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; and 
 13.21     (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, 6 5.5 percent; 
 14.22     (2) On all over $19,910 $29,930, but not 
 14.23  over $79,120 $100,200, 8 7.5 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, 6 5.5 percent; 
 14.33     (2) On all over $13,620 $17,250, but not 
 14.34  over $44,750 $56,680, 8 7.5 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, 6 5.5 percent; 
 15.5      (2) On all over $16,770 $21,240, but not 
 15.6   over $67,390 $85,350, 8 7.5 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, 1991 1999, 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, 1990 1998, and before January 
 16.14  1, 1992 2000.  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 "1990 1998" shall be substituted for the 
 16.24  word "1987 1992."  For 1991 1999, the commissioner shall then 
 16.25  determine the percent change from the 12 months ending on August 
 16.26  31, 1990 1998, to the 12 months ending on August 31, 1991 1999, 
 16.27  and in each subsequent year, from the 12 months ending on August 
 16.28  31, 1990 1999, 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  equals 6.8 7.45 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 by 4.77 5.13 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 equals eight 8.8 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 by 8.8 9.38 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; and 
 19.23     (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 the amounts determined under the following 
 20.10  clauses (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 OR BUSINESS INCOME; GENERAL RULE.] All 
 21.15  income of a unitary business is subject to apportionment except 
 21.16  nonbusiness income.  Income derived from carrying on a trade or 
 21.17  a unitary business must be assigned to this state if the trade 
 21.18  or unitary 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  a trade or unitary business is carried on exclusively within or 
 21.24  without this state:  
 21.25     (a) A trade or unitary 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) A trade or unitary 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 which are of mutual benefit, dependent upon, or 
 22.23  contributory to one another, individually or as a group result 
 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 for 
 25.19  which allocation of income within and without this state is 
 25.20  required, if the taxpayer has any income not connected with the 
 25.21  trade or business carried on partly within and partly without 
 25.22  this state that income must be allocated under subdivision 2.  
 25.23  Intangible property is employed in a trade or business if the 
 25.24  owner of the property holds it as a means of furthering the 
 25.25  trade 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, 1997 1998. 
 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, and the 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 the 25 percent 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, 1997 1998. 
 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, 1997 1998. 
 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, 
 36.28  1997 1998. 
 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 to 1.25 1.2 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 first and second years year of vehicle life shall be 
 43.13  computed upon 100 percent of the base value; for the third and 
 43.14  fourth years second 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 fifth and sixth years year, 75 
 43.17  65 percent of such value; for the sixth year, 60 percent of such 
 43.18  value; for the seventh year, 60 45 percent of such value; for 
 43.19  the eighth year, 40 30 percent of such value; for the ninth 
 43.20  year, 30 20 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 a 
 43.26  motor vehicle on which the first annual tax was paid before 
 43.27  January 1, 1990, must not exceed the tax that was paid on that 
 43.28  vehicle 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 an 
 44.13  insurance 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 insurance 
 44.17  guaranty association or similar organization organized under the 
 44.18  laws 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 of 11 12 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 on 
 65.13  June 30 of any year the unobligated balance of the special 
 65.14  assessment fund under this section is greater than $30,000,000, 
 65.15  the special assessment for the following year only shall be 
 65.16  levied 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 to a dedicated fund to provide for 
 65.20  the employment and training programs established under sections 
 65.21  268.975 to 268.98; including vocational guidance, training, 
 65.22  placement, and job development the Minnesota workforce 
 65.23  development fund created by section 116L.07. 
 65.24     (b) All money in the dedicated fund is appropriated to the 
 65.25  commissioner who must act as the fiscal agent for the money and 
 65.26  must disburse the money for the purposes of this section, not 
 65.27  allowing the money to be used for any other obligation of the 
 65.28  state.  All money in the dedicated fund shall be deposited, 
 65.29  administered, and disbursed in the same manner and under the 
 65.30  same conditions and requirements as are provided by law for the 
 65.31  other dedicated funds in the state treasury, except that all 
 65.32  interest or net income resulting from the investment or deposit 
 65.33  of money in the fund shall accrue to the fund for the purposes 
 65.34  of 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) 
 66.6   and (d) shall be allocated as follows:  
 66.7      (1) 40 percent to be allocated annually to substate 
 66.8   grantees for provision of expeditious response activities under 
 66.9   section 268.9771 and worker adjustment services under section 
 66.10  268.9781; and 
 66.11     (2) 60 percent to be allocated to activities and programs 
 66.12  authorized under sections 268.975 to 268.98. 
