173.5 the first tax increment by the authority occurs when the 173.6 aggregate of all tax increments received from the district 173.7 reaches $2,000. 173.8 Subd. 2. [EFFECTIVE DATE.] Subdivision 1 is effective upon 173.9 approval by the governing body of the city of St. Paul and 173.10 compliance with Minnesota Statutes, section 645.021, subdivision 173.11 3. 173.12 Sec. 38. [CITY OF WOODBURY LEVY AUTHORITY.] 173.13 Subdivision 1. [AUTHORIZATION.] Notwithstanding any other 173.14 law to the contrary, the city of Woodbury may levy a tax not to 173.15 exceed the amount provided in subdivision 2 on properties 173.16 defined in subdivision 3. The levy is not subject to any 173.17 current or future limitation on the amount or tax rate other 173.18 than the limitation provided in subdivision 2. 173.19 Subd. 2. [ESTABLISHMENT OF TAXING DISTRICT.] If the 173.20 governing body of the city of Woodbury elects not to impose the 173.21 tax under this section on all commercial-industrial properties 173.22 in the city, it may establish a district within which the tax 173.23 will be imposed. A district established under this section must 173.24 consist of an area within which is located business enterprises 173.25 that the governing body finds will be served by the improvements 173.26 described in subdivision 6. The governing body may exclude from 173.27 the taxing district any area in which is located a business 173.28 enterprise that, in the opinion of the governing body, has made 173.29 a substantial contribution or a binding commitment to make a 173.30 substantial contribution to the cost of the improvements 173.31 described in subdivision 6. 173.32 Subd. 3. [LIMITATION.] The levy authorized in subdivision 173.33 1 must not exceed the product of: 173.34 (1) the positive difference, if any, between the areawide 173.35 tax rate under Minnesota Statutes, section 473F.08, subdivision 173.36 5, and the local tax rate under Minnesota Statutes, section 174.1 473F.08, subdivision 4; and 174.2 (2) the portion of the net tax capacity of the properties 174.3 defined in subdivision 4 that is not subject to the areawide tax 174.4 rate under Minnesota Statutes, section 473F.08, subdivision 6. 174.5 Determination of the limitation under this subdivision 174.6 shall be made for each unique taxing jurisdiction, as defined 174.7 under Minnesota Statutes, section 273.1398, subdivision 1, 174.8 within the city. 174.9 Subd. 4. [PROPERTIES SUBJECT TO TAX.] The properties 174.10 subject to tax under this section are commercial-industrial 174.11 properties as defined under Minnesota Statutes, section 473F.02, 174.12 subdivision 3. The net tax capacity of commercial-industrial 174.13 properties subject to tax under this section does not include 174.14 that portion of the net tax capacity subject to the areawide tax 174.15 rate under Minnesota Statutes, section 473F.08, subdivision 6. 174.16 Subd. 5. [RELATION TO TAX INCREMENT FINANCING AND FISCAL 174.17 DISPARITIES.] The levy under this section is not included in 174.18 computations under Minnesota Statutes, section 469.177 or 174.19 Minnesota Statutes, chapter 473F. 174.20 Subd. 6. [USE OF PROCEEDS.] The proceeds of the tax levied 174.21 under this section must be used only for the construction of a 174.22 highway interchange at the intersection of I-494 and Tamarack 174.23 Road and for road and bridge improvements on the portion of the 174.24 roads connecting to and immediately adjacent to the interchange 174.25 that are required as the result of the construction of the 174.26 interchange. 174.27 Subd. 7. [SUNSET.] The tax under this section expires in 174.28 the year immediately following the later of the year in which: 174.29 (1) the improvements described in subdivision 6 are paid 174.30 for; or 174.31 (2) any bonds issued to pay for the cost of those 174.32 improvements are defeased. 174.33 Subd. 8. [BONDS AUTHORIZED.] The city of Woodbury may 174.34 issue general obligations to provide funding for the activities 174.35 described in subdivision 6. The obligations must be issued 174.36 under Minnesota Statutes, chapter 475, except that no referendum 175.1 is required under Minnesota Statutes, section 475.58. 175.2 Subd. 9. [EFFECTIVE DATE.] Upon compliance by the 175.3 governing body of the city of Woodbury with Minnesota Statutes, 175.4 section 645.021, subdivision 3, this section is effective for 175.5 taxes levied in 1999, payable in 2000, and thereafter. 175.6 Sec. 39. [COST ESTIMATES.] 175.7 Any waiver granted under Minnesota Statutes, section 175.8 469.169, subdivision 12, paragraph (b), must be reported within 175.9 60 days to the commissioner of finance and the chairs of the 175.10 house and senate tax committees. 175.11 Sec. 40. [INSTRUCTION TO THE REVISOR.] 175.12 In the 2000 edition of Minnesota Statutes, the revisor of 175.13 statutes shall change "Dakota county housing and redevelopment 175.14 authority" to "Dakota county community development agency" 175.15 wherever it appears. 175.16 Sec. 41. [REPEALER.] 175.17 Laws 1997, chapter 231, article 1, section 19, subdivision 175.18 2, is repealed. 175.19 Sec. 42. [EFFECTIVE DATES.] 175.20 (a) Section 2 is effective for districts for which requests 175.21 for certification were received on or after September 2, 1998. 175.22 (b) Sections 8, 9, 11, 12, 18, 20, 21, and 39 are effective 175.23 the day following final enactment. 175.24 (c) Section 17 is effective upon approval by the governing 175.25 body of the city of Inver Grove Heights, and compliance with 175.26 Minnesota Statutes, section 645.021, subdivision 3. 175.27 (d) Sections 22 to 25 are effective as to each of the 175.28 cities of Bloomington, Minneapolis, Richfield, or Eagan upon 175.29 approval by the governing body of the respective city and 175.30 compliance by its chief clerical officer with Minnesota 175.31 Statutes, section 645.021, subdivision 3; and with regard to 175.32 section 23, upon similar compliance with Minnesota Statutes, 175.33 section 469.1782, subdivision 2. 175.34 ARTICLE 12 175.35 TAX DELINQUENCY AND FORFEITURE PROCEDURES 175.36 Section 1. Minnesota Statutes 1998, section 92.51, is 176.1 amended to read: 176.2 92.51 [TAXATION; REDEMPTION; SPECIAL CERTIFICATE.] 176.3 State lands sold by the director become taxable. A 176.4 description of the tract sold, with the name of the purchaser, 176.5 must be transmitted to the proper county auditor. The auditor 176.6 must extend the land for taxation like other land. Only the 176.7 interest in the land vested by the land sale certificate in its 176.8 holder may be sold for delinquent taxes.Upon production to the176.9county treasurer of the tax certificate given upon tax sale, in176.10case the lands have not been redeemed, the tax purchaser has the176.11right to pay the principal and interest then in default upon the176.12land sale certificate as its assignee. To redeem from a tax176.13sale, the person redeeming must pay the county treasurer, for176.14the holder and owner of the tax sale certificate, in addition to176.15all sums required to be paid in other cases, all amounts paid by176.16the holder and owner for interest and principal upon the land176.17sale certificate, with interest at 12 percent per year. When176.18the director receives the tax certificate with the county176.19auditor's certificate of the expiration of the time for176.20redemption, and the county treasurer's receipt for all176.21delinquent interest and penalty on the land sale certificate,176.22the director shall issue the holder and owner of the tax176.23certificate a special certificate with the same terms and the176.24same effect as the original land sale certificate.176.25 Sec. 2. Minnesota Statutes 1998, section 279.37, 176.26 subdivision 1, is amended to read: 176.27 Subdivision 1. [COMPOSITION INTO ONE ITEM.] Delinquent 176.28 taxes upon any parcel of real estate may be composed into one 176.29 item or amount by confession of judgment at any time prior to 176.30 the forfeiture of the parcel of land to the state for taxes, for 176.31 the aggregate amount of all the taxes, costs, penalties, and 176.32 interest accrued against the parcel, ashereinafterprovided in 176.33 this section. Taxes upon property which, for the previous 176.34 year's assessment, was classified as mineral property, 176.35 employment property, or commercial or industrial propertyshall176.36 are onlybeeligible to be composed into any confession of 177.1 judgment under this section as provided in subdivision 177.2 1a. Delinquent taxes for property that has been reclassified 177.3 from 4bb to 4b under section 273.1319 may not be composed into a 177.4 confession of judgment under this subdivision. Delinquent taxes 177.5 on unimproved land are eligible to be composed into a confession 177.6 of judgment only if the land is classified as homestead, 177.7 agricultural, or timberland in the previous year or is eligible 177.8 for installment payment under subdivision 1a. The entire parcel 177.9 is eligible for the ten-year installment plan as provided in 177.10 subdivision 2 if 25 percent or more of the market value of the 177.11 parcel is eligible for confession of judgment under this 177.12 subdivision. 177.13 Sec. 3. Minnesota Statutes 1998, section 279.37, 177.14 subdivision 1a, is amended to read: 177.15 Subd. 1a. [CLASS 3A PROPERTY.] (a) The delinquent taxes 177.16 upon a parcel of property which was classified class 3a, for the 177.17 previous year's assessment and had a total market value ofless177.18than$200,000 or less for that same assessment shall be eligible 177.19 to be composed into a confession of judgment. Property 177.20 qualifying under this subdivision shall be subject to the same 177.21 provisions as provided in this section except ashereinprovided 177.22 in paragraphs (b) to (d). 177.23(a)(b) Current year taxes and penalty due at the time the 177.24 confession of judgment is entered must be paid. 177.25 (c) The down paymentshallmust include all special 177.26 assessments due in the current tax year, all delinquent special 177.27 assessments, and 20 percent of the ad valorem tax, penalties, 177.28 and interest accrued against the parcel. The balance 177.29 remainingshall beis payable in four equal annual installments; 177.30 and 177.31(b)(d) The amounts entered in judgmentshallbear interest 177.32 at the rate provided in section 279.03, subdivision 1a, 177.33 commencing with the date the judgment is entered. The interest 177.34 rate is subject to change each year on the unpaid balance in the 177.35 manner provided in section 279.03, subdivision 1a. 177.36 Sec. 4. Minnesota Statutes 1998, section 279.37, 178.1 subdivision 2, is amended to read: 178.2 Subd. 2. [INSTALLMENT PAYMENTS.] The owner of any such 178.3 parcel, or any person to whom the right to pay taxes has been 178.4 given by statute, mortgage, or other agreement, may make and 178.5 file with the county auditor of the countywhereinin which the 178.6 parcel is located a written offer to pay the current taxes each 178.7 year before they become delinquent, or to contest the taxes 178.8 under Minnesota Statutes 1941, sections 278.01 to 278.13, and 178.9 agree to confess judgment for the amounthereinbeforeprovided, 178.10 as determined by the county auditor, and shall thereby waive. 178.11 By filing the offer, the owner waives all irregularities in 178.12 connection with the tax proceedings affecting the parcel and any 178.13 defense or objection which the owner may have to the 178.14 proceedings, andshall thereby waivealso waives the 178.15 requirements of any notice of default in the payment of any 178.16 installment or interest to become due pursuant to the composite 178.17 judgment to be so entered, and shall tender therewith. With the 178.18 offer, the owner shall tender one-tenth of the amount of the 178.19 delinquent taxes, costs, penalty, and interest, and shall tender 178.20 all current year taxes and penalty due at the time the 178.21 confession of judgment is entered. In the offer, the owner 178.22 shall agreethereinto pay the balance in nine equal 178.23 installments, with interest as provided in section 279.03, 178.24 payable annually on installments remaining unpaid from time to 178.25 time, on or before December 31 of each year following the year 178.26 in which judgment was confessed, which. The offershallmust be 178.27 substantially as follows: 178.28 "To the court administrator of the district court of 178.29 ........... county, I, ....................., am the owner of 178.30 the following described parcel of real estatesituatelocated in 178.31 .................... county, Minnesota, to-wit: 178.32 .............................. Uponwhichthat real estate there 178.33 are delinquent taxes for the year ........., and prior years, as 178.34 follows: (here insert year of delinquency and the total amount 178.35 of delinquent taxes, costs, interest, and penalty)do hereby. 178.36 By signing this document I offer to confess judgment in the sum 179.1 of $...... andherebywaive all irregularities in the tax 179.2 proceedings affectingsuchthese taxes and any defense or 179.3 objection which I may havetheretoto them, and direct judgment 179.4 to be entered for theamount hereby confessedamount stated 179.5 above,lessminus the sum of $............,hereby tenderedto 179.6 be paid with this document,beingwhich is one-tenth of the 179.7 amount ofsaidthe taxes, costs, penalty, and interest;stated 179.8 above. I agree to pay the balance ofsaidthe judgment in nine 179.9 equal, annual installments, with interest as provided in section 179.10 279.03, payable annually, on the installments remaining 179.11 unpaidfrom time to time, said. I agree to pay the installments 179.12 and interestto be paidon or before December 31 of each year 179.13 following the year in which this judgment is confessed and 179.14 current taxes each year before they become delinquent, or within 179.15 30 days after the entry of final judgment in proceedings to 179.16 contestsuchthe taxes under Minnesota Statutes1941, sections 179.17 278.01 to 278.13. 179.18 Datedthis.............., ......." 179.19 Sec. 5. Minnesota Statutes 1998, section 281.23, 179.20 subdivision 2, is amended to read: 179.21 Subd. 2. [MAY COVER PARCELS BID IN AT SAME TAX SALEFORM.] 179.22All parcels of land bid in at the same tax judgment sale and179.23having the same period of redemption shall be covered by a179.24single posted notice, but a separate notice may be posted for179.25any parcel which may be omitted. SuchThe notice of expiration 179.26 of redemption must contain the tax parcel identification numbers 179.27 and legal descriptions of parcels subject to notice of 179.28 expiration of redemption provisions prescribed under subdivision 179.29 1. The notice must also indicate the names of taxpayers and fee 179.30 owners of record in the office of the county auditor at the time 179.31 the notice is prepared and names of those parties who have filed 179.32 their addresses according to section 276.041 and the amount of 179.33 payment necessary to redeem as of the date of the notice. At 179.34 the option of the county auditor, the current filed addresses of 179.35 affected persons may be included on the notice. The notice 179.36shall beis sufficient if substantially in the following form: 180.1 "NOTICE OF EXPIRATION OF REDEMPTION 180.2 Office of the County Auditor 180.3 County of ......................., State of Minnesota. 180.4 To all personsinterestedhaving an interest inthelands 180.5hereinafterdescribed in this notice: 180.6 You areherebynotified that the parcels of land 180.7hereinafterdescribed, situatedin this notice and located in 180.8 the county of ................................, state of 180.9 Minnesota,were bid in for the state on the180.10......................... day of .......................,180.11......., at the tax judgment sale of land for delinquent taxes180.12for the year .......; that the legal descriptions and tax parcel180.13identification numbers of such parcels and names of the180.14taxpayers and fee owners and in addition those parties who have180.15filed their addresses pursuant to section 276.041, and the180.16amount necessary to redeem as of the date hereof and, at the180.17election of the county auditor, the current filed addresses of180.18any such persons, are as follows:are subject to forfeiture to 180.19 the state of Minnesota because of nonpayment of delinquent 180.20 property taxes, special assessments, penalties, interest, and 180.21 costs levied on those parcels. The time for redemption from 180.22 forfeiture expires if a redemption is not made by the later of 180.23 (1) 60 days after service of this notice on all persons having 180.24 an interest in the lands of record at the office of the county 180.25 recorder or registrar of titles or (2) the second Monday in 180.26 May. The redemption must be made in my office. 180.27 Names (and 180.28 Current Filed 180.29 Addresses) for 180.30 the Taxpayers 180.31 and Fee Owners 180.32 andin Addition180.33 Those Parties 180.34 Who Have Filed Amount 180.35 Their Addresses Tax Necessary to 180.36 Pursuant to Legal Parcel Redeem as of 181.1 section 276.041 Description Number DateHereof181.2 of Notice 181.3 ................ ........... ...... ............ 181.4 ................ ........... ...... ............ 181.5That the time for redemption of such lands from such sale181.6will expire 60 days after service of notice and the filing of181.7proof thereof in my office, as provided by law. The redemption181.8must be made in my office.181.9 FAILURE TO REDEEMSUCHTHE LANDS PRIOR TO THE EXPIRATION 181.10 OF REDEMPTION WILL RESULT IN THE LOSS OF THE LAND AND 181.11 FORFEITUREOF SAID LANDTO THE STATE OF MINNESOTA. 181.12 Inquiries as tothethese proceedingsset forth abovecan 181.13 be made to the County Auditor forthe............... Countyof181.14..............., whose address is set forth below. 181.15 Witness my hand and official seal this 181.16 ............................ day of ................, ....... 181.17 ......................... 181.18 County Auditor 181.19 (OFFICIAL SEAL) 181.20 ......................... 181.21 (Address) 181.22 ......................... 181.23 (Telephone)." 181.24SuchThe noticeshallmust be posted by the auditor in the 181.25 auditor's office, subject to public inspection, andshallmust 181.26 remain so posted until at least one week after the date of the 181.27 last publication of notice, ashereinafterprovided in this 181.28 section. Proof ofsuchpostingshallmust be made by the 181.29 certificate of the auditor, filed in the auditor's office. 181.30 Sec. 6. Minnesota Statutes 1998, section 281.23, 181.31 subdivision 4, is amended to read: 181.32 Subd. 4. [PROOF OF PUBLICATION.] An affidavit establishing 181.33 proof of publication ofsuchthe notice affidavit, as provided 181.34 by law,shallmust be filed in the office of the county 181.35 auditor. A single published noticeshall be sufficient for all181.36 may include parcels of land bid in atthe samedifferent tax 182.1 judgmentsalesales,having the same periodbut included parcels 182.2 must have a common year for expiration of redemption, and182.3covered by a notice or notices kept posted during the time of182.4the publication, as hereinbefore provided. 182.5 Sec. 7. Minnesota Statutes 1998, section 281.23, 182.6 subdivision 6, is amended to read: 182.7 Subd. 6. [SERVICE OF NOTICE.] (a)ForthwithImmediately 182.8 after the commencement ofsuchpublication or mailing the county 182.9 auditor shall deliver to the sheriff of the county or any other 182.10 person not less than 18 years of age a sufficient number of 182.11 copies ofsuchthe notice of expiration of redemption for 182.12 serviceuponon the persons in possession of all parcels of such 182.13 landas areactually occupied, and documentation if the 182.14 certified mail notice was returned as undeliverable or the 182.15 notice was not mailed to the address associated with the 182.16 property. Within 30 days after receiptthereofof the notice, 182.17 the sheriff or other person serving the notice shallmake such182.18investigationinvestigate asmay benecessary to ascertain 182.19 whether or not the parcels covered bysuchthe notice are 182.20 actually occupied parcels, and shall serve a copy ofsuchthe 182.21 notice of expiration of redemption upon the person in possession 182.22 of each parcel found to be an occupied parcel, in the manner 182.23 prescribed for serving summons in a civil action. If the 182.24 sheriff or another person serving the notice has made at least 182.25 two attempts to serve the notice of expiration of redemption, 182.26 one between the weekday hours of 8:00 a.m. and 5:00 p.m. and the 182.27 other on a different day and different time period, the sheriff 182.28 or another person serving the notice may accomplish this service 182.29 by posting a copy of the notice of expiration of redemption on a 182.30 conspicuous location on the parcel. The sheriff or other person 182.31 serving the notice shall make prompt return to the auditor as to 182.32 all notices so served and as to all parcels found vacant and 182.33 unoccupied and parcels served by posting.SuchThe returnshall182.34 must be madeuponon a copy ofsuchthe notice andshall be182.35 is prima facie evidence of the factsthereinstated in it. 182.36 If the notice is served by the sheriff, the sheriff shall 183.1 receive from the county, in addition to other compensation 183.2 prescribed by law,suchfees and mileage for service on persons 183.3 in possession asareprescribed by law for such service in other 183.4 cases, and shall also receivesuchcompensation for making 183.5 investigation and return as to vacant and unoccupied lands as 183.6 the county board may fix, subject to appeal to the district 183.7 court as in case of other claims against the county. As to 183.8 either service upon persons in possession or return as to vacant 183.9 lands, the sheriff shall charge mileage only for one trip if the 183.10 occupants of more than two tracts are served simultaneously, and 183.11 in such case mileageshallmust be prorated and charged 183.12 equitably against all such owners. 183.13 (b) The secretary of state shall receive sheriff's service 183.14 for all out-of-state interests. 183.15 Sec. 8. Minnesota Statutes 1998, section 282.01, 183.16 subdivision 1, is amended to read: 183.17 Subdivision 1. [CLASSIFICATION AS CONSERVATION OR 183.18 NONCONSERVATION.] It is the general policy of this state to 183.19 encourage the best use of tax-forfeited lands, recognizing that 183.20 some lands in public ownership should be retained and managed 183.21 for public benefits while other lands should be returned to 183.22 private ownership. Parcels of land becoming the property of the 183.23 state in trust under law declaring the forfeiture of lands to 183.24 the state for taxesshallmust be classified by the county board 183.25 of the county in which the parcels lie as conservation or 183.26 nonconservation. In making the classification the board shall 183.27 consider the present use of adjacent lands, the productivity of 183.28 the soil, the character of forest or other growth, accessibility 183.29 of lands to established roads, schools, and other public 183.30 services, their peculiar suitability or desirability for 183.31 particular uses and the suitability of the forest resources on 183.32 the land for multiple use, sustained yield management. The 183.33 classification, furthermore, must encourage and foster a mode of 183.34 land utilization that will facilitate the economical and 183.35 adequate provision of transportation, roads, water supply, 183.36 drainage, sanitation, education, and recreation; facilitate 184.1 reduction of governmental expenditures; conserve and develop the 184.2 natural resources; and foster and develop agriculture and other 184.3 industries in the districts and places best suited to them. 184.4 In making the classification the county board may use 184.5 information made available by any office or department of the 184.6 federal, state, or local governments, or by any other person or 184.7 agency possessing pertinent information at the time the 184.8 classification is made. The lands may be reclassified from time 184.9 to time as the county boardmay considerconsiders necessary or 184.10 desirable, except for conservation lands held by the state free 184.11 from any trust in favor of any taxing district. 184.12 If the lands are located within the boundaries of an 184.13 organized town, with taxable valuation in excess of $20,000, or 184.14 incorporated municipality, the classification or 184.15 reclassification and sale must first be approved by the town 184.16 board of the town or the governing body of the municipality in 184.17 which the lands are located. The town board of the town or the 184.18 governing body of the municipality is considered to have 184.19 approved the classification or reclassification and sale if the 184.20 county board is not notified of the disapproval of the 184.21 classification or reclassification and sale within9060 days of 184.22 the date the request for approval was transmitted to the town 184.23 board of the town or governing body of the municipality. If the 184.24 town board or governing body desires to acquire any parcel lying 184.25 in the town or municipality by procedures authorized in this 184.26 section, it must file a written application with the county 184.27 board to withhold the parcel from public sale. The application 184.28 must be filed within9060 days of the request for 184.29 classification or reclassification and sale. The county board 184.30 shall then withhold the parcel from public sale forone yearsix 184.31 months. A municipality or governmental subdivision pay 184.32 maintenance costs incurred by the county during the six-month 184.33 period while the property is withheld from public sale, provided 184.34 the property is not offered for public sale after the six-month 184.35 period. A clerical error made by county officials does not 184.36 serve to eliminate the request of the town board or governing 185.1 body if the board or governing body has forwarded the 185.2 application to the county auditor. 185.3 Sec. 9. Minnesota Statutes 1998, section 282.01, 185.4 subdivision 4, is amended to read: 185.5 Subd. 4. [SALE: METHOD, REQUIREMENTS, EFFECTS.] The sale 185.6shallmust be conducted by the county auditor at the county seat 185.7 of the county in which the parcels lie,providedexcept that,in 185.8 St. Louis and Koochiching counties, the sale may be conducted in 185.9 any county facility within the county, and. The parcelsshall185.10 must be sold for cash only and at not less than the appraised 185.11 value, unless the county board of the countyshall havehas 185.12 adopted a resolution providing for their sale on terms, in which 185.13 event the resolutionshall controlcontrols with respectthereto185.14 to the sale. When the sale is made on terms other than for cash 185.15 only (1) a payment of at least ten percent of the purchase price 185.16 must be made at the time of purchase,thereuponand the balance 185.17shallmust be paid in no more than ten equal annual 185.18 installments, or (2) the payments must be made in accordance 185.19 with county board policy, but in no event may the board require 185.20 more than 12 installments annually, and the contract term must 185.21 not be for more than ten years.NoStanding timber or timber 185.22 productsshallmust not be removed from these lands until an 185.23 amount equal to the appraised value of all standing timber or 185.24 timber products on the lands at the time of purchase has been 185.25 paid by the purchaser; provided, that in case any. If a parcel 185.26 of land bearing standing timber or timber products is sold at 185.27 public auction for more than the appraised value, the amount bid 185.28 in excess of the appraised valueshallmust be allocated between 185.29 the land and the timber in proportion tothetheir respective 185.30 appraised valuesthereof, and no. In that case, standing timber 185.31 or timber productsshallmust not be removed from the land until 185.32 the amount of the excess bid allocated to timber or timber 185.33 products has been paid in addition to the appraised 185.34 valuethereofof the land. The purchaser is entitled to 185.35 immediate possession, subject to the provisions of any existing 185.36 valid lease made in behalf of the state. 186.1 For sales occurring on or after July 1, 1982, the unpaid 186.2 balance of the purchase price is subject to interest at the rate 186.3 determined pursuant to section 549.09. The unpaid balance of 186.4 the purchase price for sales occurring after December 31, 1990, 186.5 is subject to interest at the rate determined in section 279.03, 186.6 subdivision 1a. The interest rate is subject to change each 186.7 year on the unpaid balance in the manner provided for rate 186.8 changes in section 549.09 or 279.03, subdivision 1a, whichever, 186.9 is applicable. Interest on the unpaid contract balance on sales 186.10 occurring before July 1, 1982, is payable at the rate applicable 186.11 to the sale at the time that the sale occurred. 186.12 Sec. 10. Minnesota Statutes 1998, section 282.01, 186.13 subdivision 7, is amended to read: 186.14 Subd. 7. [COUNTY SALES; NOTICE, PURCHASE PRICE, 186.15 DISPOSITION.] The saleherein provided for shallmust commence 186.16 atsuchthe timeasdetermined by the county board of the county 186.17wherein suchin which the parcelslie, shall directare 186.18 located. The county auditor shall offer the parcels of land in 186.19 order in which they appear in the notice of sale, and shall sell 186.20 them to the highest bidder, but not for alesssum less than the 186.21 appraised value, until all of the parcels of landshallhave 186.22 been offered, and thereafter. Then the county auditor shall 186.23 sell any remaining parcels to anyone offering to pay the 186.24 appraised valuethereof, except that if the person could have 186.25 repurchased a parcel of property under section 282.012 or 186.26 282.241, that personshall not be allowed tomay not purchase 186.27 that same parcel of property at the sale under this subdivision 186.28 for a purchase price less than the sum of alldelinquenttaxes 186.29and, assessments, penalties, interest, and costs due at the time 186.30 of forfeiture computed under section 282.251,together with186.31penalties, interest, and costs that accrued or would have186.32accrued if the parcel had not forfeited to the stateand any 186.33 special assessments for improvements certified as of the date of 186.34 sale.SaidThe saleshallmust continue until allsuch186.35 the parcels are sold or until the county boardshall order186.36 orders a reappraisal orshall withdrawwithdraws any or allsuch187.1 of the parcels from sale.SuchThe list of lands may be added 187.2 to and the added lands may be sold at any time by publishing the 187.3 descriptions and appraised valuesof such. The added lands must 187.4 be: (1) parcels of landas shallthat have become forfeited and 187.5 classified as nonconservation since the commencement of any 187.6 prior saleor such; (2) parcelsas shallthat have been 187.7 reappraised, or such; (3) parcelsas shallthat have been 187.8 reclassified as nonconservation; orsuch(4) other parcelsas187.9 that are subject to sale but were omitted from the existing list 187.10 for any reason. The descriptions and appraised values must be 187.11 published in the same manner ashereinafterprovided for the 187.12 publication of the original list, provided that any. Parcels 187.13 added tosuchthe listshallmust first be offered for sale to 187.14 the highest bidder before they are sold at appraised value. All 187.15 parcels of land not offered for immediate sale, as well as 187.16 parcelsof such lands asthat are offered and not immediately 187.17 soldshall, continue to be held in trust by the state for the 187.18 taxing districts interested in each ofsaidthe parcels, under 187.19 the supervision of the county board, and such. Those parcels 187.20 may be used for public purposes until sold, as directed by the 187.21 county boardmay direct. 187.22 Sec. 11. Minnesota Statutes 1998, section 282.04, 187.23 subdivision 2, is amended to read: 187.24 Subd. 2. [RIGHTS BEFORE SALE; IMPROVEMENTS, INSURANCE, 187.25 DEMOLITION.]Until afterBefore the sale of a parcel of 187.26 forfeited land the county auditor may, with the approval of the 187.27 county board of commissioners, provide for the repair and 187.28 improvement of any building or structure located uponsuchthe 187.29 parcel, and may provide for maintenance of tax-forfeited lands, 187.30 if it is determined by the county board that such repairsor, 187.31 improvements, or maintenance are necessary for the operation, 187.32 use, preservation and safetythereof; and,of the building or 187.33 structure. If so authorized by the county board, the county 187.34 auditor may insureany suchthe building or structure against 187.35 loss or damage resulting from fire or windstorm, may purchase 187.36 workers' compensation insurance to insure the county against 188.1 claims for injury to the personsthereinemployed in the 188.2 building or structure by the county, and may insure the county, 188.3 its officers and employees against claims for injuries to 188.4 persons or property because of the management, use or operation 188.5 ofsuchthe building or structure.SuchThe county auditor may, 188.6 with the approval of the county board, provide for the 188.7 demolition ofany suchthe building or structure, which has been 188.8 determined by the county board to be within the purview of 188.9 section 299F.10, and for the sale of salvaged 188.10 materialstherefromfrom the building or structure.SuchThe 188.11 county auditor, with the approval of the county board, may 188.12 provide for the sale of abandoned personal property under either 188.13 chapter 345 or 566, as appropriate. The net proceeds from any 188.14 sale ofsuchthe personal property, salvaged materials,of188.15 timber or other products, or leases made under this lawshall188.16 must be deposited in the forfeited tax sale fund andshallmust 188.17 be distributed in the same manner as if the parcel had been sold. 188.18SuchThe county auditor, with the approval of the county 188.19 board, may provide for the demolition of any structureor188.20structureson tax-forfeited lands, if in the opinion of the 188.21 county board, the county auditor, and the land commissioner, if 188.22 therebeis one, the sale ofsuchthe land withsuchthe 188.23 structureor structures thereonon it, or the continued 188.24 existence ofsuchthe structureor structuresby reason of age, 188.25 dilapidated condition or excessive size as compared with nearby 188.26 structures, will result in a material lessening of net tax 188.27 capacities of real estate in the vicinity ofsuchthe 188.28 tax-forfeited lands, or if the demolition ofsuchthe structure 188.29 or structures will aid in disposing ofsuchthe tax-forfeited 188.30 property. 188.31 Before the sale of a parcel of forfeited land located in an 188.32 urban area, the county auditor may with the approval of the 188.33 county board provide for the gradingthereofof the land by 188.34 filling or the removal of any surplus materialtherefrom, and188.35wherefrom it. If the physical condition of forfeited lands is 188.36 such that a reasonable gradingthereofof the lands is necessary 189.1 for the protection and preservation of the property of any 189.2 adjoining owner,suchthe adjoining property owner or owners may 189.3make applicationapply to the county board to havesuchthe 189.4 grading done. If, after consideringsaidthe application, the 189.5 county board believes thatsuchthe grading will enhance the 189.6 value ofsuchthe forfeited lands commensurate with the cost 189.7 involved, it may approvethe sameit, andany suchthe work 189.8shallmust be performed under the supervision of the county or 189.9 city engineer, as the case may be, and the expensethereofpaid 189.10 from the forfeited tax sale fund. 189.11 Sec. 12. Minnesota Statutes 1998, section 282.08, is 189.12 amended to read: 189.13 282.08 [APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.] 189.14 The net proceeds from the sale or rental of any parcel of 189.15 forfeited land, or from the sale ofanyproductstherefromfrom 189.16 the forfeited land,shallmust be apportioned by the county 189.17 auditor to the taxing districts interestedthereinin the land, 189.18 as follows: 189.19 (1)Suchthe portionas may berequired to pay any amounts 189.20 included in the appraised value under section 282.01, 189.21 subdivision 3, as representing increased value due to any public 189.22 improvement made after forfeiture ofsuchthe parcel to the 189.23 state, but not exceeding the amount certified by the clerk of 189.24 the municipality, shallmust be apportioned to the municipal 189.25 subdivision entitledtheretoto it; 189.26 (2)Suchthe portionas may berequired to pay any amount 189.27 included in the appraised value under section 282.019, 189.28 subdivision 5, representing increased value due to response 189.29 actions taken after forfeiture ofsuchthe parcel to the state, 189.30 but not exceeding the amount of expenses certified by the 189.31 pollution control agency or the commissioner of 189.32 agriculture,shallmust be apportioned to the agency or the 189.33 commissioner of agriculture and deposited in the fund from which 189.34 the expenses were paid; 189.35 (3)Suchthe portion of the remainderas may berequired to 189.36 discharge any special assessment chargeable againstsuchthe 190.1 parcel for drainage or other purpose whether due or deferred at 190.2 the time of forfeiture,shallmust be apportioned to the 190.3 municipal subdivision entitledtheretoto it; and 190.4 (4) any balanceshallmust be apportioned as follows: 190.5(a) Any(i) The county board may annually by resolution set 190.6 aside no more than 30 percent of the receipts remaining to be 190.7 used for timber development on tax-forfeited land and dedicated 190.8 memorial forests, to be expended under the supervision of the 190.9 county board. Itshallmust be expended only on projects 190.10 approved by the commissioner of natural resources. 190.11(b) Any(ii) The county board may annually by resolution 190.12 set aside no more than 20 percent of the receipts remaining to 190.13 be used for the acquisition and maintenance of county parks or 190.14 recreational areas as defined in sections 398.31 to 398.36, to 190.15 be expended under the supervision of the county board. 190.16(c) If the board does not avail itself of the authority190.17under paragraph (a) or (b)(iii) Any balance remainingshall190.18 must be apportioned as follows: county, 40 percent; town or 190.19 city, 20 percent; and school district, 40 percent,and if the190.20board avails itself of the authority under paragraph (a) or (b)190.21the balance remaining shall be apportioned among the county,190.22town or city, and school district in the proportions in this190.23paragraph above stated,provided, however, that in unorganized 190.24 territory that portion whichshouldwould have accrued to the 190.25 townshipshallmust be administered by the county board of 190.26 commissioners. 190.27 Sec. 13. Minnesota Statutes 1998, section 282.09, is 190.28 amended to read: 190.29 282.09 [FORFEITED TAX SALE FUND.] 190.30 Subdivision 1. [MONEY PLACED IN FUND; FEES AND 190.31 DISBURSEMENTS.] The county auditor and county treasurer shall 190.32 place all money received through the operation of sections 190.33 282.01 to 282.13 in a fund to be known as the forfeited tax sale 190.34 fund, and all disbursements and costsshallmust be charged 190.35 against that fund, when allowed by the county board. Members of 190.36 the county board may be paid a per diem pursuant to section 191.1 375.055, subdivision 1, and reimbursed for their necessary 191.2 expenses, and may receive mileage as fixed by law. The amount 191.3 of compensation of a land commissioner and assistants, if a land 191.4 commissioner is appointed,shallmust bein the amount191.5 determined by the county board. The county auditorshallmust 191.6 receive 50 cents for each certificate of sale, each contract for 191.7 deed and each lease executed by the auditor, and, in counties 191.8 where no land commissioner is appointed, additional annual 191.9 compensation, not exceeding $300, as fixed by the county board. 191.10 The amount of compensation of any other clerical helpthat may191.11beneeded by the county auditor or land commissionershallmust 191.12 bein the amountdetermined by the county board. All 191.13 compensation provided forherein shall bein this subdivision is 191.14 in addition to other compensation allowed by law. Fees so 191.15 charged in addition to the fee imposed in section 282.014shall191.16 must be included in the annual settlement by the county auditor 191.17 as hereinafter provided. On or before February 1 each year, the 191.18 commissioner of revenue shall certify to the commissioner of 191.19 finance, by counties, the total number of state deeds issued and 191.20 reissued during the preceding calendar year for which such fees 191.21 are charged and the total amountthereofof fees. On or before 191.22 March 1 each year, each county shall remit to the commissioner 191.23 of revenue, from the forfeited tax sale fund, the aggregate 191.24 amount of the fees imposed by section 282.014 in the preceding 191.25 calendar year. The commissioner of revenue shall deposit the 191.26 amounts received in the state treasury to the credit of the 191.27 general fund. When disbursements are made from the fund for 191.28 repairs, refunds, expenses of actions to quiet title, or any 191.29 other purpose which particularly affects specific parcels of 191.30 forfeited lands, the amount ofsuchthe disbursementsshallmust 191.31 be charged to theaccount of the taxing districts interested in191.32such parcelsforfeited tax sale fund. The county auditor shall 191.33 make an annual settlement of the net proceeds received from 191.34 sales and rentals by the operation of sections 282.01 to 282.13, 191.35 on the settlement day determined in section 276.09, for the 191.36 preceding calendar year. 192.1 Subd. 2. [EXPENDITURES.] In all counties,from said192.2"Forfeited Tax Sale Fund,"the authoritiesduly charged with the192.3execution ofresponsible for carrying out the duties imposed by 192.4 sections 282.01 to 282.13, at their discretion, may expend 192.5 moneysin repairingfrom the forfeited tax sale fund to repair 192.6 any sewer or water main either inside or outside of any curb 192.7 line situated along any property forfeited to the state for 192.8 nonpayment of taxes, to acquire and maintain equipment used 192.9 exclusively for the maintenance and improvement of tax-forfeited 192.10 lands,andto cut down, otherwise destroy or eradicate noxious 192.11 weeds on all tax-forfeited lands. In any year, the money to be192.12expended for the cutting down, destruction or eradication of192.13noxious weeds shall not exceed in amount more than ten percent192.14of the net proceeds of said "Forfeited Tax Sale Fund" during the192.15preceding calendar year, or $10,000, whichever is the lesser192.16sum, and to maintain tax-forfeited lands. 192.17 Sec. 14. Minnesota Statutes 1998, section 282.241, is 192.18 amended to read: 192.19 282.241 [REPURCHASE AFTER FORFEITURE.] 192.20 The owner at the time of forfeiture, or the owner's heirs, 192.21 devisees, or representatives, or any person to whom the right to 192.22 pay taxes was given by statute, mortgage, or other agreement, 192.23 may repurchase any parcel of land claimed by the state to be 192.24 forfeited to the state for taxes unless before the time 192.25 repurchase is made the parcel is sold under installment 192.26 payments, or otherwise, by the state as provided by law, or is 192.27 under mineral prospecting permit or lease, or proceedings have 192.28 been commenced by the state or any of its political subdivisions 192.29 or by the United States to condemnsuchthe parcel of land. The 192.30 parcel of land may be repurchased for the sum of all delinquent 192.31 taxes and assessments computed under section 282.251, together 192.32 with penalties, interest, and costs, that accrued or would have 192.33 accrued if the parcel of land had not forfeited to the state. 192.34 Except for property which was homesteaded on the date of 192.35 forfeiture,suchrepurchaseshall beis permitted during one 192.36 year only from the date of forfeiture, and in any case only 193.1 after the adoption of a resolution by the board of county 193.2 commissioners determining thattherebyby repurchase undue 193.3 hardship or injustice resulting from the forfeiture will be 193.4 corrected, or that permittingsuchthe repurchase will promote 193.5 the use ofsuchthe lands that will best serve the public 193.6 interest. If the county board has good cause to believe that a 193.7 repurchase installment payment plan for a particular parcel is 193.8 unnecessary and not in the public interest, the county board may 193.9 require as a condition of repurchase that the entire repurchase 193.10 price be paid at the time of repurchase. A repurchaseshall193.11beis subject to any easement, lease, or other encumbrance 193.12 granted by the stateprior theretobefore the repurchase, and if 193.13saidthe land is located within a restricted area established by 193.14 any county under Laws 1939, chapter 340,suchthe repurchase 193.15shallmust not be permitted unlesssaidthe resolutionwith193.16respect theretoapproving the repurchase is adopted by the 193.17 unanimous vote of the board of county commissioners. 193.18 The person seeking to repurchase under this section shall 193.19 pay all maintenance costs incurred by the county auditor during 193.20 the time the property was tax-forfeited. 193.21 Sec. 15. Minnesota Statutes 1998, section 282.261, 193.22 subdivision 4, is amended to read: 193.23 Subd. 4. [SERVICE FEE.] The county auditor may collect a 193.24 service fee to cover administrative costs as set by the county 193.25 board for each repurchasecontract approvedapplication received 193.26 after July 1, 1985. The feeshallmust be paid at the time of 193.27repurchaseapplication andshallmust be credited to the county 193.28 general revenue fund. 193.29 Sec. 16. Minnesota Statutes 1998, section 282.261, is 193.30 amended by adding a subdivision to read: 193.31 Subd. 5. [COUNTY MAY IMPOSE CONDITIONS OF REPURCHASE.] The 193.32 county auditor, after receiving county board approval, may 193.33 impose conditions on repurchase of tax-forfeited lands limiting 193.34 the use of the parcel subject to the repurchase, including, but 193.35 not limited to, environmental remediation action plan 193.36 restrictions or covenants, or easements for lines or equipment 194.1 for telephone, telegraph, electric power, or telecommunications. 194.2 Sec. 17. Minnesota Statutes 1998, section 283.10, is 194.3 amended to read: 194.4 283.10 [APPLICATION MUST BE MADE WITHIN TWO YEARS.] 194.5 Nosuch refundment shallrefund may be granted unless an 194.6 applicationtherefor shall be dulyfor refund is approved and 194.7 presented to the commissioner of revenue within two years from 194.8 the date ofsuch tax certificate orthe state assignment 194.9 certificate. 194.10 Sec. 18. Minnesota Statutes 1998, section 375.192, 194.11 subdivision 2, is amended to read: 194.12 Subd. 2. [PROCEDURE, CONDITIONS.] Upon written application 194.13 by the owner of any property, the county board may grant the 194.14 reduction or abatement of estimated market valuation or taxes 194.15 and of any costs, penalties, or interest on them as the board 194.16 deems just and equitable and order the refund in whole or part 194.17 of any taxes, costs, penalties, or interest which have been 194.18 erroneously or unjustly paid. Except as provided in sections 194.19 469.1812 to 469.1815, no reduction or abatement may be granted 194.20 on the basis of providing an incentive for economic development 194.21 or redevelopment. Except as provided in section 375.194, the 194.22 county boardis authorized tomay consider and grant reductions 194.23 or abatements on applications only as they relate to taxes 194.24 payable in the current year and the two prior years; provided 194.25 that reductions or abatements for the two prior years shall be 194.26 considered or granted only for (i) clerical errors, or (ii) when 194.27 the taxpayer fails to file for a reduction or an adjustment due 194.28 to hardship, as determined by the county board. The application 194.29 must include the social security number of the applicant. The 194.30 social security number is private data on individuals as defined 194.31 by section 13.02, subdivision 12. All applications must be 194.32 approved by the county assessor, or, if the property is located 194.33 in a city of the first or second class having a city assessor, 194.34 by the city assessor, and by the county auditor before 194.35 consideration by the county board, except that the part of the 194.36 application which is for the abatement of penalty or interest 195.1 must be approved by the county treasurer and county auditor. 195.2 Approval by the county or city assessor is not required for 195.3 abatements of penalty or interest. No reduction, abatement, or 195.4 refund of any special assessments made or levied by any 195.5 municipality for local improvements shall be made unless it is 195.6 also approved by the board of review or similar taxing authority 195.7 of the municipality.Before taking actionOn any reduction or 195.8 abatementwherewhen the reduction of taxes, costs, penalties, 195.9 and interest exceed $10,000, the county board shall give20195.10days'notice within 20 days to the school board and the 195.11 municipality in which the property is located. The notice must 195.12 describe the property involved, the actual amount of the 195.13 reduction being sought, and the reason for the reduction.If195.14the school board or the municipality object to the granting of195.15the reduction or abatement, the county board must refer the195.16abatement or reduction to the commissioner of revenue with its195.17recommendation. The commissioner shall consider the abatement195.18or reduction under section 270.07, subdivision 1.195.19 An appeal may not be taken to the tax court from any order 195.20 of the county board made in the exercise of the discretionary 195.21 authority granted in this section. 195.22 The county auditor shall notify the commissioner of revenue 195.23 of all abatements resulting from the erroneous classification of 195.24 real property, for tax purposes, as nonhomestead property. For 195.25 the abatements relating to the current year's tax processed 195.26 through June 30, the auditor shall notify the commissioner on or 195.27 before July 31 of that same year of all abatement applications 195.28 granted. For the abatements relating to the current year's tax 195.29 processed after June 30 through the balance of the year, the 195.30 auditor shall notify the commissioner on or before the following 195.31 January 31 of all applications granted. The county auditor 195.32 shall submit a form containing the social security number of the 195.33 applicant and such other information the commissioner prescribes. 195.34 Sec. 19. Minnesota Statutes 1998, section 383C.482, 195.35 subdivision 1, is amended to read: 195.36 Subdivision 1. [AUDITOR TO SEARCH RECORDS; CERTIFICATES.] 196.1 The St. Louis county auditor, upon written application of any 196.2 person, shallmakesearchofthe records of the auditor's office 196.3 and the county treasurer's office, and ascertain the amount of 196.4 current tax against any lot or parcel of land described in the 196.5 application and the existence of all tax liens and tax sales as 196.6 tosuchthe lot or parcel of land, and certify the result of 196.7suchthe search under the seal of office, giving the description 196.8 of the lot or parcel of land, the amount of the current tax, if 196.9 any, and all tax liens and tax sales shown by such records, and 196.10 the amountthereofof liens and tax sales, the year of tax 196.11 covered bysuchthe lien, and the date of tax sale, and the name196.12of the purchaser at such tax sale. For the purpose of 196.13 ascertaining the current tax againstsucha lot or parcel of 196.14 land, the county auditor has the right of access to the records 196.15 of current taxes in the office of the county treasurer. 196.16 Sec. 20. [REPEALER.] 196.17 Minnesota Statutes 1998, sections 92.22; 280.27; 281.13; 196.18 281.38; 284.01; 284.02; 284.03; 284.04; 284.05; and 284.06, are 196.19 repealed. 196.20 Sec. 21. [EFFECTIVE DATE.] 196.21 This article is effective September 1, 1999, except that 196.22 sections 11 to 14 are effective beginning January 1, 2000. 196.23 ARTICLE 13 196.24 TACONITE TAXATION 196.25 Section 1. Minnesota Statutes 1998, section 298.24, 196.26 subdivision 1, is amended to read: 196.27 Subdivision 1. (a) For concentrate produced in1997 and196.2819981999, there is imposed upon taconite and iron sulphides, 196.29 and upon the mining and quarrying thereof, and upon the 196.30 production of iron ore concentrate therefrom, and upon the 196.31 concentrate so produced, a tax of $2.141 per gross ton of 196.32 merchantable iron ore concentrate produced therefrom. 196.33 (b) For concentrates produced in19992000 and subsequent 196.34 years, the tax rate shall be equal to the preceding year's tax 196.35 rate plus an amount equal to the preceding year's tax rate 196.36 multiplied by the percentage increase in the implicit price 197.1 deflator from the fourth quarter of the second preceding year to 197.2 the fourth quarter of the preceding year. "Implicit price 197.3 deflator" for the gross national product means the implicit 197.4 price deflator prepared by the bureau of economic analysis of 197.5 the United States Department of Commerce. 197.6 (c) On concentrates produced in 1997 and thereafter, an 197.7 additional tax is imposed equal to three cents per gross ton of 197.8 merchantable iron ore concentrate for each one percent that the 197.9 iron content of the product exceeds 72 percent, when dried at 197.10 212 degrees Fahrenheit. 197.11 (d) The tax shall be imposed on the average of the 197.12 production for the current year and the previous two years. The 197.13 rate of the tax imposed will be the current year's tax rate. 197.14 This clause shall not apply in the case of the closing of a 197.15 taconite facility if the property taxes on the facility would be 197.16 higher if this clause and section 298.25 were not applicable. 