 66.13     (f) Any funds not allocated, obligated, or expended in a 
 66.14  fiscal year shall be available for allocation, obligation, and 
 66.15  expenditure 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 a 
 68.13  patient or consumer" includes goods and services provided in 
 68.14  connection with independent medical examinations under section 
 68.15  65B.56 or other examinations for purposes of litigation or 
 68.16  insurance 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; and 
 69.13     (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 Minnesota to a patient who is not domiciled in 
 70.26  Minnesota; 
 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 by a post-secondary an 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; and 
 71.22     (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 return at 
 72.11  the rate specified in section 270.75 whichever 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 the actual gross revenues received during 
 72.16  the month previous 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 return at 
 72.33  the rate specified in section 270.75 whichever 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 the actual gross revenues received during 
 73.2   the quarter previous 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 made 
 75.12  on application of the taxpayer to the commissioner. 
 75.13     (f) If an order issued under this subdivision is for an 
 75.14  abatement, reduction, or refund of over $5,000, it shall be 
 75.15  valid 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 county but is not occupied on the assessment 
 85.3   date.  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 require an application, 
 89.28  including documentation of the age of the house from the owner, 
 89.29  if unknown by the assessor.  The application may be filed 
 89.30  subsequent to the date of the building permit provided that the 
 89.31  application must be filed within three years of the date the 
 89.32  building 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, the an 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.  
 90.1   Applications The 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.  If an a 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 application 
 91.6   shall state, in clear language, that If 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, or aunt, 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 the 
 97.25  residence itself and as much of the land surrounding the 
 97.26  homestead, not exceeding one acre, as is reasonably necessary 
 97.27  for the use of the dwelling as a home, and does not include any 
 97.28  other 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 four 
 98.20  townships or cities, or a combination of townships or cities 
 98.21  from the homestead; and 
 98.22     (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 2a and the detached land is located in the 
 98.36  same township or city, or not farther than four townships or 
 99.1   cities or combination thereof from the homestead.  Any taxpayer 
 99.2   of these noncontiguous 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   value that does not exceed 320 acres has a net class rate of 0.8 
101.10  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 of 1.25 1.05 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 of 1.25 1.05 
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; 
102.35  and 
102.36     (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 
107.1   68 percent for taxes payable in 1999 and 69 77.5 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 $320 
107.6   for 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 is 0.2 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; and 
109.7      (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 
109.20  hereinafter provided, and shall be first used by the municipal 
109.21  subdivision to retire any indebtedness then existing in 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, property 
109.35  conveyed under this subdivision and used for residential 
109.36  purposes is not eligible for property tax homestead 
110.1   classification under section 273.124 or for a property tax 
110.2   refund 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; and 
112.29     (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.06 or; 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 515 or, 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 establishing a one or more housing 
116.32  improvement area areas.  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, the city proposed 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  the city proposed 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 
117.29  city implementing 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, the city 
118.22  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 the city implementing entity a financial plan 
118.28  prepared by an independent third party, acceptable to the city 
118.29  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     The city implementing 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 
119.9   governing body of the city implementing 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 to assure bonds 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     The governing body of the city implementing entity may 
119.35  create and appoint an advisory board for the housing improvement 
119.36  area in the city to advise the governing body implementing 
120.1   entity in connection with the planning and construction of 
120.2   housing improvements.  In appointing the board, the council 
120.3   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   the governing body implementing entity to provide improvements 
120.7   or impose fees within the housing improvement area.  Before the 
120.8   adoption of a proposal by the governing body implementing 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 the city implementing 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  exceeds 2 mills .063 percent of taxable market value.  The 
127.15  proceeds 
127.16     (b) .048 percent of taxable market value of that tax 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 the 1999 2000 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 county 
135.2   shall have its homestead and agricultural credit aid permanently 
135.3   reduced by an amount equal to one-third of the additional amount 
135.4   received by the county under section 477A.03, subdivision 2, 
135.5   paragraph (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 in the eighth a 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.0122 in 
139.16  2000 are further increased by an additional 
139.17  $30,000,000 $20,000,000 in 2000 2001. 