197.17 (e) If the tax or any part of the tax imposed by this 197.18 subdivision is held to be unconstitutional, a tax of $2.141 per 197.19 gross ton of merchantable iron ore concentrate produced shall be 197.20 imposed. 197.21 (f) Consistent with the intent of this subdivision to 197.22 impose a tax based upon the weight of merchantable iron ore 197.23 concentrate, the commissioner of revenue may indirectly 197.24 determine the weight of merchantable iron ore concentrate 197.25 included in fluxed pellets by subtracting the weight of the 197.26 limestone, dolomite, or olivine derivatives or other basic flux 197.27 additives included in the pellets from the weight of the 197.28 pellets. For purposes of this paragraph, "fluxed pellets" are 197.29 pellets produced in a process in which limestone, dolomite, 197.30 olivine, or other basic flux additives are combined with 197.31 merchantable iron ore concentrate. No subtraction from the 197.32 weight of the pellets shall be allowed for binders, mineral and 197.33 chemical additives other than basic flux additives, or moisture. 197.34 (g)(1) Notwithstanding any other provision of this 197.35 subdivision, for the first two years of a plant's production of 197.36 direct reduced ore, no tax is imposed under this section. As 198.1 used in this paragraph, "direct reduced ore" is ore that results 198.2 in a product that has an iron content of at least 75 percent. 198.3 For the third year of a plant's production of direct reduced 198.4 ore, the rate to be applied to direct reduced ore is 25 percent 198.5 of the rate otherwise determined under this subdivision. For 198.6 the fourth such production year, the rate is 50 percent of the 198.7 rate otherwise determined under this subdivision; for the fifth 198.8 such production year, the rate is 75 percent of the rate 198.9 otherwise determined under this subdivision; and for all 198.10 subsequent production years, the full rate is imposed. 198.11 (2) Subject to clause (1), production of direct reduced ore 198.12 in this state is subject to the tax imposed by this section, but 198.13 if that production is not produced by a producer of taconite or 198.14 iron sulfides, the production of taconite or iron sulfides 198.15 consumed in the production of direct reduced iron in this state 198.16 is not subject to the tax imposed by this section on taconite or 198.17 iron sulfides. 198.18 Sec. 2. Minnesota Statutes 1998, section 298.28, 198.19 subdivision 9a, is amended to read: 198.20 Subd. 9a. [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 15.4 198.21 cents per ton for distributions in1996, 1998,1999,and2000 198.22and 20.4 cents per ton for distributions in 1997 shall, and 2001 198.23 must be paid to the taconite economic development fund. No 198.24 distribution shall be made under this paragraph in any year in 198.25 which total industry production falls below 30 million tons. 198.26 (b) An amount equal to 50 percent of the tax under section 198.27 298.24 for concentrate sold in the form of pellet chips and 198.28 fines not exceeding 5/16 inch in size and not including crushed 198.29 pellets shall be paid to the taconite economic development 198.30 fund. The amount paid shall not exceed $700,000 annually for 198.31 all companies. If the initial amount to be paid to the fund 198.32 exceeds this amount, each company's payment shall be prorated so 198.33 the total does not exceed $700,000. 198.34 Sec. 3. Minnesota Statutes 1998, section 298.28, 198.35 subdivision 9b, is amended to read: 198.36 Subd. 9b. [TACONITE ENVIRONMENTAL FUND.] Five cents per 199.1 ton for distributions in1998,1999,and2000shall, and 2001 199.2 must be paid to the taconite environmental fund for use under 199.3 section 298.2961. No distribution may be made under this 199.4 paragraph in any year in which total industry production falls 199.5 below 30,000,000 tons. 199.6 Sec. 4. Minnesota Statutes 1998, section 298.296, 199.7 subdivision 4, is amended to read: 199.8 Subd. 4. [TEMPORARY LOAN AUTHORITY.] (a) The board may 199.9 recommend that up to $7,500,000 from the corpus of the trust may 199.10 be used for loans, grants, or equity investments as provided in 199.11 this subdivision. The money would be available for loans for 199.12 construction and equipping of facilities constituting (1) a 199.13 value added iron products plant, which may be either a new plant 199.14 or a facility incorporated into an existing plant that produces 199.15 iron upgraded to a minimum of 75 percent iron content or any 199.16 iron alloy with a total minimum metallic content of 90 percent; 199.17 or (2) a new mine or minerals processing plant for any mineral 199.18 subject to the net proceeds tax imposed under section 298.015. 199.19 A loan under this paragraph may not exceed $5,000,000 for any 199.20 facility. 199.21 (b) Additionally, the board must reserve the first 199.22 $2,000,000 of the net interest, dividends, and earnings arising 199.23 from the investment of the trust after June 30, 1996, to be used 199.24 for additional grants for the purposes set forth in paragraph 199.25 (a). This amount must be reserved until it is used for the 199.26 grantsor until June 30, 1999, whichever is earlier. 199.27 (c) Additionally, the board may recommend that up to 199.28 $5,500,000 from the corpus of the trust may be used for 199.29 additional grants for the purposes set forth in paragraph (a). 199.30 (d) The board may require that it receive an equity 199.31 percentage in any project to which it contributes under this 199.32 section. 199.33(e) The authority to make loans and grants under this199.34subdivision terminates June 30, 1999.199.35 ARTICLE 14 199.36 WATER AND SANITARY SEWER DISTRICTS 200.1 Section 1. [CEDAR LAKE AREA WATER AND SANITARY SEWER 200.2 DISTRICT; DEFINITIONS.] 200.3 Subdivision 1. [APPLICATION.] In sections 1 to 19, the 200.4 definitions in this section apply. 200.5 Subd. 2. [DISTRICT.] "Cedar lake area water and sanitary 200.6 sewer district" and "district" mean the area over which the 200.7 Cedar lake area water and sanitary sewer board has jurisdiction, 200.8 which includes the area within the city of New Prague and Helena 200.9 and Cedar Lake townships in Scott county. The district shall 200.10 precisely describe the area over which it has jurisdiction by a 200.11 metes and bounds description in the comprehensive plan adopted 200.12 pursuant to section 5. The territory may not be larger than the 200.13 area encompassed by the Cedar Lake improvement district, but it 200.14 may be smaller and the area may include a route along public 200.15 rights-of-way from Cedar Lake to the city of New Prague along 200.16 which the sewer main is laid. 200.17 Subd. 3. [BOARD.] "Water and sanitary sewer board" or 200.18 "board" means the Cedar lake area water and sanitary sewer board 200.19 established for the district as provided in subdivision 2. 200.20 Subd. 4. [PERSON.] "Person" means an individual, 200.21 partnership, corporation, limited liability company, 200.22 cooperative, or other organization or entity, public or private. 200.23 Subd. 5. [LOCAL GOVERNMENTAL UNITS.] "Local governmental 200.24 units" or "governmental units" means Scott county, the city of 200.25 New Prague, and Helena and Cedar Lake Townships in Scott county. 200.26 Subd. 6. [ACQUISITION; BETTERMENT.] "Acquisition" and 200.27 "betterment" have the meanings given in Minnesota Statutes, 200.28 section 475.51. 200.29 Subd. 7. [AGENCY.] "Agency" means the Minnesota pollution 200.30 control agency created in Minnesota Statutes, section 116.02. 200.31 Subd. 8. [SEWAGE.] "Sewage" means all liquid or 200.32 water-carried waste products from whatever sources derived, 200.33 together with any groundwater infiltration and surface water as 200.34 may be present. 200.35 Subd. 9. [POLLUTION OF WATER; SEWER SYSTEM.] "Pollution of 200.36 water" and "sewer system" have the meanings given in Minnesota 201.1 Statutes, section 115.01. 201.2 Subd. 10. [TREATMENT WORKS; DISPOSAL SYSTEM.] "Treatment 201.3 works" and "disposal system" have the meanings given in 201.4 Minnesota Statutes, section 115.01. 201.5 Subd. 11. [INTERCEPTOR.] "Interceptor" means a sewer and 201.6 its necessary appurtenances, including but not limited to mains, 201.7 pumping stations, and sewage flow-regulating and -measuring 201.8 stations, that is: 201.9 (1) designed for or used to conduct sewage originating in 201.10 more than one local governmental unit; 201.11 (2) designed or used to conduct all or substantially all 201.12 the sewage originating in a single local governmental unit from 201.13 a point of collection in that unit to an interceptor or 201.14 treatment works outside that unit; or 201.15 (3) determined by the board to be a major collector of 201.16 sewage used or designed to serve a substantial area in the 201.17 district. 201.18 Subd. 12. [DISTRICT DISPOSAL SYSTEM.] "District disposal 201.19 system" means any and all interceptors or treatment works owned, 201.20 constructed, or operated by the board unless designated by the 201.21 board as local water and sanitary sewer facilities. 201.22 Subd. 13. [MUNICIPALITY.] "Municipality" means any town or 201.23 home rule charter or statutory city. 201.24 Subd. 14. [TOTAL COSTS.] "Total costs of acquisition and 201.25 betterment" and "costs of acquisition and betterment" mean all 201.26 acquisition and betterment expenses permitted to be financed out 201.27 of stopped bond proceeds issued in accordance with section 13, 201.28 whether or not the expenses are in fact financed out of the bond 201.29 proceeds. 201.30 Subd. 15. [CURRENT COSTS.] "Current costs of acquisition, 201.31 betterment, and debt service" means interest and principal 201.32 estimated to be due during the budget year on bonds issued to 201.33 finance the acquisition and betterment and all other costs of 201.34 acquisition and betterment estimated to be paid during the year 201.35 from funds other than bond proceeds and federal or state grants. 201.36 Subd. 16. [RESIDENT.] "Resident" means the owner of a 202.1 dwelling located in the district and receiving water or sewer 202.2 service. 202.3 Sec. 2. [WATER AND SANITARY SEWER BOARD.] 202.4 Subdivision 1. [ESTABLISHMENT.] A water and sanitary sewer 202.5 district is established in Helena and Cedar Lake townships and 202.6 the city of New Prague in Scott county, to be known as the Cedar 202.7 lake area water and sanitary sewer district. The water and 202.8 sewer district is under the control and management of the Cedar 202.9 lake area water and sanitary sewer board. The board is 202.10 established as a public corporation and political subdivision of 202.11 the state with perpetual succession and all the rights, powers, 202.12 privileges, immunities, and duties granted to or imposed upon a 202.13 municipal corporation, as provided in sections 1 to 19. 202.14 Subd. 2. [MEMBERS AND SELECTION.] The board is composed of 202.15 seven members selected as provided in this subdivision. Each of 202.16 the town boards of the townships shall meet to appoint two 202.17 residents to the water and sanitary sewer board. The township 202.18 appointees must live on Cedar lake and must be served by the 202.19 system. One member must be selected by the city of New Prague. 202.20 Two members must be selected by the Scott county board of 202.21 commissioners. Each member has one vote. The first terms are 202.22 as follows: two for one year, two for two years, and three for 202.23 three years, fixed by lot at the district's first meeting. 202.24 Thereafter, all terms are for three years. 202.25 Subd. 3. [TIME LIMITS FOR SELECTION.] The board members 202.26 must be selected as provided in subdivision 2 within 60 days 202.27 after sections 1 to 19 are effective. The successor to each 202.28 board member must be selected at any time within 60 days before 202.29 the expiration of the member's term in the same manner as the 202.30 predecessor was selected. A vacancy on the board must be filled 202.31 within 60 days after it occurs. 202.32 Subd. 4. [VACANCIES.] If the office of a board member 202.33 becomes vacant, the vacancy must be filled for the unexpired 202.34 term in the manner provided for selection of the member who 202.35 vacated the office. The office is deemed vacant under the 202.36 conditions specified in Minnesota Statutes, section 351.02. 203.1 Subd. 5. [REMOVAL.] A board member may be removed by the 203.2 unanimous vote of the governing body appointing the member, with 203.3 or without cause, or for malfeasance or nonfeasance in the 203.4 performance of official duties as provided by Minnesota 203.5 Statutes, sections 351.14 to 351.23. 203.6 Subd. 6. [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A 203.7 certificate of selection of every board member selected under 203.8 subdivision 2 stating the term for which selected, must be made 203.9 by the respective town clerks. The certificates, with the 203.10 approval appended by other authority, if required, must be filed 203.11 with the secretary of state. Counterparts thereof must be 203.12 furnished to the board member and the secretary of the board. 203.13 Each member shall qualify by taking and subscribing the oath of 203.14 office prescribed by the Minnesota Constitution, article 5, 203.15 section 8. The oath, duly certified by the official 203.16 administering the same, must be filed with the secretary of 203.17 state and the secretary of the board. 203.18 Subd. 7. [BOARD MEMBERS' COMPENSATION.] Each board member, 203.19 except the chair, may be paid a per diem compensation in 203.20 accordance with the board's bylaws for meetings and for other 203.21 services as are specifically authorized by the board, not to 203.22 exceed $1,000 in any one year. The chair may be paid a per diem 203.23 compensation in accordance with the board's bylaws for meetings 203.24 and for other services specifically authorized by the board, not 203.25 to exceed $1,500 in any one year. All members of the board must 203.26 be reimbursed for all reasonable and necessary expenses actually 203.27 incurred in the performance of duties. 203.28 Sec. 3. [GENERAL PROVISIONS FOR ORGANIZATION AND OPERATION 203.29 OF BOARD.] 203.30 Subdivision 1. [ORGANIZATION; OFFICERS; MEETINGS; 203.31 SEAL.] After the selection and qualification of all board 203.32 members, the board must meet to organize the board at the call 203.33 of any two board members, upon seven days' notice by registered 203.34 mail to the remaining board members, at a time and place within 203.35 the district specified in the notice. A majority of the members 203.36 is a quorum at that meeting and all other meetings of the board, 204.1 but a lesser number may meet and adjourn from time to time and 204.2 compel the attendance of absent members. At the first meeting 204.3 the board shall select its officers and conduct other 204.4 organizational business as may be necessary. Thereafter the 204.5 board shall meet regularly at the time and place that the board 204.6 designates by resolution. Special meetings may be held at any 204.7 time upon call of the chair or any two members, upon written 204.8 notice sent by mail to each member at least three days before 204.9 the meeting, or upon other notice as the board by resolution may 204.10 provide, or without notice if each member is present or files 204.11 with the secretary a written consent to the meeting either 204.12 before or after the meeting. Except as otherwise provided in 204.13 sections 1 to 19, any action within the authority of the board 204.14 may be taken by the affirmative vote of a majority of the board 204.15 and may be taken by regular or adjourned regular meeting or at a 204.16 duly held special meeting, but in any case only if a quorum is 204.17 present. Meetings of the board must be open to the public. The 204.18 board may adopt a seal, which must be officially and judicially 204.19 noticed, to authenticate instruments executed by its authority, 204.20 but omission of the seal does not affect the validity of any 204.21 instrument. 204.22 Subd. 2. [CHAIR.] The board shall elect a chair from its 204.23 membership. The term of the first chair of the board expires on 204.24 January 1, 2001, and the terms of successor chairs expire on 204.25 January 1 of each succeeding year. The chair shall preside at 204.26 all meetings of the board, if present, and shall perform all 204.27 other duties and functions usually incumbent upon such an 204.28 officer, and all administrative functions assigned to the chair 204.29 by the board. The board shall elect a vice-chair from its 204.30 membership to act for the chair during temporary absence or 204.31 disability. 204.32 Subd. 3. [SECRETARY AND TREASURER.] The board shall select 204.33 persons who may, but need not be, members of the board, to act 204.34 as its secretary and treasurer. The two offices may be combined. 204.35 The secretary and treasurer shall hold office at the pleasure of 204.36 the board, subject to the terms of any contract of employment 205.1 that the board may enter into with the secretary or treasurer. 205.2 The secretary shall record the minutes of all meetings of the 205.3 board, and be the custodian of all books and records of the 205.4 board except those that the board entrusts to the custody of a 205.5 designated employee. The treasurer is the custodian of all 205.6 money received by the board except as the board otherwise 205.7 entrusts to the custody of a designated employee. The board may 205.8 appoint a deputy to perform any and all functions of either the 205.9 secretary or the treasurer. A secretary or treasurer who is not 205.10 a member of the board or a deputy of either does not have the 205.11 right to vote. 205.12 Subd. 4. [PUBLIC EMPLOYEES.] The executive director and 205.13 other persons employed by the district are public employees and 205.14 have all the rights and duties conferred on public employees 205.15 under Minnesota Statutes, sections 179A.01 to 179A.25. The 205.16 board may elect to have employees become members of either the 205.17 public employees retirement association or the Minnesota state 205.18 retirement system. The compensation and conditions of 205.19 employment of the employees must be governed by rules applicable 205.20 to state employees in the classified service and to the 205.21 provisions of Minnesota Statutes, chapter 15A. 205.22 Subd. 5. [PROCEDURES.] The board shall adopt resolutions 205.23 or bylaws establishing procedures for board action, personnel 205.24 administration, keeping records, approving claims, authorizing 205.25 or making disbursements, safekeeping funds, and auditing all 205.26 financial operations of the board. 205.27 Subd. 6. [SURETY BONDS AND INSURANCE.] The board may 205.28 procure surety bonds for its officers and employees, in amounts 205.29 deemed necessary to ensure proper performance of their duties 205.30 and proper accounting for funds in their custody. It may 205.31 procure insurance against risks to property and liability of the 205.32 board and its officers, agents, and employees for personal 205.33 injuries or death and property damage and destruction, in 205.34 amounts deemed necessary or desirable, with the force and effect 205.35 stated in Minnesota Statutes, chapter 466. 205.36 Sec. 4. [GENERAL POWERS OF BOARD.] 206.1 Subdivision 1. [SCOPE.] The board has all powers necessary 206.2 or convenient to discharge the duties imposed upon it by law. 206.3 The powers include those specified in this section, but the 206.4 express grant or enumeration of powers does not limit the 206.5 generality or scope of the grant of powers contained in this 206.6 subdivision. 206.7 Subd. 2. [SUIT.] The board may sue or be sued. 206.8 Subd. 3. [CONTRACT.] The board may enter into any contract 206.9 necessary or proper for the exercise of its powers or the 206.10 accomplishment of its purposes. 206.11 Subd. 4. [GIFTS, GRANTS, LOANS.] The board may accept 206.12 gifts, apply for and accept grants or loans of money or other 206.13 property from the United States, the state, or any person for 206.14 any of its purposes, enter into any agreement required in 206.15 connection with them, and hold, use, and dispose of the money or 206.16 property in accordance with the terms of the gift, grant, loan, 206.17 or agreement relating to it. With respect to loans or grants of 206.18 funds or real or personal property or other assistance from any 206.19 state or federal government or its agency or instrumentality, 206.20 the board may contract to do and perform all acts and things 206.21 required as a condition or consideration for the gift, grant, or 206.22 loan pursuant to state or federal law or regulations, whether or 206.23 not included among the powers expressly granted to the board in 206.24 sections 1 to 19. 206.25 Subd. 5. [COOPERATIVE ACTION.] The board may act under 206.26 Minnesota Statutes, section 471.59, or any other appropriate law 206.27 providing for joint or cooperative action between governmental 206.28 units. 206.29 Subd. 6. [STUDIES AND INVESTIGATIONS.] The board may 206.30 conduct research studies and programs, collect and analyze data, 206.31 prepare reports, maps, charts, and tables, and conduct all 206.32 necessary hearings and investigations in connection with the 206.33 design, construction, and operation of the district disposal 206.34 system. 206.35 Subd. 7. [EMPLOYEES, TERMS.] The board may employ on terms 206.36 it deems advisable, persons or firms performing engineering, 207.1 legal, or other services of a professional nature; require any 207.2 employee to obtain and file with it an individual bond or 207.3 fidelity insurance policy; and procure insurance in amounts it 207.4 deems necessary against liability of the board or its officers 207.5 or both, for personal injury or death and property damage or 207.6 destruction, with the force and effect stated in Minnesota 207.7 Statutes, chapter 466, and against risks of damage to or 207.8 destruction of any of its facilities, equipment, or other 207.9 property as it deems necessary. 207.10 Subd. 8. [PROPERTY RIGHTS, POWERS.] The board may acquire 207.11 by purchase, lease, condemnation, gift, or grant, any real or 207.12 personal property including positive and negative easements and 207.13 water and air rights, and it may construct, enlarge, improve, 207.14 replace, repair, maintain, and operate any interceptor, 207.15 treatment works, or water facility determined to be necessary or 207.16 convenient for the collection and disposal of sewage in the 207.17 district. Any local governmental unit and the commissioners of 207.18 transportation and natural resources are authorized to convey to 207.19 or permit the use of any of the above-mentioned facilities owned 207.20 or controlled by it, by the board, subject to the rights of the 207.21 holders of any bonds issued with respect to those facilities, 207.22 with or without compensation, without an election or approval by 207.23 any other governmental unit or agency. All powers conferred by 207.24 this subdivision may be exercised both within or without the 207.25 district as may be necessary for the exercise by the board of 207.26 its powers or the accomplishment of its purposes. The board may 207.27 hold, lease, convey, or otherwise dispose of the above-mentioned 207.28 property for its purposes upon the terms and in the manner it 207.29 deems advisable. Unless otherwise provided, the right to 207.30 acquire lands and property rights by condemnation may be 207.31 exercised only in accordance with Minnesota Statutes, sections 207.32 117.011 to 117.232, and applies to any property or interest in 207.33 the property owned by any local governmental unit. Property 207.34 devoted to an actual public use at the time, or held to be 207.35 devoted to such a use within a reasonable time, must not be so 207.36 acquired unless a court of competent jurisdiction determines 208.1 that the use proposed by the board is paramount to the existing 208.2 use. Except in the case of property in actual public use, the 208.3 board may take possession of any property on which condemnation 208.4 proceedings have been commenced at any time after the issuance 208.5 of a court order appointing commissioners for its condemnation. 208.6 Subd. 9. [RELATIONSHIP TO OTHER PROPERTIES.] The board may 208.7 construct or maintain its systems or facilities in, along, on, 208.8 under, over, or through public waters, streets, bridges, 208.9 viaducts, and other public rights-of-way without first obtaining 208.10 a franchise from a county or municipality having jurisdiction 208.11 over them. However, the facilities must be constructed and 208.12 maintained in accordance with the ordinances and resolutions of 208.13 the county or municipality relating to constructing, installing, 208.14 and maintaining similar facilities on public properties and must 208.15 not unnecessarily obstruct the public use of those rights-of-way. 208.16 Subd. 10. [DISPOSAL OF PROPERTY.] The board may sell, 208.17 lease, or otherwise dispose of any real or personal property 208.18 acquired by it which is no longer required for accomplishment of 208.19 its purposes. The property may be sold in the manner provided 208.20 by Minnesota Statutes, section 469.065, insofar as practical. 208.21 The board may give notice of sale as it deems appropriate. When 208.22 the board determines that any property or any part of the 208.23 district disposal system acquired from a local governmental unit 208.24 without compensation is no longer required but is required as a 208.25 local facility by the governmental unit from which it was 208.26 acquired, the board may by resolution transfer it to that 208.27 governmental unit. 208.28 Subd. 11. [AGREEMENTS WITH OTHER GOVERNMENTAL UNITS.] The 208.29 board may contract with the United States or any agency thereof, 208.30 any state or agency thereof, or any regional public planning 208.31 body in the state with jurisdiction over any part of the 208.32 district, or any other municipal or public corporation, or 208.33 governmental subdivision or agency or political subdivision in 208.34 any state, for the joint use of any facility owned by the board 208.35 or such entity, for the operation by that entity of any system 208.36 or facility of the board, or for the performance on the board's 209.1 behalf of any service, including but not limited to planning, on 209.2 terms as may be agreed upon by the contracting parties. Unless 209.3 designated by the board as a local water and sanitary sewer 209.4 facility, any treatment works or interceptor jointly used, or 209.5 operated on behalf of the board, as provided in this 209.6 subdivision, is deemed to be operated by the board for purposes 209.7 of including those facilities in the district disposal system. 