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 general 
140.19  fund 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 the county state treasurer shall 
141.1   then refund accordingly.  The county state 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 AUTHORITY 
146.11  COMMUNITY DEVELOPMENT AGENCY.] There is hereby created in Dakota 
146.12  county a public body corporate and politic, to be known as the 
146.13  Dakota county housing and redevelopment authority community 
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 of the municipal housing and 
146.18  redevelopment act sections 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 not 
146.31  exercise jurisdiction in any municipality where a municipal 
146.32  housing and redevelopment authority is established.  A municipal 
146.33  housing and redevelopment authority may request the Dakota 
146.34  county housing and redevelopment authority community development 
146.35  agency to handle the housing duties of the authority and, in 
146.36  such an event,.  If the municipal authority makes the request, 
147.1   the Dakota county housing and redevelopment authority community 
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 housing shall does 
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 housing or project, development district 
147.9   redevelopment project, or economic development project is 
147.10  constructed in Dakota county pursuant to this authorization, and 
147.11  such the project is within the boundaries of any incorporated 
147.12  home rule charter or statutory city, the location of such the 
147.13  project shall must 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 provision shall does not 
150.8   prohibit the use of revenues derived from tax increments for the 
150.9   construction or renovation of a parking structure, a commons 
150.10  area used as a public park, or a facility used for social, 
150.11  recreational, or conference purposes and not primarily for 
150.12  conducting 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 may 
152.33  require a development authority to transfer available increments 
152.34  for any of its tax increment financing districts in the city to 
152.35  make up an insufficiency in another district in the city, 
152.36  regardless of whether the district was established by the 
153.1   development authority or another development authority.  
153.2   Notwithstanding any law to the contrary, increments transferred 
153.3   under this authority must be spent to pay preexisting 
153.4   obligations.  "Development authority" for this purpose means any 
153.5   authority 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; 
154.21  or 
154.22     (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, 2004 2006, 
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 than eight ten years of tax 
155.11  increments for the district and.  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 than March August 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   grants or pooling authority under 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, 
156.32  2001 2002. 
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  through December 31, 1998 June 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 certification is was made 
158.9   after April 30, 1998 August 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 the 
176.9   county treasurer of the tax certificate given upon tax sale, in 
176.10  case the lands have not been redeemed, the tax purchaser has the 
176.11  right to pay the principal and interest then in default upon the 
176.12  land sale certificate as its assignee.  To redeem from a tax 
176.13  sale, the person redeeming must pay the county treasurer, for 
176.14  the holder and owner of the tax sale certificate, in addition to 
176.15  all sums required to be paid in other cases, all amounts paid by 
176.16  the holder and owner for interest and principal upon the land 
176.17  sale certificate, with interest at 12 percent per year.  When 
176.18  the director receives the tax certificate with the county 
176.19  auditor's certificate of the expiration of the time for 
176.20  redemption, and the county treasurer's receipt for all 
176.21  delinquent interest and penalty on the land sale certificate, 
176.22  the director shall issue the holder and owner of the tax 
176.23  certificate a special certificate with the same terms and the 
176.24  same 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, as hereinafter provided 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 property shall 
176.36  are only be eligible 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 of less 
177.18  than $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 as herein provided 
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 payment shall must 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  remaining shall be is payable in four equal annual installments; 
177.30  and 
177.31     (b) (d) The amounts entered in judgment shall bear 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 county wherein in 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 amount hereinbefore provided, 
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, and shall thereby waive also 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 agree therein to 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 offer shall must 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 estate situate located in 
178.31  .................... county, Minnesota, to-wit: 
178.32  .............................. Upon which that 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 $...... and hereby waive all irregularities in the tax 
179.2   proceedings affecting such these taxes and any defense or 
179.3   objection which I may have thereto to them, and direct judgment 
179.4   to be entered for the amount hereby confessed amount stated 
179.5   above, less minus the sum of $............, hereby tendered to 
179.6   be paid with this document, being which is one-tenth of the 
179.7   amount of said the taxes, costs, penalty, and interest; stated 
179.8   above.  I agree to pay the balance of said the 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  unpaid from time to time, said.  I agree to pay the installments 
179.12  and interest to be paid on 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  contest such the taxes under Minnesota Statutes 1941, sections 
179.17  278.01 to 278.13. 
179.18     Dated this .............., ......." 
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 SALE FORM.] 
179.22  All parcels of land bid in at the same tax judgment sale and 
179.23  having the same period of redemption shall be covered by a 
179.24  single posted notice, but a separate notice may be posted for 
179.25  any parcel which may be omitted.  Such The 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 
179.36  shall be is 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 persons interested having an interest in the lands 
180.5   hereinafter described in this notice: 
180.6      You are hereby notified that the parcels of land 
180.7   hereinafter described, situated in this notice and located in 
180.8   the county of ................................, state of 
180.9   Minnesota, were bid in for the state on the 
180.10  .........................  day of ......................., 
180.11  ......., at the tax judgment sale of land for delinquent taxes 
180.12  for the year .......; that the legal descriptions and tax parcel 
180.13  identification numbers of such parcels and names of the 
180.14  taxpayers and fee owners and in addition those parties who have 
180.15  filed their addresses pursuant to section 276.041, and the 
180.16  amount necessary to redeem as of the date hereof and, at the 
180.17  election of the county auditor, the current filed addresses of 
180.18  any 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   and in Addition 
180.33   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    Date Hereof
181.2                                                    of Notice
181.3    ................       ...........    ......    ............
181.4    ................       ...........    ......    ............
181.5      That the time for redemption of such lands from such sale 
181.6   will expire 60 days after service of notice and the filing of 
181.7   proof thereof in my office, as provided by law.  The redemption 
181.8   must be made in my office.  
181.9     FAILURE TO REDEEM SUCH THE LANDS PRIOR TO THE EXPIRATION 
181.10        OF REDEMPTION WILL RESULT IN THE LOSS OF THE LAND AND 
181.11        FORFEITURE OF SAID LAND TO THE STATE OF MINNESOTA. 
181.12     Inquiries as to the these proceedings set forth above can 
181.13  be made to the County Auditor for the ............... County of 
181.14  ..............., 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)."  
181.24     Such The notice shall must be posted by the auditor in the 
181.25  auditor's office, subject to public inspection, and shall must 
181.26  remain so posted until at least one week after the date of the 
181.27  last publication of notice, as hereinafter provided in this 
181.28  section.  Proof of such posting shall must 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 of such the notice affidavit, as provided 
181.34  by law, shall must be filed in the office of the county 
181.35  auditor.  A single published notice shall be sufficient for all 
181.36  may include parcels of land bid in at the same different tax 
182.1   judgment sale sales, having the same period but included parcels 
182.2   must have a common year for expiration of redemption, and 
182.3   covered by a notice or notices kept posted during the time of 
182.4   the 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) Forthwith Immediately 
182.8   after the commencement of such publication 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 of such the notice of expiration of redemption for 
182.12  service upon on the persons in possession of all parcels of such 
182.13  land as are actually 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 receipt thereof of the notice, 
182.17  the sheriff or other person serving the notice shall make such 
182.18  investigation investigate as may be necessary to ascertain 
182.19  whether or not the parcels covered by such the notice are 
182.20  actually occupied parcels, and shall serve a copy of such the 
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.  Such The return shall 
182.34  must be made upon on a copy of such the notice and shall be 
182.35  is prima facie evidence of the facts therein stated 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, such fees and mileage for service on persons 
183.3   in possession as are prescribed by law for such service in other 
183.4   cases, and shall also receive such compensation 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 mileage shall must 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 taxes shall must 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 board may consider considers 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 within 90 60 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 within 90 60 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 for one year six 
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 
185.6   shall must be conducted by the county auditor at the county seat 
185.7   of the county in which the parcels lie, provided except 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 parcels shall 
185.10  must be sold for cash only and at not less than the appraised 
185.11  value, unless the county board of the county shall have has 
185.12  adopted a resolution providing for their sale on terms, in which 
185.13  event the resolution shall control controls with respect thereto 
185.14  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, thereupon and the balance 
185.17  shall must 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.  No Standing timber or timber 
185.22  products shall must 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 value shall must be allocated between 
185.29  the land and the timber in proportion to the their respective 
185.30  appraised values thereof, and no.  In that case, standing timber 
185.31  or timber products shall must 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  value thereof of 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 sale herein provided for shall must commence 
186.16  at such the time as determined by the county board of the county 
186.17  wherein such in which the parcels lie, shall direct are 
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 a less sum less than the 
186.21  appraised value, until all of the parcels of land shall have 
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 value thereof, except that if the person could have 