209.8 Sec. 5. [COMPREHENSIVE PLAN.] 209.9 Subdivision 1. [BOARD PLAN AND PROGRAM.] The board shall 209.10 adopt a comprehensive plan for the collection, treatment, and 209.11 disposal of sewage in the district for a designated period the 209.12 board deems proper and reasonable. The board shall prepare and 209.13 adopt subsequent comprehensive plans for the collection, 209.14 treatment, and disposal of sewage in the district for each 209.15 succeeding designated period as the board deems proper and 209.16 reasonable. All comprehensive plans of the district shall be 209.17 subject to the planning and zoning authority of Scott county and 209.18 in conformance with all planning and zoning ordinances of Scott 209.19 county. The first plan, as modified by the board, and any 209.20 subsequent plan shall take into account the preservation and 209.21 best and most economic use of water and other natural resources 209.22 in the area; the preservation, use, and potential for use of 209.23 lands adjoining waters of the state to be used for the disposal 209.24 of sewage; and the impact the disposal system will have on 209.25 present and future land use in the area affected. In no case 209.26 shall the comprehensive plan provide for more than 325 209.27 connections to the disposal system. All connections must be 209.28 charged a full assessment. Connections made after the initial 209.29 assessment period ends must be charged an amount equal to the 209.30 initial assessment plus an adjustment for inflation and plus any 209.31 other charges determined to be reasonable and necessary by the 209.32 board. Deferred assessments may be permitted, as provided for 209.33 in Minnesota Statutes, chapter 429. The plans shall include the 209.34 general location of needed interceptors and treatment works, a 209.35 description of the area that is to be served by the various 209.36 interceptors and treatment works, a long-range capital 210.1 improvements program, and any other details as the board deems 210.2 appropriate. In developing the plans, the board shall consult 210.3 with persons designated for the purpose by governing bodies of 210.4 any governmental unit within the district to represent the 210.5 entities and shall consider the data, resources, and input 210.6 offered to the board by the entities and any planning agency 210.7 acting on behalf of one or more of the entities. Each 210.8 comprehensive plan of the district must be approved by the 210.9 metropolitan council prior to implementation. Each plan, when 210.10 adopted, must be followed in the district and may be revised as 210.11 often as the board deems necessary. 210.12 Subd. 2. [COMPREHENSIVE PLANS; HEARING.] Before adopting 210.13 any subsequent comprehensive plan, the board shall hold a public 210.14 hearing on the proposed plan at a time and place in the district 210.15 that it selects. The hearing may be continued from time to 210.16 time. Not less than 45 days before the hearing, the board shall 210.17 publish notice of the hearing in a newspaper having general 210.18 circulation in the district, stating the date, time, and place 210.19 of the hearing, and the place where the proposed plan may be 210.20 examined by any interested person. At the hearing, all 210.21 interested persons must be permitted to present their views on 210.22 the plan. 210.23 Sec. 6. [POWERS TO ISSUE OBLIGATIONS AND IMPOSE SPECIAL 210.24 ASSESSMENTS.] 210.25 The Cedar lake area water and sanitary sewer board, in 210.26 order to implement the powers granted under sections 1 to 19 to 210.27 establish, maintain, and administer the Cedar lake area water 210.28 and sanitary sewer district, may issue obligations and impose 210.29 special assessments against benefited property within the limits 210.30 of the district benefited by facilities constructed under 210.31 sections 1 to 19 in the manner provided for local governments by 210.32 Minnesota Statutes, chapter 429. 210.33 Sec. 7. [SYSTEM EXPANSION; APPLICATION TO CITIES.] 210.34 The authority of the water and sanitary sewer board to 210.35 establish water or sewer or combined water and sewer systems 210.36 under this section extends to areas within the Cedar lake area 211.1 water and sanitary sewer district organized into cities when 211.2 requested by resolution of the governing body of the affected 211.3 city or when ordered by the Minnesota pollution control agency 211.4 after notice and hearing. For the purpose of any petition filed 211.5 or special assessment levied with respect to any system, the 211.6 entire area to be served within a city must be treated as if it 211.7 were owned by a single person, and the governing body shall 211.8 exercise all the rights and be subject to all the duties of an 211.9 owner of the area, and shall have power to provide for the 211.10 payment of all special assessments and other charges imposed 211.11 upon the area with respect to the system by the appropriation of 211.12 money, the collection of service charges, or the levy of taxes, 211.13 which shall be subject to no limitation of rate or amount. 211.14 Sec. 8. [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 211.15 Subdivision 1. [POWERS.] In addition to all other powers 211.16 conferred upon the board in sections 1 to 19, it has the powers 211.17 specified in this section. 211.18 Subd. 2. [DISCHARGE OF TREATED SEWAGE.] The board may 211.19 discharge the effluent from any treatment works operated by it 211.20 into any waters of the state, subject to approval of the agency 211.21 if required and in accordance with any effluent or water quality 211.22 standards lawfully adopted by the agency, any interstate agency, 211.23 or any federal agency having jurisdiction. 211.24 Subd. 3. [UTILIZATION OF DISTRICT SYSTEM.] The board may 211.25 require any person or local governmental unit to provide for the 211.26 discharge of any sewage, directly or indirectly, into the 211.27 district disposal system, or to connect any disposal system or a 211.28 part of it with the district disposal system wherever reasonable 211.29 opportunity for connection is provided; may regulate the manner 211.30 in which the connections are made; may require any person or 211.31 local governmental unit discharging sewage into the disposal 211.32 system to provide preliminary treatment for it; may prohibit the 211.33 discharge into the district disposal system of any substance 211.34 that it determines will or may be harmful to the system or any 211.35 persons operating it; and may require any local governmental 211.36 unit to discontinue the acquisition, betterment, or operation of 212.1 any facility for the unit's disposal system wherever and so far 212.2 as adequate service is or will be provided by the district 212.3 disposal system. 212.4 Subd. 4. [SYSTEM OF COST RECOVERY TO COMPLY WITH 212.5 APPLICABLE REGULATIONS.] Any charges, connection fees, or other 212.6 cost-recovery techniques imposed on persons discharging sewage 212.7 directly or indirectly into the district disposal system must 212.8 comply with applicable state and federal law, including state 212.9 and federal regulations governing grant applications. 212.10 Sec. 9. [BUDGET.] 212.11 (a) The board shall prepare and adopt, on or before October 212.12 1 in 2000 and each year thereafter, a budget showing for the 212.13 following calendar year or other fiscal year determined by the 212.14 board, sometimes referred to in sections 1 to 19 as the budget 212.15 year, estimated receipts of money from all sources, including 212.16 but not limited to payments by each local governmental unit, 212.17 federal or state grants, taxes on property, and funds on hand at 212.18 the beginning of the year, and estimated expenditures for: 212.19 (1) costs of operation, administration, and maintenance of 212.20 the district disposal system; 212.21 (2) cost of acquisition and betterment of the district 212.22 disposal system; and 212.23 (3) debt service, including principal and interest, on 212.24 general obligation bonds and certificates issued pursuant to 212.25 section 13, and any money judgments entered by a court of 212.26 competent jurisdiction. 212.27 (b) Expenditures within these general categories, and any 212.28 other categories as the board may from time to time determine, 212.29 must be itemized in detail as the board prescribes. The board 212.30 and its officers, agents, and employees must not spend money for 212.31 any purpose other than debt service without having set forth the 212.32 expense in the budget nor in excess of the amount set forth in 212.33 the budget for it. No obligation to make an expenditure of the 212.34 above-mentioned type is enforceable except as the obligation of 212.35 the person or persons incurring it. The board may amend the 212.36 budget at any time by transferring from one purpose to another 213.1 any sums except money for debt service and bond proceeds or by 213.2 increasing expenditures in any amount by which actual cash 213.3 receipts during the budget year exceed the total amounts 213.4 designated in the original budget. The creation of any 213.5 obligation under section 13, or the receipt of any federal or 213.6 state grant is a sufficient budget designation of the proceeds 213.7 for the purpose for which it is authorized, and of the tax or 213.8 other revenue pledged to pay the obligation and interest on it, 213.9 whether or not specifically included in any annual budget. 213.10 Sec. 10. [ALLOCATION OF COSTS.] 213.11 Subdivision 1. [DEFINITION OF CURRENT COSTS.] The 213.12 estimated cost of administration, operation, maintenance, and 213.13 debt service of the district disposal system to be paid by the 213.14 board in each fiscal year and the estimated costs of acquisition 213.15 and betterment of the system that are to be paid during the year 213.16 from funds other than state or federal grants and bond proceeds 213.17 and all other previously unallocated payments made by the board 213.18 pursuant to sections 1 to 19 to be allocated in the fiscal year 213.19 are referred to as current costs and must be allocated by the 213.20 board as provided in subdivision 2 in the budget for that year. 213.21 Subd. 2. [METHOD OF ALLOCATION OF CURRENT COSTS.] Current 213.22 costs must be allocated in the district on an equitable basis as 213.23 the board may determine by resolution to be in the best 213.24 interests of the district. The adoption or revision of any 213.25 method of allocation used by the board must be by the 213.26 affirmative vote of at least two-thirds of the members of the 213.27 board. 213.28 Sec. 11. [TAX LEVIES.] 213.29 To accomplish any duty imposed on it the board may, in 213.30 addition to the powers granted in sections 1 to 19 and in any 213.31 other law or charter, exercise the powers granted any 213.32 municipality by Minnesota Statutes, chapters 117, 412, 429, 475, 213.33 sections 115.46, 444.075, and 471.59, with respect to the area 213.34 in the district. The board may levy taxes upon all taxable 213.35 property in the district for all or a part of the amount payable 213.36 to the board, pursuant to section 10, to be assessed and 214.1 extended as a tax upon that taxable property by the county 214.2 auditor for the next calendar year, free from any limit of rate 214.3 or amount imposed by law or charter. The tax must be collected 214.4 and remitted in the same manner as other general taxes. 214.5 Sec. 12. [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 214.6 Subdivision 1. [PUBLIC HEARING REQUIREMENT ON SPECIFIC 214.7 PROJECT.] Before the board orders any project involving the 214.8 acquisition or betterment of any interceptor or treatment works, 214.9 all or a part of the cost of which will be allocated pursuant to 214.10 section 10 as current costs, the board must hold a public 214.11 hearing on the proposed project. The hearing must be held 214.12 following two publications in a newspaper having general 214.13 circulation in the district, stating the time and place of the 214.14 hearing, the general nature and location of the project, the 214.15 estimated total cost of acquisition and betterment, that portion 214.16 of costs estimated to be paid out of federal and state grants, 214.17 and that portion of costs estimated to be allocated. The 214.18 estimates must be best available at the time of the meeting and 214.19 if costs exceed the estimate, the project cannot proceed until 214.20 an additional public hearing is held, with notice as required at 214.21 the initial meeting. The two publications must be a week apart 214.22 and the hearing at least three days after the last publication. 214.23 Not less than 45 days before the hearing, notice of the hearing 214.24 must also be mailed to each clerk of all local governmental 214.25 units in the district, but failure to give mailed notice or any 214.26 defects in the notice does not invalidate the proceedings. The 214.27 project may include all or part of one or more interceptors or 214.28 treatment works. A hearing must not be held on a project unless 214.29 the project is within the area covered by the comprehensive plan 214.30 adopted by the board under section 5, except that the hearing 214.31 may be held simultaneously with a hearing on a comprehensive 214.32 plan. A hearing is not required with respect to a project, no 214.33 part of the costs of which are to be allocated as the current 214.34 costs of acquisition, betterment, and debt service. 214.35 Subd. 2. [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 214.36 board proposes to assess against benefited property within the 215.1 district all or any part of the allocable costs of the project 215.2 as provided in subdivision 5, the board shall, not less than two 215.3 weeks before the hearing provided for in subdivision 1, cause 215.4 mailed notice of the hearing to be given to the owner of each 215.5 parcel within the area proposed to be specially assessed and 215.6 shall also give two weeks' published notice of the hearing. The 215.7 notice of hearing must contain the same information provided in 215.8 the notice published by the board pursuant to subdivision 1, and 215.9 a description of the area proposed to be assessed. For the 215.10 purpose of giving mailed notice, owners are those shown to be on 215.11 the records of the county auditor or, in any county where tax 215.12 statements are mailed by the county treasurer, on the records of 215.13 the county treasurer; but other appropriate records may be used 215.14 for this purpose. For properties that are tax exempt or subject 215.15 to taxation on a gross earnings basis and not listed on the 215.16 records of the county auditor or the county treasurer, the 215.17 owners must be ascertained by any practicable means and mailed 215.18 notice given them as herein provided. Failure to give mailed 215.19 notice or any defects in the notice does not invalidate the 215.20 proceedings of the board. 215.21 Subd. 3. [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before 215.22 adoption of the resolution calling for a hearing under this 215.23 section, the board shall secure from the district engineer or 215.24 some other competent person of the board's selection a report 215.25 advising it in a preliminary way as to whether the proposed 215.26 project is feasible and whether it should be made as proposed or 215.27 in connection with some other project and the estimated costs of 215.28 the project as recommended. No error or omission in the report 215.29 invalidates the proceeding. The board may also take other steps 215.30 before the hearing, as will in its judgment provide helpful 215.31 information in determining the desirability and feasibility of 215.32 the project, including but not limited to preparation of plans 215.33 and specifications and advertisement for bids on them. The 215.34 hearing may be adjourned from time to time and a resolution 215.35 ordering the project may be adopted at any time within six 215.36 months after the date of hearing. In ordering the project the 216.1 board may reduce but not increase the extent of the project as 216.2 stated in the notice of hearing and shall find that the project 216.3 as ordered is in accordance with the comprehensive plan and 216.4 program adopted by the board pursuant to section 5. 216.5 Subd. 4. [EMERGENCY ACTION.] If the board by resolution 216.6 adopted by the affirmative vote of not less than two-thirds of 216.7 its members determines that an emergency exists requiring the 216.8 immediate purchase of materials or supplies or the making of 216.9 emergency repairs, it may order the purchase of those supplies 216.10 and materials and the making of the repairs before any hearing 216.11 required under this section. The board must set as early a date 216.12 as practicable for the hearing at the time it declares the 216.13 emergency. All other provisions of this section must be 216.14 followed in giving notice of and conducting the hearing. 216.15 Nothing in this subdivision prevents the board or its agents 216.16 from purchasing maintenance supplies or incurring maintenance 216.17 costs without regard to the requirements of this section. 216.18 Subd. 5. [POWER OF THE BOARD TO SPECIALLY ASSESS.] The 216.19 board may specially assess all or any part of the costs of 216.20 acquisition and betterment as provided in this subdivision, of 216.21 any project ordered under this section. The special assessments 216.22 must be levied in accordance with Minnesota Statutes, sections 216.23 429.051 to 429.081, except as otherwise provided in this 216.24 subdivision. No other provisions of Minnesota Statutes, chapter 216.25 429, apply. For purposes of levying the special assessments, 216.26 the hearing on the project required in subdivision 1 serves as 216.27 the hearing on the making of the original improvement provided 216.28 for by Minnesota Statutes, section 429.051. The area assessed 216.29 may be less than but may not exceed the area proposed to be 216.30 assessed as stated in the notice of hearing on the project 216.31 provided for in subdivision 2. 216.32 Sec. 13. [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 216.33 Subdivision 1. [BUDGET ANTICIPATION CERTIFICATES OF 216.34 INDEBTEDNESS.] At any time after adoption of its annual budget 216.35 and in anticipation of the collection of tax and other revenues 216.36 estimated and set forth by the board in the budget, except in 217.1 the case of deficiency taxes levied under this subdivision and 217.2 taxes levied for the payment of certificates issued under 217.3 subdivision 2, the board may, by resolution, authorize the 217.4 issuance, negotiation, and sale, in accordance with subdivision 217.5 4 in the form and manner and upon terms it determines, of its 217.6 negotiable general obligation certificates of indebtedness in 217.7 aggregate principal amounts not exceeding 50 percent of the 217.8 total amount of tax collections and other revenues, and maturing 217.9 not later than three months after the close of the budget year 217.10 in which issued. The proceeds of the sale of the certificates 217.11 must be used solely for the purposes for which the tax 217.12 collections and other revenues are to be expended under the 217.13 budget. 217.14 All the tax collections and other revenues included in the 217.15 budget for the budget year, after the expenditure of the tax 217.16 collections and other revenues in accordance with the budget, 217.17 must be irrevocably pledged and appropriated to a special fund 217.18 to pay the principal and interest on the certificates when due. 217.19 If for any reason the tax collections and other revenues are 217.20 insufficient to pay the certificates and interest when due, the 217.21 board shall levy a tax in the amount of the deficiency on all 217.22 taxable property in the district and shall appropriate this 217.23 amount when received to the special fund. 217.24 Subd. 2. [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 217.25 any budget year the receipts of tax and other revenues should 217.26 for some unforeseen cause become insufficient to pay the board's 217.27 current expenses, or if any public emergency should subject it 217.28 to the necessity of making extraordinary expenditures, the board 217.29 may by resolution authorize the issuance, negotiation, and sale, 217.30 in accordance with subdivision 4 in the form and manner and upon 217.31 the terms and conditions it determines, of its negotiable 217.32 general obligation certificates of indebtedness in an amount 217.33 sufficient to meet the deficiency. The board shall levy on all 217.34 taxable property in the district a tax sufficient to pay the 217.35 certificates and interest on the certificates and shall 217.36 appropriate all collections of the tax to a special fund created 218.1 for the payment of the certificates and the interest on them. 218.2 Certificates issued under this subdivision mature not later than 218.3 April 1 in the year following the year in which the tax is 218.4 collectible. 218.5 Subd. 3. [GENERAL OBLIGATION BONDS.] The board may by 218.6 resolution authorize the issuance of general obligation bonds 218.7 for the acquisition or betterment of any part of the district 218.8 disposal system, including but without limitation the payment of 218.9 interest during construction and for a reasonable period 218.10 thereafter, or for the refunding of outstanding bonds, 218.11 certificates of indebtedness, or judgments. The board shall 218.12 pledge its full faith and credit and taxing power for the 218.13 payment of the bonds and shall provide for the issuance and sale 218.14 and for the security of the bonds in the manner provided in 218.15 Minnesota Statutes, chapter 475. The board has the same powers 218.16 and duties as a municipality issuing bonds under that law, 218.17 except that no election is required and the debt limitations of 218.18 Minnesota Statutes, chapter 475, do not apply to the bonds. The 218.19 board may also pledge for the payment of the bonds and deduct 218.20 from the amount of any tax levy required under Minnesota 218.21 Statutes, section 475.61, subdivision 1, and any revenues 218.22 receivable under any state and federal grants anticipated by the 218.23 board and may covenant to refund the bonds if and when and to 218.24 the extent that for any reason the revenues, together with other 218.25 funds available and appropriated for that purpose, are not 218.26 sufficient to pay all principal and interest due or about to 218.27 become due, provided that the revenues have not been anticipated 218.28 by the issuance of certificates under subdivision 1. 218.29 Subd. 4. [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.] 218.30 Certificates issued under subdivisions 1 and 2 may be issued and 218.31 sold by negotiation, without public sale, and may be sold at a 218.32 price equal to the percentage of the par value of the 218.33 certificates, plus accrued interest, and bearing interest at the 218.34 rate determined by the board. An election is not required to 218.35 authorize the issuance of the certificates. The certificates 218.36 must bear the same rate of interest after maturity as before and 219.1 the full faith and credit and taxing power of the board must be 219.2 pledged to the payment of the certificates. 219.3 Sec. 14. [DEPOSITORIES.] 219.4 The board shall designate one or more national or state 219.5 banks, or trust companies authorized to do a banking business, 219.6 as official depositories for money of the board, and shall 219.7 require the treasurer to deposit all or a part of the money in 219.8 those institutions. The designation must be in writing and set 219.9 forth all the terms and conditions upon which the deposits are 219.10 made, and must be signed by the chair and treasurer and made a 219.11 part of the minutes of the board. 219.12 Sec. 15. [MONEY, ACCOUNTS, AND INVESTMENTS.] 219.13 Subdivision 1. [RECEIPT AND APPLICATION.] Money received 219.14 by the board must be deposited or invested by the treasurer and 219.15 disposed of as the board may direct in accordance with its 219.16 budget; provided that any money that has been pledged or 219.17 dedicated by the board to the payment of obligations or interest 219.18 on the obligations or expenses incident thereto, or for any 219.19 other specific purpose authorized by law, must be paid by the 219.20 treasurer into the fund to which it has been pledged. 219.21 Subd. 2. [FUNDS AND ACCOUNTS.] (a) The board's treasurer 219.22 shall establish funds and accounts as may be necessary or 219.23 convenient to handle the receipts and disbursements of the board 219.24 in an orderly fashion. 219.25 (b) The funds and accounts must be audited annually by a 219.26 certified public accountant at the expense of the district. 219.27 Subd. 3. [DEPOSIT AND INVESTMENT.] The money on hand in 219.28 those funds and accounts may be deposited in the official 219.29 depositories of the board or invested as provided in this 219.30 subdivision. Any amount not currently needed or required by law 219.31 to be kept in cash on deposit may be invested in obligations 219.32 authorized for the investment of municipal sinking funds by 219.33 Minnesota Statutes, section 118A.04. The money may also be held 219.34 under certificates of deposit issued by any official depository 219.35 of the board. 219.36 Subd. 4. [BOND PROCEEDS.] The use of proceeds of all bonds 220.1 issued by the board for the acquisition and betterment of the 220.2 district disposal system, and the use, other than investment, of 220.3 all money on hand in any sinking fund or funds of the board, is 220.4 governed by the provisions of Minnesota Statutes, chapter 475, 220.5 the provisions of sections 1 to 19, and the provisions of 220.6 resolutions authorizing the issuance of the bonds. When 220.7 received, the bond proceeds must be transferred to the treasurer 220.8 of the board for safekeeping, investment, and payment of the 220.9 costs for which they were issued. 220.10 Subd. 5. [AUDIT.] The board shall provide for and pay the 220.11 cost of an independent annual audit of its official books and 220.12 records by the state auditor or a public accountant authorized 220.13 to perform that function under Minnesota Statutes, chapter 6. 220.14 Sec. 16. [SERVICE CONTRACTS WITH GOVERNMENTAL ENTITIES 220.15 OUTSIDE THE JURISDICTION OF THE BOARD.] 220.16 (a) The board may contract with the United States or any 220.17 agency of the federal government, any state or its agency, or 220.18 any municipal or public corporation, governmental subdivision or 220.19 agency or political subdivision in any state, outside the 220.20 jurisdiction of the board, for furnishing services to those 220.21 entities, including but not limited to planning for and the 220.22 acquisition, betterment, operation, administration, and 220.23 maintenance of any or all interceptors, treatment works, and 220.24 local water and sanitary sewer facilities. The board may 220.25 include as one of the terms of the contract that the entity must 220.26 pay to the board an amount agreed upon as a reasonable estimate 220.27 of the proportionate share properly allocable to the entity of 220.28 costs of acquisition, betterment, and debt service previously 220.29 allocated in the district. When payments are made by entities 220.30 to the board, they must be applied in reduction of the total 220.31 amount of costs thereafter allocated in the district, on an 220.32 equitable basis as the board deems to be in the best interests 220.33 of the district, applying so far as practicable and appropriate 220.34 the criteria set forth in section 10, subdivision 2. A 220.35 municipality in the state of Minnesota may enter into a contract 220.36 and perform all acts and things required as a condition or 221.1 consideration therefor consistent with the purposes of sections 221.2 1 to 19, whether or not included among the powers otherwise 221.3 granted to the municipality by law or charter. 221.4 (b) The board shall contract with a qualified entity to 221.5 make necessary inspections of the district facilities, and to 221.6 otherwise process or assist in processing any of the work of the 221.7 district. 221.8 Sec. 17. [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES, 221.9 AND EQUIPMENT.] 221.10 When the board orders a project involving the acquisition 221.11 or betterment of a part of the district disposal system, it 221.12 shall cause plans and specifications of the project to be made, 221.13 or if previously made, to be modified, if necessary, and to be 221.14 approved by the agency if required, and after any required 221.15 approval by the agency, one or more contracts for work and 221.16 materials called for by the plans and specification may be 221.17 awarded as provided in Minnesota Statutes, section 471.345. 221.18 Sec. 18. [PROPERTY EXEMPT FROM TAXATION.] 221.19 Any properties, real or personal, owned, leased, 221.20 controlled, used, or occupied by the water and sanitary sewer 221.21 board for any purpose under sections 1 to 19 are declared to be 221.22 acquired, owned, leased, controlled, used, and occupied for 221.23 public, governmental, and municipal purposes, and are exempt 221.24 from taxation by the state or any political subdivision of the 221.25 state. The properties are subject to special assessments levied 221.26 by a political subdivision for a local improvement in amounts 221.27 proportionate to and not exceeding the special benefit received 221.28 by the properties from the improvement. 221.29 Sec. 19. [RELATION TO EXISTING LAWS.] 221.30 Sections 1 to 19 must be given full effect notwithstanding 221.31 the provisions of any law or charter inconsistent with sections 221.32 1 to 19. The powers conferred on the board under sections 1 to 221.33 19 do not in any way diminish or supersede the powers conferred 221.34 on the agency by Minnesota Statutes, chapters 115 to 116. 221.35 Sec. 20. [BANNING JUNCTION AREA WATER AND SANITARY SEWER 221.36 DISTRICT; DEFINITIONS.] 222.1 Subdivision 1. [APPLICATION.] For the purposes of sections 222.2 20 to 38, the terms defined in this section have the meanings 222.3 given them. 222.4 Subd. 2. [DISTRICT.] "Banning Junction area water and 222.5 sanitary sewer district" and "district" mean the area over which 222.6 the Banning Junction area water and sanitary sewer board has 222.7 jurisdiction, including the town of Finlayson and the city of 222.8 Finlayson in Pine county and Banning state park, but only that 222.9 part of the township described in the comprehensive plan adopted 222.10 by the board pursuant to section 24. 222.11 Subd. 3. [BOARD.] "Water and sanitary sewer board" or 222.12 "board" means the Banning Junction area water and sanitary sewer 222.13 board established for the district as provided in subdivision 2. 222.14 Subd. 4. [PERSON.] "Person" means an individual, 222.15 partnership, corporation, limited liability company, 222.16 cooperative, or other organization or entity, public or private. 222.17 Subd. 5. [LOCAL GOVERNMENTAL UNITS.] "Local governmental 222.18 units" or "governmental units" means the town of Finlayson, the 222.19 department of natural resources, and the city of Finlayson. 222.20 Subd. 6. [ACQUISITION; BETTERMENT.] "Acquisition" and 222.21 "betterment" have the meanings given in Minnesota Statutes, 222.22 chapter 475. 222.23 Subd. 7. [AGENCY.] "Agency" means the Minnesota pollution 222.24 control agency created in Minnesota Statutes, chapter 116. 222.25 Subd. 8. [SEWAGE.] "Sewage" means all liquid or 222.26 water-carried waste products from whatever sources derived, 222.27 together with any groundwater infiltration and surface water as 222.28 may be present. 222.29 Subd. 9. [POLLUTION OF WATER; SEWER SYSTEM.] "Pollution of 222.30 water" and "sewer system" have the meanings given in Minnesota 222.31 Statutes, section 115.01. 222.32 Subd. 10. [TREATMENT WORKS; DISPOSAL SYSTEM.] "Treatment 222.33 works" and "disposal system" have the meanings given in 222.34 Minnesota Statutes, section 115.01. 222.35 Subd. 11. [INTERCEPTOR.] "Interceptor" means a sewer and 222.36 its necessary appurtenances, including but not limited to mains, 223.1 pumping stations, and sewage flow-regulating and -measuring 223.2 stations, that is: 223.3 (1) designed for or used to conduct sewage originating in 223.4 more than one local governmental unit; 223.5 (2) designed or used to conduct all or substantially all 223.6 the sewage originating in a single local governmental unit from 223.7 a point of collection in that unit to an interceptor or 223.8 treatment works outside that unit; or 223.9 (3) determined by the board to be a major collector of 223.10 sewage used or designed to serve a substantial area in the 223.11 district. 223.12 Subd. 12. [DISTRICT DISPOSAL SYSTEM.] "District disposal 223.13 system" means any and all interceptors or treatment works owned, 223.14 constructed, or operated by the board unless designated by the 223.15 board as local water and sanitary sewer facilities. 223.16 Subd. 13. [MUNICIPALITY.] "Municipality" means any home 223.17 rule charter or statutory city or town. 223.18 Subd. 14. [TOTAL COSTS.] "Total costs of acquisition and 223.19 betterment" and "costs of acquisition and betterment" mean all 223.20 acquisition and betterment expenses permitted to be financed out 223.21 of stopped bond proceeds issued in accordance with section 32, 223.22 whether or not the expenses are in fact financed out of the bond 223.23 proceeds. 223.24 Subd. 15. [CURRENT COSTS.] "Current costs of acquisition, 223.25 betterment, and debt service" means interest and principal 223.26 estimated to be due during the budget year on bonds issued to 223.27 finance the acquisition and betterment and all other costs of 223.28 acquisition and betterment estimated to be paid during the year 223.29 from funds other than bond proceeds and federal or state grants. 223.30 Subd. 16. [RESIDENT.] "Resident" means the owner of a 223.31 dwelling located in the district and receiving water or sewer 223.32 service. 223.33 Sec. 21. [WATER AND SANITARY SEWER BOARD.] 223.34 Subdivision 1. [ESTABLISHMENT.] A water and sanitary sewer 223.35 district is established for the town of Finlayson, for the 223.36 Banning state park, under the jurisdiction of the Minnesota 224.1 department of natural resources, and for the city of Finlayson 224.2 in Pine county, to be known as the Banning Junction area water 224.3 and sanitary sewer district. The water and sewer district is 224.4 under the control and management of the Banning Junction area 224.5 water and sanitary sewer board. The board is established as a 224.6 public corporation and political subdivision of the state with 224.7 perpetual succession and all the rights, powers, privileges, 224.8 immunities, and duties that may be validly granted to or imposed 224.9 upon a municipal corporation, as provided in sections 20 to 38. 224.10 Subd. 2. [MEMBERS AND SELECTION.] The board is composed of 224.11 five members selected as follows: the town board shall meet to 224.12 appoint three members, one of whom shall be an elected township 224.13 officer, and two of whom shall be persons served by the system, 224.14 the city shall appoint one member, and the department of natural 224.15 resources shall appoint one member to the water and sanitary 224.16 sewer board and each board member shall have one vote. The 224.17 first terms must be as follows: one for one year, two for two 224.18 years, and two for three years, fixed by lot at the district's 224.19 first meeting. Thereafter, all terms are for three years. 224.20 Subd. 3. [TIME LIMITS FOR SELECTION.] The board members 224.21 must be selected as provided in subdivision 2 within 60 days 224.22 after sections 20 to 38 become effective. The successor to each 224.23 board member must be selected at any time within 60 days before 224.24 the expiration of the member's term in the same manner as the 224.25 predecessor was selected. A vacancy on the board must be filled 224.26 within 60 days after it occurs. 224.27 Subd. 4. [VACANCIES.] If the office of a board member 224.28 becomes vacant, the vacancy must be filled for the unexpired 224.29 term in the manner provided for selection of the member who 224.30 vacated the office. The office is deemed vacant under the 224.31 conditions specified in Minnesota Statutes, section 351.02. 224.32 Subd. 5. [REMOVAL.] A board member may be removed by the 224.33 unanimous vote of the governing body appointing the member, with 224.34 or without cause, or for malfeasance or nonfeasance in the 224.35 performance of official duties as provided by Minnesota 224.36 Statutes, sections 351.14 to 351.23. 225.1 Subd. 6. [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A 225.2 certificate of selection of every board member selected under 225.3 subdivision 2 stating the term for which selected, must be made 225.4 by the respective town clerks, city administrator, and by the 225.5 commissioner of natural resources. The certificates, with the 225.6 approval appended by other authority, if required, must be filed 225.7 with the secretary of state. Counterparts thereof must be 225.8 furnished to the board member and the secretary of the board. 225.9 Each member shall qualify by taking and subscribing the oath of 225.10 office prescribed by the Minnesota Constitution, article V, 225.11 section 6. The oath, duly certified by the official 225.12 administering the same, must be filed with the secretary of 225.13 state and the secretary of the board. 225.14 Subd. 7. [BOARD MEMBERS' COMPENSATION.] Each board member, 225.15 except the chair, must be paid a per diem compensation of $35 225.16 for meetings and for other services as are specifically 225.17 authorized by the board, not to exceed $1,000 in any one year. 225.18 The chair must be paid a per diem compensation of $45 for 225.19 meetings and for other services specifically authorized by the 225.20 board, not to exceed $1,500 in any one year. All members of the 225.21 board must be reimbursed for all reasonable and necessary 225.22 expenses actually incurred in the performance of duties. 225.23 Sec. 22. [GENERAL PROVISIONS FOR ORGANIZATION AND 225.24 OPERATION OF BOARD.] 225.25 Subdivision 1. [ORGANIZATION; OFFICERS; MEETINGS; SEAL.] 225.26 After the selection and qualification of all board members, they 225.27 shall meet to organize the board at the call of any two board 225.28 members, upon seven days' notice by registered mail to the 225.29 remaining board members, at a time and place within the district 225.30 specified in the notice. A majority of the members shall 225.31 constitute a quorum at that meeting and all other meetings of 225.32 the board, but a lesser number may meet and adjourn from time to 225.33 time and compel the attendance of absent members. At the first 225.34 meeting the board shall select its officers and conduct other 225.35 organizational business as may be necessary. Thereafter the 225.36 board shall meet regularly at the time and place that the board 226.1 designates by resolution. Special meetings may be held at any 226.2 time upon call of the chair or any two members, upon written 226.3 notice sent by mail to each member at least three days before 226.4 the meeting, or upon other notice as the board by resolution may 226.5 provide, or without notice if each member is present or files 226.6 with the secretary a written consent to the meeting either 226.7 before or after the meeting. Except as otherwise provided in 226.8 sections 20 to 38, any action within the authority of the board 226.9 may be taken by the affirmative vote of a majority of the board 226.10 and may be taken by regular or adjourned regular meeting or at a 226.11 duly held special meeting, but in any case only if a quorum is 226.12 present. Meetings of the board must be open to the public. The 226.13 board may adopt a seal, which must be officially and judicially 226.14 noticed, to authenticate instruments executed by its authority, 226.15 but omission of the seal does not affect the validity of any 226.16 instrument. 226.17 Subd. 2. [CHAIR.] The board shall elect a chair from its 226.18 membership. The term of the first chair of the board shall 226.19 expire on January 1, 2001, and the terms of successor chairs 226.20 expire on January 1 of each succeeding year. The chair shall 226.21 preside at all meetings of the board, if present, and shall 226.22 perform all other duties and functions usually incumbent upon 226.23 such an officer, and all administrative functions assigned to 226.24 the chair by the board. The board shall elect a vice-chair from 226.25 its membership to act for the chair during temporary absence or 226.26 disability. 226.27 Subd. 3. [SECRETARY AND TREASURER.] The board shall select 226.28 a person or persons who may, but need not be, a member or 226.29 members of the board, to act as its secretary and treasurer. 226.30 The secretary and treasurer shall hold office at the pleasure of 226.31 the board, subject to the terms of any contract of employment 226.32 that the board may enter into with the secretary or treasurer. 226.33 The secretary shall record the minutes of all meetings of the 226.34 board, and be the custodian of all books and records of the 226.35 board except those that the board entrusts to the custody of a 226.36 designated employee. The treasurer is the custodian of all 227.1 money received by the board except as the board otherwise 227.2 entrusts to the custody of a designated employee. The board may 227.3 appoint a deputy to perform any and all functions of either the 227.4 secretary or the treasurer. A secretary or treasurer who is not 227.5 a member of the board or a deputy of either does not have the 227.6 right to vote. 227.7 Subd. 4. [EXECUTIVE DIRECTOR.] The board may appoint an 227.8 executive director, selected solely upon the basis of training, 227.9 experience, and other qualifications and who shall serve at the 227.10 pleasure of the board and at a compensation to be determined by 227.11 the board. The executive director need not be a resident of the 227.12 district. The executive director may also be selected by the 227.13 board to serve as either secretary or treasurer, or both, of the 227.14 board. The executive director shall attend all meetings of the 227.15 board, but shall not vote, and shall have the following powers 227.16 and duties: 227.17 (1) to see that all resolutions, rules, regulations, or 227.18 orders of the board are enforced; 227.19 (2) to appoint and remove, upon the basis of merit and 227.20 fitness, all subordinate officers and regular employees of the 227.21 board except the secretary and the treasurer and their deputies; 227.22 (3) to present to the board plans, studies, and other 227.23 reports prepared for board purposes and recommend to the board 227.24 for adoption the measures the executive director deems necessary 227.25 to enforce or carry out the powers and the duties of the board, 227.26 or the efficient administration of the affairs of the board; 227.27 (4) to keep the board fully advised as to its financial 227.28 condition, and to prepare and submit to the board and to the 227.29 governing bodies of the local governmental units, the board's 227.30 annual budget and other financial information the board may 227.31 request; 227.32 (5) to recommend to the board for adoption rules and 227.33 regulations the executive director deems necessary for the 227.34 efficient operation of the district disposal system; and 227.35 (6) to perform other duties prescribed by the board. 227.36 Subd. 5. [PUBLIC EMPLOYEES.] The executive director and 228.1 other persons employed by the district are public employees and 228.2 have all the rights and duties conferred on public employees 228.3 under Minnesota Statutes, sections 179A.01 to 179A.25. The 228.4 board may elect to have employees become members of either the 228.5 public employees retirement association or the Minnesota state 228.6 retirement system. The compensation and conditions of 228.7 employment of the employees must be governed by rules applicable 228.8 to state employees in the classified service and to the 228.9 provisions of Minnesota Statutes, chapter 15A. 228.10 Subd. 6. [PROCEDURES.] The board shall adopt resolutions 228.11 or bylaws establishing procedures for board action, personnel 228.12 administration, keeping records, approving claims, authorizing 228.13 or making disbursements, safekeeping funds, and auditing all 228.14 financial operations of the board. 228.15 Subd. 7. [SURETY BONDS AND INSURANCE.] The board may 228.16 procure surety bonds for its officers and employees, in amounts 228.17 deemed necessary to ensure proper performance of their duties 228.18 and proper accounting for funds in their custody. It may 228.19 procure insurance against risks to property and liability of the 228.20 board and its officers, agents, and employees for personal 228.21 injuries or death and property damage and destruction, in 228.22 amounts deemed necessary or desirable, with the force and effect 228.23 stated in Minnesota Statutes, chapter 466. 228.24 Sec. 23. [GENERAL POWERS OF BOARD.] 228.25 Subdivision 1. [SCOPE.] The board has all powers necessary 228.26 or convenient to discharge the duties imposed upon it by law. 228.27 The powers include those specified in this section, but the 228.28 express grant or enumeration of powers does not limit the 228.29 generality or scope of the grant of powers contained in this 228.30 subdivision. 228.31 Subd. 2. [SUIT.] The board may sue or be sued. 228.32 Subd. 3. [CONTRACT.] The board may enter into any contract 228.33 necessary or proper for the exercise of its powers or the 228.34 accomplishment of its purposes. 228.35 Subd. 4. [GIFTS, GRANTS, LOANS.] The board may accept 228.36 gifts, apply for and accept grants or loans of money or other 229.1 property from the United States, the state, or any person for 229.2 any of its purposes, enter into any agreement required in 229.3 connection with them, and hold, use, and dispose of the money or 229.4 property in accordance with the terms of the gift, grant, loan, 229.5 or agreement relating to it. With respect to loans or grants of 229.6 funds or real or personal property or other assistance from any 229.7 state or federal government or its agency or instrumentality, 229.8 the board may contract to do and perform all acts and things 229.9 required as a condition or consideration for the gift, grant, or 229.10 loan pursuant to state or federal law or regulations, whether or 229.11 not included among the powers expressly granted to the board in 229.12 sections 20 to 38. 229.13 Subd. 5. [COOPERATIVE ACTION.] The board may act under 229.14 Minnesota Statutes, section 471.59, or any other appropriate law 229.15 providing for joint or cooperative action between governmental 229.16 units. 229.17 Subd. 6. [STUDIES AND INVESTIGATIONS.] The board may 229.18 conduct research studies and programs, collect and analyze data, 229.19 prepare reports, maps, charts, and tables, and conduct all 229.20 necessary hearings and investigations in connection with the 229.21 design, construction, and operation of the district disposal 229.22 system. 229.23 Subd. 7. [EMPLOYEES, TERMS.] The board may employ on terms 229.24 it deems advisable, persons or firms performing engineering, 229.25 legal, or other services of a professional nature; require any 229.26 employee to obtain and file with it an individual bond or 229.27 fidelity insurance policy; and procure insurance in amounts it 229.28 deems necessary against liability of the board or its officers 229.29 or both, for personal injury or death and property damage or 229.30 destruction, with the force and effect stated in Minnesota 229.31 Statutes, chapter 466, and against risks of damage to or 229.32 destruction of any of its facilities, equipment, or other 229.33 property as it deems necessary. 229.34 Subd. 8. [PROPERTY RIGHTS, POWERS.] The board may acquire 229.35 by purchase, lease, condemnation, gift, or grant, any real or 229.36 personal property including positive and negative easements and 230.1 water and air rights, and it may construct, enlarge, improve, 230.2 replace, repair, maintain, and operate any interceptor, 230.3 treatment works, or water facility determined to be necessary or 230.4 convenient for the collection and disposal of sewage in the 230.5 district. Any local governmental unit and the commissioners of 230.6 transportation and natural resources are authorized to convey to 230.7 or permit the use of any of the above-mentioned facilities owned 230.8 or controlled by it, by the board, subject to the rights of the 230.9 holders of any bonds issued with respect to those facilities, 230.10 with or without compensation, without an election or approval by 230.11 any other governmental unit or agency. All powers conferred by 230.12 this subdivision may be exercised both within or without the 230.13 district as may be necessary for the exercise by the board of 230.14 its powers or the accomplishment of its purposes. The board may 230.15 hold, lease, convey, or otherwise dispose of the above-mentioned 230.16 property for its purposes upon the terms and in the manner it 230.17 deems advisable. Unless otherwise provided, the right to 230.18 acquire lands and property rights by condemnation may be 230.19 exercised only in accordance with Minnesota Statutes, sections 230.20 117.011 to 117.232, and shall apply to any property or interest 230.21 in the property owned by any local governmental unit. No 230.22 property devoted to an actual public use at the time, or held to 230.23 be devoted to such a use within a reasonable time, shall be so 230.24 acquired unless a court of competent jurisdiction determines 230.25 that the use proposed by the board is paramount to the existing 230.26 use. Except in the case of property in actual public use, the 230.27 board may take possession of any property on which condemnation 230.28 proceedings have been commenced at any time after the issuance 230.29 of a court order appointing commissioners for its condemnation. 230.30 Subd. 9. [RELATIONSHIP TO OTHER PROPERTIES.] The board may 230.31 construct or maintain its systems or facilities in, along, on, 230.32 under, over, or through public waters, streets, bridges, 230.33 viaducts, and other public rights-of-way without first obtaining 230.34 a franchise from a county or municipality having jurisdiction 230.35 over them. However, the facilities must be constructed and 230.36 maintained in accordance with the ordinances and resolutions of 231.1 the county or municipality relating to constructing, installing, 231.2 and maintaining similar facilities on public properties and must 231.3 not unnecessarily obstruct the public use of those rights-of-way. 231.4 Subd. 10. [DISPOSAL OF PROPERTY.] The board may sell, 231.5 lease, or otherwise dispose of any real or personal property 231.6 acquired by it which is no longer required for accomplishment of 231.7 its purposes. The property may be sold in the manner provided 231.8 by Minnesota Statutes, section 469.065, insofar as practical. 231.9 The board may give notice of sale as it deems appropriate. When 231.10 the board determines that any property or any part of the 231.11 district disposal system acquired from a local governmental unit 231.12 without compensation is no longer required but is required as a 231.13 local facility by the governmental unit from which it was 231.14 acquired, the board may by resolution transfer it to that 231.15 governmental unit. 231.16 Subd. 11. [AGREEMENTS WITH OTHER GOVERNMENTAL UNITS.] The 231.17 board may contract with the United States or any agency thereof, 231.18 any state or agency thereof, or any regional public planning 231.19 body in the state with jurisdiction over any part of the 231.20 district, or any other municipal or public corporation, or 231.21 governmental subdivision or agency or political subdivision in 231.22 any state, for the joint use of any facility owned by the board 231.23 or such entity, for the operation by that entity of any system 231.24 or facility of the board, or for the performance on the board's 231.25 behalf of any service, including but not limited to planning, on 231.26 terms as may be agreed upon by the contracting parties. Unless 231.27 designated by the board as a local water and sanitary sewer 231.28 facility, any treatment works or interceptor jointly used, or 231.29 operated on behalf of the board, as provided in this 231.30 subdivision, is deemed to be operated by the board for purposes 231.31 of including those facilities in the district disposal system. 231.32 Sec. 24. [COMPREHENSIVE PLAN.] 231.33 Subdivision 1. [BOARD PLAN AND PROGRAM.] The board shall 231.34 adopt a comprehensive plan for the collection, treatment, and 231.35 disposal of sewage in the district for a designated period the 231.36 board deems proper and reasonable. The board shall prepare and 232.1 adopt subsequent comprehensive plans for the collection, 232.2 treatment, and disposal of sewage in the district for each 232.3 succeeding designated period as the board deems proper and 232.4 reasonable. The first plan, as modified by the board, and any 232.5 subsequent plan shall take into account the preservation and 232.6 best and most economic use of water and other natural resources 232.7 in the area; the preservation, use, and potential for use of 232.8 lands adjoining waters of the state to be used for the disposal 232.9 of sewage; and the impact the disposal system will have on 232.10 present and future land use in the area affected. The plans 232.11 shall include the general location of needed interceptors and 232.12 treatment works, a description of the area that is to be served 232.13 by the various interceptors and treatment works, a long-range 232.14 capital improvements program, and any other details as the board 232.15 deems appropriate. In developing the plans, the board shall 232.16 consult with persons designated for the purpose by governing 232.17 bodies of any governmental unit within the district to represent 232.18 the entities and shall consider the data, resources, and input 232.19 offered to the board by the entities and any planning agency 232.20 acting on behalf of one or more of the entities. Each plan, 232.21 when adopted, must be followed in the district and may be 232.22 revised as often as the board deems necessary. 