186.25  repurchased a parcel of property under section 282.012 or 
186.26  282.241, that person shall not be allowed to may 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 all delinquent taxes 
186.29  and, assessments, penalties, interest, and costs due at the time 
186.30  of forfeiture computed under section 282.251, together with 
186.31  penalties, interest, and costs that accrued or would have 
186.32  accrued if the parcel had not forfeited to the state and any 
186.33  special assessments for improvements certified as of the date of 
186.34  sale.  Said The sale shall must continue until all such 
186.35  the parcels are sold or until the county board shall order 
186.36  orders a reappraisal or shall withdraw withdraws any or all such 
187.1   of the parcels from sale.  Such The 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 values of such.  The added lands must 
187.4   be:  (1) parcels of land as shall that have become forfeited and 
187.5   classified as nonconservation since the commencement of any 
187.6   prior sale or such; (2) parcels as shall that have been 
187.7   reappraised, or such; (3) parcels as shall that have been 
187.8   reclassified as nonconservation; or such (4) other parcels as 
187.9   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 as hereinafter provided for the 
187.12  publication of the original list, provided that any.  Parcels 
187.13  added to such the list shall must 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  parcels of such lands as that are offered and not immediately 
187.17  sold shall, continue to be held in trust by the state for the 
187.18  taxing districts interested in each of said the 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 board may 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 after Before 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 upon such the 
187.29  parcel, and may provide for maintenance of tax-forfeited lands, 
187.30  if it is determined by the county board that such repairs or, 
187.31  improvements, or maintenance are necessary for the operation, 
187.32  use, preservation and safety thereof; and, of the building or 
187.33  structure.  If so authorized by the county board, the county 
187.34  auditor may insure any such the 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 persons therein employed 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   of such the building or structure.  Such The county auditor may, 
188.6   with the approval of the county board, provide for the 
188.7   demolition of any such the 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  materials therefrom from the building or structure.  Such The 
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 of such the personal property, salvaged materials, of 
188.15  timber or other products, or leases made under this law shall 
188.16  must be deposited in the forfeited tax sale fund and shall must 
188.17  be distributed in the same manner as if the parcel had been sold.
188.18     Such The county auditor, with the approval of the county 
188.19  board, may provide for the demolition of any structure or 
188.20  structures on tax-forfeited lands, if in the opinion of the 
188.21  county board, the county auditor, and the land commissioner, if 
188.22  there be is one, the sale of such the land with such the 
188.23  structure or structures thereon on it, or the continued 
188.24  existence of such the structure or structures by 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 of such the 
188.28  tax-forfeited lands, or if the demolition of such the structure 
188.29  or structures will aid in disposing of such the 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 grading thereof of the land by 
188.34  filling or the removal of any surplus material therefrom, and 
188.35  where from it.  If the physical condition of forfeited lands is 
188.36  such that a reasonable grading thereof of the lands is necessary 
189.1   for the protection and preservation of the property of any 
189.2   adjoining owner, such the adjoining property owner or owners may 
189.3   make application apply to the county board to have such the 
189.4   grading done.  If, after considering said the application, the 
189.5   county board believes that such the grading will enhance the 
189.6   value of such the forfeited lands commensurate with the cost 
189.7   involved, it may approve the same it, and any such the work 
189.8   shall must be performed under the supervision of the county or 
189.9   city engineer, as the case may be, and the expense thereof paid 
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 of any products therefrom from 
189.16  the forfeited land, shall must be apportioned by the county 
189.17  auditor to the taxing districts interested therein in the land, 
189.18  as follows: 
189.19     (1) Such the portion as may be required 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 of such the parcel to the 
189.23  state, but not exceeding the amount certified by the clerk of 
189.24  the municipality, shall must be apportioned to the municipal 
189.25  subdivision entitled thereto to it; 
189.26     (2) Such the portion as may be required 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 of such the 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, shall must 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) Such the portion of the remainder as may be required to 
189.36  discharge any special assessment chargeable against such the 
190.1   parcel for drainage or other purpose whether due or deferred at 
190.2   the time of forfeiture, shall must be apportioned to the 
190.3   municipal subdivision entitled thereto to it; and 
190.4      (4) any balance shall must 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.  It shall must 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 authority 
190.17  under paragraph (a) or (b) (iii) Any balance remaining shall 
190.18  must be apportioned as follows:  county, 40 percent; town or 
190.19  city, 20 percent; and school district, 40 percent, and if the 
190.20  board avails itself of the authority under paragraph (a) or (b) 
190.21  the balance remaining shall be apportioned among the county, 
190.22  town or city, and school district in the proportions in this 