232.23 Subd. 2. [COMPREHENSIVE PLANS; HEARING.] Before adopting 232.24 any subsequent comprehensive plan, the board shall hold a public 232.25 hearing on the proposed plan at a time and place in the district 232.26 that it selects. The hearing may be continued from time to 232.27 time. Not less than 45 days before the hearing, the board shall 232.28 publish notice of the hearing in a newspaper having general 232.29 circulation in the district, stating the date, time, and place 232.30 of the hearing, and the place where the proposed plan may be 232.31 examined by any interested person. At the hearing, all 232.32 interested persons must be permitted to present their views on 232.33 the plan. 232.34 Subd. 3. [GOVERNMENTAL UNIT PLANS AND PROGRAMS; 232.35 COORDINATION WITH BOARD'S RESPONSIBILITIES.] Once the board's 232.36 plan is adopted, no construction project involving the 233.1 construction of new sewers or other disposal facilities may be 233.2 undertaken by the local governmental unit unless its governing 233.3 body shall first find the project to be in accordance with the 233.4 governmental unit's comprehensive plan and program as approved 233.5 by the board. Before approval by the board of the comprehensive 233.6 plan and program of any local governmental unit in the district, 233.7 no water and sanitary sewer construction project may be 233.8 undertaken by the governmental unit unless approval of the 233.9 project is first secured from the board as to those features of 233.10 the project affecting the board's responsibilities as determined 233.11 by the board. 233.12 Sec. 25. [POWERS TO ISSUE OBLIGATIONS AND IMPOSE SPECIAL 233.13 ASSESSMENTS.] 233.14 The Banning Junction area water and sanitary sewer board, 233.15 in order to implement the powers granted under sections 20 to 38 233.16 to establish, maintain, and administer the Banning Junction area 233.17 water and sanitary sewer district, may issue obligations and 233.18 impose special assessments against benefited property within the 233.19 limits of the district benefited by facilities constructed under 233.20 sections 20 to 38 in the manner provided for local governments 233.21 by Minnesota Statutes, chapter 429. 233.22 Sec. 26. [SYSTEM EXPANSION; APPLICATION TO CITIES.] 233.23 The authority of the water and sanitary sewer board to 233.24 establish water or sewer or combined water and sewer systems 233.25 under this section extends to areas within the Banning Junction 233.26 area water and sanitary sewer district organized into cities 233.27 when requested by resolution of the governing body of the 233.28 affected city or when ordered by the Minnesota pollution control 233.29 agency after notice and hearing. For the purpose of any 233.30 petition filed or special assessment levied with respect to any 233.31 system, the entire area to be served within a city must be 233.32 treated as if it were owned by a single person, and the 233.33 governing body shall exercise all the rights and be subject to 233.34 all the duties of an owner of the area, and shall have power to 233.35 provide for the payment of all special assessments and other 233.36 charges imposed upon the area with respect to the system by the 234.1 appropriation of money, the collection of service charges, or 234.2 the levy of taxes, which shall be subject to no limitation of 234.3 rate or amount. 234.4 Sec. 27. [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 234.5 Subdivision 1. [POWERS.] In addition to all other powers 234.6 conferred upon the board in sections 20 to 38, it has the powers 234.7 specified in this section. 234.8 Subd. 2. [DISCHARGE OF TREATED SEWAGE.] The board may 234.9 discharge the effluent from any treatment works operated by it 234.10 into any waters of the state, subject to approval of the agency 234.11 if required and in accordance with any effluent or water quality 234.12 standards lawfully adopted by the agency, any interstate agency, 234.13 or any federal agency having jurisdiction. 234.14 Subd. 3. [UTILIZATION OF DISTRICT SYSTEM.] The board may 234.15 require any person or local governmental unit to provide for the 234.16 discharge of any sewage, directly or indirectly, into the 234.17 district disposal system, or to connect any disposal system or a 234.18 part of it with the district disposal system wherever reasonable 234.19 opportunity for connection is provided; may regulate the manner 234.20 in which the connections are made; may require any person or 234.21 local governmental unit discharging sewage into the disposal 234.22 system to provide preliminary treatment for it; may prohibit the 234.23 discharge into the district disposal system of any substance 234.24 that it determines will or may be harmful to the system or any 234.25 persons operating it; and may require any local governmental 234.26 unit to discontinue the acquisition, betterment, or operation of 234.27 any facility for the unit's disposal system wherever and so far 234.28 as adequate service is or will be provided by the district 234.29 disposal system. 234.30 Subd. 4. [SYSTEM OF COST RECOVERY TO COMPLY WITH 234.31 APPLICABLE REGULATIONS.] Any charges, connection fees, or other 234.32 cost-recovery techniques imposed on persons discharging sewage 234.33 directly or indirectly into the district disposal system must 234.34 comply with applicable state and federal law, including state 234.35 and federal regulations governing grant applications. 234.36 Sec. 28. [BUDGET.] 235.1 The board shall prepare and adopt, on or before October 1 235.2 in 1999 and each year thereafter, a budget showing for the 235.3 following calendar year or other fiscal year determined by the 235.4 board, sometimes referred to in sections 20 to 38 as the budget 235.5 year, estimated receipts of money from all sources, including 235.6 but not limited to payments by each local governmental unit, 235.7 federal or state grants, taxes on property, and funds on hand at 235.8 the beginning of the year, and estimated expenditures for: 235.9 (1) costs of operation, administration, and maintenance of 235.10 the district disposal system; 235.11 (2) cost of acquisition and betterment of the district 235.12 disposal system; and 235.13 (3) debt service, including principal and interest, on 235.14 general obligation bonds and certificates issued pursuant to 235.15 section 32, and any money judgments entered by a court of 235.16 competent jurisdiction. Expenditures within these general 235.17 categories, and any other categories as the board may from time 235.18 to time determine, must be itemized in detail as the board 235.19 prescribes. The board and its officers, agents, and employees 235.20 shall not spend money for any purpose other than debt service 235.21 without having set forth the expense in the budget nor in excess 235.22 of the amount set forth in the budget for it. No obligation to 235.23 make an expenditure of the above-mentioned type is enforceable 235.24 except as the obligation of the person or persons incurring it. 235.25 The board may amend the budget at any time by transferring from 235.26 one purpose to another any sums except money for debt service 235.27 and bond proceeds or by increasing expenditures in any amount by 235.28 which actual cash receipts during the budget year exceed the 235.29 total amounts designated in the original budget. The creation 235.30 of any obligation under section 32 or the receipt of any federal 235.31 or state grant is a sufficient budget designation of the 235.32 proceeds for the purpose for which it is authorized, and of the 235.33 tax or other revenue pledged to pay the obligation and interest 235.34 on it, whether or not specifically included in any annual budget. 235.35 Sec. 29. [ALLOCATION OF COSTS.] 235.36 Subdivision 1. [DEFINITION OF CURRENT COSTS.] The 236.1 estimated cost of administration, operation, maintenance, and 236.2 debt service of the district disposal system to be paid by the 236.3 board in each fiscal year and the estimated costs of acquisition 236.4 and betterment of the system that are to be paid during the year 236.5 from funds other than state or federal grants and bond proceeds 236.6 and all other previously unallocated payments made by the board 236.7 pursuant to sections 20 to 38 to be allocated in the fiscal year 236.8 are referred to as current costs and must be allocated by the 236.9 board as provided in subdivision 2 in the budget for that year. 236.10 Subd. 2. [METHOD OF ALLOCATION OF CURRENT COSTS.] Current 236.11 costs must be allocated in the district on an equitable basis as 236.12 the board may determine by resolution to be in the best 236.13 interests of the district. The adoption or revision of any 236.14 method of allocation used by the board must be by the 236.15 affirmative vote of at least two-thirds of the members of the 236.16 board. 236.17 Sec. 30. [TAX LEVIES.] 236.18 To accomplish any duty imposed on it the board may, in 236.19 addition to the powers granted in sections 20 to 38 and in any 236.20 other law or charter, exercise the powers granted any 236.21 municipality by Minnesota Statutes, chapters 117, 412, 429, 475, 236.22 sections 115.46, 444.075, and 471.59, with respect to the area 236.23 in the district. The board may levy taxes upon all taxable 236.24 property in the district for all or a part of the amount payable 236.25 to the board, pursuant to section 29, to be assessed and 236.26 extended as a tax upon that taxable property by the county 236.27 auditor for the next calendar year, free from any limitation of 236.28 rate or amount imposed by law or charter. The tax must be 236.29 collected and remitted in the same manner as other general taxes. 236.30 Sec. 31. [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 236.31 Subdivision 1. [PUBLIC HEARING REQUIREMENT ON SPECIFIC 236.32 PROJECT.] Before the board orders any project involving the 236.33 acquisition or betterment of any interceptor or treatment works, 236.34 all or a part of the cost of which will be allocated pursuant to 236.35 section 29 as current costs, the board shall hold a public 236.36 hearing on the proposed project. The hearing must be held 237.1 following two publications in a newspaper having general 237.2 circulation in the district, stating the time and place of the 237.3 hearing, the general nature and location of the project, the 237.4 estimated total cost of acquisition and betterment, that portion 237.5 of costs estimated to be paid out of federal and state grants, 237.6 and that portion of costs estimated to be allocated. The 237.7 estimates must be best available at the time of the meeting and 237.8 if costs exceed the estimate, the project cannot proceed until 237.9 an additional public hearing is held, with notice as required at 237.10 the initial meeting. The two publications must be a week apart 237.11 and the hearing at least three days after the last publication. 237.12 Not less than 45 days before the hearing, notice of the hearing 237.13 must also be mailed to each clerk of all local governmental 237.14 units in the district, but failure to give mailed notice or any 237.15 defects in the notice does not invalidate the proceedings. The 237.16 project may include all or part of one or more interceptors or 237.17 treatment works. No hearing may be held on any project unless 237.18 the project is within the area covered by the comprehensive plan 237.19 adopted by the board pursuant to section 24 except that the 237.20 hearing may be held simultaneously with a hearing on a 237.21 comprehensive plan. A hearing is not required with respect to a 237.22 project, no part of the costs of which are to be allocated as 237.23 the current costs of acquisition, betterment, and debt service. 237.24 Subd. 2. [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 237.25 board proposes to assess against benefited property within the 237.26 district all or any part of the allocable costs of the project 237.27 as provided in subdivision 5, the board shall, not less than two 237.28 weeks before the hearing provided for in subdivision 1, cause 237.29 mailed notice of the hearing to be given to the owner of each 237.30 parcel within the area proposed to be specially assessed and 237.31 shall also give two weeks' published notice of the hearing. The 237.32 notice of hearing must contain the same information provided in 237.33 the notice published by the board pursuant to subdivision 1, and 237.34 a description of the area proposed to be assessed. For the 237.35 purpose of giving mailed notice, owners are those shown to be on 237.36 the records of the county auditor or, in any county where tax 238.1 statements are mailed by the county treasurer, on the records of 238.2 the county treasurer; but other appropriate records may be used 238.3 for this purpose. For properties that are tax exempt or subject 238.4 to taxation on a gross earnings basis and not listed on the 238.5 records of the county auditor or the county treasurer, the 238.6 owners must be ascertained by any practicable means and mailed 238.7 notice given them as herein provided. Failure to give mailed 238.8 notice or any defects in the notice does not invalidate the 238.9 proceedings of the board. 238.10 Subd. 3. [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before 238.11 adoption of the resolution calling for a hearing under this 238.12 section, the board shall secure from the district engineer or 238.13 some other competent person of the board's selection a report 238.14 advising it in a preliminary way as to whether the proposed 238.15 project is feasible and whether it should be made as proposed or 238.16 in connection with some other project and the estimated costs of 238.17 the project as recommended. No error or omission in the report 238.18 invalidates the proceeding. The board may also take other steps 238.19 before the hearing, as will in its judgment provide helpful 238.20 information in determining the desirability and feasibility of 238.21 the project, including but not limited to preparation of plans 238.22 and specifications and advertisement for bids on them. The 238.23 hearing may be adjourned from time to time and a resolution 238.24 ordering the project may be adopted at any time within six 238.25 months after the date of hearing. In ordering the project the 238.26 board may reduce but not increase the extent of the project as 238.27 stated in the notice of hearing and shall find that the project 238.28 as ordered is in accordance with the comprehensive plan and 238.29 program adopted by the board pursuant to section 24. 238.30 Subd. 4. [EMERGENCY ACTION.] If the board by resolution 238.31 adopted by the affirmative vote of not less than two-thirds of 238.32 its members determines that an emergency exists requiring the 238.33 immediate purchase of materials or supplies or the making of 238.34 emergency repairs, it may order the purchase of those supplies 238.35 and materials and the making of the repairs before any hearing 238.36 required under this section, provided that the board shall set 239.1 as early a date as practicable for the hearing at the time it 239.2 declares the emergency. All other provisions of this section 239.3 must be followed in giving notice of and conducting the 239.4 hearing. Nothing herein may be construed as preventing the 239.5 board or its agents from purchasing maintenance supplies or 239.6 incurring maintenance costs without regard to the requirements 239.7 of this section. 239.8 Subd. 5. [POWER OF THE BOARD TO SPECIALLY ASSESS.] The 239.9 board may specially assess all or any part of the costs of 239.10 acquisition and betterment as herein provided, of any project 239.11 ordered pursuant to this section. The special assessments must 239.12 be levied in accordance with the provisions of Minnesota 239.13 Statutes, sections 429.051 to 429.081, except as otherwise 239.14 provided in this subdivision. No other provisions of Minnesota 239.15 Statutes, chapter 429, apply. For purposes of levying the 239.16 special assessments, the hearing on the project required in 239.17 subdivision 1 serves as the hearing on the making of the 239.18 original improvement provided for by Minnesota Statutes, section 239.19 429.051. The area assessed may be less than but may not exceed 239.20 the area proposed to be assessed as stated in the notice of 239.21 hearing on the project provided for in subdivision 2. 239.22 Sec. 32. [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 239.23 Subdivision 1. [BUDGET ANTICIPATION CERTIFICATES OF 239.24 INDEBTEDNESS.] At any time after adoption of its annual budget 239.25 and in anticipation of the collection of tax and other revenues 239.26 estimated and set forth by the board in the budget, except in 239.27 the case of deficiency taxes levied under this subdivision and 239.28 taxes levied for the payment of certificates issued under 239.29 subdivision 2, the board may, by resolution, authorize the 239.30 issuance, negotiation, and sale, in accordance with subdivision 239.31 4 in the form and manner and upon terms it determines, of its 239.32 negotiable general obligation certificates of indebtedness in 239.33 aggregate principal amounts not exceeding 50 percent of the 239.34 total amount of tax collections and other revenues, and maturing 239.35 not later than three months after the close of the budget year 239.36 in which issued. The proceeds of the sale of the certificates 240.1 must be used solely for the purposes for which the tax 240.2 collections and other revenues are to be expended pursuant to 240.3 the budget. 240.4 All the tax collections and other revenues included in the 240.5 budget for the budget year, after the expenditure of the tax 240.6 collections and other revenues in accordance with the budget, 240.7 must be irrevocably pledged and appropriated to a special fund 240.8 to pay the principal and interest on the certificates when due. 240.9 If for any reason the tax collections and other revenues are 240.10 insufficient to pay the certificates and interest when due, the 240.11 board shall levy a tax in the amount of the deficiency on all 240.12 taxable property in the district and shall appropriate this 240.13 amount when received to the special fund. 240.14 Subd. 2. [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 240.15 any budget year the receipts of tax and other revenues should 240.16 for some unforeseen cause become insufficient to pay the board's 240.17 current expenses, or if any public emergency should subject it 240.18 to the necessity of making extraordinary expenditures, the board 240.19 may by resolution authorize the issuance, negotiation, and sale, 240.20 in accordance with subdivision 4 in the form and manner and upon 240.21 the terms and conditions it determines, of its negotiable 240.22 general obligation certificates of indebtedness in an amount 240.23 sufficient to meet the deficiency. The board shall levy on all 240.24 taxable property in the district a tax sufficient to pay the 240.25 certificates and interest on the certificates and shall 240.26 appropriate all collections of the tax to a special fund created 240.27 for the payment of the certificates and the interest on them. 240.28 Certificates issued under this subdivision mature not later than 240.29 April 1 in the year following the year in which the tax is 240.30 collectible. 240.31 Subd. 3. [GENERAL OBLIGATION BONDS.] The board may by 240.32 resolution authorize the issuance of general obligation bonds 240.33 for the acquisition or betterment of any part of the district 240.34 disposal system, including but without limitation the payment of 240.35 interest during construction and for a reasonable period 240.36 thereafter, or for the refunding of outstanding bonds, 241.1 certificates of indebtedness, or judgments. The board shall 241.2 pledge its full faith and credit and taxing power for the 241.3 payment of the bonds and shall provide for the issuance and sale 241.4 and for the security of the bonds in the manner provided in 241.5 Minnesota Statutes, chapter 475. The board has the same powers 241.6 and duties as a municipality issuing bonds under that law, 241.7 except that no election is required and the debt limitations of 241.8 Minnesota Statutes, chapter 475, do not apply to the bonds. The 241.9 board may also pledge for the payment of the bonds and deduct 241.10 from the amount of any tax levy required under Minnesota 241.11 Statutes, section 475.61, subdivision 1, and any revenues 241.12 receivable under any state and federal grants anticipated by the 241.13 board and may covenant to refund the bonds if and when and to 241.14 the extent that for any reason the revenues, together with other 241.15 funds available and appropriated for that purpose, are not 241.16 sufficient to pay all principal and interest due or about to 241.17 become due, provided that the revenues have not been anticipated 241.18 by the issuance of certificates under subdivision 1. 241.19 Subd. 4. [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.] 241.20 Certificates issued under subdivisions 1 and 2 may be issued and 241.21 sold by negotiation, without public sale, and may be sold at a 241.22 price equal to the percentage of the par value of the 241.23 certificates, plus accrued interest, and bearing interest at the 241.24 rate determined by the board. No election is required to 241.25 authorize the issuance of the certificates. The certificates 241.26 must bear the same rate of interest after maturity as before and 241.27 the full faith and credit and taxing power of the board must be 241.28 pledged to the payment of the certificates. 241.29 Sec. 33. [DEPOSITORIES.] 241.30 The board shall designate one or more national or state 241.31 banks, or trust companies authorized to do a banking business, 241.32 as official depositories for money of the board, and shall 241.33 require the treasurer to deposit all or a part of the money in 241.34 those institutions. The designation must be in writing and must 241.35 set forth all the terms and conditions upon which the deposits 241.36 are made, and must be signed by the chair and treasurer and made 242.1 a part of the minutes of the board. 242.2 Sec. 34. [MONEY, ACCOUNTS, AND INVESTMENTS.] 242.3 Subdivision 1. [RECEIPT AND APPLICATION.] Money received 242.4 by the board must be deposited or invested by the treasurer and 242.5 disposed of as the board may direct in accordance with its 242.6 budget; provided that any money that has been pledged or 242.7 dedicated by the board to the payment of obligations or interest 242.8 on the obligations or expenses incident thereto, or for any 242.9 other specific purpose authorized by law, must be paid by the 242.10 treasurer into the fund to which it has been pledged. 242.11 Subd. 2. [FUNDS AND ACCOUNTS.] (a) The board's treasurer 242.12 shall establish funds and accounts as may be necessary or 242.13 convenient to handle the receipts and disbursements of the board 242.14 in an orderly fashion. 242.15 (b) The funds and accounts must be audited annually by a 242.16 certified public accountant at the expense of the district. 242.17 Subd. 3. [DEPOSIT AND INVESTMENT.] The money on hand in 242.18 those funds and accounts may be deposited in the official 242.19 depositories of the board or invested as provided in this 242.20 subdivision. Any amount not currently needed or required by law 242.21 to be kept in cash on deposit may be invested in obligations 242.22 authorized for the investment of municipal sinking funds by 242.23 Minnesota Statutes, section 118A.04. The money may also be held 242.24 under certificates of deposit issued by any official depository 242.25 of the board. 242.26 Subd. 4. [BOND PROCEEDS.] The use of proceeds of all bonds 242.27 issued by the board for the acquisition and betterment of the 242.28 district disposal system, and the use, other than investment, of 242.29 all money on hand in any sinking fund or funds of the board, is 242.30 governed by the provisions of Minnesota Statutes, chapter 475, 242.31 the provisions of sections 20 to 38, and the provisions of 242.32 resolutions authorizing the issuance of the bonds. When 242.33 received, the bond proceeds must be transferred to the treasurer 242.34 of the board for safekeeping, investment, and payment of the 242.35 costs for which they were issued. 242.36 Subd. 5. [AUDIT.] The board shall provide for and pay the 243.1 cost of an independent annual audit of its official books and 243.2 records by the state auditor or a public accountant authorized 243.3 to perform that function under Minnesota Statutes, chapter 6. 243.4 Sec. 35. [SERVICE CONTRACTS WITH GOVERNMENTAL ENTITIES 243.5 OUTSIDE THE JURISDICTION OF THE BOARD.] 243.6 (a) The board may contract with the United States or any 243.7 agency of the federal government, any state or its agency, or 243.8 any municipal or public corporation, governmental subdivision or 243.9 agency or political subdivision in any state, outside the 243.10 jurisdiction of the board, for furnishing services to those 243.11 entities, including but not limited to planning for and the 243.12 acquisition, betterment, operation, administration, and 243.13 maintenance of any or all interceptors, treatment works, and 243.14 local water and sanitary sewer facilities. The board may 243.15 include as one of the terms of the contract that the entity must 243.16 pay to the board an amount agreed upon as a reasonable estimate 243.17 of the proportionate share properly allocable to the entity of 243.18 costs of acquisition, betterment, and debt service previously 243.19 allocated in the district. When payments are made by entities 243.20 to the board, they must be applied in reduction of the total 243.21 amount of costs thereafter allocated in the district, on an 243.22 equitable basis as the board deems to be in the best interests 243.23 of the district, applying so far as practicable and appropriate 243.24 the criteria set forth in section 29, subdivision 2. A 243.25 municipality in the state of Minnesota may enter into a contract 243.26 and perform all acts and things required as a condition or 243.27 consideration therefor consistent with the purposes of sections 243.28 20 to 38, whether or not included among the powers otherwise 243.29 granted to the municipality by law or charter. 243.30 (b) The board shall contract with a qualified entity to 243.31 make necessary inspections on the district facilities, and to 243.32 otherwise process or assist in processing any of the work of the 243.33 district. 243.34 Sec. 36. [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES, 243.35 AND EQUIPMENT.] 243.36 When the board orders a project involving the acquisition 244.1 or betterment of a part of the district disposal system, it 244.2 shall cause plans and specifications of the project to be made, 244.3 or if previously made, to be modified, if necessary, and to be 244.4 approved by the agency if required, and after any required 244.5 approval by the agency, one or more contracts for work and 244.6 materials called for by the plans and specification may be 244.7 awarded as provided in Minnesota Statutes, section 471.345. 244.8 Sec. 37. [PROPERTY EXEMPT FROM TAXATION.] 244.9 Any properties, real or personal, owned, leased, 244.10 controlled, used, or occupied by the water and sanitary sewer 244.11 board for any purpose under sections 20 to 38 are declared to be 244.12 acquired, owned, leased, controlled, used, and occupied for 244.13 public, governmental, and municipal purposes, and are exempt 244.14 from taxation by the state or any political subdivision of the 244.15 state, provided that the properties are subject to special 244.16 assessments levied by a political subdivision for a local 244.17 improvement in amounts proportionate to and not exceeding the 244.18 special benefit received by the properties from the 244.19 improvement. No possible use of any properties in any manner 244.20 different from their use as part of a disposal system at the 244.21 time may be considered in determining the special benefit 244.22 received by the properties. All assessments are subject to 244.23 final approval by the board, whose determination of the benefits 244.24 is conclusive upon the political subdivision levying the 244.25 assessment. 244.26 Sec. 38. [RELATION TO EXISTING LAWS.] 244.27 The provisions of sections 20 to 38 must be given full 244.28 effect notwithstanding the provisions of any law or charter 244.29 inconsistent with sections 20 to 38. The powers conferred on 244.30 the board under sections 20 to 38 do not in any way diminish or 244.31 supersede the powers conferred on the agency by Minnesota 244.32 Statutes, chapters 115 to 116. 244.33 Sec. 39. [EFFECTIVE DATE; REVERSE REFERENDUM.] 244.34 Prior to approval by resolution by each of the local 244.35 governing bodies of the city of New Prague, and Helena and Cedar 244.36 Lake townships, under Minnesota Statutes, section 645.021, 245.1 subdivision 2, each city or township shall publish a notice of 245.2 its intention to establish the district in a newspaper of 245.3 general circulation in the city or township, together with a 245.4 date for a public hearing. The hearing must be held at least 245.5 two weeks but not more than four weeks after the publication of 245.6 the resolution. Following the public hearing, the city or 245.7 township may determine to take no further action or adopt a 245.8 resolution confirming its intention to establish the district. 245.9 That resolution must also be published in a newspaper of general 245.10 circulation in the district. If within 30 days after 245.11 publication of the resolution, a petition signed by at least 245.12 five percent of the registered voters in the city or township 245.13 requesting a vote on the proposed resolution is filed with the 245.14 county auditor, the resolution is not effective until it has 245.15 been submitted to the voters in the city or township at a 245.16 general or special election and a majority of votes cast on the 245.17 question of approving the resolution are in the affirmative. 245.18 The commissioner of revenue shall prepare a suggested form of 245.19 question to be presented at the election. If the majority of 245.20 the votes are cast in the affirmative or if no reverse referenda 245.21 are held, sections 1 to 19 are effective the day after a 245.22 certificate of approval under Minnesota Statutes, section 245.23 645.021, subdivision 3, is filed by the last of the four local 245.24 governmental units subject to sections 1 to 19. 245.25 Prior to approval by resolution by each of the local 245.26 governing bodies of the city and town of Finlayson, under 245.27 Minnesota Statutes, section 645.021, subdivision 2, the city or 245.28 town shall publish a notice of its intention to establish the 245.29 district in a newspaper of general circulation in the city or 245.30 town, together with a date for a public hearing. The hearing 245.31 must be held at least two weeks but not more than four weeks 245.32 after the publication of the resolution. Following the public 245.33 hearing, the city or town may determine to take no further 245.34 action or adopt a resolution confirming its intention to 245.35 establish the district. That resolution must also be published 245.36 in a newspaper of general circulation in the district. If 246.1 within 30 days after publication of the resolution, a petition 246.2 signed by at least five percent of the registered voters in the 246.3 city or town requesting a vote on the proposed resolution is 246.4 filed with the county auditor, the resolution is not effective 246.5 until it has been submitted to the voters in the city or town at 246.6 a general or special election and a majority of votes cast on 246.7 the question of approving the resolution are in the affirmative. 246.8 The commissioner of revenue shall prepare a suggested form of 246.9 question to be presented at the election. If the majority of 246.10 the votes are cast in the affirmative or if no reverse referenda 246.11 are held, sections 20 to 38 are effective as to the city and the 246.12 town of Finlayson separately the day after the certificate of 246.13 approval of the governing body of each is filed as provided in 246.14 Minnesota Statutes, section 645.021, subdivision 3. 246.15 ARTICLE 15 246.16 AUTOMATIC REBATE IN ENACTED BUDGET 246.17 Section 1. [16A.1522] [REBATE REQUIREMENTS.] 246.18 Subdivision 1. [FORECAST.] If, on the basis of a forecast 246.19 of general fund revenues and expenditures in November of an 246.20 even-numbered year or February of an odd-numbered year, the 246.21 commissioner projects a positive unrestricted budgetary general 246.22 fund balance at the close of the biennium that exceeds one-half 246.23 of one percent of total general fund biennial revenues, the 246.24 commissioner shall designate the entire balance as available for 246.25 rebate to the taxpayers of this state. In forecasting, 246.26 projecting, or designating the unrestricted budgetary general 246.27 fund balance or general fund biennial revenue under this 246.28 section, the commissioner shall not include any balance or 246.29 revenue attributable to settlement payments received after July 246.30 1, 1998, as defined in Section IIB of the settlement document, 246.31 filed May 18, 1998, in State v. Philip Morris, Inc., No. 246.32 C1-94-8565 (Minnesota District Court, Second Judicial District). 246.33 Subd. 2. [PLAN.] If the commissioner designates an amount 246.34 for rebate in either forecast, the governor shall present a plan 246.35 to the legislature for rebating that amount. The plan must 246.36 provide for payments to begin no later than August 15 of the 247.1 odd-numbered year. By April 15 of each odd-numbered year, the 247.2 legislature shall enact, modify, or reject the plan presented by 247.3 the governor. 247.4 Subd. 3. [CERTIFICATION.] By July 15 of each odd-numbered 247.5 year, based on a preliminary analysis of the general fund 247.6 balance at the end of the fiscal year June 30, the commissioner 247.7 of finance shall certify to the commissioner of revenue the 247.8 amount available for rebate. 247.9 Subd. 4. [TRANSFER TO TAX RELIEF ACCOUNT.] Any positive 247.10 unrestricted budgetary general fund balance on June 30 of an 247.11 odd-numbered year is appropriated to the commissioner for 247.12 transfer to the tax relief account. 247.13 Subd. 5. [APPROPRIATION.] A sum sufficient to pay any 247.14 rebate due under the plan enacted under subdivision 2 is 247.15 appropriated from the general fund to the commissioner of 247.16 revenue. 247.17 Sec. 2. [ABOLISHING TAX REFORM AND REDUCTION ACCOUNT.] 247.18 The tax reform and reduction account created in Laws 1998, 247.19 chapter 389, article 9, section 2, subdivision 2, clause (2), is 247.20 abolished. The balance in the account shall revert to the 247.21 unrestricted general fund balance. 247.22 Sec. 3. [EFFECTIVE DATE.] 247.23 Section 1 is effective September 1, 1999. Section 2 is 247.24 effective the day following final enactment. 247.25 ARTICLE 16 247.26 MISCELLANEOUS 247.27 Section 1. [16A.77] [TOBACCO SETTLEMENT FUND.] 247.28 (a) A tobacco settlement fund is established in the state 247.29 treasury. Amounts in the fund are available only for purposes 247.30 authorized by appropriation by the legislature. The governor 247.31 shall make recommendations to the legislature regarding use of 247.32 the money in the fund. 247.33 (b) The commissioner of finance shall credit all settlement 247.34 payments received after July 1, 1998, as defined in Section IIB 247.35 of the settlement document, filed May 18, 1998, in the State of 247.36 Minnesota et al. vs. Philip Morris et al., to the tobacco 248.1 settlement fund. All other payments to the state resulting from 248.2 the specified litigation shall be credited to the general fund. 248.3 Sec. 2. Minnesota Statutes 1998, section 256.969, is 248.4 amended by adding a subdivision to read: 248.5 Subd. 9c. [COUNTY BILLING.] Hospitals that have a medical 248.6 assistance disproportionate population adjustment greater than 248.7 eight percent shall be eligible for a special payment for 248.8 uncompensated care. These hospitals may bill a county of 248.9 residence for services provided to a resident of that county 248.10 provided that: 248.11 (1) the patient is a resident of a county other than the 248.12 county in which the hospital is located; and 248.13 (2) the hospital has made a preliminary determination at 248.14 the time service is delivered that: 248.15 (i) the patient is not eligible for any public health care 248.16 program or it cannot be determined whether the person is 248.17 eligible for any public health care program; 248.18 (ii) the person is uninsured or it cannot be determined if 248.19 the person is uninsured; and 248.20 (iii) the person has insufficient resources to pay the cost 248.21 of services delivered by the hospital. 248.22 Counties that are billed under this program must pay 248.23 eligible hospitals at the rates established under the medical 248.24 assistance program. If the county can establish eligibility for 248.25 a public health care program after the service has been 248.26 delivered, the hospital shall refund any amount received from 248.27 the county and shall bill the program for which eligibility has 248.28 been established. Annually, each eligible hospital shall sum 248.29 the amount collected from each county. If this sum is less than 248.30 $10,000, the hospital shall refund this sum to the county. 248.31 Sec. 3. [256B.053] [COUNTY BILLING BY CLINICS.] 248.32 Clinics that: (1) serve the primary health care needs of 248.33 low-income population groups; (2) use a sliding fee scale based 248.34 on ability to pay and do not limit access to care because of 248.35 financial limitations of the client; and (3) are nonprofit under 248.36 chapter 317, or are federally qualified health centers, shall be 249.1 eligible for a special payment for uncompensated care. The 249.2 clinics may bill a county of residence for services provided to 249.3 a resident of that county provided that: 249.4 (1) the patient is a resident of a county other than the 249.5 county in which the clinic is located; and 249.6 (2) the clinic has made a preliminary determination at the 249.7 time service is delivered that: 249.8 (i) the patient is not eligible for any public health care 249.9 program or it cannot be determined whether the person is 249.10 eligible for any public health care program; 249.11 (ii) the person is uninsured or it cannot be determined if 249.12 the person is uninsured; and 249.13 (iii) the person has insufficient resources to pay the cost 249.14 of services delivered by the clinic. 249.15 Counties that are billed under this program shall pay 249.16 eligible clinics at the rates established under the medical 249.17 assistance program. If the county can establish eligibility for 249.18 a public health care program after service has been delivered, 249.19 the clinic shall refund any amount received from the county and 249.20 shall bill the program for which eligibility has been 249.21 established. Annually, each eligible clinic shall sum the 249.22 amount collected from each county. If this sum is less than 249.23 $10,000, the clinic shall refund this sum to the county. 249.24 Sec. 4. Minnesota Statutes 1998, section 270.65, is 249.25 amended to read: 249.26 270.65 [DATE OF ASSESSMENT; DEFINITION.] 249.27 For purposes of taxes administered by the commissioner, the 249.28 term "date of assessment" means the date a return was filed or 249.29 the date a return should have been filed, whichever is later; 249.30 or, in the case of taxes determined by the commissioner, "date 249.31 of assessment" means the date of the order assessing taxes; or, 249.32 in the case of an amended return filed by the taxpayer, the 249.33 assessment date is the date the return was filed with the 249.34 commissioner; or, in the case of a check from a taxpayer that is 249.35 dishonored and results in an erroneous refund being given to the 249.36 taxpayer, remittance of the check is deemed to be an assessment 250.1 and the "date of assessment" is the date the check was received 250.2 by the commissioner. 250.3 Sec. 5. Minnesota Statutes 1998, section 270.78, is 250.4 amended to read: 250.5 270.78 [PENALTY FOR FAILURE TO MAKE PAYMENT BY ELECTRONIC 250.6 FUNDS TRANSFER.] 250.7(a)In addition to other applicable penalties imposed by 250.8 law, after notification from the commissioner of revenue to the 250.9 taxpayer that payments for a tax administered by the 250.10 commissioner are required to be made by means of electronic 250.11 funds transfer, and the payments are remitted by some other 250.12 means, there is a penalty in the amount of five percent of each 250.13 payment that should have been remitted electronically. The 250.14 penalty can be abated under the abatement procedures prescribed 250.15 in section 270.07, subdivision 6, if the failure to remit the 250.16 payment electronically is due to reasonable cause. The penalty 250.17 bears interest at the rate specified in section 270.75 from the 250.18 due date of the payment of the tax to the date of payment of the 250.19 penalty. 250.20(b) The penalty under paragraph (a) does not apply if the250.21taxpayer pays by other means the amount due at least three250.22business days before the date the payment is due. This250.23paragraph does not apply after December 31, 1997.250.24 Sec. 6. Minnesota Statutes 1998, section 270A.03, 250.25 subdivision 2, is amended to read: 250.26 Subd. 2. [CLAIMANT AGENCY.] "Claimant agency" means any 250.27 state agency, as defined by section 14.02, subdivision 2, the 250.28 regents of the University of Minnesota, any district court of 250.29 the state, any county, any statutory or home rule charter city 250.30 presenting a claim for a municipal hospital or a public library, 250.31 a hospital district, a private nonprofit hospital that leases 250.32 its building from the county in which it is located, any public 250.33 agency responsible for child support enforcement, any public 250.34 agency responsible for the collection of court-ordered 250.35 restitution, and any public agency established by general or 250.36 special law that is responsible for the administration of a 251.1 low-income housing program. 251.2 Sec. 7. Minnesota Statutes 1998, section 270A.07, 251.3 subdivision 2, is amended to read: 251.4 Subd. 2. [SETOFF PROCEDURES.] (a) The commissioner, upon 251.5 receipt of notification, shall initiate procedures to detect any 251.6 refunds otherwise payable to the debtor. When the commissioner 251.7 determines that a refund is due to a debtor whose debt was 251.8 submitted by a claimant agency, the commissioner shall first 251.9 deduct the fee in subdivision 1 and then remit the refund or the 251.10 amount claimed, whichever is less, to the agency. In 251.11 transferring or remitting moneys to the claimant agency, the 251.12 commissioner shall provide information indicating the amount 251.13 applied against each debtor's obligation and the debtor's 251.14 address listed on the tax return. 251.15 (b) The commissioner shall remit to the debtor the amount 251.16 of any refund due in excess of the debt submitted for setoff by 251.17 the claimant agency. Notice of the amount setoff and address of 251.18 the claimant agency shall accompany any disbursement to the 251.19 debtor of the balance of a refund. The notice shall also advise 251.20 the debtor of the right to contest the validity of the claim, 251.21 other than a claim based upon child support under section 251.22 518.171, 518.54, 518.551, or chapter 518C at a hearing, subject 251.23 to the restrictions in this paragraph. The debtor must assert 251.24 this right by written request to the claimant agency, which 251.25 request the claimant agency must receive within 45 days of the 251.26 date of the notice. This right does not apply to (1) issues 251.27 relating to the validity of the claim that have been previously 251.28 raised at a hearing under this section or section 270A.09; (2) 251.29 issues relating to the validity of the claim that were not 251.30 timely raised by the debtor under section 270A.08, subdivision 251.31 2;or(3) issues relating to the validity of the claim that have 251.32 been previously raised at a hearing conducted under rules 251.33 promulgated by the United States Department of Housing and Urban 251.34 Development or any public agency that is responsible for the 251.35 administration of a low-income housing program, or that were not 251.36 timely raised by the debtor under those rules; or (4) issues 252.1 relating to the validity of the claim for which a hearing is 252.2 discretionary under section 270A.09. 252.3 Sec. 8. Minnesota Statutes 1998, section 270A.08, 252.4 subdivision 2, is amended to read: 252.5 Subd. 2. [REQUIREMENTS OF NOTICE.] (a) This written notice 252.6 shall clearly and with specificity set forth the basis for the 252.7 claim to the refund including the name of the benefit program 252.8 involved if the debt arises from a public assistance grant and 252.9 the dates on which the debt was incurred and, further, shall 252.10 advise the debtor of the claimant agency's intention to request 252.11 setoff of the refund against the debt. 252.12 (b) Except as provided in paragraph (c), the notice will 252.13 also advise the debtor that the debt can be setoff against a 252.14 refund unless the time period allowed by law for collecting the 252.15 debt has expired, and will advise the debtor of the right to 252.16 contest the validity of the claim at a hearing. The debtor must 252.17 assert this right by written request to the claimant agency, 252.18 which request the agency must receive within 45 days of the 252.19 mailing date of the original notice or of the corrected notice, 252.20 as required by subdivision 1. If the debtor has not received 252.21 the notice, the 45 days shall not commence until the debtor has 252.22 received actual notice. The debtor shall have the burden of 252.23 showing no notice and shall be entitled to a hearing on the 252.24 issue of notice as well as on the merits. 252.25 (c) If the claimant agency is a public agency that is 252.26 responsible for the administration of a low-income housing 252.27 program, the notice will also advise the debtor that the debt 252.28 can be set off against a refund unless the time period allowed 252.29 by law for collecting the debt has expired. If the public 252.30 agency has provided the debtor with the opportunity to contest 252.31 the issues relating to the validity of the claim at a hearing 252.32 under rules promulgated by the United States Department of 252.33 Housing and Urban Development or the public agency, the notice 252.34 will advise the debtor of that fact and advise the debtor that 252.35 no further hearing may be requested by the debtor to contest the 252.36 validity of the claim. 253.1 Sec. 9. Minnesota Statutes 1998, section 287.01, 253.2 subdivision 3, as amended by Laws 1999, chapter 31, section 1, 253.3 is amended to read: 253.4 Subd. 3. [DEBT.] "Debt" means the principal amount of an 253.5 obligation to pay moneyor to perform or refrain from performing253.6an actthat is secured in whole or in part by a mortgage of an 253.7 interest in real property. 253.8 Sec. 10. Minnesota Statutes 1998, section 287.05, 253.9 subdivision 1, as amended by Laws 1999, chapter 31, section 5, 253.10 is amended to read: 253.11 Subdivision 1. [REAL PROPERTY OUTSIDE MINNESOTA.] (a) When 253.12 a multistate mortgage is intended to secure only a portion of a 253.13 debt amount recited or referred to in the mortgage, the mortgage 253.14 may contain the following statement, or its equivalent, on the 253.15 first page: "Notwithstanding anything to the contrary herein, 253.16 enforcement of this mortgage in Minnesota is limited to a debt 253.17 amount of $....... under chapter 287 of Minnesota Statutes." In 253.18 such case, the tax shall be imposed based only on the amount of 253.19 debt so stated to be secured by real property located in this 253.20 state; and, the effect of the mortgage, or any amendment or 253.21 extension, as evidence in any court in this state, or as notice 253.22 for any purpose in this state, shall be limited to the amount 253.23 contained in the statement and for which the tax has been 253.24 paid and additional amounts for accrued interest and advances 253.25 not subject to tax under section 287.035 or 287.05, subdivision 253.26 4. 253.27 (b) All multistate mortgages not taxed under paragraph (a) 253.28 shall be taxed under sections 287.01 to 287.13 as if the real 253.29 property identified in the mortgage secures payment of that 253.30 portion of the maximum debt amount referred to, or incorporated 253.31 by reference, in the mortgage that is equal to a fraction the 253.32 numerator of which is the value of the real property described 253.33 in the mortgage that is located in this state and the 253.34 denominator of which is the value of all the real property 253.35 described in the mortgage. 253.36 Sec. 11. Minnesota Statutes 1998, section 287.05, 254.1 subdivision 1a, as amended by Laws 1999, chapter 31, section 5, 254.2 is amended to read: 254.3 Subd. 1a. [REAL PROPERTY IN THIS STATE SECURES PORTION OF 254.4 DEBT.] (a) When the real property identified in a mortgage is 254.5 located entirely in this state and is intended to secure only a 254.6 portion of a debt amount recited or referred to in the mortgage, 254.7 the mortgage may contain the following statement, or its 254.8 equivalent, on the first page: "Notwithstanding anything to the 254.9 contrary herein, enforcement of this mortgage is limited to a 254.10 debt amount of $....... under chapter 287 of Minnesota 254.11 Statutes." In such case, the tax shall be imposed based only on 254.12 the amount of debt so stated to be secured by real property; 254.13 and, the effect of the mortgage, or any amendment or extension, 254.14 as evidence in any court in this state, or as notice for any 254.15 purpose in this state, shall be limited to the amount contained 254.16 in the statement and for which the tax has been paid and 254.17 additional amounts for accrued interest and advances not subject 254.18 to tax under section 287.035 or 287.05, subdivision 4. 254.19 (b) All mortgages that are not multistate mortgages and 254.20 that are not taxed under paragraph (a) shall be taxed under 254.21 sections 287.01 to 287.13 as if the real property identified in 254.22 the mortgage secures payment of the maximum debt amount referred 254.23 to, or incorporated by reference, in the mortgage. 254.24 Sec. 12. Minnesota Statutes 1998, section 289A.31, 254.25 subdivision 2, is amended to read: 254.26 Subd. 2. [JOINT INCOME TAX RETURNS.] (a) If a joint income 254.27 tax return is made by a husband and wife, the liability for the 254.28 tax is joint and several. A spouse whois relieved ofqualifies 254.29 for relief from a liability attributable toa substantialan 254.30 underpayment under section6013(e)6015(b) of the Internal 254.31 Revenue Code isalsorelieved of the state income tax liability 254.32 on thesubstantialunderpayment. 254.33 (b) In the case of individuals who were a husband and wife 254.34 prior to the dissolution of their marriage or their legal 254.35 separation, or prior to the death of one of the individuals, for 254.36 tax liabilities reported on a joint or combined return, the 255.1 liability of each person is limited to the proportion of the tax 255.2 due on the return that equals that person's proportion of the 255.3 total tax due if the husband and wife filed separate returns for 255.4 the taxable year. This provision is effective only when the 255.5 commissioner receives written notice of the marriage 255.6 dissolution, legal separation, or death of a spouse from the 255.7 husband or wife. No refund may be claimed by an ex-spouse, 255.8 legally separated or widowed spouse for any taxes paid more than 255.9 60 days before receipt by the commissioner of the written notice. 255.10 Sec. 13. Minnesota Statutes 1998, section 289A.40, 255.11 subdivision 1a, is amended to read: 255.12 Subd. 1a. [INDIVIDUAL INCOME TAXES;REASONABLE255.13CAUSESUSPENSION DURING PERIOD OF DISABILITY.] If the 255.14 taxpayerestablishes reasonable cause for failing to timely file255.15the return required by section 289A.08, subdivision 1, files the255.16required return within ten years of the date specified in255.17section 289A.18, subdivision 1, and independently verifies that255.18an overpayment has been made, the commissioner shall grant a255.19refund claimed by the original return, notwithstanding the255.20limitations of subdivision 1meets the requirements for 255.21 suspending the running of the time period to file a claim for 255.22 refund under section 6511(h) of the Internal Revenue Code, the 255.23 time period in subdivision 1 for the taxpayer to file a claim 255.24 for an individual income tax refund is suspended. 255.25 Sec. 14. Minnesota Statutes 1998, section 289A.50, 255.26 subdivision 7, is amended to read: 255.27 Subd. 7. [REMEDIES.] (a) If the taxpayer is notified by 255.28 the commissioner that the refund claim is denied in whole or in 255.29 part, the taxpayer may: 255.30 (1) file an administrative appeal as provided in section 255.31 289A.65, or an appeal with the tax court, within 60 days after 255.32 issuance of the commissioner's notice of denial; or 255.33 (2) file an action in the district court to recover the 255.34 refund. 255.35 (b) An action in the district court on a denied claim for 255.36 refund must be brought within 18 months of the date of the 256.1 denial of the claim by the commissioner. 256.2 (c) No action in the district court or the tax court shall 256.3 be brought within six months of the filing of the refund claim 256.4 unless the commissioner denies the claim within that period. 256.5 (d) If a taxpayer files a claim for refund and the 256.6 commissioner has not issued a denial of the claim, the taxpayer 256.7 may bring an action in the district court or the tax court at 256.8 any time after the expiration of six months of the time the 256.9 claim was filed, but within four years of the date that the256.10claim was filed. 256.11 (e) The commissioner and the taxpayer may agree to extend 256.12 the period for bringing an action in the district court. 256.13 (f) An action for refund of tax by the taxpayer must be 256.14 brought in the district court of the district in which lies the 256.15 county of the taxpayer's residence or principal place of 256.16 business. In the case of an estate or trust, the action must be 256.17 brought at the principal place of its administration. Any 256.18 action may be brought in the district court for Ramsey county. 