190.23  paragraph above stated, provided, however, that in unorganized 
190.24  territory that portion which should would have accrued to the 
190.25  township shall must 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 costs shall must 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, shall must be in the amount 
191.5   determined by the county board.  The county auditor shall must 
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 help that may 
191.11  be needed by the county auditor or land commissioner shall must 
191.12  be in the amount determined by the county board.  All 
191.13  compensation provided for herein shall be in 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 282.014 shall 
191.16  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 amount thereof of 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 of such the disbursements shall must 
191.31  be charged to the account of the taxing districts interested in 
191.32  such parcels forfeited 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 said 
192.2   "Forfeited Tax Sale Fund," the authorities duly charged with the 
192.3   execution of responsible for carrying out the duties imposed by 
192.4   sections 282.01 to 282.13, at their discretion, may expend 
192.5   moneys in repairing from 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, and to cut down, otherwise destroy or eradicate noxious 
192.11  weeds on all tax-forfeited lands.  In any year, the money to be 
192.12  expended for the cutting down, destruction or eradication of 
192.13  noxious weeds shall not exceed in amount more than ten percent 
192.14  of the net proceeds of said "Forfeited Tax Sale Fund" during the 
192.15  preceding calendar year, or $10,000, whichever is the lesser 
192.16  sum, 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 condemn such the 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, such repurchase shall be is 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 that thereby by repurchase undue 
193.3   hardship or injustice resulting from the forfeiture will be 
193.4   corrected, or that permitting such the repurchase will promote 
193.5   the use of such the 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 repurchase shall 
193.11  be is subject to any easement, lease, or other encumbrance 
193.12  granted by the state prior thereto before the repurchase, and if 
193.13  said the land is located within a restricted area established by 
193.14  any county under Laws 1939, chapter 340, such the repurchase 
193.15  shall must not be permitted unless said the resolution with 
193.16  respect thereto approving 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 repurchase contract approved application received 
193.26  after July 1, 1985.  The fee shall must be paid at the time of 
193.27  repurchase application and shall must 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      No such refundment shall refund may be granted unless an 
194.6   application therefor shall be duly for refund is approved and 
194.7   presented to the commissioner of revenue within two years from 
194.8   the date of such tax certificate or the 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 board is authorized to may 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 action On any reduction or 
195.8   abatement where when the reduction of taxes, costs, penalties, 
195.9   and interest exceed $10,000, the county board shall give 20 
195.10  days' 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.  If 
195.14  the school board or the municipality object to the granting of 
195.15  the reduction or abatement, the county board must refer the 
195.16  abatement or reduction to the commissioner of revenue with its 
195.17  recommendation.  The commissioner shall consider the abatement 
195.18  or 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, shall make search of the 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   to such the lot or parcel of land, and certify the result of 
196.7   such the 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 amount thereof of liens and tax sales, the year of tax 
196.11  covered by such the lien, and the date of tax sale, and the name 
196.12  of the purchaser at such tax sale.  For the purpose of 
196.13  ascertaining the current tax against such a 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 in 1997 and 
196.28  1998 1999, 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 in 1999 2000 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 in 1996, 1998, 1999, and 2000 
198.22  and 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 in 1998, 1999, and 2000 shall, 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  grants or 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 this 
199.34  subdivision 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 the 
250.21  taxpayer pays by other means the amount due at least three 
250.22  business days before the date the payment is due.  This 
250.23  paragraph 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 money or to perform or refrain from performing 
253.6   an act that 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 who is relieved of qualifies 
254.29  for relief from a liability attributable to a substantial an 
254.30  underpayment under section 6013(e) 6015(b) of the Internal 
254.31  Revenue Code is also relieved of the state income tax liability 
254.32  on the substantial underpayment.  
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; REASONABLE 
255.13  CAUSE SUSPENSION DURING PERIOD OF DISABILITY.] If the 
255.14  taxpayer establishes reasonable cause for failing to timely file 
255.15  the return required by section 289A.08, subdivision 1, files the 
255.16  required return within ten years of the date specified in 
255.17  section 289A.18, subdivision 1, and independently verifies that 
255.18  an overpayment has been made, the commissioner shall grant a 
255.19  refund claimed by the original return, notwithstanding the 
255.20  limitations of subdivision 1 meets 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 the 
256.10  claim 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, or 6, 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, 1999 2001. 
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.