256.19 Sec. 15. Minnesota Statutes 1998, section 289A.55, 256.20 subdivision 9, is amended to read: 256.21 Subd. 9. [INTEREST ON PENALTIES.] (a) A penalty imposed 256.22 under section 289A.60, subdivision 1, 2, 3, 4, 5,or6, or 21 256.23 bears interest from the date the return or payment was required 256.24 to be filed or paid, including any extensions, to the date of 256.25 payment of the penalty. 256.26 (b) A penalty not included in paragraph (a) bears interest 256.27 only if it is not paid within ten days from the date of notice. 256.28 In that case interest is imposed from the date of notice to the 256.29 date of payment. 256.30 Sec. 16. [414.12] [DIRECTOR'S POWERS.] 256.31 Notwithstanding anything to the contrary in sections 414.01 256.32 to 414.11, the director of the office of strategic and 256.33 long-range planning, upon consultation with affected parties and 256.34 considering the procedures and principles established in 256.35 sections 414.01 to 414.11, and Laws 1997, chapter 202, article 256.36 4, sections 1 to 13, may require alternative dispute resolution 257.1 processes, including those provided in chapter 14, in the 257.2 execution of the office's duties under this chapter. 257.3 Sec. 17. Minnesota Statutes 1998, section 475.58, is 257.4 amended by adding a subdivision to read: 257.5 Subd. 3a. [YOUTH ICE FACILITIES.] A municipality may, 257.6 without regard to the election requirement under subdivision 1 257.7 or under any other provision of law or home rule charter, issue 257.8 and sell obligations to refund existing debt of an indoor ice 257.9 arena that is used predominantly for youth athletic activity if 257.10 all the following conditions are met: 257.11 (1) the obligations are secured by a pledge of revenues 257.12 from the facility; and 257.13 (2) the governing body of the municipality finds, based on 257.14 analysis provided by a professional experienced in finance, that 257.15 the facility's revenues and other available money will be 257.16 sufficient to pay the obligations, without reliance on a 257.17 property tax levy or the municipality's general purpose state 257.18 aid. 257.19 Sec. 18. Laws 1997, First Special Session chapter 3, 257.20 section 27, is amended to read: 257.21 Sec. 27. [TAXPAYER'S PERSONAL INFORMATION; DISCLOSURE.] 257.22 (a) An owner of property in Washington or Ramsey county 257.23 that is subject to property taxation must be informed in a clear 257.24 and conspicuous manner in writing on a form sent to property 257.25 taxpayers that the property owner's name, address, and other 257.26 information may be used, rented, or sold for business purposes, 257.27 including surveys, marketing, and solicitation. 257.28 (b) If the property owner so requests on the form provided, 257.29 then any such list generated by the county and sold for business 257.30 purposes must exclude the owner's name and address if the 257.31 business purpose is conducting surveys, marketing, or 257.32 solicitation. 257.33 (c) This section expires August 1,19992001. 257.34 Sec. 19. [CHISAGO COUNTY AGGREGATE REMOVAL TAX.] 257.35 Subdivision 1. [AUTHORIZATION.] This section applies to 257.36 Chisago county and to its local approval of an aggregate removal 258.1 tax under Minnesota Statutes, section 298.75. Notwithstanding 258.2 the time limitations of Minnesota Statutes, section 645.021, 258.3 subdivision 3, the aggregate removal tax shall be deemed 258.4 approved if the chief clerical officer of Chisago county files 258.5 the certificate of approval of the tax before the first day of 258.6 the 2000 regular session of the legislature. 258.7 Subd. 2. [EFFECTIVE DATE.] This section is effective the 258.8 day following final enactment. 258.9 Sec. 20. [MINNESOTA MINERALS 21ST CENTURY FUND; CONTINGENT 258.10 APPROPRIATION.] 258.11 Subdivision 1. [ALLOCATION.] If, on the basis of a 258.12 forecast of general fund revenues and expenditures after 258.13 November 1, 1999, the commissioner of finance determines that 258.14 there will be a positive unrestricted budgetary general fund 258.15 balance at the close of the biennium, the commissioner of 258.16 finance must allocate money as follows: 258.17 (1) first, to the budget reserve until the total amount in 258.18 that account equals $622,000,000; then 258.19 (2) second, to the Minnesota minerals 21st century fund, if 258.20 a bill styled as H.F. No. 2390 is enacted in 1999 and creates 258.21 such a fund, until the amount allocated under this clause equals 258.22 $20,000,000. 258.23 Subd. 2. [MATCHING REQUIREMENT.] If a bill styled as H.F. 258.24 No. 2390 is enacted in 1999 and it provides for creation of the 258.25 Minnesota minerals 21st century fund, the commissioner of the 258.26 iron range resources and rehabilitation board shall, upon the 258.27 recommendation of the board, match the funds allocated under 258.28 subdivision 1 to the extent they are used for a loan or equity 258.29 investment meeting the requirements of the provision creating 258.30 the Minnesota minerals 21st century fund within H.F. No. 2390. 258.31 Notwithstanding Minnesota Statutes, section 645.33, this 258.32 subdivision supersedes any contrary provisions of H.F. No. 2390 258.33 that is enacted in 1999. 258.34 Sec. 21. [ACTIVE DUTY MILITARY MEMBERS; EXTENSIONS OF TIME 258.35 RELATING TO TAXES.] 258.36 Subdivision 1. [INCOME TAX EXTENSION.] The limitations of 259.1 time provided by Minnesota Statutes, chapters 289 and 290, 259.2 relating to income taxes, and Minnesota Statutes, chapter 271, 259.3 relating to the tax court, for filing income tax returns, paying 259.4 income taxes, claiming income tax refunds, commencing actions 259.5 relating to income taxes, appealing to the tax court from orders 259.6 relating to income taxes, and appealing to the supreme court 259.7 from decisions of the tax court relating to income taxes are 259.8 extended until May 30, 1999, for members of the National Guard 259.9 or a reserve unit of the armed services of the United States who 259.10 are called to active duty stationed outside of Minnesota after 259.11 March 1, 1999, and before January 1, 2000. 259.12 Subd. 2. [INTEREST AND PENALTIES.] Interest on income tax 259.13 must not be assessed or collected from an individual with 259.14 respect to whom, and for the period during which, the 259.15 limitations of time are extended as provided in subdivision 1. 259.16 A penalty shall not be assessed or collected from an individual 259.17 for failure during that period to perform an act required by the 259.18 laws described in subdivision 1. 259.19 Subd. 3. [ABATEMENT.] The commissioner of revenue shall 259.20 abate penalties and interest on withholding taxes and 259.21 declarations under Minnesota Statutes, section 290.92, and on 259.22 sales taxes deposits and returns under Minnesota Statutes, 259.23 chapters 289A and 297B, for failure to pay amounts or file 259.24 returns due between April 1, 1999, and May 30, 1999, if: 259.25 (1) the taxpayer is an individual described in subdivision 259.26 1 and the taxpayer's ability to file returns or declarations or 259.27 pay the taxes is affected by the requirement to leave the state 259.28 for active duty in the armed forces; and 259.29 (2) the taxpayer files all required returns and 259.30 declarations and pays all tax amounts due by May 30, 1999. 259.31 Subd. 4. [APPLICABILITY.] Nothing in this section reduces 259.32 the time within which an act is required or permitted under 259.33 Minnesota Statutes, chapter 271, 289A, 290, 297A, or 297B. 259.34 Sec. 22. [EFFECTIVE DATES.] 259.35 Section 4 is effective for checks received on or after the 259.36 day following final enactment. 260.1 Sections 5 and 15 are effective for payments due on or 260.2 after the day following final enactment. 260.3 Sections 6, 7, and 8 are effective for claims for setoff 260.4 submitted to the commissioner of revenue by claimant agencies 260.5 after June 30, 1999. 260.6 Sections 9 to 11 are effective for documents executed, 260.7 recorded, or registered after June 30, 1999. 260.8 Section 12, paragraph (a), is effective at the same time 260.9 that section 6015(b) of the Internal Revenue Code is effective 260.10 for federal tax purposes. Section 12, paragraph (b), is 260.11 effective for claims for innocent spouse relief, requests for 260.12 allocation of joint income tax liability, and taxes filed or 260.13 paid on or after the day following final enactment. 260.14 Section 13 is effective for disabilities existing on or 260.15 after the date of enactment for which claims for refund have not 260.16 expired under the time limit in Minnesota Statutes, section 260.17 289A.40, subdivision 1. Claims based upon reasonable cause must 260.18 be filed prior to the expiration of the repealed ten-year period 260.19 or within one year after the date of enactment, whichever is 260.20 earlier. 260.21 Section 14 is effective for refund claims filed on or after 260.22 the day following final enactment. 260.23 Sections 16 and 21 are effective the day following final 260.24 enactment. 260.25 Section 18 applies to Washington county only and is 260.26 effective upon approval by the governing body of Washington 260.27 county, and compliance with Minnesota Statutes, section 645.021, 260.28 subdivision 3. 260.29 ARTICLE 17 260.30 BUSINESS SUBSIDIES 260.31 Section 1. [116J.993] [DEFINITIONS.] 260.32 Subdivision 1. [SCOPE.] For the purposes of sections 260.33 116J.993 to 116J.996, the terms defined in this section have the 260.34 meanings given them. 260.35 Subd. 2. [BENEFIT DATE.] "Benefit date" means the date 260.36 that the recipient receives the business subsidy. If the 261.1 business subsidy involves the purchase, lease, or donation of 261.2 physical equipment, then the benefit date begins when the 261.3 recipient puts the equipment into service. If the business 261.4 subsidy is for improvements to property, then the benefit date 261.5 refers to the earliest date of either: 261.6 (1) when the improvements are finished for the entire 261.7 project; or 261.8 (2) when a business occupies the property. If a business 261.9 occupies the property and the subsidy grantor expects that other 261.10 businesses will also occupy the same property, the grantor may 261.11 assign a separate benefit date for each business when it first 261.12 occupies the property. 261.13 Subd. 3. [BUSINESS SUBSIDY.] "Business subsidy" or 261.14 "subsidy" means a state or local government agency grant, 261.15 contribution of personal property, real property, 261.16 infrastructure, the principal amount of a loan at rates below 261.17 those commercially available to the recipient, any reduction or 261.18 deferral of any tax or any fee, any guarantee of any payment 261.19 under any loan, lease, or other obligation, or any preferential 261.20 use of government facilities given to a business. 261.21 The following forms of financial assistance are not a 261.22 business subsidy: 261.23 (1) assistance that is generally available to all 261.24 businesses or to a general class of similar businesses, such as 261.25 a line of business, size, location, or similar general criteria; 261.26 (2) public improvements to buildings or lands owned by the 261.27 state or local government that serve a public purpose and do not 261.28 principally benefit a single business or defined group of 261.29 businesses at the time the improvements are made; 261.30 (3) redevelopment property polluted by contaminants as 261.31 defined in section 116J.552, subdivision 3; 261.32 (4) assistance provided for the sole purpose of renovating 261.33 or bringing up to code old or decaying building stock and when 261.34 the assistance is matched by the business using private sources; 261.35 (5) assistance provided to organizations whose primary 261.36 mission is to provide job readiness and training services if the 262.1 sole purpose of the assistance is to provide those services; 262.2 (6) assistance for housing; 262.3 (7) assistance for pollution control or abatement; 262.4 (8) assistance for energy conservation; 262.5 (9) tax reductions resulting from conformity with federal 262.6 tax law; 262.7 (10) workers' compensation and unemployment compensation; 262.8 (11) benefits derived from regulation; 262.9 (12) indirect benefits derived from assistance to 262.10 educational institutions; 262.11 (13) funds from bonds allocated under chapter 474A; 262.12 (14) assistance for a collaboration between a Minnesota 262.13 higher education institution and a business; 262.14 (15) a business subsidy of less than $25,000; and 262.15 (16) redevelopment when the recipient's investment in the 262.16 purchase of the site and in site preparation is 80 percent or 262.17 more of the assessed value at the time of purchase. 262.18 Subd. 4. [GRANTOR.] "Grantor" means any state or local 262.19 government agency with the authority to grant a business subsidy. 262.20 Subd. 5. [LOCAL GOVERNMENT AGENCY.] "Local government 262.21 agency" includes a statutory or home rule charter city, housing 262.22 and redevelopment authority, town, county, port authority, 262.23 economic development authority, community development agency, 262.24 nonprofit entity created by a local government agency, or any 262.25 other entity created by or authorized by a local government with 262.26 authority to provide business subsidies. "Local government 262.27 agency" does not include the St. Paul port authority or a seaway 262.28 port authority. 262.29 Subd. 6. [RECIPIENT.] "Recipient" means any for-profit or 262.30 nonprofit business entity that receives a business subsidy. 262.31 Only nonprofit entities with a ratio of highest to lowest paid 262.32 employee, determined on the basis of full-time equivalent 262.33 positions, exceeding ten to one are included in this definition. 262.34 Subd. 7. [STATE GOVERNMENT AGENCY.] "State government 262.35 agency" means any state agency that has the authority to award 262.36 business subsidies. State government agency includes the St. 263.1 Paul port authority and a seaway port authority. 263.2 Sec. 2. [116J.994] [REGULATING LOCAL AND STATE BUSINESS 263.3 SUBSIDIES.] 263.4 Subdivision 1. [PUBLIC PURPOSE.] A business subsidy must 263.5 meet a public purpose other than increasing the tax base. Job 263.6 retention may only be used as a public purpose in cases where 263.7 job loss is imminent and demonstrable. 263.8 Subd. 2. [DEVELOPING A SET OF CRITERIA.] A business 263.9 subsidy may not be granted until the grantor has adopted 263.10 criteria after a public hearing for awarding business subsidies 263.11 that comply with this section. The criteria must include a 263.12 policy regarding the wages to be paid for the jobs created. The 263.13 commissioner of trade and economic development may assist local 263.14 government agencies in developing criteria. 263.15 Subd. 3. [SUBSIDY AGREEMENT.] (a) A recipient must enter 263.16 into a subsidy agreement with the grantor of the subsidy that 263.17 includes: 263.18 (1) a description of the subsidy, including the amount and 263.19 type of subsidy, and type of district if the subsidy is tax 263.20 increment financing; 263.21 (2) a statement of the public purposes for the subsidy; 263.22 (3) goals for the subsidy; 263.23 (4) a description of the financial obligation of the 263.24 recipient if the goals are not met; 263.25 (5) a statement of why the subsidy is needed; 263.26 (6) a commitment to continue operations at the site where 263.27 the subsidy is used for at least five years after the benefit 263.28 date; 263.29 (7) the name and address of the parent corporation of the 263.30 recipient, if any; and 263.31 (8) a list of all financial assistance by all grantors for 263.32 the project. 263.33 (b) Business subsidies in the form of grants must be 263.34 structured as forgivable loans. If a business subsidy is not 263.35 structured as a forgivable loan, the agreement must state the 263.36 fair market value of the subsidy to the recipient, including the 264.1 value of conveying property at less than a fair market price, or 264.2 other in-kind benefits to the recipient. 264.3 (c) If a business subsidy benefits more than one recipient, 264.4 the grantor must assign a proportion of the business subsidy to 264.5 each recipient that signs a subsidy agreement. The proportion 264.6 assessed to each recipient must reflect a reasonable estimate of 264.7 the recipient's share of the total benefits of the project. 264.8 (d) The state or local government agency and the recipient 264.9 must both sign the subsidy agreement and, if the grantor is a 264.10 local government agency, the agreement must be approved by the 264.11 local elected governing body. 264.12 Subd. 4. [WAGE AND JOB GOALS.] The subsidy agreement, in 264.13 addition to any other goals, must include: (1) goals for the 264.14 number of jobs created, which may include separate goals for the 264.15 number of part-time or full-time jobs, or, in cases where job 264.16 loss is imminent and demonstrable, goals for the number of jobs 264.17 retained; and (2) wage goals for the jobs created or retained. 264.18 In addition to other specific goal time frames, the wage 264.19 and job goals must contain specific goals to be attained within 264.20 two years of the benefit date. 264.21 Subd. 5. [PUBLIC NOTICE AND HEARING.] (a) Before granting 264.22 a business subsidy that exceeds $500,000 for a state government 264.23 grantor and $100,000 for a local government grantor, the grantor 264.24 must provide public notice and a hearing on the subsidy. A 264.25 public hearing and notice pursuant to this subdivision is not 264.26 required if a hearing and notice on the subsidy is otherwise 264.27 required by law. 264.28 (b) Public notice of a proposed business subsidy under this 264.29 subdivision by a state government grantor must be published in 264.30 the State Register. Public notice of a proposed business 264.31 subsidy under this subdivision by a local government grantor 264.32 must be published in a local newspaper of general circulation. 264.33 The public notice must identify the location at which 264.34 information about the business subsidy, including a copy of the 264.35 subsidy agreement, is available. Published notice should be 264.36 sufficiently conspicuous in size and placement to distinguish 265.1 the notice from the surrounding text. The grantor must make the 265.2 information available in printed paper copies and, if possible, 265.3 on the Internet. The government agency must provide at least a 265.4 ten-day notice for the public hearing. 265.5 (c) The public notice must include the date, time, and 265.6 place of the hearing. 265.7 (d) The public hearing by a state government grantor must 265.8 be held in St. Paul. 265.9 Subd. 6. [FAILURE TO MEET GOALS.] The subsidy agreement 265.10 must specify the recipient's obligation if the recipient does 265.11 not fulfill the agreement. At a minimum, the agreement must 265.12 require a recipient failing to meet subsidy agreement goals to 265.13 pay back the assistance plus interest provided that repayment 265.14 may be prorated to reflect partial fulfillment of goals. The 265.15 interest rate must be set at the implicit price deflator defined 265.16 under section 275.70, subdivision 2. The grantor, after a 265.17 public hearing, may extend for up to one year the period for 265.18 meeting the goals provided in a subsidy agreement. 265.19 A recipient that fails to meet the terms of a subsidy 265.20 agreement may not receive a business subsidy from any grantor 265.21 for a period of five years from the date of failure or until a 265.22 recipient satisfies its repayment obligation under this 265.23 subdivision, whichever occurs first. 265.24 Before a grantor signs a business subsidy agreement, the 265.25 grantor must check with the compilation and summary report 265.26 required by this section to determine if the recipient is 265.27 eligible to receive a business subsidy. 265.28 Subd. 7. [REPORTS BY RECIPIENTS TO GRANTORS.] (a) A 265.29 business subsidy grantor must monitor the progress by the 265.30 recipient in achieving agreement goals. 265.31 (b) A recipient must provide information regarding goals 265.32 and results for two years after the benefit date or until the 265.33 goals are met, whichever is later. If the goals are not met, 265.34 the recipient must continue to provide information on the 265.35 subsidy until the subsidy is repaid. The information must be 265.36 filed on forms developed by the commissioner in cooperation with 266.1 representatives of local government. Copies of the completed 266.2 forms must be sent to the commissioner and the local government 266.3 agency that provided the business subsidy. The report must 266.4 include: 266.5 (1) the type, public purpose, and amount of subsidies and 266.6 type of district if the subsidy is tax increment financing; 266.7 (2) the hourly wage of each job created with separate bands 266.8 of wages; 266.9 (3) the sum of the hourly wages and cost of health 266.10 insurance provided by the employer with separate bands of wages; 266.11 (4) the date the job and wage goals will be reached; 266.12 (5) a statement of goals identified in the subsidy 266.13 agreement and an update on achievement of those goals; 266.14 (6) the location of the recipient prior to receiving the 266.15 business subsidy; 266.16 (7) why the recipient did not complete the project outlined 266.17 in the subsidy agreement at their previous location, if the 266.18 recipient was previously located at another site in Minnesota; 266.19 (8) the name and address of the parent corporation of the 266.20 recipient, if any; 266.21 (9) a list of all financial assistance by all grantors for 266.22 the project; and 266.23 (10) other information the commissioner may request. 266.24 A report must be filed no later than March 1 of each year for 266.25 the previous year and within 30 days after the deadline for 266.26 meeting the job and wage goals. A local government agency must, 266.27 by April 1 of each year, report in a form approved by the 266.28 commissioner a summary of the business subsidy reports submitted 266.29 that year. The local government agency must include a list of 266.30 recipients that did not complete the report and of recipients 266.31 that have not met their job and wage goals within two years and 266.32 what steps are being taken to bring them into compliance or to 266.33 recoup the subsidy. The commissioner, by July 1 of each year, 266.34 must provide to the legislature a summary of the reports 266.35 submitted to the department. 266.36 (c) Financial assistance that is excluded from the 267.1 definition of "business subsidy" by subdivision 3, clauses (3), 267.2 (4), and (7), is subject to the reporting requirements of this 267.3 subdivision, except that the report of the recipient must 267.4 include: 267.5 (1) the type, public purpose, and amount of the financial 267.6 assistance, and type of district if the subsidy is tax increment 267.7 financing; 267.8 (2) progress towards meeting goals stated in the subsidy 267.9 agreement and the public purpose of the assistance; 267.10 (3) the hourly wage of each job created with separate bands 267.11 of wages; 267.12 (4) the sum of the hourly wages and cost of health 267.13 insurance provided by the employer with separate bands of wages; 267.14 (5) the location of the recipient prior to receiving the 267.15 assistance; and 267.16 (6) other information the grantor requests. 267.17 (d) If the recipient does not submit its report, the local 267.18 government agency must mail the recipient a warning within one 267.19 week of the required filing date. If, after 14 days of the 267.20 postmarked day of the warning, the recipient fails to provide a 267.21 report, then a penalty of $100 per day, payable to the grantor, 267.22 applies until the report is filed. 267.23 Subd. 8. [GOVERNMENT REPORTS.] (a) The commissioner of 267.24 trade and economic development must coordinate the production of 267.25 reports so that useful comparisons across time periods and 267.26 across grantors can be made. The commissioner may add other 267.27 information to the report as the commissioner deems necessary to 267.28 evaluate business subsidies. 267.29 (b) State and local government agencies, regardless of 267.30 whether they awarded any business subsidies, must file the 267.31 report required by this subdivision by April 1 of each year with 267.32 the commissioner. If the commissioner has not received the 267.33 report by that date, the commissioner shall issue a warning to 267.34 the government agency. If the commissioner has not received a 267.35 report by June 1 of the same year, then the government agency 267.36 may not grant any business subsidies until it files the report. 268.1 (c) The commissioner of trade and economic development must 268.2 provide information on reporting requirements to state and local 268.3 government agencies. 268.4 Subd. 9. [COMPILATION AND SUMMARY REPORT.] The department 268.5 of trade and economic development must publish a compilation and 268.6 summary of the results of the reports for the previous calendar 268.7 year by July 1 of each year. The reports of the government 268.8 agencies to the department and the compilation and summary 268.9 report of the department must be made available to the public. 268.10 Among the information in the summary and compilation 268.11 report, the commissioner must include: 268.12 (1) total amount of subsidies awarded in each development 268.13 region of the state; 268.14 (2) distribution of business subsidy amounts by size of the 268.15 business subsidy; 268.16 (3) distribution of business subsidy amounts by time 268.17 category, such as monthly or quarterly; 268.18 (4) distribution of subsidies by type and by public 268.19 purpose; 268.20 (5) percent of all business subsidies that reached their 268.21 goals; 268.22 (6) percent of business subsidies that did not reach their 268.23 goals by two years from the benefit date; 268.24 (7) total dollar amount of business subsidies that did not 268.25 meet their goals after two years from the benefit date; 268.26 (8) percent of subsidies that did not meet their goals and 268.27 that did not receive repayment; 268.28 (9) list of recipients that have failed to meet the terms 268.29 of a subsidy agreement in the past five years; 268.30 (10) number of part-time and full-time jobs within separate 268.31 bands of wages; and 268.32 (11) benefits paid within separate bands of wages. 268.33 Sec. 3. [116J.995] [ECONOMIC GRANTS.] 268.34 An appropriation rider in an appropriation to the 268.35 department of trade and economic development that specifies that 268.36 the appropriation be granted to a particular business or class 269.1 of businesses must contain a statement of the expected benefits 269.2 associated with the grant. At a minimum, the statement must 269.3 include goals for the number of jobs created, wages paid, and 269.4 the tax revenue increases due to the grant. 269.5 Sec. 4. [REPEALER.] 269.6 Minnesota Statutes 1998, section 116J.991, is repealed. 269.7 Sec. 5. [EFFECTIVE DATE.] 269.8 Sections 1 and 2 are effective August 1, 1999, except that, 269.9 for direct appropriations, it is effective only for 269.10 appropriations authorized after August 1, 1999. Section 3 is 269.11 effective for appropriations authorized after August 1, 1999.